| Allowance for Credit Losses | Allowance for Credit Losses For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Three months ended June 30, 2023 (in thousands) Beginning Charge-offs Recoveries Provision (benefit) Ending Commercial real estate: CRE non-owner occupied $ 32,963 $ — $ — $ 79 $ 33,042 CRE owner occupied 14,559 — 1 5,648 20,208 Multifamily 13,873 — — 202 14,075 Farmland 3,542 — — 149 3,691 Total commercial real estate loans 64,937 — 1 6,078 71,016 Consumer: SFR 1-4 1st DT liens 11,920 — — 1,214 13,134 SFR HELOCs and junior liens 10,914 — 37 (343) 10,608 Other 2,062 (163) 26 846 2,771 Total consumer loans 24,896 (163) 63 1,717 26,513 Commercial and industrial 12,069 (113) 123 (432) 11,647 Construction 5,655 — — 1,376 7,031 Agriculture production 833 — 31 241 1,105 Leases 17 — — — 17 Allowance for credit losses on loans 108,407 (276) 218 8,980 117,329 Reserve for unfunded commitments 4,195 — — 670 4,865 Total $ 112,602 $ (276) $ 218 $ 9,650 $ 122,194 Allowance for credit losses – Six months ended June 30, 2023 (in thousands) Beginning Charge-offs Recoveries Provision (benefit) Ending Commercial real estate: CRE non-owner occupied $ 30,962 $ — $ — $ 2,080 $ 33,042 CRE owner occupied 14,014 — 1 6,193 20,208 Multifamily 13,132 — — 943 14,075 Farmland 3,273 — — 418 3,691 Total commercial real estate loans 61,381 — 1 9,634 71,016 Consumer: SFR 1-4 1st DT liens 11,268 — — 1,866 13,134 SFR HELOCs and junior liens 11,413 (42) 102 (865) 10,608 Other 1,958 (305) 77 1,041 2,771 Total consumer loans 24,639 (347) 179 2,042 26,513 Commercial and industrial 13,597 (1,687) 176 (439) 11,647 Construction 5,142 — — 1,889 7,031 Agriculture production 906 — 32 167 1,105 Leases 15 — — 2 17 Allowance for credit losses on loans 105,680 (2,034) 388 13,295 117,329 Reserve for unfunded commitments 4,315 — — 550 4,865 Total $ 109,995 $ (2,034) $ 388 $ 13,845 $ 122,194 In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance have been statistically correlated with historical credit losses and various econometrics, including California unemployment, gross domestic product, and corporate bond yields. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date. This forecast data continues to evolve and includes improving shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date, particularly CA unemployment trends. Despite continued declines on a year over year comparative basis, core inflation remains elevated from wage pressures, and higher living costs such as housing and food prices. Management notes the rapid intervals of rate increases by the Federal Reserve and flattening or inversion of the yield curve, have formed expectations of the US entering a recession within 12 months. As a result, management continues to believe that certain credit weaknesses are likely present in the overall economy and that it is appropriate to cautiously maintain a reserve level that incorporates such risk factors. Purchased loans and leases that reflect a more-than-insignificant deterioration of credit from origination are considered PCD. For PCD loans and leases, the initial estimate of expected credit losses is recognized in the ACL on the date of acquisition using the same methodology as other loans and