Investor Presentaiton
$ In Thousands
Asset Quality - Allowance and Net Chargeoffs.
Total Allowance + Purchase Discount
$16,000
2.00%
$500
Net Chargeoffs
IN
0.20%
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
4Q'21
1Q'22
2Q'22
3Q'22
4Q'22
Purch Disc
ACL
Total Allowance / Gross Loans
1Q'23
2Q'23
1.62%
$400
1.50%
1.26%
$300
1.00%
$ In Thousands
0.50%
$200
0.04%
$100
$0
-0.07%
0.15%
0.14%
0.10%
0.05%
0.01%
0.00%
0.00%
0.00%
-0.03%
-0.05%
-0.05%
0.00%
3Q'23
-$100
Allowance for Unfunded Commitments
(ACL+Unfunded+Purch Disc)/(Gross Loans+Purch Disc)
4Q'21
1Q'22
2Q'22
3Q'22
4Q'22
I Net Chargeoffs (Recoveries)
1Q'23
2Q'23
-0.10%
3Q'23
Net Chargeoffs (Recoveries) / Average Loans
The Company adopted the Current Expected Credit Losses ("CECL") standard effective January 1, 2023 and revised the initial adoption during 20'23. As revised, the adoption resulted in a $4.2
million increase in the allowance for credit losses on loans ("ACL"), which included a transfer of $2.9 million from purchase discount on acquired loans and a $1.3 million adjustment directly from
retained earnings, net of deferred taxes Additionally, the allowance for unfunded commitments increased $1.4 million, also adjusted directly from retained earnings, net of deferred taxes. (Total
of $5.6 million combined.)
At September 30, 2023, the Company had an ACL balance of $10.3 million, or 1.14% of gross loans HFI, and an allowance for unfunded commitments balance of $1.1 million; the combined total
allowance for lending related credit losses was $11.3 million, or 1.26% of gross loans HFI.
When combined, the $3.3 million of purchase discount on acquired loans plus total allowance represented 1.62% of total loans HFI plus purchase discount.
The increase in the purchase discount during 20'22 was related to the acquisition of Legacy Bank.
Net charge-offs of $330,000 in 3Q'23 primarily consisted of one loan that was fully reserved for in 2Q'23.
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