Loans Receivable and Allowance for Credit Losses | Loans Receivable and Allowance for Credit Losses The following is a summary of loans receivable by segment: June 30, 2023 December 31, 2022 (Dollars in thousands) Loan portfolio composition Commercial real estate (“CRE”) loans $ 9,192,160 $ 9,414,580 Commercial and industrial (“C&I”) loans 4,805,126 5,109,532 Residential mortgage loans 834,377 846,080 Consumer and other loans 33,147 33,348 Total loans receivable, net of deferred costs and fees 14,864,810 15,403,540 Allowance for credit losses (172,996) (162,359) Loans receivable, net of allowance for credit losses $ 14,691,814 $ 15,241,181 Loans receivable is stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts, and purchase accounting fair value adjustments. The Company had net deferred fees of $10.5 million and $11.1 million at June 30, 2023 and December 31, 2022, respectively. The loan portfolio consists of four segments: CRE loans, C&I loans, residential mortgage loans, and consumer and other loans. CRE loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and collateralized by residential or commercial properties. C&I loans are loans provided to businesses for various purposes such as working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance activities, and other business-related financing needs. This segment includes warehouse lines of credit for residential mortgages and Small Business Administration (“SBA”) loans. Residential mortgage loans are extended for personal, family, or household use and are secured by a mortgage or deed of trust. Consumer and other loans consist of home equity, credit card, and other personal loans. The Company had loans receivable of $14.86 billion at June 30, 2023, a decrease of $538.7 million, or 3.5%, from December 31, 2022. The largest decrease in loans receivable during the six months ended June 30, 2023, was in C&I and CRE loans. During the six months ended June 30, 2023, loan payoffs and paydowns exceeded new origination volume, reflecting, in part, declining customer demand in a high interest rate environment, and the Company’s disciplined pricing and conservative underwriting. The Company had $49.2 million in loans held for sale at June 30, 2023, compared with $49.2 million at December 31, 2022. Loans held for sale at June 30, 2023, consisted of $3.2 million in residential mortgage loans and $46.0 million in other loans. Loans held for sale are not included in the loans receivable table presented above. The tables below detail the activity in the allowance for credit losses (“ACL”) by portfolio segment for the three and six months ended June 30, 2023 and 2022. CRE Loans C&I Loans Residential Mortgage Loans Consumer and Other Loans Total (Dollars in thousands) Three Months Ended June 30, 2023 Balance, beginning of period $ 108,835 $ 42,790 $ 11,253 $ 666 $ 163,544 Provision (credit) for credit losses (3,076) 11,013 730 233 8,900 Loans charged off (561) (298) — (120) (979) Recoveries of charge offs 123 1,389 — 19 1,531 Balance, end of period $ 105,321 $ 54,894 $ 11,983 $ 798 $ 172,996 Six Months Ended June 30, 2023 Balance, beginning of period $ 95,884 $ 56,872 $ 8,920 $ 683 $ 162,359 ASU 2022-02 day 1 adoption adjustment 19 (426) — — (407) Provision (credit) for credit losses 9,787 (2,487) 3,063 237 10,600 Loans charged off (561) (738) — (175) (1,474) Recoveries of charge offs 192 1,673 — 53 1,918 Balance, end of period $ 105,321 $ 54,894 $ 11,983 $ 798 $ 172,996 CRE Loans C&I Loans Residential Mortgage Loans Consumer and Other Loans Total (Dollars in thousands) Three Months Ended June 30, 2022 Balance, beginning of period $ 106,545 $ 35,676 $ 4,262 $ 967 $ 147,450 Provision (credit) for credit losses (7,229) 8,715 1,817 (103) 3,200 Loans charged off (476) (172) — (64) (712) Recoveries of charge offs 984 633 — 25 1,642 Balance, end of period $ 99,824 $ 44,852 $ 6,079 $ 825 $ 151,580 Six Months Ended June 30, 2022 Balance, beginning of period $ 108,440 $ 27,811 $ 3,316 $ 983 $ 140,550 Provision (credit) for credit losses (25,542) 15,051 2,763 (72) (7,800) Loans charged off (1,751) (349) — (115) (2,215) Recoveries of charge offs 18,677 2,339 — 29 21,045 Balance, end of period $ 99,824 $ 44,852 $ 6,079 $ 825 $ 151,580 The following tables break out the allowance for credit losses and loan balance by measurement methodology at June 30, 2023 and December 31, 2022: June 30, 2023 CRE Loans C&I Loans Residential Mortgage Loans Consumer and Other Loans Total (Dollars in