| Loans and Allowance for Credit Losses | Loans and allowance for credit losses: Loans outstanding as of September 30, 2022 and December 31, 2021, by class of financing receivable are as follows: September 30, December 31, 2022 2021 Commercial and industrial (1) $ 1,534,159 $ 1,290,565 Construction 1,679,497 1,327,659 Residential real estate: 1-to-4 family mortgage 1,545,252 1,270,467 Residential line of credit 460,774 383,039 Multi-family mortgage 394,366 326,551 Commercial real estate: Owner-occupied 1,158,343 951,582 Non-owner occupied 1,954,219 1,730,165 Consumer and other 378,406 324,634 Gross loans 9,105,016 7,604,662 Less: Allowance for credit losses (134,476) (125,559) Net loans $ 8,970,540 $ 7,479,103 (1) Includes $851 and $3,990 of loans originated as part of the Paycheck Protection Program as of September 30, 2022 and December 31, 2021, respectively. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans. As of September 30, 2022 and December 31, 2021, $865,616 and $1,136,294, respectively, of qualifying residential mortgage loans (including loans held for sale) and $1,665,345 and $1,581,673, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. Additionally, as of September 30, 2022 and December 31, 2021, qualifying loans of $3,012,814 and $2,440,097, respectively, were pledged to the Federal Reserve Bank under the Borrower-in-Custody program. The components of amortized cost for loans on the consolidated balance sheets exclude accrued interest receivable as the Company presents accrued interest receivable separately on the balance sheet. As of September 30, 2022 and December 31, 2021, accrued interest receivable on loans held for investment was $32,247 and $31,676, respectively. Allowance for Credit Losses The Company calculates its expected credit loss using a lifetime loss rate methodology. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history. The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool. The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss. When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; and loans with other unique risk characteristics. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs and TDRs use the same methodology. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis. The Company performed qualitative evaluations within the Company's established qualitative framework, assessing the impact of the current economic outlook (including uncertainty due to inflation, negative economic forecasts, predicted Federal Reserve rate increases, status of federal government stimulus programs, and other considerations). The increase in estimated required reserve during the three and nine months ended September 30, 2022 was a result of increased loan growth and a tightening monetary policy environment both of which were incorporated into the Company's reasonable and supportable forecasts. Qualitative adjustments increased the reserve on loans with commercial exposure to address elevated risk in these assets not covered by the model. Loss rates on residential backed loans were qualitatively adjusted downwards, addressing the relative strength of asset values in the Company's predominant markets. Qualitative factors also included weighted projections that the economy may be nearing a recession. The following tables provide the changes in the allowance for credit losses by class of financing receivable for the three and nine months ended September 30, 2022 and 2021: Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Three months ended September 30, 2022 Beginning balance - June 30, 2022 $ 10,191 $ 38,383 $ 21,398 $ 6,875 $ 6,503 $ 7,329 $ 22,536 $ 13,057 $ 126,272 Provision for credit losses 5 3,044 3,975 77 (629) 688 247 782 8,189 Recoveries of loans previously charged-off 342 — 13 — — 51 — 70 476 Loans charged off — — (20) — — — — (441) (461) Ending balance - September 30, 2022 $ 10,538 $ 41,427 $ 25,366 $ 6,952 $ 5,874 $ 8,068 $ 22,783 $ 13,468 $ 134,476 Nine Months Ended September 30, 2022 Beginning balance - December 31, 2021 $ 15,751 $ 28,576 $ 19,104 $ 