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Loans and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2023
Receivables [Abstract] |
Loans and Allowance for Credit Losses | NOTE 4 – Loans and Allowance for Credit Losses The Company makes loans to individuals and small businesses for various personal and commercial purposes primarily in the Upstate, Midlands, and Lowcountry regions of South Carolina, the Triangle,Triad, and Charlotte regions of North Carolina as well as Atlanta, Georgia. The Company’s loan portfolio is not concentrated in loans to any single borrower or a relatively small number of borrowers. The Company focuses its lending activities on businesses and individuals that reside in the markets that we serve. The principal component of the loan portfolio is loans secured by real estate mortgages which account for 84.8% of total loans at December 31, 2023. Commercial loans comprise 56.5% of total real estate loans and consumer loans account for 43.5%. Commercial real estate loans are further categorized into owner occupied which represents 17.5% of total loans and non-owner occupied loans which represents 26.2%. Commercial construction loans represent only 4.2% of the total loan portfolio. In addition to monitoring potential concentrations of loans to particular borrowers or groups of borrowers, industries and geographic regions, management monitors exposure to credit risk from concentrations of lending products and practices such as loans that subject borrowers to substantial payment increases (e.g. principal deferral periods, loans with initial interest-only periods, etc.), and loans with high loan-to-value ratios. Additionally, there are industry practices that could subject the Company to increased credit risk should economic conditions change over the course of a loan’s life. For example, the Company makes variable rate loans and fixed rate principal-amortizing loans with maturities prior to the loan being fully paid (i.e. balloon payment loans). The various types of loans are individually underwritten and monitored to manage the associated risks. Loan Portfolio Composition The following table summarizes the composition of our loan portfolio. Total gross loans are recorded net of deferred loan fees and costs, which totaled $7.0 million and $7.3 million as of December 31, 2023 and December 31, 2022, respectively.
Schedule of composition of our loan portfolio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31 |
(dollars in thousands) Commercial [Member] |  | 2023 |  |  |  |  |  | 2022 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied REOwner occupied RE [Member] |  | $ | 631,657 |  |  |  | 17.5 | % |  |  | 612,901 |  |  |  | 18.7 | %
Non-owner occupied RENon-owner occupied RE [Member] |  |  | 942,529 |  |  |  | 26.2 | % |  |  | 862,579 |  |  |  | 26.3 | %
ConstructionConstruction [Member] |  |  | 150,680 |  |  |  | 4.2 | % |  |  | 109,726 |  |  |  | 3.4 | %
BusinessBusiness [Member] |  |  | 500,161 |  |  |  | 13.9 | % |  |  | 468,112 |  |  |  | 14.3 | %
Total commercial loansConsumer [Member] |  |  | 2,225,027 |  |  |  | 61.8 | % |  |  | 2,053,318 |  |  |  | 62.7 | %
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate Real estate [Member] |  |  | 1,082,429 |  |  |  | 30.0 | % |  |  | 931,278 |  |  |  | 28.4 | %
Home equity Home equity [Member] |  |  | 183,004 |  |  |  | 5.1 | % |  |  | 179,300 |  |  |  | 5.5 | %
Construction Construction [Member] |  |  | 63,348 |  |  |  | 1.7 | % |  |  | 80,415 |  |  |  | 2.5 | %
Other Other [Member] |  |  | 48,819 |  |  |  | 1.4 | % |  |  | 29,052 |  |  |  | 0.9 | %
Total consumer loans |  |  | 1,377,600 |  |  |  | 38.2 | % |  |  | 1,220,045 |  |  |  | 37.3 | %
Total gross loans, net of deferred fees |  |  | 3,602,627 |  |  |  | 100.0 | % |  |  | 3,273,363 |  |  |  | 100.0 | %
Less – allowance for credit losses |  |  | (40,682 | ) |  |  |  |  |  |  | (38,639 | ) |  |  |  |
Total loans, net |  | $ | 3,561,945 |  |  |  |  |  |  |  | 3,234,724 |  |  |  |  |
The composition of gross loans by rate type is as follows:
Schedule of composition of gross loans by rate type |  |  |
|  | December 31, |
(dollars in thousands) |  | 2023 |  |  | 2022 |
Floating rate loans |  | $ | 574,352 |  |  |  | 439,287 |
Fixed rate loans |  |  | 3,028,275 |  |  |  | 2,834,076 |
|  | $ | 3,602,627 |  |  |  | 3,273,363 |
At December 31, 2023, approximately $1.25 billion of the Company’s mortgage loans were pledged as collateral for advances from the FHLB, as set forth in Note 8. Credit Quality Indicators The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type. A description of the general characteristics of the risk grades is as follows:
| ● | Pass— A pass loan ranges from minimal to average credit risk; however, still has acceptable credit risk.
| ● | Watch— A watch loan exhibits above average credit risk due to minor weaknesses and warrants closer scrutiny by management.
| ● | Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date.
| ● | Substandard— A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, which may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
| ● | Doubtful— A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.