thousands) Allowance for credit losses: Individually evaluated $ 1,150 $ 11,706 $ 245 $ 72 $ 13,173 Collectively evaluated 104,171 43,188 11,738 726 159,823 Total $ 105,321 $ 54,894 $ 11,983 $ 798 $ 172,996 Loans outstanding: Individually evaluated $ 29,096 $ 23,042 $ 8,583 $ 180 $ 60,901 Collectively evaluated 9,163,064 4,782,084 825,794 32,967 14,803,909 Total $ 9,192,160 $ 4,805,126 $ 834,377 $ 33,147 $ 14,864,810 December 31, 2022 CRE Loans C&I Loans Residential Mortgage Loans Consumer and Other Loans Total (Dollars in thousands) Allowance for credit losses: Individually evaluated $ 870 $ 2,941 $ 24 $ 21 $ 3,856 Collectively evaluated 95,014 53,931 8,896 662 158,503 Total $ 95,884 $ 56,872 $ 8,920 $ 683 $ 162,359 Loans outstanding: Individually evaluated $ 43,461 $ 12,477 $ 9,775 $ 436 $ 66,149 Collectively evaluated 9,371,119 5,097,055 836,305 32,912 15,337,391 Total $ 9,414,580 $ 5,109,532 $ 846,080 $ 33,348 $ 15,403,540 At June 30, 2023 and December 31, 2022, reserves for unfunded loan commitments recorded in other liabilities were $3.1 million and $1.4 million, respectively. For the three and six months ended June 30, 2023, the Company recorded additions to reserves for unfunded commitments totaling $110 thousand and $1.7 million, respectively. For the three and six months ended June 30, 2022, the Company recorded additions to reserves for unfunded commitments totaling $180 thousand and $380 thousand, respectively. Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due, and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial conditions have deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company does not recognize interest income while loans are on nonaccrual status. The tables below represent the amortized cost of nonaccrual loans, as well as loans past due 90 or more days and still on accrual status, by loan segment and broken out by loans with a recorded ACL and those without a recorded ACL, at June 30, 2023 and December 31, 2022. June 30, 2023 Nonaccrual with No ACL Nonaccrual with an ACL Total Nonaccrual (1) Accruing Loans Past Due 90 Days or More (Dollars in thousands) CRE loans $ 22,286 $ 6,984 $ 29,270 $ 14,737 C&I loans 1,212 21,830 23,042 362 Residential mortgage loans 4,420 4,163 8,583 — Consumer and other loans — 357 357 83 Total $ 27,918 $ 33,334 $ 61,252 $ 15,182 December 31, 2022 Nonaccrual with No ACL Nonaccrual with an ACL Total Nonaccrual (1) Accruing Loans Past Due 90 Days or More (Dollars in thousands) CRE loans $ 29,782 $ 4,133 $ 33,915 $ — C&I loans 1,618 4,002 5,620 336 Residential mortgage loans 5,959 3,816 9,775 — Consumer and other loans — 377 377 65 Total $ 37,359 $ 12,328 $ 49,687 $ 401 __________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $11.9 million and $9.8 million, at June 30, 2023 and December 31, 2022, respectively. The following table presents the amortized cost of collateral-dependent loans at June 30, 2023 and December 31, 2022: June 30, 2023 December 31, 2022 Real Estate Collateral Other Collateral Total Real Estate Collateral Other Collateral Total (Dollars in thousands) CRE loans $ 25,635 $ — $ 25,635 $ 35,523 $ — $ 35,523 C&I loans 1,212 20,203 21,415 1,618 2,743 4,361 Residential mortgage loans 4,420 — 4,420 5,959 — 5,959 Total $ 31,267 $ 20,203 $ 51,470 $ 43,100 $ 2,743 $ 45,843 Collateral on loans is a significant portion of what secures collateral-dependent loans and significant changes to the fair value of the collateral can potentially impact ACL. During the six months ended June 30, 2023, the Company did not have any significant changes to the extent to which collateral secured its collateral-dependent loans, due to general deterioration or from other factors. Real estate collateral securing CRE and C&I consisted of commercial real estate properties including hotel/motel, building, office, gas station/carwash, and warehouse properties. Accrued interest receivable on loans totaled $50.6 million at June 30, 2023, and $47.3 million at December 31, 2022. With the adoption of CECL, the Company elected not to consider accrued interest receivable in its estimates of expected credit losses because the Company writes off uncollectible accrued interest receivable in a timely manner. The Company considers writing off accrued interest amounts once the amounts become 90 days past due to be considered within a timely manner. The Company has elected to write off accrued interest receivable by reversing interest income. The following table presents interest income