5,903 $ 6,976 $ 12,593 $ 25,768 $ 10,888 $ 125,559 Provision for credit losses (4,784) 12,840 6,266 1,032 (1,102) (4,601) (2,985) 3,575 10,241 Recoveries of loans previously charged-off 1,326 11 39 17 — 76 — 635 2,104 Loans charged off (1,755) — (43) — — — — (1,630) (3,428) Ending balance - September 30, 2022 $ 10,538 $ 41,427 $ 25,366 $ 6,952 $ 5,874 $ 8,068 $ 22,783 $ 13,468 $ 134,476 Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Three Months Ended September 30, 2021 Beginning balance - June 30, 2021 $ 13,791 $ 32,838 $ 19,672 $ 6,716 $ 13,475 $ 4,707 $ 42,856 $ 10,608 $ 144,663 Provision for loan losses 3,203 (3,080) (2,677) (952) (1,462) 7,665 (6,450) 921 (2,832) Recoveries of loans previously charged-off 19 3 33 1 — 4 — 169 229 Loans charged off (2,175) (1) — — — — — (438) (2,614) Ending balance - September 30, 2021 $ 14,838 $ 29,760 $ 17,028 $ 5,765 $ 12,013 $ 12,376 $ 36,406 $ 11,260 $ 139,446 Nine Months Ended September 30, 2021 Beginning balance - December 31, 2020 $ 14,748 $ 58,477 $ 19,220 $ 10,534 $ 7,174 $ 4,849 $ 44,147 $ 11,240 $ 170,389 Provision for credit losses 2,667 (28,690) (2,141) (4,767) 4,839 7,384 (7,741) 1,100 (27,349) Recoveries of loans previously charged-off 235 3 98 16 — 143 — 554 1,049 Loans charged off (2,812) (30) (149) (18) — — — (1,634) (4,643) Ending balance - $ 14,838 $ 29,760 $ 17,028 $ 5,765 $ 12,013 $ 12,376 $ 36,406 $ 11,260 $ 139,446 Credit Quality - Commercial Loans The Company categorizes commercial loan types into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually. The Company uses the following definitions for risk ratings: Pass. Loans rated Pass include those that are adequately collateralized performing loans which management believes do not have conditions that have occurred or may occur that would result in the loan being downgraded into an inferior category. The Pass category also includes commercial loans rated as Watch, which include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category. Special Mention. Loans rated Special Mention are those that have potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position at some future date. Management does not believe there will be a loss of principal or interest. These loans require intensive servicing and may possess more than normal credit risk. Classified. Loans included in the Classified category include loans rated as Substandard and Doubtful. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Also included in this category are loans classified as Doubtful, which have all the weaknesses inherent in those classified as Substandard, with the added characteristic that the weakness or weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable. Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes. During the nine months ended September 30, 2022, the Company revised the presentation of the below credit quality vintage tables without change to accounting or credit policies. The updated presentation disaggregates between commercial and consumer loan types with consumer loans reported as either performing or nonperforming based on their delinquency and accrual status. As such, the tables presented below as of December 31, 2021 have been revised to align with current period presentation. The following tables present the credit quality of our commercial loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below. As of September 30, 2022 Commercial Term Loans Amortized Cost Basis by Origination Year 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total Commercial and industrial Pass $ 284,399 $ 220,172 $ 83,831 $ 96,337 $ 40,939 $ 63,998 $ 718,260 $ 1,507,936 Special Mention 26 355 — 375 151 — 2,732 3,639 Classified 65 1,220 2,106 1,593 451 9,015 8,134 22,584 Total 284,490 221,747 85,937 98,305 41,541 73,013 729,126 1,534,159 Construction Pass 570,166 569,425 215,636 71,706 18,027 46,794 183,738 1,675,492 Special Mention 428 — 18 — 7 2,530 — 2,983 Classified — 822 — — — — 200 1,022 Total 570,594 570,247 215,654 71,706 18,034 49,324 183,938 1,679,497 Residential real estate: Multi-family