leases held-for-investment. The following table provides a summary of loans and leases purchased as part of the VRB acquisition with credit deterioration at acquisition: As of March 25, 2022 (in thousands) Commercial Real Estate Consumer Commercial and Industrial Construction Agriculture Production Total Par value $ 27,237 $ 3,877 $ 2,674 $ 25,645 $ 9,080 $ 68,513 ACL at acquisition (1,573) (144) (81) (201) (38) (2,037) Non-credit discount (2,305) (360) (47) (232) (12) (2,956) Purchase price $ 23,359 $ 3,373 $ 2,546 $ 25,212 $ 9,030 $ 63,520 For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Year ended December 31, 2022 (in thousands) Beginning ACL of PCD Loans Charge-offs Recoveries Provision Ending Balance Commercial real estate: CRE non-owner occupied $ 25,739 $ 746 $ — $ 1 $ 4,476 $ 30,962 CRE owner occupied 10,691 63 — 2 3,258 14,014 Multifamily 12,395 — — — 737 13,132 Farmland 2,315 764 (294) — 488 3,273 Total commercial real estate loans 51,140 1,573 (294) 3 8,959 61,381 Consumer: SFR 1-4 1st DT liens 10,723 144 — 79 322 11,268 SFR HELOCs and junior liens 10,510 — (22) 429 496 11,413 Other 2,241 — (572) 235 54 1,958 Total consumer loans 23,474 144 (594) 743 872 24,639 Commercial and industrial 3,862 81 (697) 1,157 9,194 13,597 Construction 5,667 201 — — (726) 5,142 Agriculture production 1,215 38 — 4 (351) 906 Leases 18 — — — (3) 15 Allowance for credit losses on loans 85,376 2,037 (1,585) 1,907 17,945 105,680 Reserve for unfunded commitments 3,790 — — — 525 4,315 Total $ 89,166 $ 2,037 $ (1,585) $ 1,907 $ 18,470 $ 109,995 Allowance for credit losses – Three months ended June 30, 2022 (in thousands) Beginning ACL of PCD Loans Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 28,055 $ — $ — $ 26 $ 28,081 CRE owner occupied 12,071 — 1 548 12,620 Multifamily 11,987 — — (192) 11,795 Farmland 2,879 — — 75 2,954 Total commercial real estate loans 54,992 — — 1 457 55,450 Consumer: SFR 1-4 1st DT liens 10,669 — 1 (359) 10,311 SFR HELOCs and junior liens 10,843 — 153 595 11,591 Other 2,167 (166) 76 (48) 2,029 Total consumer loans 23,679 — (166) 230 188 23,931 Commercial and industrial 9,042 (235) 124 1,048 9,979 Construction 7,437 — — 85 7,522 Agriculture production 883 — 1 162 1,046 Leases 16 — — — 16 Allowance for credit losses on loans 96,049 — (401) 356 1,940 97,944 Reserve for unfunded commitments 3,915 — — 160 4,075 Total $ 99,964 $ — $ (401) $ 356 $ 2,100 $ 102,019 Allowance for credit losses – Six months ended June 30, 2022 (in thousands) Beginning Adoption of CECL Charge-offs Recoveries Provision (benefit) Ending Balance Commercial real estate: CRE non-owner occupied $ 25,739 $ 746 $ — $ — $ 1,596 $ 28,081 CRE owner occupied 10,691 63 — 1 1,865 12,620 Multifamily 12,395 — — — (600) 11,795 Farmland 2,315 764 (294) — 169 2,954 Total commercial real estate loans 51,140 1,573 (294) 1 3,030 55,450 Consumer: SFR 1-4 1st DT liens 10,723 144 — 41 (597) 10,311 SFR HELOCs and junior liens 10,510 — — 328 753 11,591 Other 2,241 — (285) 147 (74) 2,029 Total consumer loans 23,474 144 (285) 516 82 23,931 Commercial and industrial 3,862 81 (565) 1,011 5,590 9,979 Construction 5,667 201 — — 1,654 7,522 Agriculture production 1,215 38 — 2 (209) 1,046 Leases 18 — — — (2) 16 Allowance