The following table presents the components of loans as of the periods shown:


(Dollars in thousands)	September 30, 2023		December 31, 2022
Commercial:
Business	$	811,203	$	851,072
Real estate	640,167		632,839
Acquisition, development and construction	121,758		126,999
Total commercial	1,573,128		1,610,910
Residential real estate	650,321		606,970
Home equity lines of credit	14,862		18,734
Consumer	30,341		131,566
Total loans, excluding purchased credit impaired loans	2,268,652		2,368,180
Purchased credit impaired loans:





Residential real estate	—		2,482


Total purchased credit impaired loans	—		2,482
Total loans	2,268,652		2,370,662
Deferred loan origination costs, net	1,781		1,983
Loans receivable	$	2,270,433	$	2,372,645

We currently manage our loan portfolios and the respective exposure to credit losses (credit risk) by the following specific portfolio segments. With the adoption of ASU 2016-13 on January 1, 2023, we modified our loan portfolio segmentation to be based primarily on call report codes, which are levels at which we develop and document our systematic methodology to determine the allowance for credit losses attributable to each respective portfolio segment. The ACL portfolio segments are aggregated into broader segments in order to present informative yet concise disclosures within this document, as follows:

Commercial business loans – Commercial business loans are made to provide funds for equipment and general corporate needs, as well as to finance owner-occupied real estate, and to finance future cash flows of Federal government lease contracts. Repayment of these loans primarily uses the funds obtained from the operation of the borrower’s business. Commercial business loans also include lines of credit that are utilized to finance a borrower’s short-term credit needs and/or to finance a percentage of eligible receivables and inventory. This segment includes both internally originated and purchased participation loans. Credit risk arises from the successful operation of the business, which may be affected by competition, rising interest rates, regulatory changes and adverse conditions in the local and regional economy.

Commercial real estate loans – Commercial real estate loans consist of non-owner occupied properties, such as investment properties for retail, office and multifamily with a history of occupancy and cash flow. This segment includes both internally originated and purchased participation loans. These loans carry the risk of adverse changes in the local economy and a tenant’s deteriorating credit strength, lease expirations in soft markets and sustained vacancies, which can adversely impact cash flow.

Commercial acquisition, development and construction loans – Commercial acquisition, development and construction loans are intended to finance the construction of commercial and residential properties, and also includes loans for the acquisition and development of land. Construction loans represent a higher degree of risk than permanent real estate loans and may be affected by a variety of factors such as the borrower’s ability to control costs and adhere to time schedules and the risk that constructed units may not be absorbed by the market within the anticipated time frame or at the anticipated price. The loan commitment on these loans often includes an interest reserve that allows the lender to periodically advance loan funds to pay interest charges on the outstanding balance of the loan.

Residential real estate – This residential real estate subsegment contains permanent and construction mortgage loans principally to consumers, but also includes loans to residential real estate developers, secured by residential real estate, which we previously presented under commercial acquisitions, development and construction loans under the incurred loss model. Residential real estate loans to consumers are evaluated for the adequacy of repayment sources at the time of approval, based upon measures including credit scores, debt-to-income ratios and collateral values. Credit risk arises from the borrower’s, and where applicable, the builder’s, continuing financial stability, which can be adversely impacted by job loss, divorce, illness or personal bankruptcy, among other factors. Residential real estate secured loans to developers represent a higher degree of risk than permanent real estate loans and may be affected by a variety of factors such as the borrower’s ability to control costs and adhere to time schedules and the risk that constructed units may not be absorbed by the market within the anticipated time frame or at the anticipated price. Also impacting credit risk would be a shortfall in the value of the residential real estate in relation to the outstanding loan balance in the event of a default or subsequent liquidation of the real estate collateral.

Consumer loans – This segment of loans includes primarily installment loans and personal lines of credit. Consumer loans include installment loans used by clients to purchase automobiles, boats and recreational vehicles. Credit risk is similar to residential real estate loans described above as it is subject to the borrower’s continuing financial stability and the value of the collateral securing the loan. This segment primarily includes loans purchased from a third-party originator that originates loans in order to finance the purchase of personal automotive vehicles for sub-prime borrowers. Credit risk is unique in comparison to the Consumer segment as this segment includes only those loans provided to consumers that cannot typically obtain financing through traditional lenders. As such, these loans are subject to a higher risk of default than the typical consumer loan.


