2021 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)

2021

2020

2019

2018

2017

Net Charge-offs (Recoveries) Commercial . . . . . . . . . . . . . . . . . . . . . . $ Construction and Land Development . Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . CRE Nonowner Occupied . . . . . . . . . Total Real Estate Mortgage Loans . . . Consumer and Other. . . . . . . . . . . . . . . Total Net Charge-offs (Recoveries) . . . . $ Net Charge-offs to Average Loans Commercial . . . . . . . . . . . . . . . . . . . . . . Construction and Land Development . Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . . . . CRE Owner Occupied . . . . . . . . . . . . CRE Nonowner Occupied . . . . . . . . . Total Real Estate Mortgage Loans . . . Consumer and Other. . . . . . . . . . . . . . . Total Net Charge-offs to Average Loans. . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) $

339 $ 152 $

(15) $

(4)

—

—

(1)

73

(24)

(21) (32)

90

27 — — 27 27

(38)

(138)

(10)

— —

—

—

— 80 16

111 (27)

(53)

(38)

32

26

61

(29) $

435 $ 205 $

46 $

6

0.00 %

0.12 %

0.05 %

(0.01)%

0.00 %

0.00

0.00

0.00

0.04

(0.02)

(0.01) (0.04) 0.00

0.03 (0.01) 0.00

0.01 0.00 0.00 0.00 0.65

(0.02) 0.00 0.00

(0.07) 0.00 0.03

0.00 0.45

0.01 0.28

0.00 0.63

0.00 1.36

0.00 % 0.00 % Gross Loans, End of Period . . . . . . . . . . 2,819,472 2,326,428 1,912,038 1,664,931 1,347,113 Average Loans. . . . . . . . . . . . . . . . . . . . . 2,584,857 2,154,420 1,785,937 1,491,166 1,177,491 Allowance to Total Gross Loans . . . . . . 1.42 % 1.50 % 1.18 % 1.20 % 1.22 % Allowance to Total Gross Loans, Excluding PPP Loans. . . . . . . . . . . . . . 1.43 % 1.59 % N/A N/A N/A The following table presents a summary of the allocation of the allowance for loan losses by loan portfolio segment for the periods indicated: Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Commercial . . . . . . . . . . . . . . . . . . $ 6,256 15.6 % $ 5,703 16.4 % $ 3,058 13.6 % $ 2,898 14.5 % $ 2,435 14.7 % Paycheck Protection Program . . . . . 13 — 70 0.2 — — — — — — Construction and Land Development . . . . . . . . . . . . . . . 3,757 9.4 2,491 7.1 2,202 9.8 2,451 12.2 1,892 11.5 Real Estate Mortgage: 1 - 4 Family Mortgage . . . . . . . . . 3,757 9.4 3,972 11.4 2,839 12.6 2,597 13.0 2,317 14.0 Multifamily . . . . . . . . . . . . . . . . . 12,610 31.5 9,517 27.3 5,824 25.9 4,644 23.2 3,170 19.2 CRE Owner Occupied . . . . . . . . . 1,495 3.7 1,162 3.3 792 3.5 808 4.0 956 5.8 CRE Nonowner Occupied . . . . . . 11,335 28.3 10,991 31.6 6,972 30.9 5,872 29.3 5,087 30.8 Total Real Estate Mortgage Loans . 29,197 72.9 25,642 73.6 16,427 72.9 13,921 69.5 11,530 69.8 Consumer and Other. . . . . . . . . . . . 147 0.5 203 0.6 85 0.4 65 0.3 60 0.4 Unallocated . . . . . . . . . . . . . . . . . . 650 1.6 732 2.1 754 3.3 696 3.5 585 3.6 Total Allowance for Loan Losses . . . $ 40,020 100.0 % $ 34,841 100.0 % $ 22,526 100.0 % $ 20,031 100.0 % $ 16,502 100.0 % 0.02 % 0.01 % 0.00 % December 31, December 31, December 31, December 31, December 31, 2021 2020 2019 2018 2017 (dollars in thousands)

69