for credit losses on loans 85,376 2,037 (1,144) 1,530 10,145 97,944 Reserve for unfunded commitments 3,790 — — — 285 4,075 Total $ 89,166 $ 2,037 $ (1,144) $ 1,530 $ 10,430 $ 102,019 As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio. The Company analyzes loans individually to classify the loans as to credit risk and grading. This analysis is performed annually for all outstanding balances greater than $1 million and non-homogeneous loans, such as commercial real estate loans, unless other indicators, such as delinquency, trigger more frequent evaluation. Loans below the $1 million threshold and homogenous in nature are evaluated as needed for proper grading based on delinquency and borrower credit scores. The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows: • Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital. • Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention. • Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well-defined workout/rehabilitation program. • Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans. • Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated: Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE non-owner occupied risk ratings Pass $ 74,480 $ 411,202 $ 287,950 $ 139,902 $ 224,859 $ 833,291 $ 104,382 $ — $ 2,076,066 Special Mention — — 7,422 5,450 17,579 27,217 1,347 — 59,015 Substandard — — 791 — 2,392 4,670 212 — 8,065 Doubtful/Loss — — — — — — — — — Total $ 74,480 $ 411,202 $ 296,163 $ 145,352 $ 244,830 $ 865,178 $ 105,941 $ — $ 2,143,146 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: CRE owner occupied risk ratings Pass $ 43,483 $ 191,817 $ 193,284 $ 122,066 $ 61,481 $ 284,127 $ 29,719 $ — $ 925,977 Special Mention 73 845 14,981 3,040 717 6,386 — — 26,042 Substandard — 3,072 1,176 5,185 112 10,644 153 — 20,342 Doubtful/Loss — — — — — — — — — Total $ 43,556 $ 195,734 $ 209,441 $ 130,291 $ 62,310 $ 301,157 $ 29,872 $ — $ 972,361 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: Multifamily risk ratings Pass $ 7,578 $ 179,229 $ 280,895 $ 90,198 $ 107,518 $ 236,312 $ 37,843 $ — $ 939,573 Special Mention — — 11,908 — — — — — 11,908 Substandard — — — — — 109 — — 109 Doubtful/Loss — — — — — — — — — Total $ 7,578 $ 179,229 $ 292,803 $ 90,198 $ 107,518 $ 236,421 $ 37,843 $ — $ 951,590 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial real estate: Farmland risk ratings Pass $ 14,477 $ 46,947 $ 46,891 $ 16,295 $ 17,340 $ 44,959 $ 54,290 $ — $ 241,199 Special Mention — 3,119 4,986 326 5,234 4,834 736 — 19,235 Substandard — — 790 365 — 10,458 4,780 — 16,393 Doubtful/Loss — — — — — — — — — Total $ 14,477 $ 50,066 $ 52,667 $ 16,986 $ 22,574 $ 60,251 $ 59,806 $ — $ 276,827 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 52,682 $ 191,299 $ 269,009 $ 126,461 $ 31,577 $ 138,088 $ — $ 3,542 $ 812,658 Special Mention — 1,073 — 3,214 815 6,810 — 34 11,946 Substandard — 155 1,332 — — 2,500 — 755 4,742 Doubtful/Loss — — — — — — — — — Total $ 52,682 $ 192,527 $ 270,341 $ 129,675 $ 32,392 $ 147,398 $ — $ 4,331 $ 829,346 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: SFR HELOCs and Junior Liens Pass $ 307 $ — $ — $ — $ — $ 110 $ 350,621 $ 7,487 $ 358,525 Special Mention — — — — — — 959 137 1,096 Substandard — — — — — — 3,461 518 3,979 Doubtful/Loss — — — — — — — — — Total $ 307 $ — $ — $ — $ — $ 110 $ 355,041 $ 8,142 $ 363,600 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Consumer loans: Other risk ratings Pass $ 13,725 $ 10,649 $ 10,641 $ 8,747 $ 8,510 $ 5,716 $ 654 $ — $ 58,642 Special Mention — — 99 17 60 82 18 — 276 Substandard 90 42 60 30 74 44 21 — 361 Doubtful/Loss — — — — — — — — — Total $ 13,815 $ 10,691 $ 10,800 $ 8,794 $ 8,644 $ 5,842 $ 693 $ — $ 59,279 Current period gross charge-offs $ 72 $ 48 $ — $ 36 $ — $ 2 $ 5 $ — $ 163 Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 40,481 $ 94,564 $ 61,113 $ 12,857 $ 17,544 $ 9,489 $ 319,172 $ 308 $ 555,528 Special Mention 658 2,999 238 64 26 970 7,116 401 12,472 Substandard — 1,245 1,703 3,029 19 271 1,881 99 8,247 Doubtful/Loss — — — — — — — — — Total $ 41,139 $ 98,808 $ 63,054 $ 15,950 $ 17,589 $ 10,730 $ 328,169 $ 808 $ 576,247 Current period gross charge-offs $ 63 $ — $ — $ — $ — $ — $ 50 $ — $ 113 Construction loans: Construction risk ratings Pass $ 19,561 $ 126,026 $ 66,947 $ 47,431 $ 4,822 $ 6,572 $ — $ — $ 271,359 Special Mention — 6,993 — — — — — — 6,993 Substandard — — — — 73 — — — 73 Doubtful/Loss — — — — — — — — — Total $ 19,561 $ 133,019 $ 66,947 $ 47,431 $ 4,895 $ 6,572 $ — $ — $ 278,425 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Agriculture production loans: Agriculture production risk ratings Pass $ 249 $ 3,154 $ 2,407 $ 882 $ 875 $ 8,611 $ 35,606 $ — $ 51,784 Special Mention — — — — — 296 6,399 — 6,695 Substandard — — — — — — 2,858 — 2,858 Doubtful/Loss — — — — — — — — — Total $ 249 $ 3,154 $ 2,407 $ 882 $ 875 $ 8,907 $ 44,863 $ — $ 61,337 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Leases: Lease risk ratings Pass $ 8,582 $ — $ — $ — $ — $ — $ — $ — $8,582 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 8,582 $ — $ — $ — $ — $ — $ — $ — $ 8,582 Current period gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Total loans outstanding: Risk ratings Pass $ 275,605 $ 1,254,887 $ 1,219,137 $ 564,839 $ 474,526 $ 1,567,275 $ 932,287 $ 11,337 $ 6,299,893 Special Mention 731 15,029 39,634 12,111 24,431 46,595 16,575 572 155,678 Substandard 90 4,514 5,852 8,609 2,670 28,696 13,366 1,372 65,169 Doubtful/Loss — — — — — — — — — Total $ 276,426 $ 1,274,430 $ 1,264,623 $ 585,559 $ 501,627 $ 1,642,566 $ 962,228 $ 13,281 $ 6,520,740 Current period gross charge-offs $ 135 $ 48 $ — $ 36 $ — $ 2 $ 55 $ — $ 276 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2022 (in thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE non-owner occupied risk ratings Pass $ 399,910 $ 304,636 $ 152,960 $ 221,659 $ 147,842 $ 748,994 $ 123,794 $ — $ 2,099,795 Special Mention — — — 20,033 — 21,681 1,346 — 43,060 Substandard — 864 768 — 1,059 4,179 — — 6,870 Doubtful/Loss — — — — — — — — — Total $ 399,910 $ 305,500 $ 153,728 $ 241,692 $ 148,901 $ 774,854 $ 125,140 $ — $ 2,149,725 Commercial real estate: CRE owner occupied risk ratings Pass $ 210,101 $ 197,787 $ 120,929 $ 64,244 $ 49,755 $ 251,137 $ 43,343 $ — $ 937,296 Special Mention 131 16,296 234 731 — 6,971 879 — 25,242 Substandard 3,213 — 5,249 1,893 1,103 10,654 157 — 22,269 Doubtful/Loss — — — — — — — — — Total $ 213,445 $ 214,083 $ 126,412 $ 66,868 $ 50,858 $ 268,762 $ 44,379 $ — $ 984,807 Commercial real estate: Multifamily risk ratings Pass $ 159,318 $ 290,170 $ 96,937 $ 108,586 $ 106,287 $ 154,125 $ 28,989 $ — $ 944,412 Special Mention — — — — — — — — — Substandard — — — — — 125 — — 125 Doubtful/Loss — — — — — — — — — Total $ 159,318 $ 290,170 $ 96,937 $ 108,586 $ 106,287 $ 154,250 $ 28,989 $ — $ 944,537 Commercial real estate: Farmland risk ratings Pass $ 47,067 $ 53,275 $ 16,739 $ 18,589 $ 12,386 $ 34,528 $ 53,684 $ — $ 236,268 Special Mention 3,139 783 246 5,000 — 3,991 14,275 — 27,434 Substandard — — 1,772 765 3,158 7,094 3,523 — 16,312 Doubtful/Loss — — — — — — — — — Total $ 50,206 $ 54,058 $ 18,757 $ 24,354 $ 15,544 $ 45,613 $ 71,482 $ — $ 280,014 Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 194,933 $ 265,370 $ 131,922 $ 33,395 $ 28,545 $ 115,469 $ 8 $ 2,924 $ 772,566 Special Mention — — 1,531 282 3,277 5,854 — 465 11,409 Substandard — 1,204 — — 1,004 3,521 — 645 6,374 Doubtful/Loss — — — — — — — — — Total $ 194,933 $ 266,574 $ 133,453 $ 33,677 $ 32,826 $ 124,844 $ 8 $ 4,034 $ 790,349 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2022 (in thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Consumer loans: SFR HELOCs and Junior Liens Pass $ 505 $ — $ — $ — $ — $ 127 $ 378,939 $ 8,462 $ 388,033 Special Mention — — — — — — 1,842 81 1,923 Substandard — — — — — — 3,072 638 3,710 Doubtful/Loss — — — — — — — — — Total $ 505 $ — $ — $ — $ — $ 127 $ 383,853 $ 9,181 $ 393,666 Consumer loans: Other risk ratings Pass $ 14,070 $ 12,990 $ 10,211 $ 10,650 $ 5,225 $ 1,945 $ 899 $ — $ 55,990 Special Mention — 18 77 135 176 32 47 — 485 Substandard — — 42 92 — 96 23 — 253 Doubtful/Loss — — — — — — — — — Total $ 14,070 $ 13,008 $ 10,330 $ 10,877 $ 5,401 $ 2,073 $ 969 $ — $ 56,728 Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 125,710 $ 64,966 $ 17,746 $ 23,131 $ 7,628 $ 5,051 $ 297,341 $ 483 $ 542,056 Special Mention 3,032 139 21 49 138 768 11,547 — 15,694 Substandard 1,293 1,142 5,179 14 33 611 3,798 101 12,171 Doubtful/Loss — — — — — — — — — Total $ 130,035 $ 66,247 $ 22,946 $ 23,194 $ 7,799 $ 6,430 $ 312,686 $ 584 $ 569,921 Construction loans: Construction risk ratings Pass $ 72,840 $ 72,308 $ 43,409 $ 15,358 $ 2,159 $ 4,900 $ — $ — $ 210,974 Special Mention — — — — — — — — — Substandard — — — 457 — 129 — — 586 Doubtful/Loss — — — — — — — — — Total $ 72,840 $ 72,308 $ 43,409 $ 15,815 $ 2,159 $ 5,029 $ — $ — $ 211,560 Agriculture production loans: Agriculture production risk ratings Pass $ 3,414 $ 2,777 $ 1,149 $ 1,104 $ 8,902 $ 1,058 $ 38,425 $ — $ 56,829 Special Mention — — — — 90 31 1,632 — 1,753 Substandard — — — — — — 2,832 — 2,832 Doubtful/Loss — — — — — — — — — Total $ 3,414 $ 2,777 $ 1,149 $ 1,104 $ 8,992 $ 1,089 $ 42,889 $ — $ 61,414 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2022 (in thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Leases: Lease risk ratings Pass $ 7,726 $ — $ — $ — $ — $ — $ — $ — $ 7,726 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total $ 7,726 $ — $ — $ — $ — $ — $ — $ — $ 7,726 Total loans outstanding: Risk ratings Pass $ 1,235,594 $ 1,264,279 $ 592,002 $ 496,716 $ 368,729 $ 1,317,334 $ 965,422 $ 11,869 $ 6,251,945 Special Mention 6,302 17,236 2,109 