The following table presents loan balances classified by credit quality indicators by year of origination as of December 31, 2023.
Schedule of classified by credit quality indicators by year of origination |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2023 |
(dollars in thousands) |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving |  |  | Revolving Converted to Term |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 42,846 |  |  |  | 180,654 |  |  |  | 138,549 |  |  |  | 64,818 |  |  |  | 59,880 |  |  |  | 110,502 |  |  |  | 85 |  |  |  | 166 |  |  |  | 597,500 |
Watch |  |  | - |  |  |  | 3,460 |  |  |  | 460 |  |  |  | 15,997 |  |  |  | 3,525 |  |  |  | 6,616 |  |  |  | - |  |  |  | - |  |  |  | 30,058 |
Special Mention |  |  | - |  |  |  | 181 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 3,057 |  |  |  | - |  |  |  | - |  |  |  | 3,238 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 861 |  |  |  | - |  |  |  | - |  |  |  | 861 |
Total Owner occupied RE |  |  | 42,846 |  |  |  | 184,295 |  |  |  | 139,009 |  |  |  | 80,815 |  |  |  | 63,405 |  |  |  | 121,036 |  |  |  | 85 |  |  |  | 166 |  |  |  | 631,657 |
Non-owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 84,617 |  |  |  | 298,063 |  |  |  | 162,697 |  |  |  | 107,364 |  |  |  | 59,260 |  |  |  | 163,990 |  |  |  | 9,249 |  |  |  | - |  |  |  | 885,240 |
Watch |  |  | 1,007 |  |  |  | 3,260 |  |  |  | 9,914 |  |  |  | 533 |  |  |  | 5,545 |  |  |  | 10,630 |  |  |  | - |  |  |  | - |  |  |  | 30,889 |
Special Mention |  |  | - |  |  |  | - |  |  |  | 7,759 |  |  |  | - |  |  |  | 8,252 |  |  |  | 879 |  |  |  | - |  |  |  | - |  |  |  | 16,890 |
Substandard |  |  | - |  |  |  | - |  |  |  | 313 |  |  |  | - |  |  |  | 8,088 |  |  |  | 1,109 |  |  |  | - |  |  |  | - |  |  |  | 9,510 |
Total Non-owner occupied RE |  |  | 85,624 |  |  |  | 301,323 |  |  |  | 180,683 |  |  |  | 107,897 |  |  |  | 81,145 |  |  |  | 176,608 |  |  |  | 9,249 |  |  |  | - |  |  |  | 942,529 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 27,262 |  |  |  | 86,161 |  |  |  | 24,399 |  |  |  | 11,459 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 149,281 |
Watch |  |  | - |  |  |  | 1,399 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,399 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 27,262 |  |  |  | 87,560 |  |  |  | 24,399 |  |  |  | 11,459 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 150,680 |
Business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 48,705 |  |  |  | 134,999 |  |  |  | 48,557 |  |  |  | 18,868 |  |  |  | 17,292 |  |  |  | 47,708 |  |  |  | 146,745 |  |  |  | 1,431 |  |  |  | 464,305 |
Watch |  |  | 127 |  |  |  | 15,867 |  |  |  | 1,833 |  |  |  | 1,010 |  |  |  | 842 |  |  |  | 3,584 |  |  |  | 7,570 |  |  |  | 506 |  |  |  | 31,339 |
Special Mention |  |  | 241 |  |  |  | 961 |  |  |  | 98 |  |  |  | 857 |  |  |  | 184 |  |  |  | 447 |  |  |  | 150 |  |  |  | 97 |  |  |  | 3,035 |
Substandard |  |  | - |  |  |  | - |  |  |  | 155 |  |  |  | - |  |  |  | 132 |  |  |  | 1,195 |  |  |  | - |  |  |  | - |  |  |  | 1,482 |
Total Business |  |  | 49,073 |  |  |  | 151,827 |  |  |  | 50,643 |  |  |  | 20,735 |  |  |  | 18,450 |  |  |  | 52,934 |  |  |  | 154,465 |  |  |  | 2,034 |  |  |  | 500,161 |
Total Commercial loans |  |  | 204,805 |  |  |  | 725,005 |  |  |  | 394,734 |  |  |  | 220,906 |  |  |  | 163,000 |  |  |  | 350,578 |  |  |  | 163,799 |  |  |  | 2,200 |  |  |  | 2,225,027 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 144,179 |  |  |  | 273,585 |  |  |  | 278,138 |  |  |  | 176,395 |  |  |  | 66,087 |  |  |  | 105,383 |  |  |  | - |  |  |  | - |  |  |  | 1,043,767 |
Watch |  |  | 490 |  |  |  | 5,658 |  |  |  | 8,230 |  |  |  | 3,917 |  |  |  | 2,051 |  |  |  | 3,890 |  |  |  | - |  |  |  | - |  |  |  | 24,236 |
Special Mention |  |  | 143 |  |  |  | 2,499 |  |  |  | 1,657 |  |  |  | 1,291 |  |  |  | 2,220 |  |  |  | 3,360 |  |  |  | - |  |  |  | - |  |  |  | 11,170 |
Substandard |  |  | - |  |  |  | - |  |  |  | 635 |  |  |  | 817 |  |  |  | 318 |  |  |  | 1,486 |  |  |  | - |  |  |  | - |  |  |  | 3,256 |