	Impaired Loans with Specific Allowance				Impaired Loans with No Specific Allowance		Total Impaired Loans
(Dollars in thousands)	Recorded Investment		Related Allowance		Recorded Investment		Recorded Investment		Unpaid Principal Balance

December 31, 2022
Commercial
Business	$	3,436	$	1,253	$	7,015	$	10,451	$	15,324
Real estate	1,240		222		125		1,365		1,470
Acquisition, development and construction	—		—		—		—		1,415

Total commercial	4,676		1,475		7,140		11,816		18,209
Residential real estate	—		—		2,603		2,603		2,671
Home equity lines of credit	—		—		90		90		94
Consumer	1,347		268		4		1,351		1,351
Total impaired loans	$	6,023	$	1,743	$	9,837	$	15,860	$	22,325

The following table presents the average recorded investment in impaired loans and related interest income recognized for the periods shown:


	Three Months Ended September 30, 2022						Nine Months Ended September 30, 2022
(Dollars in thousands)	Average Investment in Impaired Loans		Interest Income Recognized on Accrual Basis		Interest Income Recognized on Cash Basis		Average Investment in Impaired Loans		Interest Income Recognized on Accrual Basis		Interest Income Recognized on Cash Basis
Commercial
Business	$	12,390	$	1	$	2	$	11,378	$	6	$	6
Real estate	1,372		14		18		1,491		43		47
Acquisition, development and construction	282		—		—		303		—		—

Total commercial	14,044		15		20		13,172		49		53
Residential	8,425		4		3		8,390		12		11
Home equity	157		—		—		169		—		—
Consumer	1085		—		—		757		—		—
Total	$	23,711	$	19	$	23	$	22,488	$	61	$	64

As of September 30, 2023, the Bank’s other real estate owned balance totaled $0.9 million, all of which was related to our acquisition of The First State Bank (“First State”) in 2020. The Bank held $0.8 million of other real estate owned as a result of the foreclosure of two unrelated commercial loans. The remaining $0.1 million consists of one foreclosed residential real estate property. As of September 30, 2023, there were two residential mortgages in the process of foreclosure with loan balances totaling $0.2 million.

Loans categorized as “Pass” rated have adequate sources of repayment, with little identifiable risk of collection and general conformity to the Bank's policy requirements, product guidelines and underwriting standards. Any exceptions that are identified during the underwriting and approval process have been adequately mitigated by other factors.

Loans categorized as “Special Mention” rated have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special mention assets are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification.

Loans categorized as “Substandard” rated are inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Loans categorized as “Doubtful” rated have all the weakness inherent in those classified Substandard with the added characteristic that the weakness makes collections or liquidation in full, on the basis of currently known facts, conditions and values, highly questionable and improbable. However, these loans are not yet rated as loss because certain events may occur which would salvage the debt.

The Special Mention rated category includes assets that are currently protected but are potentially weak, resulting in undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Any portion of a loan that has been or is expected to be charged off is placed in the “Loss” category.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories, unless a specific action, such as past due status, bankruptcy, repossession or death, occurs to raise awareness of a possible credit event. The Bank’s Chief Credit Officer is responsible for the timely and accurate risk rating of the loans in the portfolio at origination and on an ongoing basis. The Bank's Credit Department

Review of the appropriate risk grade is included in both the internal and external loan review process and on an ongoing basis. The Bank has an experienced Credit Department that continually reviews and assesses loans within the portfolio. The Bank engages an external consultant to conduct independent loan reviews on at least an annual basis. Generally, the external consultant reviews commercial relationships in excess of $3.0 million or criticized relationships. The Bank's Credit Department compiles detailed reviews, including plans for resolution, on loans classified as Substandard on a quarterly basis. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance.


