Credit Quality | 5. CREDIT QUALITY Management monitors the credit quality of its loans and leases on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. United considers a loan to be past due when it is 30 days or more past its contractual payment due date. For all loan classes, past due loans and leases are reviewed on a monthly basis to identify loans and leases for nonaccrual status. Generally, when collection in full of the principal and interest is jeopardized, the loan is placed on nonaccrual status. The accrual of interest income on commercial and most consumer loans generally is discontinued when a loan becomes 90 to 120 days past due as to principal or interest. However, regardless of delinquency status, if a loan is fully secured and in the process of collection and resolution of collection is expected in the near term (generally less than 90 days), then the loan will not be placed on nonaccrual status. When interest accruals are discontinued, unpaid interest recognized in income in the current year is reversed, and unpaid interest accrued in prior years is charged to the allowance for credit losses. United’s method of income recognition for loans and leases that are classified as nonaccrual is to recognize interest income on a cash basis or apply the cash receipt to principal when the ultimate collectibility of principal is in doubt. Nonaccrual loans and leases will not normally be returned to accrual status unless all past due principal and interest has been paid and the borrower has evidenced their ability to meet the contractual provisions of the note. Generally, a loan is categorized as a TDR if a concession is granted and there is deterioration in the financial condition of the borrower. The portfolio of TDR loans is monitored monthly. A loan is categorized as a troubled debt restructuring (“TDR”) if a concession is granted and there is deterioration in the financial condition of the borrower. A loan classified as a TDR will generally retain such classification until the loan is paid in full. However, a one-to-four-family In response to the coronavirus (“COVID-19”) COVID-19 As of June 30, 2022, United had TDRs of $25,504 as compared to $35,856 as of December 31, 2021. Of the $25,504 aggregate balance of TDRs at June 30, 2022, $11,298 was on nonaccrual, $3,162 was 90 days or more past due and $140 was 30-89 The following tables sets forth the balances of TDRs at June 30, 2022 and December 31, 2021 and the reasons for modification: Reason for modification June 30, 2022 December 31, 2021 Interest rate reduction $ 2,181 $ 3,163 Interest rate reduction and change in terms 1,243 1,412 Concession of principal and term 17 19 Extended maturity 4,752 4,831 Transfer of asset 0 5,407 Change in terms 17,311 21,024 Total $ 25,504 $ 35,856 The following table sets forth United’s troubled debt restructurings that have been restructured during the three months ended June 30, 2022 and 2021, segregated by class of loans: Troubled Debt Restructurings For the Three Months Ended June 30, 2022 June 30, 2021 Number of Pre- Modification Post- Number of Pre- Modification Post- Commercial real estate: Owner-occupied 0 $ 0 $ 0 0 $ 0 $ 0 Nonowner-occupied 0 0 0 1 5,413 5,364 Other commercial 1 132 131 1 181 181 Residential real estate 0 0 0 0 0 0 Construction & land 0 0 0 0 0 0 Consumer: Bankcard 0 0 0 0 0 0 Other consumer 0 0 0 0 0 0 Total 1 $ 132 $ 131 2 $ 5,594 $ 5,545 The following table sets forth United’s troubled debt restructurings that have been restructured during the six months ended June 30, 2022 and 2021, segregated by class of loans: Troubled Debt Restructurings For the Six Months Ended June 30, 2022 June 30, 2021 Number of Pre- Modification Post- Number of Pre- Modification Post- Commercial real estate: Owner-occupied 1 $ 2,801 $ 2,750 1 $ 940 $ 1,106 Nonowner-occupied 0 0 0 