Total Real estate |  |  | 144,812 |  |  |  | 281,742 |  |  |  | 288,660 |  |  |  | 182,420 |  |  |  | 70,676 |  |  |  | 114,119 |  |  |  | - |  |  |  | - |  |  |  | 1,082,429 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 171,003 |  |  |  | - |  |  |  | 171,003 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 6,393 |  |  |  | - |  |  |  | 6,393 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,283 |  |  |  | - |  |  |  | 4,283 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,325 |  |  |  | - |  |  |  | 1,325 |
Total Home equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 183,004 |  |  |  | - |  |  |  | 183,004 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 14,339 |  |  |  | 39,893 |  |  |  | 9,116 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 63,348 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 14,339 |  |  |  | 39,893 |  |  |  | 9,116 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 63,348 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 1,278 |  |  |  | 2,551 |  |  |  | 2,361 |  |  |  | 1,457 |  |  |  | 803 |  |  |  | 2,604 |  |  |  | 36,549 |  |  |  | - |  |  |  | 47,603 |
Watch |  |  | 9 |  |  |  | 29 |  |  |  | 348 |  |  |  | - |  |  |  | 15 |  |  |  | 163 |  |  |  | 58 |  |  |  | - |  |  |  | 622 |
Special Mention |  |  | 33 |  |  |  | 333 |  |  |  | - |  |  |  | - |  |  |  | 23 |  |  |  | 82 |  |  |  | 41 |  |  |  | - |  |  |  | 512 |
Substandard |  |  | - |  |  |  | - |  |  |  | 75 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7 |  |  |  | - |  |  |  | 82 |
Total Other |  |  | 1,320 |  |  |  | 2,913 |  |  |  | 2,784 |  |  |  | 1,457 |  |  |  | 841 |  |  |  | 2,849 |  |  |  | 36,655 |  |  |  | - |  |  |  | 48,819 |
Total Consumer loans |  |  | 160,471 |  |  |  | 324,548 |  |  |  | 300,560 |  |  |  | 183,877 |  |  |  | 71,517 |  |  |  | 116,968 |  |  |  | 219,659 |  |  |  | - |  |  |  | 1,377,600 |
Total loans |  | $ | 365,276 |  |  |  | 1,049,553 |  |  |  | 695,294 |  |  |  | 404,783 |  |  |  | 234,517 |  |  |  | 467,546 |  |  |  | 383,458 |  |  |  | 2,200 |  |  |  | 3,602,627 |
Current period gross write-offs |  |  | - |  |  |  | (200 | ) |  |  | - |  |  |  | (28 | ) |  |  | - |  |  |  | (42 | ) |  |  | (469 | ) |  |  | (22 | ) |  |  | (761 | )
The following table presents loan balances classified by credit quality indicators and loan categories as of December 31, 2022.
|  | December 31, 2022 |
(dollars in thousands) |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Revolving |  |  | Revolving Converted to Term |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 169,083 |  |  |  | 122,654 |  |  |  | 85,867 |  |  |  | 66,299 |  |  |  | 36,718 |  |  |  | 93,915 |  |  |  | - |  |  |  | - |  |  |  | 574,536 |
Watch |  |  | 14,648 |  |  |  | 479 |  |  |  | 9,339 |  |  |  | 3,658 |  |  |  | - |  |  |  | 6,792 |  |  |  | - |  |  |  | - |  |  |  | 34,916 |
Special Mention |  |  | 200 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,960 |  |  |  | - |  |  |  | - |  |  |  | 3,160 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 289 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 289 |
Total Owner occupied RE |  |  | 183,931 |  |  |  | 123,133 |  |  |  | 95,206 |  |  |  | 69,957 |  |  |  | 37,007 |  |  |  | 103,667 |  |  |  | - |  |  |  | - |  |  |  | 612,901 |
Non-owner occupied RE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 281,890 |  |  |  | 169,599 |  |  |  | 113,264 |  |  |  | 59,550 |  |  |  | 79,722 |  |  |  | 106,967 |  |  |  | 604 |  |  |  | 137 |  |  |  | 811,733 |
Watch |  |  | 1,061 |  |  |  | 9,491 |  |  |  | - |  |  |  | 10,683 |  |  |  | 1,408 |  |  |  | 11,660 |  |  |  | - |  |  |  | - |  |  |  | 34,303 |
Special Mention |  |  | - |  |  |  | 202 |  |  |  | - |  |  |  | 6,087 |  |  |  | - |  |  |  | 930 |  |  |  | - |  |  |  | - |  |  |  | 7,219 |
Substandard |  |  | - |  |  |  | 134 |  |  |  | - |  |  |  | 7,992 |  |  |  | 327 |  |  |  | 871 |  |  |  | - |  |  |  | - |  |  |  | 9,324 |
Total Non-owner occupied RE |  |  | 282,951 |  |  |  | 179,426 |  |  |  | 113,264 |  |  |  | 84,312 |  |  |  | 81,457 |  |  |  | 120,428 |  |  |  | 604 |  |  |  | 137 |  |  |  | 862,579 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 48,420 |  |  |  | 55,129 |  |  |  | 4,811 |  |  |  | 247 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 108,607 |
Watch |  |  | 1,119 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 1,119 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 49,539 |  |  |  | 55,129 |  |  |  | 4,811 |  |  |  | 247 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 109,726 |