	Term Loans Amortized Cost Basis by Origination Year
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
September 30, 2023
Commercial business:
Risk rating:
Pass	$	49,607	$	293,000	$	84,060	$	28,735	$	15,491	$	60,635	$	219,201	$	—	$	750,729
Special Mention	—		5,231		13		842		10		4,418		510		—		11,024
Substandard	—		1		35,353		—		5,362		4,525		—		—		45,241
Doubtful	—		2,071		468		264		—		1,406		—		—		4,209
Total commercial business loans	$	49,607	$	300,303	$	119,894	$	29,841	$	20,863	$	70,984	$	219,711	$	—	$	811,203
Gross charge-offs	$	—	$	228	$	975	$	141	$	—	$	2,953	$	—	$	—	$	4,297

Commercial real estate:
Risk rating:
Pass	$	60,509	$	158,327	$	222,770	$	12,094	$	26,592	$	110,857	$	—	$	—	$	591,149
Special Mention	—		—		8,010		—		6,801		14,994		—		—		29,805
Substandard	—		—		—		—		—		19,213		—		—		19,213
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate loans	$	60,509	$	158,327	$	230,780	$	12,094	$	33,393	$	145,064	$	—	$	—	$	640,167
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial acquisition, development and construction:
Risk rating:
Pass	$	2,987	$	46,062	$	30,768	$	22,016	$	3,128	$	1,551	$	—	$	—	$	106,512
Special Mention	—		—		14,476		—		—		5		—		—		14,481
Substandard	—		—		—		—		—		765		—		—		765
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial acquisition, development and construction loans	$	2,987	$	46,062	$	45,244	$	22,016	$	3,128	$	2,321	$	—	$	—	$	121,758
Gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—


(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total












December 31, 2022
Commercial
Business	$	830,319	$	5,963	$	12,103	$	2,687	$	851,072
Real estate	592,997		18,883		20,600		359		632,839
Acquisition, development and construction	120,788		5,277		934		—		126,999

Total commercial	1,544,104		30,123		33,637		3,046		1,610,910
Residential real estate	605,513		760		1,556		1,623		609,452
Home equity lines of credit	18,269		375		90		—		18,734
Consumer	131,562		—		4		—		131,566
Total loans	$	2,299,448	$	31,258	$	35,287	$	4,669	$	2,370,662

A loan that has deteriorated and requires additional collection efforts by the Bank could warrant non-accrual status. A complete review is presented to the Chief Credit Officer and/or the Special Asset Review Committee (“SARC”), as required with respect to any loan which is in a collection process and to make a determination as to whether the loan should be placed on non-accrual status. The placement of loans on non-accrual status is subject to applicable regulatory restrictions and guidelines. Generally, loans should be placed in non-accrual status when the loan reaches 90 days past due, becomes likely the borrower cannot or will not make scheduled principal or interest payments, full repayment of principal and interest is not expected or the loan displays potential loss characteristics. Normally, all accrued interest is charged off when a loan is placed in non-accrual status unless we believe it is likely the accrued interest will be collected. Any payments subsequently received are applied to the principal. All principal and interest due must be paid up-to-date and the Bank is reasonably sure of future satisfactory payment performance to remove a loan from non-accrual status. Usually, this requires the receipt of six consecutive months of regular, on-time payments. Removal of a loan from non-accrual status will require the approval of the Chief Credit Officer and/or the SARC.


(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Non-Accrual		90+ Days Still Accruing		Non Accrual with No Credit Loss		Interest Income Recognized
September 30, 2023
Commercial
Business	$	802,899	$	789	$	64	$	7,451	$	8,304	$	811,203	$	7,451	$	—	$	3,782	$	—
Real estate	640,167		—		—		—		—		640,167		—		—		—		—
Acquisition, development and construction	120,993		—		—		765		765		121,758		765		—		—		—
Total commercial	1,564,059		789		64		8,216		9,069		1,573,128		8,216		—		3,782		—
Residential real estate	648,511		414		127		1,269		1,810		650,321		1,269		—		—		—
Home equity lines of credit	14,807		48		7		—		55		14,862		165		—		—		—
Consumer	26,995		1,821		582		943		3,346		30,341		943		—		—		—
Total loans	$	2,254,372	$	3,072	$	780	$	10,428	$	14,280	$	2,268,652	$	10,593	$	—	$	3,782	$	—


(Dollars in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Total Loans		Non-Accrual		90+ Days Still Accruing