mortgage Pass 117,654 163,283 33,326 30,470 4,201 35,279 8,966 393,179 Special Mention — — — — — — — — Classified — — — — — 1,187 — 1,187 Total 117,654 163,283 33,326 30,470 4,201 36,466 8,966 394,366 Commercial real estate: Owner occupied Pass 215,250 231,038 117,751 159,546 78,881 266,021 66,718 1,135,205 Special Mention 103 1,293 — 1,470 2,294 390 — 5,550 Classified — — 241 5,992 1,282 9,418 655 17,588 Total 215,353 232,331 117,992 167,008 82,457 275,829 67,373 1,158,343 Non-owner occupied Pass 411,612 428,087 138,590 171,747 225,519 505,370 56,718 1,937,643 Special Mention — 1,015 — — 82 — — 1,097 Classified — — — 150 3,329 12,000 — 15,479 Total 411,612 429,102 138,590 171,897 228,930 517,370 56,718 1,954,219 Total commercial loans Pass 1,599,081 1,612,005 589,134 529,806 367,567 917,462 1,034,400 6,649,455 Special Mention 557 2,663 18 1,845 2,534 2,920 2,732 13,269 Classified 65 2,042 2,347 7,735 5,062 31,620 8,989 57,860 Total commercial loans $ 1,599,703 $ 1,616,710 $ 591,499 $ 539,386 $ 375,163 $ 952,002 $ 1,046,121 $ 6,720,584 As of December 31, 2021 Commercial Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total Commercial and industrial Pass $ 273,232 $ 95,279 $ 140,938 $ 52,162 $ 33,997 $ 57,020 $ 596,667 $ 1,249,295 Special Mention 79 9 949 632 3 1,519 12,367 15,558 Classified 918 2,391 2,376 3,089 3,370 6,425 7,143 25,712 Total 274,229 97,679 144,263 55,883 37,370 64,964 616,177 1,290,565 Construction Pass 677,258 280,828 135,768 23,916 15,313 67,818 117,176 1,318,077 Special Mention 62 184 — — 1,208 1,384 — 2,838 Classified — — 2,922 2,882 3 737 200 6,744 Total 677,320 281,012 138,690 26,798 16,524 69,939 117,376 1,327,659 Residential real estate: Multi-family mortgage Pass 166,576 32,242 64,345 7,124 5,602 38,526 10,891 325,306 Special Mention — — — — — — — — Classified — — — — — 1,245 — 1,245 Total 166,576 32,242 64,345 7,124 5,602 39,771 10,891 326,551 Commercial real estate: Owner occupied Pass 170,773 131,471 174,257 83,698 69,939 236,998 57,123 924,259 Special Mention — — 1,502 3,541 885 2,555 213 8,696 Classified — — 3,102 768 3,295 9,616 1,846 18,627 Total 170,773 131,471 178,861 88,007 74,119 249,169 59,182 951,582 Non-owner occupied Pass 462,478 154,048 165,917 264,855 170,602 414,859 46,541 1,679,300 Special Mention — — 3,747 3,388 — 969 — 8,104 Classified — — 1,898 23,849 1,506 15,508 — 42,761 Total 462,478 154,048 171,562 292,092 172,108 431,336 46,541 1,730,165 Total commercial loans Pass 1,750,317 693,868 681,225 431,755 295,453 815,221 828,398 5,496,237 Special Mention 141 193 6,198 7,561 2,096 6,427 12,580 35,196 Classified 918 2,391 10,298 30,588 8,174 33,531 9,189 95,089 Total commercial loans $ 1,751,376 $ 696,452 $ 697,721 $ 469,904 $ 305,723 $ 855,179 $ 850,167 $ 5,626,522 Credit Quality - Consumer Loans For consumer and residential loan classes, the company primarily evaluates credit quality based on delinquency and accrual status of the loan, credit documentation and by payment activity. The performing or nonperforming status is updated on an on-going basis dependent upon improvement and deterioration in credit quality. The following tables present the credit quality by classification (performing or nonperforming) of our consumer loan portfolio by year of origination as of September 30, 2022 and December 31, 2021. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the tables below. As of September 30, 2022 Consumer Term Loans Amortized Cost Basis by Origination Year 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Total Residential real estate: 1-to-4 family mortgage Performing 507,621 454,839 166,905 96,216 72,019 228,305 — 1,525,905 Nonperforming 1,039 4,379 3,940 2,020 1,731 6,238 — 19,347 Total 508,660 459,218 170,845 98,236 73,750 234,543 — 1,545,252 Residential line of credit Performing — — — — — — 458,894 458,894 Nonperforming — — — — — — 1,880 1,880 Total — — — — — — 460,774 460,774 Consumer and other Performing 107,264 61,291 44,898 32,694 28,416 86,524 9,564 370,651 Nonperforming 81 1,061 1,365 936 1,591 2,720 1 7,755 Total 107,345 62,352 46,263 