Business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 136,489 |  |  |  | 57,804 |  |  |  | 29,864 |  |  |  | 21,807 |  |  |  | 35,249 |  |  |  | 28,914 |  |  |  | 136,337 |  |  |  | 709 |  |  |  | 447,174 |
Watch |  |  | 3,186 |  |  |  | 2,058 |  |  |  | 1,318 |  |  |  | 1,282 |  |  |  | 179 |  |  |  | 3,074 |  |  |  | 3,783 |  |  |  | 439 |  |  |  | 15,319 |
Special Mention |  |  | 1,137 |  |  |  | 260 |  |  |  | 386 |  |  |  | 210 |  |  |  | - |  |  |  | 252 |  |  |  | 115 |  |  |  | 642 |  |  |  | 3,002 |
Substandard |  |  | 498 |  |  |  | - |  |  |  | 188 |  |  |  | 233 |  |  |  | 315 |  |  |  | 911 |  |  |  | 472 |  |  |  | - |  |  |  | 2,617 |
Total Business |  |  | 141,310 |  |  |  | 60,122 |  |  |  | 31,756 |  |  |  | 23,533 |  |  |  | 35,743 |  |  |  | 33,151 |  |  |  | 140,707 |  |  |  | 1,790 |  |  |  | 468,112 |
Total Commercial loans |  |  | 657,731 |  |  |  | 417,810 |  |  |  | 245,037 |  |  |  | 178,049 |  |  |  | 154,207 |  |  |  | 257,246 |  |  |  | 141,311 |  |  |  | 1,927 |  |  |  | 2,053,318 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 243,589 |  |  |  | 269,565 |  |  |  | 189,075 |  |  |  | 72,499 |  |  |  | 39,042 |  |  |  | 76,172 |  |  |  | - |  |  |  | - |  |  |  | 889,942 |
Watch |  |  | 6,196 |  |  |  | 8,256 |  |  |  | 3,847 |  |  |  | 2,278 |  |  |  | 494 |  |  |  | 3,671 |  |  |  | - |  |  |  | - |  |  |  | 24,742 |
Special Mention |  |  | 3,114 |  |  |  | 1,938 |  |  |  | 2,644 |  |  |  | 2,258 |  |  |  | 955 |  |  |  | 2,639 |  |  |  | - |  |  |  | - |  |  |  | 13,548 |
Substandard |  |  | - |  |  |  | 648 |  |  |  | 227 |  |  |  | 341 |  |  |  | 408 |  |  |  | 1,422 |  |  |  | - |  |  |  | - |  |  |  | 3,046 |
Total Real estate |  |  | 252,899 |  |  |  | 280,407 |  |  |  | 195,793 |  |  |  | 77,376 |  |  |  | 40,899 |  |  |  | 83,904 |  |  |  | - |  |  |  | - |  |  |  | 931,278 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 165,847 |  |  |  | - |  |  |  | 165,847 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 7,226 |  |  |  | - |  |  |  | 7,226 |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 4,055 |  |  |  | - |  |  |  | 4,055 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,172 |  |  |  | - |  |  |  | 2,172 |
Total Home equity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 179,300 |  |  |  | - |  |  |  | 179,300 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 41,138 |  |  |  | 34,039 |  |  |  | 4,923 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 80,100 |
Watch |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Special Mention |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 315 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 315 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Construction |  |  | 41,138 |  |  |  | 34,039 |  |  |  | 4,923 |  |  |  | 315 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 80,415 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  |  | 3,894 |  |  |  | 3,038 |  |  |  | 1,702 |  |  |  | 1,534 |  |  |  | 341 |  |  |  | 3,015 |  |  |  | 14,465 |  |  |  | - |  |  |  | 27,989 |
Watch |  |  | 46 |  |  |  | 367 |  |  |  | 15 |  |  |  | 5 |  |  |  | 16 |  |  |  | 175 |  |  |  | 93 |  |  |  | - |  |  |  | 717 |
Special Mention |  |  | 94 |  |  |  | - |  |  |  | - |  |  |  | 44 |  |  |  | 75 |  |  |  | 23 |  |  |  | 97 |  |  |  | - |  |  |  | 332 |
Substandard |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | - |  |  |  | - |  |  |  | 9 |  |  |  | - |  |  |  | 14 |
Total Other |  |  | 4,034 |  |  |  | 3,405 |  |  |  | 1,717 |  |  |  | 1,588 |  |  |  | 432 |  |  |  | 3,213 |  |  |  | 14,663 |  |  |  | - |  |  |  | 29,052 |
Total Consumer loans |  |  | 298,071 |  |  |  | 317,851 |  |  |  | 202,433 |  |  |  | 79,279 |  |  |  | 41,331 |  |  |  | 87,117 |  |  |  | 193,963 |  |  |  | - |  |  |  | 1,220,045 |
Total loans |  | $ | 955,802 |  |  |  | 735,661 |  |  |  | 447,470 |  |  |  | 257,328 |  |  |  | 195,538 |  |  |  | 344,363 |  |  |  | 335,274 |  |  |  | 1,927 |  |  |  | 3,273,363 |
Current period gross write-offs |  |  | - |  |  |  | (91 | ) |  |  | - |  |  |  | (23 | ) |  |  | - |  |  |  | (32 | ) |  |  | (339 | ) |  |  | - |  |  |  | (485 | )
The following tables present loan balances by payment status.