26,230 3,681 39,328 31,568 546 127,000 Substandard 4,506 3,210 13,010 3,221 6,357 26,409 13,405 1,384 71,502 Doubtful/Loss — — — — — — — — — Total $ 1,246,402 $ 1,284,725 $ 607,121 $ 526,167 $ 378,767 $ 1,383,071 $ 1,010,395 $ 13,799 $ 6,450,447 The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated: Analysis of Past Due Loans - As of June 30, 2023 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 304 $ — $ 347 $ 651 $ 2,142,495 $ 2,143,146 CRE owner occupied 191 — 250 441 971,920 972,361 Multifamily — — — — 951,590 951,590 Farmland 150 — 1,508 1,658 275,169 276,827 Total commercial real estate loans 645 — 2,105 2,750 4,341,174 4,343,924 Consumer: SFR 1-4 1st DT liens 1 106 1,484 1,591 827,755 829,346 SFR HELOCs and junior liens 1,918 391 327 2,636 360,964 363,600 Other 181 76 99 356 58,923 59,279 Total consumer loans 2,100 573 1,910 4,583 1,247,642 1,252,225 Commercial and industrial 158 160 1,399 1,717 574,530 576,247 Construction 400 — — 400 278,025 278,425 Agriculture production — — 33 33 61,304 61,337 Leases — — — — 8,582 8,582 Total $ 3,303 $ 733 $ 5,447 $ 9,483 $ 6,511,257 $ 6,520,740 Analysis of Past Due Loans - As of December 31, 2022 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ — $ — $ — $ — $ 2,149,725 $ 2,149,725 CRE owner occupied — 98 75 173 984,634 984,807 Multifamily 159 — — 159 944,378 944,537 Farmland — — — — 280,014 280,014 Total commercial real estate loans 159 98 75 332 4,358,751 4,359,083 Consumer: SFR 1-4 1st DT liens 24 — 279 303 790,046 790,349 SFR HELOCs and junior liens 172 166 707 1,045 392,621 393,666 Other 26 34 55 115 56,613 56,728 Total consumer loans 222 200 1,041 1,463 1,239,280 1,240,743 Commercial and industrial 2,300 190 283 2,773 567,148 569,921 Construction — — 379 379 211,181 211,560 Agriculture production — — — — 61,414 61,414 Leases — — — — 7,726 7,726 Total $ 2,681 $ 488 $ 1,778 $ 4,947 $ 6,445,500 $ 6,450,447 The following table shows the ending balance of non accrual loans by loan category as of the date indicated: Non Accrual Loans As of June 30, 2023 As of December 31, 2022 (in thousands) Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Commercial real estate: CRE non-owner occupied $ 1,230 $ 1,230 $ — $ 1,739 $ 1,739 $ — CRE owner occupied 9,090 18,871 — 4,938 4,938 — Multifamily 110 110 — 125 125 — Farmland 2,594 2,230 — 1,772 1,772 — Total commercial real estate loans 13,024 22,441 — 8,574 8,574 — Consumer: SFR 1-4 1st DT liens 3,082 3,393 — 4,117 4,220 — SFR HELOCs and junior liens 3,182 3,489 — 2,498 3,155 — Other 90 129 — 47 84 — Total consumer loans 6,354 7,011 — 6,662 7,459 — Commercial and industrial 6,371 7,504 32 1,224 3,518 — Construction 73 73 — 491 491 — Agriculture production 563 563 — 1,279 1,279 — Leases — — — — — — Sub-total 26,385 37,592 32 18,230 21,321 — Less: Guaranteed loans (798) (964) — (105) (225) Total, net $ 25,587 $ 36,628 $ 32 $ 18,125 $ 21,096 $ — Interest income on non accrual loans that would have been recognized during the three months ended June 30, 2023 and 2022, if all such loans had been current in accordance with their original terms, totaled $0.96 million and $0.24 million, respectively. Interest income actually recognized on these originated loans during the three months