December 31, 2022
Commercial
Business	$	850,112	$	—	$	960	$	—	$	960	$	851,072	$	7,528	$	—
Real estate	632,839		—		—		—		—		632,839		—		—
Acquisition, development and construction	126,999		—		—		—		—		126,999		—		—

Total commercial	1,609,950		—		960		—		960		1,610,910		7,528		—
Residential real estate	606,554		1,820		1,078		—		2,898		609,452		2,196		—
Home equity lines of credit	18,131		603		—		—		603		18,734		90		—
Consumer	120,504		6,848		2,867		1,347		11,062		131,566		1,351		—
Total loans	$	2,355,139	$	9,271	$	4,905	$	1,347	$	15,523	$	2,370,662	$	11,165	$	—

The ACL is a valuation account that is deducted from the loans' amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the ACL when management believes the loan balance is uncollectible. Accrued interest receivable is excluded from the estimate of credit losses. Management determines the ACL balance using relevant available information, from internal and external sources, relating to past events, current conditions and reasonable and supportable forecasts. Historical credit behaviors along with model judgments provide the basis for the estimation of expected credit losses. Adjustments to modeled loss estimates may be made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level or term, as well as for changes in environmental conditions, such as changes in economic conditions, property values or other relevant factors.

The ACL is calculated on a collective basis when similar risk characteristics exist. The ACL for the majority of loans and leases was calculated using a discounted cash flow methodology applied at a loan level with a one-year reasonable and supportable forecast period and a one-year straight-line reversion period with loss rates, prepayment assumptions and curtailment assumptions driven by each loan’s collateral type. Expected credit loss rates were estimated using a regression model based on historical data from peer banks which incorporates a third-party vendor’s economic forecast to predict the change in credit losses. As of September 30, 2023, the Bank expects the markets in which it operates will experience a decline in economic conditions and an

Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not also included in the collective evaluation. When Bank management determines that foreclosure is probable or when the borrower is experiencing financial difficulty at the reporting date and repayment is expected to be substantially through the operation or sale of the collateral, expected credit losses are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.


(Dollars in thousands)	Real Estate		Vehicles and Equipment		Assignment of Cash Flow		Accounts Receivable		Other		Totals		Allowance for Credit Losses
September 30, 2023
Commercial
Business	$	1,141	$	4,058	$	1	$	462	$	264	$	5,926	$	1,491


Total commercial	$	1,141	$	4,058	$	1	$	462	$	264	$	5,926	$	1,491
Residential	1,088		—		—		—		—		1,088		36

Consumer	—		943		—		—		—		943		159
Total	$	2,229	$	5,001	$	1	$	462	$	264	$	7,957	$	1,686

Collateral value	$	4,301	$	5,309	$	—	$	906	$	320	$	10,836

The Bank evaluates certain loans in homogeneous pools, rather than on an individual basis, when those loans are below specific thresholds based on outstanding principal balance. More specifically, residential mortgage loans, home equity lines of credit and consumer loans are evaluated collectively for expected credit losses by applying allocation rates derived from the Bank’s historical losses specific to these loans. The reserve was immaterial at September 30, 2023 and December 31, 2022.

Management has identified a number of additional qualitative factors which it uses to supplement the estimated losses derived from the loss rate methodologies employed within the CECL model because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from the loss rate methodologies. The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory and governmental sources are: lending policies and procedures, nature and volume of the portfolio, experience and ability of lending management and staff, volume and severity of problem credits, quality of the loan review system, changes in the value of underlying collateral, effect of concentrations of credit from a loan type, industry and/or geographic standpoint, changes in economic and business conditions, consumer sentiment and other external factors.

For accounting methodologies related to the incurred loss method previously used before the adoption of ASC 326, refer to Note 1 - Summary of Significant Accounting Policies and Note 3 - Loans and Allowance for Loan Losses of the Notes to the Consolidated Financial Statements included in Item 8, Financial Statements and Supplementary Data, of the 2022 Form 10-K.

To estimate the liability for off-balance sheet credit exposures, Bank management analyzed the portfolios of unfunded commitments based on the same segmentation used for the allowance for credit losses calculation. The estimated funding rate for each segment was derived from a funding rate study created by a third-party vendor which analyzed funding of various loan types over time to develop industry benchmarks at the call report code level. Once the estimated future advances were calculated, the allocation rate applicable to that portfolio segment was applied in the same manner as those used for the allowance for credit loss calculation. The resulting estimated loss allocations were totaled to determine the liability for unfunded commitments related to these loans, which management considers necessary to anticipate potential losses on those commitments that have a reasonable probability of funding. As of September 30, 2023 and December 31, 2022, the liability for unfunded commitments related to loans held for investment was $1.4 million and $0.5 million, respectively.


