2020 Annual Report

The following table presents a summary of the activity in the allowance for loan loss reserve for the periods indicated:

As of and for the year ended December 31,

(dollars in thousands) 2016 Balance, Beginning of Period. . . . . . . . $ 22,526 $ 20,031 $ 16,502 $ 12,333 $ 10,052 Charge-offs: Commercial . . . . . . . . . . . . . . . . . . . . . 346 160 10 1 107 Construction and LandDevelopment . — — 358 — 248 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . 144 195 21 — 1 CRE Owner Occupied . . . . . . . . . . . — — — — 123 CRE Nonowner Occupied . . . . . . . . — — — 111 613 Total Real Estate Mortgage Loans . . 144 195 21 111 737 Consumer and Other. . . . . . . . . . . . . . 27 33 32 65 22 Total Charge-offs . . . . . . . . . . . . . . . . . 517 388 421 177 1,114 Recoveries: Commercial . . . . . . . . . . . . . . . . . . . . . 7 8 25 5 101 Construction and LandDevelopment . — 1 285 24 8 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . 54 168 59 138 32 CRE Owner Occupied . . . . . . . . . . . 10 — — — — Total Real Estate Mortgage Loans . . 64 168 59 138 32 Consumer and Other. . . . . . . . . . . . . . 11 6 6 4 4 Total Recoveries . . . . . . . . . . . . . . . . . . 82 183 375 171 145 Net Charge-offs . . . . . . . . . . . . . . . . . . . 435 205 46 6 969 Provision for Loan Losses . . . . . . . . . . 12,750 2,700 3,575 4,175 3,250 Balance at End of Period . . . . . . . . . . . $ 34,841 $ 22,526 $ 20,031 $ 16,502 $ 12,333 Gross Loans, End of Period . . . . . . . . . 2,326,428 1,912,038 1,664,931 1,347,113 1,000,739 Average Loans. . . . . . . . . . . . . . . . . . . . 2,154,420 1,785,937 1,491,166 1,177,491 896,915 Net Charge-offs to Average Loans. . . . 0.02 % 0.01 % 0.00 % 0.00 % 0.11 % Allowance to Total Gross Loans . . . . . 1.50 % 1.18 % 1.20 % 1.22 % 1.23 % Allowance to Total Gross Loans, Excluding PPP Loans. . . . . . . . . . . . . 1.59 % N/A N/A N/A N/A 2020 2019 2018 2017

The following table presents a summary of the allocation of the allowance for loan losses by loan portfolio segment for the periods indicated:

December 31,

December 31,

December 31,

December 31,

December 31,

2020

2019

2018

2017

2016

(dollars in thousands)

Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent

Commercial . . . . . . . . . . . . . . . . $ 5,703

16.4 % $ 3,058

13.6 % $ 2,898 14.5 % $ 2,435 14.7 % $ 1,315 10.7 %

Paycheck Protection Program . . .

70

0.2

—

—

—

—

—

—

—

—

Construction and Land Development . . . . . . . . . . . . . 2,491 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . 3,972 Multifamily . . . . . . . . . . . . . . . 9,517 CRE Owner Occupied . . . . . . . 1,162 CRE Nonowner Occupied . . . . 10,991

7.1 2,202

9.8 2,451 12.2 1,892 11.5 1,379 11.2

11.4 2,839 27.3 5,824

12.6 2,597 13.0 2,317 14.0 2,410 19.5 25.9 4,644 23.2 3,170 19.2 1,568 12.7

3.3

792

3.5

808

4.0

956

5.8 1,160

9.4

31.6 6,972

30.9 5,872 29.3 5,087 30.8 3,323 27.0

Total Real Estate Mortgage Loans . . . . . . . . . . . . . . . . . . . 25,642 73.6 16,427 72.9 13,921 69.5 11,530 69.8 8,461 68.6 Consumer and Other. . . . . . . . . . 203 0.6 85 0.4 65 0.3 60 0.4 78 0.6 Unallocated . . . . . . . . . . . . . . . . 732 2.1 754 3.3 696 3.5 585 3.6 1,100 8.9 Total Allowance for Loan Losses . . . . . . . . . . . . . . . . . . . . $ 34,841 100.0 % $ 22,526 100.0 % $ 20,031 100.0 % $ 16,502 100.0 % $ 12,333 100.0 %

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