Loans | Note 6 — Loans The following is a summary of total loans: September 30, December 31, (Dollars in thousands) 2022 2021 Loans: Construction and land development (1) $ 2,550,552 $ 2,029,216 Commercial non-owner occupied 7,964,470 6,735,699 Commercial owner occupied real estate 5,426,216 4,970,116 Consumer owner occupied (2) 4,729,790 3,638,364 Home equity loans 1,247,330 1,168,594 Commercial and industrial 4,977,737 3,761,133 Other income producing property 676,846 696,804 Consumer 1,259,846 904,657 Other loans 3,516 23,583 Total loans 28,836,303 23,928,166 Less allowance for credit losses (324,398) (301,807) Loans, net $ 28,511,905 $ 23,626,359 (1) Construction and land development includes loans for both commercial construction and development, as well as loans for 1-4 family construction and lot loans. (2) Consumer owner occupied real estate includes loans on both 1-4 family owner occupied property, as well as loans collateralized by 1-4 family owner occupied property with a business intent. In accordance with the adoption of ASU 2016-13, the above table reflects the loan portfolio at the amortized cost basis for the periods September 30, 2022 and December 31, 2021, to include net deferred costs of $45.9 million compared to net deferred fees of $15.9 million, respectively, and unamortized discount total related to loans acquired of $79.5 million and $68.0 million, respectively. The Company purchased loans through its acquisition of Atlantic Capital in the first quarter, for which there was, at acquisition, evidence of more than an insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows: (Dollars in thousands) March 1, 2022 Book value of acquired loans at acquisition $ 137,874 Allowance for credit losses at acquisition (13,758) Non-credit discount at acquisition (5,943) Carrying value or book value of acquired loans at acquisition $ 118,173 As part of the ongoing monitoring of the credit quality of our loan portfolio, Management tracks certain credit quality indicators, including trends related to (i) the level of classified loans, (ii) net charge-offs, (iii) non-performing loans (see details below), and (iv) the general economic conditions of the markets that we serve. We use a risk grading matrix to assign a risk grade to each commercial loan. Classified loans are assessed at a minimum every six months. A description of the general characteristics of the risk grades is as follows: ● Pass —These loans range from minimal credit risk to average, however, still acceptable credit risk. ● Special mention —A special mention loan has 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 the institution’s credit position at some future date. ● Substandard —A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. ● Doubtful —A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable. The following tables present the credit risk profile by risk grade of commercial loans by origination year as of September 30, 2022 and December 31, 2021: Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of September 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Construction and land development Risk rating: Pass $ 584,646 $ 688,921 $ 177,223 $ 77,949 $ 15,244 $ 35,460 $ 71,362 $ 1,650,805 Special mention 561 2,258 26 87 7,263 556 — 10,751 Substandard 349 652 13 2,345 — 4,345 — 7,704 Doubtful — — — — — 6 — 6 Total Construction and land development $ 585,556 $ 691,831 $ 177,262 $ 80,381 $ 22,507 $ 40,367 $ 71,362 $ 1,669,266 Commercial non-owner occupied Risk rating: Pass $ 1,768,208 $ 1,912,649 $ 771,153 $ 1,002,194 $ 553,378 $ 1,567,763 $ 128,190 $ 7,703,535 Special mention 