reversals, due to loans being placed on nonaccrual status, by loan segment for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 (Dollars in thousands) CRE loans $ 214 $ 1,097 $ 665 $ 1,252 C&I loans 368 7 886 26 Residential mortgage loans 18 — 32 139 Total $ 600 $ 1,104 $ 1,583 $ 1,417 The following table presents the amortized cost of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due at June 30, 2023 and December 31, 2022, by loan segment: June 30, 2023 December 31, 2022 30-59 Days 60-89 Days 90 or More Days Total 30-59 Days 60-89 Days 90 or More Days Total (Dollars in thousands) CRE loans $ 7,497 $ 319 $ 21,063 $ 28,879 $ 2,292 $ 2,727 $ 5,694 $ 10,713 C&I loans 765 121 20,150 21,036 3,258 18 2,137 5,413 Residential mortgage loans 1,043 — 4,606 5,649 2,310 — 5,106 7,416 Consumer and other loans 148 57 83 288 617 44 308 969 Total Past Due $ 9,453 $ 497 $ 45,902 $ 55,852 $ 8,477 $ 2,789 $ 13,245 $ 24,511 The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. Homogeneous loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans) are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis. The definitions for risk ratings are as follows: • Pass: Loans that meet a preponderance or more of the Company’s underwriting criteria and evidence an acceptable level of risk. • Special Mention: Loans that 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 loan or of the institution’s credit position at some future date. • Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Loans in this classification have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. • Doubtful: Loans that have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the amortized cost basis of loans receivable by segment, risk rating, and year of origination at June 30, 2023 and December 31, 2022. June 30, 2023 Term Loan by Origination Year Revolving Loans Total 2023 2022 2021 2020 2019 Prior (Dollars in thousands) CRE loans Pass $ 389,783 $ 2,450,867 $ 2,107,752 $ 1,281,552 $ 1,039,543 $ 1,693,896 $ 81,560 $ 9,044,953 Special mention — 2,772 22,388 4,145 22,789 19,165 10,997 82,256 Substandard — 824 8,370 1,001 2,884 51,872 — 64,951 Subtotal $ 389,783 $ 2,454,463 $ 2,138,510 $ 1,286,698 $ 1,065,216 $ 1,764,933 $ 92,557 $ 9,192,160 Year-to-date gross charge offs $ — $ 119 $ — $ 11 $ 34 $ 397 $ — $ 561 C&I loans Pass $ 807,771 $ 1,686,472 $ 885,837 $ 255,862 $ 219,210 $ 107,364 $ 654,007 $ 4,616,523 Special mention 38 19,212 54,415 9,854 173 — 44,858 128,550 Substandard 51 16,977 24,716 4,695 577 2,910 10,127 60,053 Subtotal $ 807,860 $ 1,722,661 $ 964,968 $ 270,411 $ 219,960 $ 110,274 $ 708,992 $ 4,805,126 Year-to-date gross charge offs $ — $ 89 $ 54 $ 45 $ 85 $ 465 $ — $ 738 Residential mortgage loans Pass $ 15,658 $ 373,241 $ 273,044 $ 1,374 $ 29,436 $ 132,782 $ — $ 825,535 Special mention — — — — — — — — Substandard — — 314 — 1,723 6,805 — 8,842 Subtotal $ 15,658 $ 373,241 $ 273,358 $ 1,374 $ 31,159 $ 139,587 $ — $ 834,377 Year-to-date gross charge offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer and other loans Pass $ 3,565 $ 1,158 $ 332 $ 2,739 $ 165 $ 8,861 $ 15,970 $ 32,790 Special mention — — — — — — — — Substandard — — — — — 357 — 357 Subtotal $ 3,565 $ 1,158 $ 332 $ 2,739 $ 165 $ 9,218 $ 15,970 $ 33,147 Year-to-date gross charge offs $ — $ — $ — $ — $ — $ — $ 175 $ 175 Total loans Pass $ 1,216,777 $ 4,511,738 $ 3,266,965 $ 1,541,527 $ 1,288,354 $ 1,942,903 $ 751,537 $ 14,519,801 Special mention 38 21,984 76,803 13,999 22,962 19,165 55,855 210,806 Substandard 51 17,801 33,400 5,696 5,184 61,944 10,127 134,203 Total $ 1,216,866 $ 4,551,523 $ 3,377,168 $ 1,561,222 $ 1,316,500 $ 2,024,012 $ 817,519 $ 14,864,810 Total year-to-date gross charge offs $ — $ 208 $ 54 $ 56 $ 119 $ 862 $ 175 $ 1,474 December 31, 2022 Term Loan by Origination Year Revolving Loans Total 2022 2021 2020 2019 2018 Prior (Dollars in thousands) CRE loans Pass $ 2,421,631 $ 2,194,073 $ 1,372,027 $ 1,076,405 $ 1,018,553 $ 1,064,267 $ 105,274 $ 9,252,230 Special mention — 14,622 7,301 20,426 13,565 26,746 202 82,862 Substandard — 8,240 1,736 7,881 10,250 51,381 — 79,488 Subtotal $ 2,421,631 $ 2,216,935 $ 1,381,064 $ 1,104,712 $ 1,042,368 $ 1,142,394 $ 105,476 $ 9,414,580 C&I loans Pass $ 2,311,344 $ 1,090,034 $ 291,592 $ 298,133 $ 69,721 $ 95,531 $ 864,343 $ 5,020,698 Special mention 17,911 37,393 13,707 110 — 24 5,256 74,401 Substandard — 2,833 5,889 1,000 1,020 3,691 — 14,433 Subtotal $ 2,329,255 $ 1,130,260 $ 311,188 $ 299,243 $ 70,741 $ 99,246 $ 869,599 $ 