2 6,350 6,292 Other commercial 1 132 131 1 181 181 Residential real estate 0 0 0 0 0 0 Construction & land development 0 0 0 0 0 0 Consumer: Bankcard 0 0 0 0 0 0 Other consumer 0 0 0 0 0 0 Total 2 $ 2,933 $ 2,881 4 $ 7,471 $ 7,579 The following table sets forth United’s troubled debt restructurings, based on their post-modification outstanding recorded balance, that have been restructured during the three and six months ended June 30, 2022 and 2021, segregated by the reason for modification: Three Months Ended June 30 Six Months Ended June 30 Reason for modification 2022 2021 2022 2021 Interest rate reduction $ 0 $ 0 $ 0 $ 0 Interest rate reduction and change in terms 131 0 131 0 Forgiveness of principal 0 0 0 0 Concession of principal and termp 0 0 0 0 Transfer of asset 0 5,545 0 5,545 Extended maturity 0 0 0 2,034 Change in terms 0 0 2,750 0 Total $ 131 $ 5,545 $ 2,881 $ 7,579 The following table presents troubled debt restructurings, by class of loan, that were restructured during the twelve-month period ended June 30, 2022 and had charge-offs during the six months ended June 30, 2022. No charge-offs were recorded during the three months ended June 30, 2022. The recorded investment amounts presented were as of the June 30, 2022 balance sheet date. Six Months Ended June 30, 2022 Number of Recorded Troubled Debt Restructurings Commercial real estate: Owner-occupied 0 $ 0 Nonowner-occupied 0 0 Other commercial 1 108 Residential real estate 0 0 Construction & land development 0 0 Consumer: Bankcard 0 0 Other consumer 0 0 Total 1 $ 108 The following table presents troubled debt restructurings, by class of loan, that were restructured during the twelve-month period ended June 30, 2021 and had charge-offs during the three and six months ended June 30, 2021. The recorded investment amounts presented were as of the June 30, 2021 balance sheet date. Three Months Ended June 30, 2021 Six Months Ended June 30, 2021 Number of Recorded Number of Recorded Troubled Debt Restructurings Commercial real estate: Owner-occupied 0 $ 0 0 $ 0 Nonowner-occupied 0 0 0 0 Other commercial 0 0 0 0 Residential real estate 1 0 1 0 Construction & land development 1 0 2 0 Consumer: Bankcard 0 0 0 0 Other consumer 0 0 0 0 Total 2 $ 0 3 $ 0 The following table sets forth United’s age analysis of its past due loans and leases, segregated by class of loans: Age Analysis of Past Due Loans and Leases As of June 30, 2022 30-89 Days 90 Days or Total Past Current & Total Financing 90 Days or Commercial real estate: Owner-occupied $ 6,491 $ 11,264 $ 17,755 $ 1,696,217 $ 1,713,972 $ 2,873 Nonowner-occupied 15,290 10,892 26,182 5,929,657 5,955,839 1,506 Other commercial 42,699 9,196 51,895 3,429,261 3,481,156 1,919 Residential real estate 20,506 23,448 43,954 4,060,894 4,104,848 9,994 Construction & land development 5,121 655 5,776 2,389,508 2,395,284 0 Consumer: Bankcard 44 43 87 8,564 8,651 43 Other consumer 22,661 3,791 26,452 1,307,923 1,334,375 3,270 Total $ 112,812 $ 59,289 $ 172,101 $ 18,822,024 $ 18,994,125 $ 19,605 Age Analysis of Past Due Loans and Leases As of December 31, 2021 30-89 Days 90 Days or Total Past Current & Total Financing 90 Days or Commercial real estate: Owner-occupied $ 7,522 $ 13,325 $ 20,847 $ 1,712,329 $ 1,733,176 $ 611 Nonowner-occupied 5,791 18,829 24,620 5,932,668 5,957,288 545 Other commercial 21,444 15,883 37,327 3,425,034 3,462,361 6,569 Residential real estate 19,488 23,495 42,983 3,648,577 3,691,560 8,241 Construction & land development 6,599 3,096 9,695 2,004,470 2,014,165 383 Consumer: Bankcard 100 187 287 8,626 8,913 187 Other consumer 17,264 2,615 19,879 1,163,965 1,183,844 2,445 Total $ 78,208 $ 77,430 $ 155,638 $ 17,895,669 $ 18,051,307 $ 18,981 The following table sets forth United’s nonaccrual loans and leases, segregated by class of loans: At June 30, 2022 At December 31, 