14,054 6,914 42,841 6,277 28,528 27,283 — 125,897 Substandard 8,890 24,968 620 40,807 7,966 49,054 2,653 134,958 Doubtful — 1 — 79 — — — 80 Total Commercial non-owner occupied $ 1,791,152 $ 1,944,532 $ 814,614 $ 1,049,357 $ 589,872 $ 1,644,100 $ 130,843 $ 7,964,470 Commercial Owner Occupied Risk rating: Pass $ 838,791 $ 1,167,238 $ 743,632 $ 737,627 $ 476,813 $ 1,134,341 $ 72,065 $ 5,170,507 Special mention 11,866 25,820 6,032 11,305 8,907 60,034 2,281 126,245 Substandard 6,545 21,691 17,877 19,406 6,456 56,461 1,003 129,439 Doubtful — — 1 — — 24 — 25 Total commercial owner occupied $ 857,202 $ 1,214,749 $ 767,542 $ 768,338 $ 492,176 $ 1,250,860 $ 75,349 $ 5,426,216 Commercial and industrial Risk rating: Pass $ 1,224,618 $ 941,383 $ 577,778 $ 304,904 $ 231,177 $ 373,938 $ 1,186,170 $ 4,839,968 Special mention 5,790 4,034 1,013 2,949 4,893 5,266 22,222 46,167 Substandard 6,154 28,588 2,127 5,746 6,965 7,460 34,288 91,328 Doubtful — — — — 155 69 50 274 Total commercial and industrial $ 1,236,562 $ 974,005 $ 580,918 $ 313,599 $ 243,190 $ 386,733 $ 1,242,730 $ 4,977,737 Other income producing property Risk rating: Pass $ 111,929 $ 96,377 $ 62,628 $ 48,310 $ 52,095 $ 121,664 $ 47,962 $ 540,965 Special mention 968 1,331 1,295 317 193 4,463 173 8,740 Substandard 648 472 1,325 301 223 12,911 1,342 17,222 Doubtful — — — — — 5 131 136 Total other income producing property $ 113,545 $ 98,180 $ 65,248 $ 48,928 $ 52,511 $ 139,043 $ 49,608 $ 567,063 Consumer owner occupied Risk rating: Pass $ 5,281 $ 3,507 $ 1,983 $ 778 $ 72 $ 354 $ 15,331 $ 27,306 Special mention 545 21 165 287 — — 266 1,284 Substandard — 96 13 1,632 — 212 151 2,104 Doubtful — — — — — 145 — 145 Total Consumer owner occupied $ 5,826 $ 3,624 $ 2,161 $ 2,697 $ 72 $ 711 $ 15,748 $ 30,839 Other loans Risk rating: Pass $ 3,516 $ — $ — $ — $ — $ — $ — $ 3,516 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total other loans $ 3,516 $ — $ — $ — $ — $ — $ — $ 3,516 Total Commercial Loans Risk rating: Pass $ 4,536,989 $ 4,810,075 $ 2,334,397 $ 2,171,762 $ 1,328,779 $ 3,233,520 $ 1,521,080 $ 19,936,602 Special mention 33,784 40,378 51,372 21,222 49,784 97,602 24,942 319,084 Substandard 22,586 76,467 21,975 70,237 21,610 130,443 39,437 382,755 Doubtful — 1 1 79 155 249 181 666 Total Commercial Loans $ 4,593,359 $ 4,926,921 $ 2,407,745 $ 2,263,300 $ 1,400,328 $ 3,461,814 $ 1,585,640 $ 20,639,107 Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Construction and land development Risk rating: Pass $ 570,166 $ 360,488 $ 206,586 $ 38,866 $ 24,728 $ 49,321 $ 76,680 $ 1,326,835 Special mention 2,347 3,067 186 — 1,557 1,715 487 9,359 Substandard 960 210 2,304 326 543 2,209 — 6,552 Doubtful 1 — — — — 8 — 9 Total Construction and land development $ 573,474 $ 363,765 $ 209,076 $ 39,192 $ 26,828 $ 53,253 $ 77,167 $ 1,342,755 Commercial non-owner occupied Risk rating: Pass $ 1,812,512 $ 798,171 $ 1,061,021 $ 676,803 $ 494,618 $ 1,371,729 $ 102,763 $ 6,317,617 Special mention 16,683 12,985 14,138 36,875 25,729 110,109 — 216,519 Substandard 23,035 160 64,408 23,346 31,952 56,477 2,139 201,517 Doubtful — — — — — 46 — 46 Total Commercial non-owner occupied $ 1,852,230 $ 811,316 $ 1,139,567 $ 737,024 $ 552,299 $ 1,538,361 $ 104,902 $ 6,735,699 Commercial Owner Occupied Risk rating: Pass $ 1,182,722 $ 780,339 $ 801,162 $ 549,642 $ 428,163 $ 980,701 $ 69,739 $ 4,792,468 Special mention 9,152 4,257 7,331 10,860 22,792 49,083 115 103,590 Substandard 7,375 2,907 8,587 2,053 18,600 34,431 80 74,033 Doubtful — 1 — — — 24 — 25 Total commercial owner occupied $ 1,199,249 $ 787,504 $ 817,080 $ 562,555 $ 469,555 $ 1,064,239 $ 69,934 $ 4,970,116 