5,109,532 Residential mortgage loans Pass $ 382,935 $ 283,163 $ 1,386 $ 30,603 $ 62,976 $ 75,242 $ — $ 836,305 Special mention — — — — — — — — Substandard — 311 — 967 384 8,113 — 9,775 Subtotal $ 382,935 $ 283,474 $ 1,386 $ 31,570 $ 63,360 $ 83,355 $ — $ 846,080 Consumer and other loans Pass $ 10,005 $ 723 $ 3,351 $ 223 $ 10 $ 1,420 $ 17,239 $ 32,971 Special mention — — — — — — — — Substandard — — — — — 377 — 377 Subtotal $ 10,005 $ 723 $ 3,351 $ 223 $ 10 $ 1,797 $ 17,239 $ 33,348 Total loans Pass $ 5,125,915 $ 3,567,993 $ 1,668,356 $ 1,405,364 $ 1,151,260 $ 1,236,460 $ 986,856 $ 15,142,204 Special mention 17,911 52,015 21,008 20,536 13,565 26,770 5,458 157,263 Substandard — 11,384 7,625 9,848 11,654 63,562 — 104,073 Total $ 5,143,826 $ 3,631,392 $ 1,696,989 $ 1,435,748 $ 1,176,479 $ 1,326,792 $ 992,314 $ 15,403,540 For the three and six months ended June 30, 2023 and the twelve months ended December 31, 2022, there were no revolving loans converted to term loans. The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are carried at the lower of cost or fair value. The breakdown of loans by segment that were reclassified from held for investment to held for sale for the three and six months ended June 30, 2023 and 2022, is presented in the following table: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Transfer of loans held for investment to held for sale (Dollars in thousands) CRE loans $ 13,168 $ 57,835 $ 66,776 $ 155,486 C&I loans 61,608 9,867 170,483 16,769 Total $ 74,776 $ 67,702 $ 237,259 $ 172,255 The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company differentiates its loan segments based on shared risk characteristics for which allowance for credit losses is measured on a collective basis. Risk Characteristics CRE loans Property type, location, owner-occupied status C&I loans Delinquency status, risk rating, industry type Residential mortgage loans FICO score, LTV, delinquency status, maturity date, collateral value, location Consumer and other loans Historical losses The Company uses a combination of a modeled and non-modeled approach that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. The Company uses Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”) methodologies with quantitative factors and qualitative considerations in the calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of two years, at which point loss assumptions revert back to historical loss information by means of one-year reversion period. Included in the quantitative portion of the ACL analysis are inputs such as borrowers’ net operating income, debt coverage ratios, real estate collateral values, as well as factors that are more subjective or require management’s judgment, including key macroeconomic variables from Moody’s forecast scenarios such as GDP, unemployment rates, interest rates, and CRE prices. These key inputs are utilized in the Company’s models to develop PD and LGD assumptions used in the calculation of estimated quantitative losses. The ACL for the Company’s construction, credit card, and certain consumer loans is calculated based on a non-modeled approach that utilizes historical loss rates to estimate losses. A non-modeled approach was chosen for these loans as fewer data points exist, which could result in high levels of estimated loss volatility under a modeled approach. In the aggregate, non-modeled loans represented less than 2% of the Company’s total loan portfolio at June 30, 2023. The Company’s Economic Forecast Committee (“EFC”) reviews economic forecast scenarios that are incorporated in the Company’s ACL. The EFC reviews multiple scenarios provided to the Company by an independent third party and chooses a single scenario that best aligns with management’s expectation of future economic conditions. At June 30, 2023, the Company utilized the June 2023 Consensus economic forecast scenario from Moody’s, as it best aligned with management’s expectations of future conditions. The forecast projected GDP growth of 0.2% in 2023, 1.4% for 2024, and 2.1% for 2025, with unemployment projected to be 4.3% for 2023, 4.7% for 2024, and 4.3% in 2025. CRE prices in the Consensus scenario were expected to decrease, with the CRE price index declining to -5.2% for 2023 and -8.6% for 2024, then rebounding to +8.8% in 2025. The Company also utilized Moody’s December 2022 Consensus economic forecast for the calculation of the December 31, 2022 ACL. In order to quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled and non-modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 25 basis points for each loan type pool. This matrix considers the following seven factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses, updated to reflect the adoption of CECL: • Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices; • Changes in the nature and volume of the loan portfolio; • Changes in the experience, ability, and depth of lending management and staff; • Changes in the trends of the volume and severity of past due loans, classified loans, nonaccrual loans, and other loan modifications; • Changes in the quality of the loan review system and the degree of oversight by the management and the Board of Directors; • The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and • The effect of external factors, such as competition, legal requirements, and regulatory requirements on the level of estimated losses in the loan portfolio. For loans that do not share similar risk characteristics such as nonaccrual loans above $1.0 million, the Company evaluates these loans on an individual basis in accordance with ASC 326. Such nonaccrual loans are considered to have different risk profiles than performing loans and are therefore evaluated individually. The Company elected to collectively assess nonaccrual loans with balances below $1.0 million along with the performing and accrual loans, in order to reduce the operational burden of individually assessing small nonaccrual loans with immaterial balances. For individually assessed loans, the ACL is measured using either 1) the present value of future cash flows discounted at the loan’s effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral, if the loan is collateral-dependent. For the collateral-dependent loans, the Company obtains a new appraisal to determine the fair value of collateral. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, the Company either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third-party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an ACL with a corresponding charge to the provision for credit losses. The Company maintains a separate ACL for its off-balance-sheet unfunded loan commitments. The Company uses an estimated funding rate to allocate an allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn lines of credit can potentially become drawn at any point. The funding rate is determined based on a look-back period of eight quarters. Credit loss is not estimated for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. Loan Modifications to Borrowers Experiencing Financial Difficulty In January 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): TDR and Vintage Disclosures (“ASU 2022-02”), which eliminated the accounting guidance for TDR while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. The Company applied this guidance on a modified retrospective transition method, which resulted in a positive cumulative effect adjustment to retained earnings of $287 thousand, net of tax. Subsequent to the adoption of ASU 2022-02, the new guidance is applied uniformly to the Company’s entire loan portfolio when estimating expected credit losses. For the three and six months ended June 30, 2023, there was only one C&I loan modification to a borrower experiencing financial difficulty, amounting to $26.0 million or 0.54% of total C&I loans. The loan modification type was a term extension of four months. For the three and six months ended June 30, 2023, the Company recorded an allowance for credit losses of $115 thousand for this modification. There were no loan modifications that subsequently defaulted during the period. Troubled Debt Restructurings At December 31, 2022, TDR loans totaled $41.1 million, consisting of $16.9 million in TDR loans on accrual status and $24.2 million in TDR loans on nonaccrual status. The Company recorded an allowance for credit losses totaling $2.8 million for TDR loans at December 31, 2022. At December 31, 2022, the Company had outstanding commitments to extend additional funds to these borrowers totaling $40 thousand. On January 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting guidance for TDR loans. The Company adopted ASU 2022-02 applying the amended requirements prospectively, except the recognition and measurement of existing TDRs, for which the Company elected the option to apply a modified retrospective transition method. Therefore, the Company did not have any TDR loans at June 30, 2023. |