ended June 30, 2023 and 2022 was $0.7 million and $0.01 million, respectively. The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods: As of June 30, 2023 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR-1st Deed SFR-2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 136 $ 304 $ — $ 791 $ — $ — $ — $ — $ — $ — $ — $ 1,231 CRE owner occupied 505 75 — 18,291 — — — — — — — 18,871 Multifamily — — — — 109 — — — — — — 109 Farmland — — — — — 2,594 — — — — — 2,594 Total commercial real estate loans 641 379 — 19,082 109 2,594 — — — — — 22,805 Consumer: SFR 1-4 1st DT liens — — — — — — 3,394 — — — — 3,394 SFR HELOCs and junior liens — — — — — — 1,958 1,224 — — — 3,182 Other — — — 3 — — — — 91 — 26 120 Total consumer loans — — — 3 — — 5,352 1,224 91 — 26 6,696 Commercial and industrial — — — — — — — — — 6,651 853 7,504 Construction — — — — — — 73 — — — — 73 Agriculture production — — — — — — — — — — 563 563 Leases — — — — — — — — — — — — Total $ 641 $ 379 $ — $ 19,085 $ 109 $ 2,594 $ 5,425 $ 1,224 $ 91 $ 6,651 $ 1,442 $ 37,641 As of December 31, 2022 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 777 $ 98 $ — $ 864 $ — $ — $ — $ — $ — $ — $ — $ 1,739 CRE owner occupied 548 75 1,103 3,212 — — — — — — — 4,938 Multifamily — — — — 125 — — — — — — 125 Farmland — — — — — 1,772 — — — — — 1,772 Total commercial real estate loans 1,325 173 1,103 4,076 125 1,772 — — — — — 8,574 Consumer: SFR 1-4 1st DT liens — — — — — — 4,220 — — — — 4,220 SFR HELOCs and junior liens — — — — — — 1,664 1,121 — — — 2,785 Other — — — 5 — — — — 61 — 2 68 Total consumer loans — — — 5 — — 5,884 1,121 61 — 2 7,073 Commercial and industrial — — — 1,874 — — — — — 1,596 48 3,518 Construction — — — 379 — — 112 — — — — 491 Agriculture production — — — — — — — — — — 1,279 1,279 Leases — — — — — — — — — — — — Total $ 1,325 $ 173 $ 1,103 $ 6,334 $ 125 $ 1,772 $ 5,996 $ 1,121 $ 61 $ 1,596 $ 1,329 $ 20,935 Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, forbearances, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following tables show the amortized cost basis of loans that were both experiencing financial difficulty and modified during the periods presented. 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 receivables is also presented below. For the three and six months ended June 30, 2023 (in thousands) Payment Delay/Term Extension Total % of Loans Outstanding Commercial real estate: CRE non-owner occupied $ — — % CRE owner occupied — — Multifamily — — Farmland — — Total commercial real estate loans — — Consumer: SFR 1-4 1st DT liens — — SFR HELOCs and junior liens — — Other — — Total consumer loans — — Commercial and industrial 177 0.03 Construction — — Agriculture production — — Leases — — Total $ 177 0.03 % The following table presents the financial effect of loan modifications made to borrowers experiencing financial difficulty during the three and six months ended June 30, 2023. Weighted Average Months Term Extension Commercial and industrial 12 There were no loans with payment defaults by borrowers experiencing financial difficulty during the quarter ended June 30, 2023 which had material modifications in rate, term or principal forgiveness during the twelve months prior to default. |