33,630 30,007 89,244 9,565 378,406 Total consumer loans Performing 614,885 516,130 211,803 128,910 100,435 314,829 468,458 2,355,450 Nonperforming 1,120 5,440 5,305 2,956 3,322 8,958 1,881 28,982 Total consumer loans $ 616,005 $ 521,570 $ 217,108 $ 131,866 $ 103,757 $ 323,787 $ 470,339 $ 2,384,432 As of December 31, 2021 Consumer Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total Residential real estate: 1-to-4 family mortgage Performing 521,533 204,690 121,775 100,164 109,087 199,262 — 1,256,511 Nonperforming 1,232 3,734 977 2,429 1,765 3,819 — 13,956 Total 522,765 208,424 122,752 102,593 110,852 203,081 — 1,270,467 Residential line of credit Performing — — — — — — 381,303 381,303 Nonperforming — — — — — — 1,736 1,736 Total — — — — — — 383,039 383,039 Consumer and other Performing 82,910 55,123 38,281 32,893 21,856 74,248 14,478 319,789 Nonperforming 199 345 545 1,352 861 1,496 47 4,845 Total 83,109 55,468 38,826 34,245 22,717 75,744 14,525 324,634 Total consumer loans Performing 604,443 259,813 160,056 133,057 130,943 273,510 395,781 1,957,603 Nonperforming 1,431 4,079 1,522 3,781 2,626 5,315 1,783 20,537 Total consumer loans $ 605,874 $ 263,892 $ 161,578 $ 136,838 $ 133,569 $ 278,825 $ 397,564 $ 1,978,140 Non-accrual and Past Due Loans Nonperforming loans include loans that are no longer accruing interest (non-accrual loans) and loans past due ninety or more days and still accruing interest. The following tables represent an analysis of the aging by class of financing receivable as of September 30, 2022 and December 31, 2021: September 30, 2022 30-89 days 90 days or Non-accrual Loans current Total Commercial and industrial $ 1,812 $ 38 $ 1,730 $ 1,530,579 $ 1,534,159 Construction 1,916 — — 1,677,581 1,679,497 Residential real estate: 1-to-4 family mortgage 16,994 13,767 5,580 1,508,911 1,545,252 Residential line of credit 542 209 1,671 458,352 460,774 Multi-family mortgage — — 44 394,322 394,366 Commercial real estate: Owner occupied 982 — 4,873 1,152,488 1,158,343 Non-owner occupied 293 — 6,960 1,946,966 1,954,219 Consumer and other 8,057 1,988 5,767 362,594 378,406 Total $ 30,596 $ 16,002 $ 26,625 $ 9,031,793 $ 9,105,016 December 31, 2021 30-89 days 90 days or Non-accrual Loans current on payments and accruing interest Total Commercial and industrial $ 1,030 $ 63 $ 1,520 $ 1,287,952 $ 1,290,565 Construction 4,852 718 3,622 1,318,467 1,327,659 Residential real estate: 1-to-4 family mortgage 11,007 9,363 4,593 1,245,504 1,270,467 Residential line of credit 319 — 1,736 380,984 383,039 Multi-family mortgage — — 49 326,502 326,551 Commercial real estate: Owner occupied 1,417 — 6,710 943,455 951,582 Non-owner occupied 427 — 14,084 1,715,654 1,730,165 Consumer and other 7,398 1,591 3,254 312,391 324,634 Total $ 26,450 $ 11,735 $ 35,568 $ 7,530,909 $ 7,604,662 The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance as of September 30, 2022 and December 31, 2021 by class of financing receivable. September 30, 2022 Non-accrual Non-accrual Related Commercial and industrial $ 1,228 $ 502 $ 3 Residential real estate: 1-to-4 family mortgage 1,537 4,043 73 Residential line of credit 1,070 601 9 Multi-family mortgage — 44 1 Commercial real estate: Owner occupied 4,710 163 1 Non-owner occupied 6,751 209 4 Consumer and other — 5,767 291 Total $ 15,296 $ 11,329 $ 382 December 31, 2021 Non-accrual Non-accrual Related Commercial and industrial $ 1,085 $ 435 $ 6 Construction 2,882 740 99 Residential real estate: 1-to-4 family mortgage 378 4,215 60 Residential line of credit 797 939 11 Multi-family mortgage — 49 2 Commercial real estate: Owner occupied 5,346 1,364 206 Non-owner occupied 13,898 186 7 Consumer and other — 3,254 164 Total $ 24,386 $ 11,182 $ 555 The following presents interest income recognized on non-accrual loans for the three and nine months ended September 30, 2022 and 2021: Three Months Ended September 30, Nine Months Ended September 30, 2022 2021 2022 2021 Commercial and industrial $ 26 $ 190 $ 163 $ 523 Construction 5 75 31 105 Residential real estate: 1-to-4 family mortgage 78 114 185 199 