2021 Nonaccruals With No 90 Days or Nonaccruals With No 90 Days or Commercial Real Estate: Owner-occupied $ 8,391 $ 8,391 $ 2,873 $ 12,714 $ 12,714 $ 611 Nonowner-occupied 9,386 9,386 1,506 18,284 18,284 545 Other Commercial 7,277 5,894 1,919 9,314 8,261 6,569 Residential Real Estate 13,454 12,667 9,994 15,254 14,298 8,241 Construction 655 655 0 2,713 2,713 383 Consumer: Bankcard 0 0 43 0 0 187 Other consumer 521 521 3,270 170 170 2,445 Total $ 39,684 $ 37,514 $ 19,605 $ 58,449 $ 56,440 $ 18,981 Interest income recognized on nonaccrual loans was insignificant during the three and six months ended June 30, 2022 and 2021. For the adoption of ASC Topic 326, United elected the practical expedient to measure expected credit losses on collateral dependent loans and leases based on the difference between the loan’s amortized cost and the collateral’s fair value, adjusted for selling costs. The following table presents the amortized cost basis of collateral-dependent loans and leases in which repayment is expected to be derived substantially through the operation or sale of the collateral and where the borrower is experiencing financial difficulty, by class of loans and leases as of June 30, 2022 and December 31, 2021: Collateral Dependent Loans and Leases At June 30, 2022 Residential Business Land Commercial Other Total Commercial real estate: Owner-occupied $ 0 $ 28 $ 0 $ 7,734 $ 9,459 $ 17,221 Nonowner-occupied 3,393 0 0 2,809 18,557 24,759 Other commercial 2,093 5,011 0 0 428 7,532 Residential real estate 13,295 0 0 0 0 13,295 Construction & land development 0 0 1,520 0 334 1,854 Consumer: Bankcard 0 0 0 0 0 0 Other consumer 0 0 0 0 0 0 Total $ 18,781 $ 5,039 $ 1,520 $ 10,543 $ 28,778 $ 64,661 Collateral Dependent Loans and Leases At December 31, 2021 Residential Business Land Commercial Other Total Commercial real estate: Owner-occupied $ 0 $ 38 $ 0 $ 9,775 $ 11,223 $ 21,036 Nonowner-occupied 7,085 0 703 8,665 52,299 68,752 Other commercial 2,093 15,225 0 0 732 18,050 Residential real estate 16,749 0 0 0 0 16,749 Construction & land development 0 0 4,770 0 1,103 5,873 Consumer: Bankcard 0 0 0 0 0 0 Other consumer 0 0 0 0 0 0 Total $ 25,927 $ 15,263 $ 5,473 $ 18,440 $ 65,357 $ 130,460 United categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt: current financial information, historical payment experience, credit documentation, underlying collateral (if any), public information and current economic trends, among other factors. United uses the following definitions for risk ratings: • Pass • Special Mention • Substandard • Doubtful For United’s loans with a corporate credit exposure, United analyzes loans individually to classify the loans as to credit risk. Review and analysis of criticized (special mention-rated loans in the amount of $1,000 or greater) and classified (substandard-rated and worse in the amount of $500 and greater) loans is completed once per quarter. Review of notes with committed exposure of $2,000 or greater is completed at least annually. For loans with a consumer credit exposure, United internally assigns a grade based upon an individual loan’s delinquency status. United reviews and updates, as necessary, these grades on a quarterly basis. Special mention loans, with a corporate credit exposure, 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 loans or in the Company’s credit position at some future date. Borrowers may be experiencing adverse operating trends (declining revenues or margins) or an ill proportioned balance sheet (e.g., increasing inventory without an increase in sales, high leverage, tight liquidity). Adverse economic or market conditions, such as interest rate increases or the entry of a new competitor, may also support a special mention rating. Nonfinancial reasons for rating a credit exposure special mention include management problems, pending litigation, an ineffective loan agreement or other material structural weakness, and any other significant deviation from prudent lending practices. For loans with a consumer credit exposure, loans that are past due 30-89 A substandard loan with a corporate credit exposure is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt by the borrower. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. They require more intensive supervision by management. Substandard loans are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. For some substandard loans, the likelihood of full collection of interest and principal may be in doubt and thus, placed on nonaccrual. For loans with a consumer credit exposure, loans that are 90 days or more past due or that have been placed on nonaccrual are considered substandard. A loan with corporate credit exposure is classified as doubtful if it has all the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection in full, on the basis of currently existing facts, conditions, and values, highly questionable. A doubtful loan has a high probability of total or substantial loss, but because of specific pending events that may strengthen the loan, its classification as loss is deferred. Doubtful borrowers are usually in default, lack adequate liquidity or capital, and lack the resources necessary to remain an operating entity. Pending events can include mergers, acquisitions, liquidations, capital injections, the perfection of liens on additional collateral, the valuation of collateral, and refinancing. Generally, there are not any loans with a consumer credit exposure that are classified as doubtful. Usually, they are charged-off Based on the most recent analysis performed, the risk category of loans and leases by class of loans is as follows: Commercial Real Estate – Owner-occupied As of June 30, 2022 Term Loans Origination Year Revolving loans Revolving loans converted to Total 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 130,241 $ 334,991 $ 300,384 $ 139,810 $ 121,248 $ 598,569 $ 39,519 $ 376 $ 1,665,138 Special Mention 0 310 531 504 2,947 20,524 943 0 25,759 Substandard 0 633 47 28 651 21,188 0 239 22,786 Doubtful 0 0 0 0 0 289 0 0 289 Total $ 130,241 $ 335,934 $ 300,962 $ 140,342 $ 124,846 $ 640,570 $ 40,462 $ 615 $ 1,713,972 Current-period charge-offs 0 0 0 0 0 (31 ) 0 0 (31 ) Current-period recoveries 0 0 0 0 0 465 0 0 465 Current-period net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 434 $ 0 $ 0 $ 434 Term Loans Origination Year Revolving loans Revolving loans and leases converted to Total As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 319,007 $ 310,893 $ 161,075 $ 135,472 $ 168,874 $ 539,640 $ 39,117 $ 401 $ 1,674,479 Special Mention 0 0 51 5,399 712 20,672 959 0 27,793 Substandard 0 55 38 661 1,304 27,458 839 244 30,599 Doubtful 0 0 0 0 0 305 0 0 305 Total $ 319,007 $ 310,948 $ 161,164 $ 141,532 $ 170,890 $ 588,075 $ 40,915 $ 645 $ 1,733,176 YTD charge-offs 0 0 0 0 (44 ) (370 ) 0 0 (414 ) YTD recoveries 0 0 0 0 13 856 0 0 869 YTD net charge-offs $ 0 $ 0 $ 0 $ 0 $ (31) $ 486 $ 0 $ 0 $ 455 Commercial Real Estate – Nonowner-occupied Term Loans Revolving loans Revolving loans converted to Total As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 747,959 $ 1,495,714 $ 780,303 $ 612,860 $ 403,475 $ 1,556,089 $ 123,280 $ 152 $ 5,719,832 Special Mention 604 0 2,916 82,777 5,698 22,995 0 0 114,990 Substandard 0 0 697 34,079 28,230 58,011 0 0 121,017 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 748,563 $ 1,495,714 $ 783,916 $ 729,716 $ 437,403 $ 1,637,095 $ 123,280 $ 152 $ 5,955,839 Current-period charge-offs 0 0 0 0 0 0 0 0 0 Current-period recoveries 0 0 0 0 0 115 0 0 115 Current-period net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 115 $ 0 $ 0 $ 115 Term Loans Revolving loans Revolving