Schedule of loan balances by payment status |  |  |  |  |  |  |  |  |  |  |  |
|  | December 31, 2023 |
(dollars in thousands) |  | Accruing 30-59 days past due |  |  | Accruing 60-89 days past due |  |  | Accruing 90 days or more past due |  |  | Nonaccrual loans |  |  | Accruing current |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | 74 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 631,583 |  |  |  | 631,657 |
Non-owner occupied RE |  |  | 8,102 |  |  |  | - |  |  |  | - |  |  |  | 1,423 |  |  |  | 933,004 |  |  |  | 942,529 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 150,680 |  |  |  | 150,680 |
Business |  |  | 567 |  |  |  | - |  |  |  | - |  |  |  | 319 |  |  |  | 499,275 |  |  |  | 500,161 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 1,750 |  |  |  | - |  |  |  | - |  |  |  | 985 |  |  |  | 1,079,694 |  |  |  | 1,082,429 |
Home equity |  |  | 601 |  |  |  | 30 |  |  |  | - |  |  |  | 1,236 |  |  |  | 181,137 |  |  |  | 183,004 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 63,348 |  |  |  | 63,348 |
Other |  |  | 25 |  |  |  | 25 |  |  |  | - |  |  |  | - |  |  |  | 48,769 |  |  |  | 48,819 |
Total loans |  | $ | 11,119 |  |  |  | 55 |  |  |  | - |  |  |  | 3,963 |  |  |  | 3,587,490 |  |  |  | 3,602,627 |
|  |  | December 31, 2022 |
(dollars in thousands) |  |  | Accruing 30-59 days past due |  |  |  | Accruing 60-89 days past due |  |  |  | Accruing 90 days or more past due |  |  |  | Nonaccrual loans |  |  |  | Accruing current |  |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 612,901 |  |  |  | 612,901 |
Non-owner occupied RE |  |  | 119 |  |  |  | 757 |  |  |  | - |  |  |  | 247 |  |  |  | 861,456 |  |  |  | 862,579 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 109,726 |  |  |  | 109,726 |
Business |  |  | 24 |  |  |  | 1 |  |  |  | - |  |  |  | 182 |  |  |  | 467,905 |  |  |  | 468,112 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 330 |  |  |  | - |  |  |  | - |  |  |  | 1,099 |  |  |  | 929,849 |  |  |  | 931,278 |
Home equity |  |  | 50 |  |  |  | - |  |  |  | - |  |  |  | 1,099 |  |  |  | 178,151 |  |  |  | 179,300 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 80,415 |  |  |  | 80,415 |
Other |  |  | 88 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 28,964 |  |  |  | 29,052 |
Total loans |  | $ | 611 |  |  |  | 758 |  |  |  | - |  |  |  | 2,627 |  |  |  | 3,269,367 |  |  |  | 3,273,363 |
As of December 31, 2023 and December 31, 2022, loans 30 days or more past due represented 0.37% and 0.11% of the Company’s total loan portfolio, respectively. Commercial loans 30 days or more past due were 0.27% and 0.03% of the Company’s total loan portfolio as of December 31, 2023 and December 31, 2022, respectively. Consumer loans 30 days or more past due were 0.09% and 0.08% of total loans as of December 31, 2023 and December 31, 2022, respectively. The increase in accruing 30-59 days past due at December 31, 2023 primarily relates to one commercial relationship totaling $8.1 million. Nonperforming assets The following table shows the nonperforming assets and the related percentage of nonperforming assets to total assets and gross loans. Generally, a loan is placed on nonaccrual status when it becomes 90 days past due as to principal or interest, or when we believe, after considering economic and business conditions and collection efforts, that the borrower’s financial condition is such that collection of the contractual principal or interest on the loan is doubtful. A payment of interest on a loan that is classified as nonaccrual is recognized as a reduction in principal when received.