Commercial and industrial Risk rating: Pass $ 1,198,849 $ 618,676 $ 360,551 $ 267,772 $ 178,538 $ 219,339 $ 860,134 $ 3,703,859 Special mention 2,759 1,519 2,434 1,268 3,224 3,871 3,281 18,356 Substandard 738 5,965 8,212 2,653 3,438 5,183 12,701 38,890 Doubtful — — 5 3 2 16 2 28 Total commercial and industrial $ 1,202,346 $ 626,160 $ 371,202 $ 271,696 $ 185,202 $ 228,409 $ 876,118 $ 3,761,133 Other income producing property Risk rating: Pass $ 105,533 $ 73,583 $ 67,173 $ 76,971 $ 56,343 $ 142,183 $ 56,190 $ 577,976 Special mention 1,580 1,851 1,063 232 1,381 13,526 424 20,057 Substandard 1,304 482 298 166 787 12,531 46 15,614 Doubtful — — — — — 6 — 6 Total other income producing property $ 108,417 $ 75,916 $ 68,534 $ 77,369 $ 58,511 $ 168,246 $ 56,660 $ 613,653 Consumer owner occupied Risk rating: Pass $ 3,513 $ 2,874 $ 1,099 $ 85 $ 139 $ 820 $ 16,977 $ 25,507 Special mention 1,219 180 2,430 81 — 3 — 3,913 Substandard — 16 238 — — 223 — 477 Doubtful — — — 1 — 145 — 146 Total Consumer owner occupied $ 4,732 $ 3,070 $ 3,767 $ 167 $ 139 $ 1,191 $ 16,977 $ 30,043 Other loans Risk rating: Pass $ 23,583 $ — $ — $ — $ — $ — $ — $ 23,583 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total other loans $ 23,583 $ — $ — $ — $ — $ — $ — $ 23,583 Total Commercial Loans Risk rating: Pass $ 4,896,878 $ 2,634,131 $ 2,497,592 $ 1,610,139 $ 1,182,529 $ 2,764,093 $ 1,182,483 $ 16,767,845 Special mention 33,740 23,859 27,582 49,316 54,683 178,307 4,307 371,794 Substandard 33,412 9,740 84,047 28,544 55,320 111,054 14,966 337,083 Doubtful 1 1 5 4 2 245 2 260 Total Commercial Loans $ 4,964,031 $ 2,667,731 $ 2,609,226 $ 1,688,003 $ 1,292,534 $ 3,053,699 $ 1,201,758 $ 17,476,982 For the consumer segment, delinquency of a loan is determined by past due status. Consumer loans are automatically placed on nonaccrual status once the loan is 90 days past due. Construction and land development loans are on 1-4 properties and lots. The following table presents the credit risk profile by past due status of consumer loans by origination year as of September 30, 2022: Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of September 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Consumer owner occupied Days past due: Current $ 1,351,309 $ 1,335,059 $ 650,548 $ 327,852 $ 193,413 $ 824,959 $ 1,227 $ 4,684,367 30 days past due 178 1,247 432 786 99 2,753 — 5,495 60 days past due — 240 462 314 194 1,105 — 2,315 90 days past due — 433 451 913 772 4,205 — 6,774 Total Consumer owner occupied $ 1,351,487 $ 1,336,979 $ 651,893 $ 329,865 $ 194,478 $ 833,022 $ 1,227 $ 4,698,951 Home equity loans Days past due: Current $ 4,837 $ 5,303 $ 3,803 $ 2,257 $ 1,881 $ 20,142 $ 1,203,325 $ 1,241,548 30 days past due — — 155 170 250 36 3,009 3,620 60 days past due — — — 195 — 313 347 855 90 days past due — 60 40 54 — 942 211 1,307 Total Home equity loans $ 4,837 $ 5,363 $ 3,998 $ 2,676 $ 2,131 $ 21,433 $ 1,206,892 $ 1,247,330 Consumer Days past due: Current $ 327,444 $ 225,458 $ 123,591 $ 94,584 $ 49,018 $ 149,297 $ 258,354 $ 1,227,746 30 days past due 134 311 178 234 154 1,325 16,509 18,845 60 days past due 154 85 37 10 110 891 9,880 11,167 90 days past due 1 21 20 25 35 1,399 587 2,088 Total consumer $ 327,733 $ 225,875 $ 123,826 $ 94,853 $ 49,317 $ 152,912 $ 285,330 $ 1,259,846 Construction and land development Days past due: Current $ 320,794 $ 446,805 $ 74,247 $ 14,872 $ 7,608 $ 16,011 $ 355 $ 880,692 30 days past due — — 24 20 69 24 — 137 60 days past due — — 300 — — — — 300 90 days past due — — 157 — — — — 157 Total Construction and land development $ 320,794 $ 446,805 $ 74,728 $ 14,892 $ 7,677 $ 16,035 $ 355 $ 