loans and leases converted to Total As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 1,558,474 $ 925,508 $ 707,570 $ 460,660 $ 397,003 $ 1,490,548 $ 102,561 $ 2,039 $ 5,644,363 Special Mention 819 2,953 113,655 5,826 372 40,534 2,793 0 166,952 Substandard 0 714 13,042 28,411 1,095 102,711 0 0 145,973 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 1,559,293 $ 929,175 $ 834,267 $ 494,897 $ 398,470 $ 1,633,793 $ 105,354 $ 2,039 $ 5,957,288 YTD charge-offs 0 0 0 0 0 (3,531 ) 0 0 (3,531 ) YTD recoveries 0 0 0 0 0 1,907 0 0 1,097 YTD net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ (1,624) $ 0 $ 0 $ (1,624) Other commercial Term Loans and leases Revolving loans Revolving loans and leases converted to Total As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 567,622 $ 697,587 $ 432,390 $ 284,419 $ 89,628 $ 291,631 $ 928,405 $ 1,795 $ 3,293,477 Special Mention 14,698 3,308 421 2,510 2,029 3,714 102,288 50 129,018 Substandard 4 82 203 770 7,025 12,259 38,092 125 58,560 Doubtful 0 0 0 0 101 0 0 0 101 Total $ 582,324 $ 700,977 $ 433,014 $ 287,699 $ 98,783 $ 307,604 $ 1,068,785 $ 1,970 $ 3,481,156 Current-period charge-offs 0 (31 ) 0 (200 ) (9 ) (554 ) 0 0 (794 ) Current-period recoveries 0 0 0 4 705 2,629 0 0 3,338 Current-period net charge-offs $ 0 $ (31) $ 0 $ (196) $ 696 $ 2,075 $ 0 $ 0 $ 2,544 Term Loans and leases Revolving loans Revolving loans and leases converted to Total Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 924,726 $ 557,422 $ 306,945 $ 107,426 $ 87,090 $ 76,032 $ 1,211,865 $ 2,038 $ 3,273,544 Special Mention 1,880 0 31,614 3,012 1,801 3,390 76,987 61 118,745 Substandard 793 11 1,561 4,930 2,146 18,963 41,357 205 69,966 Doubtful 0 0 0 0 0 106 0 0 106 Total $ 927,399 $ 557,433 $ 340,120 $ 115,368 $ 91,037 $ 98,491 $ 1,330,209 $ 2,304 $ 3,462,361 YTD charge-offs 0 (87 ) (31 ) (200 ) (174 ) (5,650 ) (40 ) 0 (6,182 ) YTD recoveries 0 3 30 86 34 4,154 0 0 4,307 YTD net charge-offs $ 0 $ (84) $ (1) $ (114) $ (140) $ (1,496) $ (40) $ 0 $ (1,875) Residential Real Estate Term Loans Revolving loans Revolving loans converted to Total Origination Year As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 820,260 $ 851,239 $ 500,110 $ 317,301 $ 264,524 $ 878,279 $ 439,679 $ 2,891 $ 4,074,283 Special Mention 0 0 0 0 221 5,055 2,079 0 7,355 Substandard 0 1,654 69 449 649 18,897 1,492 0 23,210 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 820,260 $ 852,893 $ 500,179 $ 317,750 $ 265,394 $ 902,231 $ 443,250 $ 2,891 $ 4,104,848 Current-period charge-offs 0 (735 ) 0 0 (224 ) (313 ) 0 0 (1,272 ) Current-period recoveries 0 0 0 0 14 1,044 1 0 1,059 Current-period net charge-offs $ 0 $ (735) $ 0 $ 0 $ (210) $ 731 $ 1 $ 0 $ (213) Term Loans Revolving loans Revolving loans converted to Total Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 815,693 $ 568,323 $ 383,250 $ 315,211 $ 178,101 $ 931,730 $ 455,705 $ 2,972 $ 3,650,985 Special Mention 0 0 0 223 91 12,251 2,339 0 14,904 Substandard 464 0 444 617 2,763 19,773 1,497 113 25,671 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 816,157 $ 568,323 $ 383,694 $ 316,051 $ 180,955 $ 963,754 $ 459,541 $ 3,085 $ 3,691,560 YTD charge-offs 0 0 (37 ) (38 ) (167 ) (5,774 ) 0 0 (6,016 ) YTD recoveries 0 0 0 0 3 2,384 13 0 2,400 YTD net charge-offs $ 0 $ 0 $ (37) $ (38) $ (164) $ (3,390) $ 13 $ 0 $ (3,616) Construction and Land Development Term Loans Revolving loans Revolving loans converted to Total Origination Year As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 281,030 $ 960,857 $ 452,808 $ 246,205 $ 109,234 $ 107,108 $ 229,992 $ 0 $ 2,387,234 Special Mention 0 0 67 3,258 0 1,209 979 0 5,513 Substandard 0 276 0 132 0 2,129 0 0 2,537 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 281,030 $ 961,133 $ 452,875 $ 249,595 $ 109,234 $ 110,446 $ 230,971 $ 0 $ 2,395,284 Current-period charge-offs 0 0 0 