Schedule of nonperforming assets, including nonaccruing TDRs |  |  |  |  |  |
|  | December 31, |
(dollars in thousands) |  | 2023 |  |  | 2022 |
Nonaccrual loans |  | $ | 3,963 |  |  |  | 831 |
Nonaccruing TDRs |  |  | - |  |  |  | 1,796 |
Total nonaccrual loans, including nonaccruing TDRs |  |  | 3,963 |  |  |  | 2,627 |
Other real estate owned |  |  | - |  |  |  | - |
Total nonperforming assets |  | $ | 3,963 |  |  |  | 2,627 |
Nonperforming assets as a percentage of: |  |  |  |  |  |  |  |
Total assets |  |  | 0.10 | % |  |  | 0.07 | %
Gross loans |  |  | 0.11 | % |  |  | 0.08 | %
Total loans over 90 days past due |  | $ | 1,300 |  |  |  | 402 |
Loans over 90 days past due and still accruing |  |  | - |  |  |  | - |
Accruing troubled debt restructurings |  |  | - |  |  |  | 4,503 |
The table below summarizes nonaccrual loans by major categories for the periods presented.
Schedule nonaccrual loans by major categories |  |  |  |  |  |  |  |  |
|  | December 31, 2023 |  |  | December 31, 2022 |
(dollars in thousands) |  | Nonaccrual loans with no allowance |  |  | Nonaccrual loans with an allowance |  |  | Total nonaccrual loans |  |  | Nonaccrual loans with no allowance |  |  | Nonaccrual loans with an allowance |  |  | Total nonaccrual loans |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  | $ | - |  |  |  | - |  |  |  | - |
Non-owner occupied RE |  |  | 653 |  |  |  | 770 |  |  |  | 1,423 |  |  |  | 114 |  |  |  | 133 |  |  |  | 247 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | 164 |  |  |  | 155 |  |  |  | 319 |  |  |  | - |  |  |  | 182 |  |  |  | 182 |
Total commercial |  |  | 817 |  |  |  | 925 |  |  |  | 1,742 |  |  |  | 114 |  |  |  | 315 |  |  |  | 429 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | - |  |  |  | 985 |  |  |  | 985 |  |  |  | - |  |  |  | 1,099 |  |  |  | 1,099 |
Home equity |  |  | 343 |  |  |  | 893 |  |  |  | 1,236 |  |  |  | 194 |  |  |  | 905 |  |  |  | 1,099 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  |  | 343 |  |  |  | 1,878 |  |  |  | 2,221 |  |  |  | 194 |  |  |  | 2,004 |  |  |  | 2,198 |
Total nonaccrual loans |  | $ | 1,160 |  |  |  | 2,803 |  |  |  | 3,963 |  |  | $ | 308 |  |  |  | 2,319 |  |  |  | 2,627 |
Foregone interest income on the nonaccrual loans for the year ended December 31, 2023 was approximately $73,000 and approximately $28,000 for the same period in 2022. Interest income recognized on nonaccrual loans was insignificant during the years ended December 31, 2023 and 2022. Modifications to Borrowers Experiencing Financial Difficulty The Company adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measurement of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination or acquisition. The starting point for the estimate of the allowance for credit losses is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses because of the measurement methodologies used to estimate the allowance, a change to the allowance for credit losses is generally not recorded upon modification. The following table shows the amortized cost basis of the loans modified to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023, disaggregated by class of loans and type of concession granted and describes the financial effect of the modifications made to borrowers experiencing financial difficulty.
Schedule of amortized cost basis of loans |  |  |  |  |  |  |  | Term Extension
(dollars in thousands) |  | Amortized Cost Basis |  |  | % of Total Loan Type |  |  | Financial Effect
Commercial Business |  | $ | 319 |  |  |  | 0.06 | % |  | Added a 1-year term to both of the loans modified. One loan was granted an extended amortization due to the inability to pay on a 3-year amortization. The other loan was given an interest only period due to the ability to pay only interest to get the loan renewed.
Neither of the two loans modified had a payment default during the period. The Company closely monitors the performance of the loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. Both loans are in current payment status since the loan modification occurred in the third quarter of 2023. There have been no commitments to lend additional funds to the borrowers experiencing financial difficulty as of December 31, 2023. Prior to the adoption of ASU 2022-02, the Company considered a loan to be a TDR when a debtor experienced financial difficulty and the Company granted a concession to the debtor that it would not normally consider. Concessions related to the contractual interest rate, maturity date, or payment structure of the note. As part of our prior workout plan for individual loan relationships, we restructured loan terms to assist borrowers facing challenges in the current economic environment. At December 31, 2022, our TDRs included 13 loans totaling $6.3 million with a specific allowance for credit losses of $1.2 million. One consumer real estate loan with a pre-modification and post-modification balance of $885,000and two commercial business loans with a pre-modification and post-modification balance totaling $1.1 million were considered new TDRs during the twelve months ended December 31, 2022. As of December 31, 2022, there were no loans modified as a TDR for which there was a payment default (60 days past due) within 12 months of the restructuring date. Allowance for Credit Losses The following table summarizes the activity related to the allowance for credit losses for the year ended December 31, 2023 and December 31, 2022 under the CECL methodology. On January 1, 2022, we adopted the CECL methodology for estimating credit losses, which resulted in an increase of $1.5 million in our allowance for credit losses. The $2.2 million provision for credit losses for the 12 months ended December 31, 2023 was driven primarily by $329.3 million in loan growth for the year combined with lower expected loss rates due to historically low charge-offs during the year. The $5.4 million provision for credit losses for the 12 months ended December 31, 2022 was driven primarily by $783.5 million in loan growth for the year, as well as slightly lower expected loss rates and minor adjustments to two internal qualitative factors which increased the qualitative component of the allowance and related provision expense in 2022.