881,286 Other income producing property Days past due: Current $ 32,433 $ 21,664 $ 4,989 $ 2,819 $ 4,580 $ 42,373 $ 634 $ 109,492 30 days past due — — — — — 165 — 165 60 days past due — — — — — — — — 90 days past due — — — — — 126 — 126 Total other income producing property $ 32,433 $ 21,664 $ 4,989 $ 2,819 $ 4,580 $ 42,664 $ 634 $ 109,783 Total Consumer Loans Days past due: Current $ 2,036,817 $ 2,034,289 $ 857,178 $ 442,384 $ 256,500 $ 1,052,782 $ 1,463,895 $ 8,143,845 30 days past due 312 1,558 789 1,210 572 4,303 19,518 28,262 60 days past due 154 325 799 519 304 2,309 10,227 14,637 90 days past due 1 514 668 992 807 6,672 798 10,452 Total Consumer Loans $ 2,037,284 $ 2,036,686 $ 859,434 $ 445,105 $ 258,183 $ 1,066,066 $ 1,494,438 $ 8,197,196 The following table presents total loans by origination year as of September 30, 2022: Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of September 30, 2022 2022 2021 2020 2019 2018 Prior Revolving Total Total Loans $ 6,630,643 $ 6,963,607 $ 3,267,179 $ 2,708,405 $ 1,658,511 $ 4,527,880 $ 3,080,078 $ 28,836,303 The following table presents the credit risk profile by past due status of consumer loans by origination year as of December 31, 2021: Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Consumer owner occupied Days past due: Current $ 1,192,449 $ 710,828 $ 405,138 $ 246,487 $ 228,876 $ 810,605 $ 4 $ 3,594,387 30 days past due 354 666 234 472 1,068 2,230 — 5,024 60 days past due — 330 218 254 111 928 — 1,841 90 days past due 235 574 691 549 274 4,746 — 7,069 Total Consumer owner occupied $ 1,193,038 $ 712,398 $ 406,281 $ 247,762 $ 230,329 $ 818,509 $ 4 $ 3,608,321 Home equity loans Days past due: Current $ 7,128 $ 5,648 $ 4,745 $ 2,180 $ 993 $ 24,716 $ 1,116,621 $ 1,162,031 30 days past due 6 49 68 71 24 491 2,200 2,909 60 days past due — — — — — 603 339 942 90 days past due 75 65 172 180 22 1,548 650 2,712 Total Home equity loans $ 7,209 $ 5,762 $ 4,985 $ 2,431 $ 1,039 $ 27,358 $ 1,119,810 $ 1,168,594 Consumer Days past due: Current $ 298,779 $ 169,443 $ 127,757 $ 69,892 $ 36,304 $ 151,948 $ 44,864 $ 898,987 30 days past due 229 364 208 191 132 1,570 137 2,831 60 days past due 145 82 90 124 90 658 17 1,206 90 days past due 74 121 181 109 29 1,119 — 1,633 Total consumer $ 299,227 $ 170,010 $ 128,236 $ 70,316 $ 36,555 $ 155,295 $ 45,018 $ 904,657 Construction and land development Days past due: Current $ 411,728 $ 204,368 $ 33,965 $ 13,429 $ 8,484 $ 14,185 $ 162 $ 686,321 30 days past due — 24 — — — — — 24 60 days past due — — — — — 12 — 12 90 days past due — — — — — 104 — 104 Total Construction and land development $ 411,728 $ 204,392 $ 33,965 $ 13,429 $ 8,484 $ 14,301 $ 162 $ 686,461 Other income producing property Days past due: Current $ 22,131 $ 5,620 $ 4,906 $ 4,977 $ 6,303 $ 37,575 $ 1,379 $ 82,891 30 days past due — — — — — 90 — 90 60 days past due — — — — — 156 — 156 90 days past due — — — — — 14 — 14 Total other income producing property $ 22,131 $ 5,620 $ 4,906 $ 4,977 $ 6,303 $ 37,835 $ 1,379 $ 83,151 Total Consumer Loans Days past due: Current $ 1,947,911 $ 1,095,907 $ 576,511 $ 336,965 $ 280,960 $ 1,039,029 $ 1,147,334 $ 6,424,617 30 days past due 589 1,103 510 734 1,224 4,381 2,337 10,878 60 days past due 145 412 308 378 201 2,357 356 4,157 90 days past due 384 760 1,044 838 325 7,531 650 11,532 Total Consumer Loans $ 1,949,029 $ 1,098,182 $ 578,373 $ 338,915 $ 282,710 $ 1,053,298 $ 1,150,677 $ 6,451,184 The following table presents total loans by origination year as of December 31, 2021: Term Loans (Dollars in thousands) Amortized Cost Basis by Origination Year As of December 31, 2021 