	Commercial								Residential		Home Equity		Consumer		Total
(Dollars in thousands)	Business		Real Estate		Acquisition, development and construction		Total Commercial
June 30, 2023	$	11,308	$	3,051	$	1,707	$	16,066	$	7,168	$	114	$	6,946	$	30,294
Provision (release of allowance) for credit losses	1,584		183		343		2,110		(242)		(15)		(2,012)		(159)
Charge-offs	(4,028)		—		—		(4,028)		(359)		—		(3,677)		(8,064)
Recoveries	4		7		—		11		—		1		2,193		2,205
ACL at September 30, 2023	$	8,868	$	3,241	$	2,050	$	14,159	$	6,567	$	100	$	3,450	$	24,276

(Dollars in thousands)
ALL, prior to adoption of ASC 326, at December 31, 2022	$	8,771	$	5,704	$	1,064	$	15,539	$	2,880	$	131	$	5,287	$	23,837
Impact of adopting ASC 326	(126)		(2,846)		288		(2,684)		3,889		(5)		6,482		7,682
Provision (release of allowance) for credit losses	3,770		363		698		4,831		(328)		(29)		(4,165)		309
Initial allowance on loans purchased with credit deterioration	710		—		—		710		507		—		—		1,217
Charge-offs	(4,297)		—		—		(4,297)		(381)		—		(11,933)		(16,611)
Recoveries	40		20		—		60		—		3		7,779		7,842
ACL at September 30, 2023	$	8,868	$	3,241	$	2,050	$	14,159	$	6,567	$	100	$	3,450	$	24,276

During the three and nine months ended September 30, 2023, there were charge offs totaling $8.1 million and $16.6 million, respectively. For the three months ended September 30, 2023, $3.7 million, or 46%, of charge offs were related to the subprime consumer automotive segment, $2.4 million, or 30%, was related to a commercial note secured by accounts receivable, $0.9 million, or 11%, was related to a commercial note funding a government lease transaction and the remaining $1.1 million was for multiple unrelated commercial and consumer notes. For the nine months ended September 30, 2023, $12.0 million, or 72%, was related to the subprime consumer automotive segment. Outside of the loans described above, there were an additional four unrelated commercial notes totaling $0.3 million that were charged over the nine months ended September 30, 2023. During the three and nine months ended September 30, 2023, the allowance related to unfunded commitments was not significant.


	Commercial								Residential		Home Equity		Consumer		Total
(Dollars in thousands)	Business		Real Estate		Acquisition, development and construction		Total Commercial
ALL balance at June 30, 2022	$	8,077	$	6,641	$	967	$	15,685	$	1,772	$	141	$	5,136	$	22,734
Charge-offs	—		—		—		—		—		—		(3,652)		(3,652)
Recoveries	41		65		—		106		—		1		2,206		2,313
Provision (release)	1,626		(310)		191		1,507		1,165		(6)		2,454		5,120
ALL balance at September 30, 2022	$	9,744	$	6,396	$	1,158	$	17,298	$	2,937	$	136	$	6,144	$	26,515

(Dollars in thousands)
ALL balance at December 31, 2021	$	8,027	$	5,091	$	982	$	14,100	$	1,492	$	128	$	2,546	$	18,266
Charge-offs	—		—		—		—		—		—		(7,304)		(7,304)
Recoveries	51		127		—		178		—		5		3,870		4,053
Provision	1,666		1,178		176		3,020		1,445		3		7,032		11,500
ALL balance at September 30, 2022	$	9,744	$	6,396	$	1,158	$	17,298	$	2,937	$	136	$	6,144	$	26,515
Individually evaluated for impairment	$	2,078	$	221	$	—	$	2,299	$	84	$	—	$	248	$	2,631
Collectively evaluated for impairment	$	7,666	$	6,175	$	1,158	$	14,999	$	2,853	$	136	$	5,896	$	23,884