Schedule of activity related to the allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Twelve months ended December 31, 2023 |
|  | Commercial |  |  | Consumer |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non-owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Balance, beginning of period |  | $ | 5,867 |  |  |  | 10,376 |  |  |  | 1,292 |  |  |  | 7,861 |  |  |  | 9,487 |  |  |  | 2,551 |  |  |  | 893 |  |  |  | 312 |  |  |  | 38,639 |
Provision for credit losses |  |  | 251 |  |  |  | 848 |  |  |  | 302 |  |  |  | (755 | ) |  |  | 1,160 |  |  |  | 422 |  |  |  | (216 | ) |  |  | 197 |  |  |  | 2,209 |
Loan charge-offs |  |  | - |  |  |  | (242 | ) |  |  | - |  |  |  | (65 | ) |  |  | - |  |  |  | (438 | ) |  |  | - |  |  |  | (16 | ) |  |  | (761 | )
Loan recoveries |  |  | - |  |  |  | 185 |  |  |  | - |  |  |  | 344 |  |  |  | - |  |  |  | 65 |  |  |  | - |  |  |  | 1 |  |  |  | 595 |
Net loan recoveries (charge-offs) |  |  | - |  |  |  | (57 | ) |  |  | - |  |  |  | 279 |  |  |  | - |  |  |  | (373 | ) |  |  | - |  |  |  | (15 | ) |  |  | (166 | )
Balance, end of period |  | $ | 6,118 |  |  |  | 11,167 |  |  |  | 1,594 |  |  |  | 7,385 |  |  |  | 10,647 |  |  |  | 2,600 |  |  |  | 677 |  |  |  | 494 |  |  |  | 40,682 |
Net charge-offs to average loans (annualized) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 0.00 | %
Allowance for credit losses to gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.13 | %
Allowance for credit losses to nonperforming loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1026.55 | %
|  | Twelve months ended December 31, 2022 |
|  | Commercial |  |  | Consumer |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non-owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Balance, beginning of period |  | $ | 4,700 |  |  |  | 10,518 |  |  |  | 625 |  |  |  | 4,887 |  |  |  | 7,083 |  |  |  | 1,697 |  |  |  | 578 |  |  |  | 320 |  |  |  | 30,408 |
Adjustment for CECL |  |  | (313 | ) |  |  | 333 |  |  |  | 154 |  |  |  | 1,057 |  |  |  | (294 | ) |  |  | 438 |  |  |  | 130 |  |  |  | (5 | ) |  |  | 1,500 |
Provision for credit losses |  |  | 1,480 |  |  |  | (2,015 | ) |  |  | 513 |  |  |  | 1,764 |  |  |  | 2,698 |  |  |  | 663 |  |  |  | 185 |  |  |  | 87 |  |  |  | 5,375 |
Loan charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (55 | ) |  |  | - |  |  |  | (339 | ) |  |  | - |  |  |  | (91 | ) |  |  | (485 | )
Loan recoveries |  |  | - |  |  |  | 1,540 |  |  |  | - |  |  |  | 208 |  |  |  | - |  |  |  | 92 |  |  |  | - |  |  |  | 1 |  |  |  | 1,841 |
Net loan recoveries (charge-offs) |  |  | - |  |  |  | 1,540 |  |  |  | - |  |  |  | 153 |  |  |  | - |  |  |  | (247 | ) |  |  | - |  |  |  | (90 | ) |  |  | 1,356 |
Balance, end of period |  | $ | 5,867 |  |  |  | 10,376 |  |  |  | 1,292 |  |  |  | 7,861 |  |  |  | 9,487 |  |  |  | 2,551 |  |  |  | 893 |  |  |  | 312 |  |  |  | 38,639 |
Net recoveries to average loans (annualized) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (0.05 | %)
Allowance for credit losses to gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1.18 | %
Allowance for credit losses to nonperforming loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1470.84 | %
Prior to the adoption of ASC 326 on January 1, 2022, the Company calculated the allowance for loan losses under the incurred loss methodology. The following table summarizes the activity related to the allowance for loan losses in prior periods under this methodology.