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans $ 6,913,060 $ 3,765,913 $ 3,187,599 $ 2,026,918 $ 1,575,244 $ 4,106,997 $ 2,352,435 $ 23,928,166 The following table presents an aging analysis of past due accruing loans, segregated by class: 30 - 59 Days 60 - 89 Days 90+ Days Total Non- Total (Dollars in thousands) Past Due Past Due Past Due Past Due Current Accruing Loans September 30, 2022 Construction and land development $ 843 $ 464 $ 21 $ 1,328 $ 2,548,764 $ 460 $ 2,550,552 Commercial non-owner occupied 10,035 586 — 10,621 7,932,535 21,314 7,964,470 Commercial owner occupied 2,901 1,318 294 4,513 5,390,789 30,914 5,426,216 Consumer owner occupied 4,740 368 — 5,108 4,707,496 17,186 4,729,790 Home equity loans 3,104 659 — 3,763 1,237,245 6,322 1,247,330 Commercial and industrial 29,527 9,036 3,211 41,774 4,922,124 13,839 4,977,737 Other income producing property 2,191 1,110 262 3,563 670,821 2,462 676,846 Consumer 18,488 10,963 — 29,451 1,226,652 3,743 1,259,846 Other loans — — — — 3,516 — 3,516 $ 71,829 $ 24,504 $ 3,788 $ 100,121 $ 28,639,942 $ 96,240 $ 28,836,303 December 31, 2021 Construction and land development $ 1,176 $ 59 $ 43 $ 1,278 $ 2,026,371 $ 1,567 $ 2,029,216 Commercial non-owner occupied 3,591 2,110 96 5,797 6,709,993 19,909 6,735,699 Commercial owner occupied 2,756 1,732 626 5,114 4,950,470 14,532 4,970,116 Consumer owner occupied 4,046 533 — 4,579 3,615,602 18,183 3,638,364 Home equity loans 2,565 913 — 3,478 1,158,861 6,255 1,168,594 Commercial and industrial 50,451 26,639 3,991 81,081 3,672,611 7,441 3,761,133 Other income producing property 879 424 106 1,409 691,320 4,075 696,804 Consumer 2,672 840 1 3,513 897,688 3,456 904,657 Other loans — — — — 23,583 — 23,583 $ 68,136 $ 33,250 $ 4,863 $ 106,249 $ 23,746,499 $ 75,418 $ 23,928,166 The following table is a summary of information pertaining to nonaccrual loans by class, including restructured loans: September 30, Greater than Non-accrual December 31, (Dollars in thousands) 2022 90 Days Accruing (1) with no allowance (1) 2021 Construction and land development $ 460 $ 21 $ 145 $ 1,567 Commercial non-owner occupied 21,314 — 6,574 19,909 Commercial owner occupied real estate 30,914 294 15,578 14,532 Consumer owner occupied 17,186 — — 18,183 Home equity loans 6,322 — 1,597 6,255 Commercial and industrial 13,839 3,211 5,796 7,441 Other income producing property 2,462 262 — 4,075 Consumer 3,743 — — 3,456 Total loans on nonaccrual status $ 96,240 $ 3,788 $ 29,690 $ 75,418 (1) Greater than 90 days accruing and non-accrual with no allowance loans at September 30, 2022. There is no interest income recognized during the period on nonaccrual loans. The Company follows its nonaccrual policy by reversing contractual interest income in the income statement when the Company places a loan on nonaccrual status. Loans on nonaccrual status in which there is no allowance assigned are individually evaluated loans that do not carry a specific reserve. See Note 2 — Summary of Significant Accounting Policies for further detailed on individually evaluated loans. The following is a summary of collateral dependent loans, by type of collateral, and the extent to which they are collateralized during the period: September 30, Collateral December 31, Collateral (Dollars in thousands) 2022 Coverage % 2021 Coverage % Commercial owner occupied real estate Church $ — $ — $ 1,953 $ 2,308 118% Other 15,578 23,135 149% 4,656 12,200 262% Commercial non-owner occupied real estate Hotel — — 1,822 4,100 225% Other 6,574 10,900 166% 6,949 9,630 139% Commercial and industrial Other 5,163 5,446 105% — — Home equity loans Residential 1-4 family dwelling 1,552 1,671 108% — — Total collateral dependent loans $ 28,867 $ 41,152 $ 15,380 $ 28,238 The Bank designates individually evaluated loans (excluding TDRs) on non-accrual with a net book balance exceeding the designated threshold as collateral dependent loans. Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining ACL. Under ASC 326-20-35-6, the Bank has adopted the collateral maintenance practical expedient to measure the ACL based on the fair value of collateral. The ACL is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for selling costs, and amortized cost. The significant changes above in collateral percentage are due to appraisal value updates or changes in the number of loans within the asset class and collateral type. Overall collateral dependent loans increased In the course of resolving delinquent loans, the Bank may choose to restructure the contractual terms of certain loans. Any loans that are modified are reviewed by the Bank to determine if a TDR, sometimes referred to herein as a restructured loan, has occurred. The Bank designates loan modifications as TDRs when it grants a concession to a borrower that it would not otherwise consider due to the borrower experiencing financial difficulty (FASB ASC Topic 310-40). The concessions granted on TDRs generally include terms to reduce the interest rate, extend the term of the debt obligation, or modify the payment structure on the debt obligation. See Note 2 — Summary of Significant Accounting Policies for how such modifications are factored into the determination of the ACL. Loans on nonaccrual status at the date of modification are initially classified as nonaccrual TDRs. Loans on accruing status at the date of concession are initially classified as accruing TDRs if the note is reasonably assured of repayment and performance is expected in accordance with its modified terms. Such loans may be designated as nonaccrual loans subsequent to the concession date if reasonable doubt exists as to the collection of interest or principal under the restructuring agreement. Nonaccrual TDRs are returned to accruing status when there is economic substance to the restructuring, there is documented credit evaluation of the borrower’s financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum of six months). The Company elected the accounting policy in the CARES Act to not apply TDR accounting to loans modified for borrowers impacted by the COVID-19 pandemic if the concession met the criteria stipulated in the CARES Act. Details in regard to the Company’s implemented loan modification programs in response to the COVID-19 pandemic under the CARES Act is disclosed under the Note 2 – Summary of Significant Accounting Policies. The following tables present loans designated as TDRs segregated by class and type of concession that were restructured during the three months ended September 30, 2022 and during the 30, 2022 and 2021. There were Three Months Ended September 30, 2022 2021 Pre-Modification Post-Modification Pre-Modification Post-Modification Number Amortized Amortized Number Amortized Amortized (Dollars in thousands) of loans Cost Cost of loans Cost Cost Interest rate modification Commercial non-owner occupied 2 $ 2,321 $ 2,321 — $ — $ — Commercial owner occupied 2 2,629 2,629 — — — Commercial and industrial 1 535 535 — — — Total interest rate modifications 5 $ 5,485 $ 5,485 — $ — $ — Term modification Commercial non-owner occupied 1 $ 375 $ 375 — $ — $ — Commercial owner occupied 2 1,042 1,042 — — — Commercial and industrial 3 3,097 3,097 — — — Total term modifications 6 4,514 4,514 — — — 11 $ 9,999 $ 9,999 — |