The following table presents the primary segments of our loan portfolio as of the period shown:


	Commercial								Residential		Home Equity Lines of Credit		Consumer		Total
(Dollars in thousands)	Business		Real Estate		Acquisition, development and construction		Total Commercial
September 30, 2022
Individually evaluated for impairment	$	15,349	$	1,090	$	278	$	16,717	$	8,421	$	157	$	1246	$	26,541
Collectively evaluated for impairment	856,919		700,395		131,107		1,688,421		596,214		19,219		140,043		2,443,897
Total loans	$	872,268	$	701,485	$	131,385	$	1,705,138	$	604,635	$	19,376	$	141,289	$	2,470,438

The ACL is based on estimates and actual losses will vary from current estimates. Management believes that the granularity of the portfolio segments, the related loss estimation methodologies and other qualitative factors, as well as the consistency in the application of assumptions, result in an ACL that is representative of the risk found in the components of the portfolio at any given date.

Occasionally, the Bank modifies loans to borrowers in financial distress by providing concessions that allow for the borrower to lower their payment obligations for a defined period, these may include, but are not limited to: principal forgiveness, payment delays, term extensions, interest rate reductions and any combinations of the preceding.


(Dollars in thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Total		Total Class of Financing Receivable
September 30, 2023
Commercial
Business	$	—	$	7,681	$	—	$	—	$	7,681	1	%
Real estate	—		11,321		—		—		11,321		2	%

Total commercial	—		19,002		—		—		19,002		1	%
Residential	—				—		—		—		—	%
Home equity lines of credit	—				—		—		—		—	%
Consumer	—				—		—		—		—	%
Total	$	—	$	19,002	$	—	$	—	$	19,002	1	%

The above table presents the amortized cost basis of loans at September 30, 2023 that were experiencing financial difficulty and modified during the three and nine months ended September 30, 2023, by class and by type of modification. Also presented above is the percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable. Fourteen loans to 13 borrowers received payment delay modifications in the nine months ended September 30, 2023, including one secured by commercial office real estate totaling $11.3 million, one commercial loan secured by accounts receivable totaling $0.2 million, and 12 commercial loans with government guarantees totaling $7.5 million.


(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due
September 30, 2023
Commercial
Business	$	—	$	2,071	$	—	$	2,071
Real estate	—		—		—		—

Total commercial	—		2,071		—		2,071
Residential	—		—		—		—
Home equity lines of credit	—		—		—		—
Consumer	—		—		—		—
Total	$	—	$	2,071	$	—	$	2,071


(Dollars in thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Total
September 30, 2023
Commercial
Business	$	—	$	2,071	$	—	$	—	$	2,071
Real estate	—		—		—		—		—

Total commercial	—		2,071		—		—		2,071
Residential	—		—		—		—		—
Home equity lines of credit	—		—		—		—		—
Consumer	—		—		—		—		—
Total	$	—	$	2,071	$	—	$	—	$	2,071

As of September 30, 2023, there is one modified loan that has defaulted, with an amortized costs basis of $2.1 million. This is a commercial note with a government guarantee and is considered non-accrual as of September 30, 2023. Upon the Bank’s determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written-off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

At December 31, 2022, the Bank had specific reserve allocations for TDRs of $0.4 million. Loans considered to be troubled debt restructured loans totaled $10.4 million as of December 31, 2022. Of the total, $4.7 million represents accruing troubled debt restructured loans and represent 45% of total impaired loans at December 31, 2022. Meanwhile, as of December 31, 2022, $5.7 million represents nine loans to seven borrowers that have defaulted under the restructured terms. The largest of these loans is a $1.9 million restructured commercial loan to a company previously dependent on the coal industry, which is now structured as an unsecured loan. Three of these loans to an unrelated borrower, totaling $3.1 million, are restructured equipment loans to a borrower in the coal industry, which was provided extended interest-only terms to allow time for the collateral equipment to be sold. There is a commercial loan totaling $0.5 million secured by government lease payments that previously defaulted and is now making restructured payments. The four remaining unrelated borrowers have a single loan each, totaling $0.2 million. These borrowers have experienced continued financial difficulty and were considered non-performing loans as of December 31, 2022.