|  | Twelve months ended December 31, 2021 |
|  | Commercial |  |  | Consumer |  |  |  |
(dollars in thousands) |  | Owner occupied RE |  |  | Non-owner occupied RE |  |  | Construction |  |  | Business |  |  | Real Estate |  |  | Home Equity |  |  | Construction |  |  | Other |  |  | Total |
Balance, beginning of period |  | $ | 8,092 |  |  |  | 12,050 |  |  |  | 1,154 |  |  |  | 7,870 |  |  |  | 10,482 |  |  |  | 3,248 |  |  |  | 746 |  |  |  | 507 |  |  |  | 44,149 |
Provision for credit losses |  |  | (3,486 | ) |  |  | (958 | ) |  |  | (529 | ) |  |  | (2,041 | ) |  |  | (3,417 | ) |  |  | (1,613 | ) |  |  | (168 | ) |  |  | (188 | ) |  |  | (12,400 | )
Loan charge-offs |  |  | - |  |  |  | (837 | ) |  |  | - |  |  |  | (1,181 | ) |  |  | - |  |  |  | (139 | ) |  |  | - |  |  |  | (9 | ) |  |  | (2,166 | )
Loan recoveries |  |  | 94 |  |  |  | 263 |  |  |  | - |  |  |  | 239 |  |  |  | 18 |  |  |  | 201 |  |  |  | - |  |  |  | 10 |  |  |  | 825 |
Net loan recoveries (charge-offs) |  |  | 94 |  |  |  | (574 | ) |  |  | - |  |  |  | (942 | ) |  |  | 18 |  |  |  | 62 |  |  |  | - |  |  |  | 1 |  |  |  | (1,341 | )
Balance, end of period |  | $ | 4,700 |  |  |  | 10,518 |  |  |  | 625 |  |  |  | 4,887 |  |  |  | 7,083 |  |  |  | 1,697 |  |  |  | 578 |  |  |  | 320 |  |  |  | 30,408 |
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The following table presents an analysis of collateral-dependent loans of the Company as of December 31, 2023 and December 31, 2022.
Schedule of analysis of collateral-dependent loans |  |  |  |  |  |  |  |  |
|  | December 31, 2023 |
(dollars in thousands) |  | Real estate |  |  | Business assets |  |  | Other |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-owner occupied RE |  |  | 720 |  |  |  | - |  |  |  | - |  |  |  | 720 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | 164 |  |  |  | - |  |  |  | - |  |  |  | 164 |
Total commercial |  |  | 884 |  |  |  | - |  |  |  | - |  |  |  | 884 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 166 |  |  |  | - |  |  |  | - |  |  |  | 166 |
Home equity |  |  | 343 |  |  |  | - |  |  |  | - |  |  |  | 343 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  |  | 509 |  |  |  | - |  |  |  | - |  |  |  | 509 |
Total |  | $ | 1,393 |  |  |  | - |  |  |  | - |  |  |  | 1,393 |
|  |  | December 31, 2022 |
(dollars in thousands) |  | Real estate |  |  | Business assets |  |  | Other |  |  | Total |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied RE |  | $ | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-owner occupied RE |  |  | 114 |  |  |  | - |  |  |  | - |  |  |  | 114 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Business |  |  | 30 |  |  |  | - |  |  |  | - |  |  |  | 30 |
Total commercial |  |  | 144 |  |  |  | - |  |  |  | - |  |  |  | 144 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate |  |  | 207 |  |  |  | - |  |  |  | - |  |  |  | 207 |
Home equity |  |  | 194 |  |  |  | - |  |  |  | - |  |  |  | 194 |
Construction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Other |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total consumer |  |  | 401 |  |  |  | - |  |  |  | - |  |  |  | 401 |
Total |  | $ | 545 |  |  |  | - |  |  |  | - |  |  |  | 545 |
Allowance for Credit Losses - Unfunded Loan Commitments The allowance for credit losses for unfunded loan commitments was $1.8 million and $2.8 million at December 31, 2023 and 2022, respectively, and is separately classified on the balance sheet within other liabilities. Prior to the adoption of CECL, the Company’s reserve for unfunded commitments was not material. The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the twelve months ended December 31, 2023 and December 31, 2022.
Schedule of allowance for credit losses for unfunded loan commitments |  |  |  |  |  |
(dollars in thousands) |  | Twelve months ended December 31, 2023 |  |  | Twelve months ended December 31, 2022 |
Balance, beginning of period |  | $ | 2,780 |  |  |  | - |
Adjustment for adoption of CECL |  |  | - |  |  |  | 2,000 |
Provision for credit losses |  |  | (949 | ) |  |  | 780 |
Balance, end of period |  | $ | 1,831 |  |  |  | 2,780 |
Unfunded Loan Commitments |  |  | 724,606 |  |  |  | 878,324 |
Reserve for Unfunded Commitments to Unfunded Loan Commitments |  |  | 0.25 | % |  |  | 0.32 | %

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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