0 0 (2 ) 0 0 (2 ) Current-period recoveries 0 0 0 0 0 1,261 0 0 1,261 Current-period net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,259 $ 0 $ 0 $ 1,259 Term Loans Revolving loans Revolving loans converted to term Total Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 767,351 $ 518,291 $ 278,020 $ 152,062 $ 18,371 $ 74,532 $ 192,421 $ 0 $ 2,001,048 Special Mention 0 69 3,261 0 0 1,237 995 0 5,562 Substandard 332 0 280 925 0 5,272 746 0 7,555 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 767,683 $ 518,360 $ 281,561 $ 152,987 $ 18,371 $ 81,041 $ 194,162 $ 0 $ 2,014,165 YTD charge-offs 0 0 0 0 (177 ) (383 ) 0 0 (560 ) YTD recoveries 0 0 0 0 133 471 0 0 604 YTD net charge-offs $ 0 $ 0 $ 0 $ 0 $ (44 ) $ 88 $ 0 $ 0 $ 44 Bankcard Term Loans Revolving loans Revolving loans converted to Total Origination Year As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 8,564 $ 0 $ 8,564 Special Mention 0 0 0 0 0 0 44 0 44 Substandard 0 0 0 0 0 0 43 0 43 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 8,651 $ 0 $ 8,651 Current-period charge-offs 0 0 0 0 0 0 (245 ) 0 (245 ) Current-period recoveries 0 0 0 0 0 0 3 0 3 Current-period net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ (242 ) $ 0 $ (242 ) Term Loans Revolving loans Revolving loans converted to Total Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 8,626 $ 0 $ 8,626 Special Mention 0 0 0 0 0 0 100 0 100 Substandard 0 0 0 0 0 0 187 0 187 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 8,913 $ 0 $ 8,913 YTD charge-offs 0 0 0 0 0 0 (190 ) 0 (190 ) YTD recoveries 0 0 0 0 0 42 0 42 YTD net charge-offs $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ (148 ) $ 0 $ (148 ) Other Consumer Term Loans Revolving loans Revolving loans converted to Total Origination Year As of June 30, 2022 2022 2021 2020 2019 2018 Prior Internal Risk Grade: Pass $ 422,042 $ 397,073 $ 226,998 $ 173,114 $ 83,363 $ 940 $ 3,175 $ 0 $ 1,306,705 Special Mention 2,644 10,644 4,942 3,323 1,617 547 34 0 23,751 Substandard 236 1,655 1,422 344 225 37 0 0 3,919 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 424,922 $ 409,372 $ 233,362 $ 176,781 $ 85,205 $ 1,524 $ 3,209 $ 0 $ 1,334,375 Current-period charge-offs (12 ) (514 ) (354 ) (205 ) (64 ) (102 ) 0 0 (1,251 ) Current-period recoveries 0 37 34 53 44 107 0 0 275 Current-period net charge-offs $ (12) $ (477) $ (320) $ (152) $ (20) $ 5 $ 0 $ 0 $ (976) Term Loans Revolving loans Revolving loans converted to Total Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Internal Risk Grade: Pass $ 473,430 $ 293,023 $ 234,340 $ 119,678 $ 29,697 $ 10,335 $ 3,465 $ 0 $ 1,163,968 Special Mention 5,600 5,630 2,948 2,036 569 466 13 0 17,262 Substandard 903 930 456 211 22 87 5 0 2,614 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 479,933 $ 299,583 $ 237,744 $ 121,925 $ 30,288 $ 10,888 $ 3,483 $ 0 $ 1,183,844 YTD charge-offs (101 ) (776 ) (709 ) (483 ) (126 ) (203 ) (6 ) 0 (2,404 ) YTD recoveries 5 86 51 101 18 186 2 0 449 YTD net charge-offs $ (96) $ (690) $ (658) $ (382) $ (108) $ (17) $ (4) $ 0 $ (1,955) At June 30, 2022 and December 31, 2021, other real estate owned (“OREO”) included in other assets in the Consolidated Balance Sheets was $13,847 and $14,823, respectively. OREO consists of real estate acquired in foreclosure or other settlement of loans. Such assets are carried at the lower of the investment in the assets or the fair value of the assets less estimated selling costs. Any adjustment to the fair value at the date of transfer is charged against the allowance for loan losses. Any subsequent valuation adjustments as well as any costs relating to operating, holding or disposing of the property are recorded in other expense in the period incurred. At June 30, 2022, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process as compared to $13 at December 31, 2021. |