Residential line of credit 37 197 98 242 Multi-family mortgage — — 2 2 Commercial real estate: Owner occupied 61 187 149 419 Non-owner occupied 89 123 235 353 Consumer and other 113 75 182 130 Total $ 409 $ 961 $ 1,045 $ 1,973 Accrued interest receivable written off as an adjustment to interest income amounted to $151 and $63 for the three months ended September 30, 2022 and 2021, respectively, and $458 and $660 for the nine months ended September 30, 2022 and 2021, respectively. Troubled debt restructurings As of September 30, 2022 and December 31, 2021, the Company had a recorded investment in TDRs of $14,959 and $32,435, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. Of these loans, $7,592 and $11,084 were classified as non-accrual loans as of September 30, 2022 and December 31, 2021, respectively. The Company has calculated $258 and $1,245 in allowances for credit losses on TDRs as of September 30, 2022 and December 31, 2021, respectively. There were no significant unfunded loan commitments to extend additional funds on troubled debt restructurings as of September 30, 2022 or December 31, 2021. The following tables present the financial effect of TDRs recorded during the periods indicated: Three Months Ended September 30, 2022 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 1 $ 207 $ 117 $ — Residential real estate: 1-to-4 family mortgage 1 $ 252 $ 568 $ — Total 2 $ 459 $ 685 $ — Nine Months Ended September 30, 2022 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 2 $ 262 $ 172 $ — Residential real estate: 1-to-4 family mortgage 2 332 648 — Residential line of credit 1 49 49 — Consumer and other 1 22 22 — Total 6 $ 665 $ 891 $ — Three Months Ended September 30, 2021 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Residential real estate: 1-to-4 family mortgage 1 134 134 — Total 1 $ 134 $ 134 $ — Nine Months Ended September 30, 2021 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 5 $ 13,162 $ 13,162 $ — Commercial real estate: Owner occupied 4 3,550 3,550 — Non-owner occupied 1 11,997 11,997 — Residential real estate: 1-4 family mortgage 3 945 945 — Residential line of credit 1 11 11 — Total 14 $ 29,665 $ 29,665 $ — Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $304 during the nine months ended September 30, 2022. Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $304 during the three and nine months ended September 30, 2022. Troubled debt restructurings for which there was a payment default within twelve months following the modification totaled $305 during the three and nine months ended September 30, 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the three and nine months ended September 30, 2022 and 2021 that did not meet the definition of a TDR. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments. Collateral Dependent Loans For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following tables present the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. Significant changes in individually assessed reserves are due to changes in the valuation of the underlying collateral in addition to changes in accrual and past due status. September 30, 2022 Type of Collateral Real Estate Financial Assets and Equipment Total Individually assessed allowance for credit loss Commercial and industrial $ 1,228 $ 787 $ 2,015 $ — Residential real estate: 1-to-4 family mortgage 1,192 — 1,192 205 Residential line of credit 1,069 — 1,069 — Commercial real estate: Owner occupied 5,823 — 5,823 — Non-owner occupied 6,751 — 6,751 — Consumer and other 139 — 139 — Total $ 16,202 $ 787 $ 16,989 $ 205 December 31, 2021 Type of Collateral Real Estate Financial Assets and Equipment Total Individually assessed allowance for credit loss Commercial and industrial $ 799 $ 1,090 $ 1,889 $ — Construction 3,580 — 3,580 92 Residential real estate: 1-to-4 family mortgage 338 — 338 — Residential line of credit 1,400 — 1,400 10 Commercial real estate: Owner occupied 8,117 71 8,188 200 Non-owner occupied 13,899 — 13,899 — Consumer and other 25 — 25 1 Total $ 28,158 $ 1,161 $ 29,319 $ 303 |
