v3.25.2
Loans and Allowance for Credit Losses on Loans
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans Loans and Allowance for Credit Losses on Loans
Loans Held-For-Investment
The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated.
($ in thousands)March 31, 2025December 31, 2024
Commercial real estate:
Commercial property
$965,302 $940,931 
Business property618,771 595,547 
Multifamily207,096 194,220 
Construction
23,978 21,854 
Total commercial real estate1,815,147 1,752,552 
Commercial and industrial494,697 472,763 
Consumer:
Residential mortgage406,774 392,456 
Other consumer10,992 11,616 
Total consumer417,766 404,072 
Loans held-for-investment
2,727,610 2,629,387 
Allowance for credit losses on loans(31,942)(30,628)
Net loans held-for-investment
$2,695,668 $2,598,759 
In the ordinary course of business, the Company may grant loans to certain of its officers and directors, and the companies with which they are associated. As of March 31, 2025 and December 31, 2024, the Company had no such loans outstanding.
Allowance for Credit Losses on Loans
The following table presents a composition of provision for credit losses for the periods indicated:
Three Months Ended March 31,
($ in thousands)20252024
Provision for credit losses on loans $1,591 $922 
Provision for credit losses on off-balance sheet credit exposures7 168 
Total provision for credit losses$1,598 $1,090 
The following tables present the activities in ACL on loans for the periods indicated:
($ in thousands)Commercial PropertyBusiness PropertyMultifamilyConstructionCommercial and IndustrialResidential MortgageOther ConsumerTotal
Balance at January 1, 2025$12,923 $3,967 $2,371 $81 $8,713 $2,506 $67 $30,628 
Charge-offs— — — — (351)— (2)(353)
Recoveries— 1 — — 71 — 4 76 
Provision (reversal) for credit losses on loans(868)224 272 (35)1,148 873 (23)1,591 
Balance at March 31, 2025$12,055 $4,192 $2,643 $46 $9,581 $3,379 $46 $31,942 
Balance at January 1, 2024$12,665 $4,739 $1,441 $135 $6,245 $2,226 $82 $27,533 
Charge-offs— — — — (155)— (30)(185)
Recoveries— 2 — — 9 — 51 62 
Provision (reversal) for credit losses on loans(546)73 (126)(26)1,489 108 (50)922 
Balance at March 31, 2024$12,119 $4,814 $1,315 $109 $7,588 $2,334 $53 $28,332 
The increase in overall ACL for the three months ended March 31, 2025 was primarily due to increases in loans held-for-investment
Credit Quality Indicators
The Company classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans in regards to credit risk. This analysis typically includes non-homogeneous loans, such as commercial property and commercial and industrial loans, and is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:
Pass - Loans classified as pass include non-homogeneous loans not meeting the risk ratings defined below and smaller, homogeneous loans not assessed on an individual basis.
Special Mention - Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of repayment prospects for the loan or of the institution’s credit position at some future date.
Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.
Doubtful - Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of March 31, 2025 and gross write offs for the three months ended March 31, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from the Term Loans by Origination Year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
March 31, 2025
Commercial Real Estate:
Commercial property
Pass$71,294 $192,738 $141,854 $256,925 $121,904 $156,067 $21,039 $384 $962,205 
Special mention— — — — — — — — — 
Substandard— — 129 387 251 2,330 — — 3,097 
Doubtful— — — — — — — — — 
Total$71,294 $192,738 $141,983 $257,312 $122,155 $158,397 $21,039 $384 $965,302 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$49,572 $92,440 $99,723 $93,244 $146,812 $118,595 $6,521 $4,896 $611,803 
Special mention— — — 5,010 — — — — 5,010 
Substandard— — — 446 862 650 — — 1,958 
Doubtful— — — — — — — — — 
Total$49,572 $92,440 $99,723 $98,700 $147,674 $119,245 $6,521 $4,896 $618,771 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Multifamily
Pass$18,121 $30,707 $52,981 $39,666 $37,845 $26,776 $1,000 $— $207,096 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$18,121 $30,707 $52,981 $39,666 $37,845 $26,776 $1,000 $— $207,096 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Construction
Pass$— $1,342 $8,436 $14,200 $— $— $— $— $23,978 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $1,342 $8,436 $14,200 $— $— $— $— $23,978 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
March 31, 2025 (Continued)
Commercial and Industrial
Pass$4,144 $44,923 $31,856 $20,622 $6,768 $9,032 $373,865 $3,421 $494,631 
Special mention— — — — — — — — — 
Substandard— — — — — 66 — — 66 
Doubtful— — — — — — — — — 
Total$4,144 $44,923 $31,856 $20,622 $6,768 $9,098 $373,865 $3,421 $494,697 
Year-to-date period gross write offs
$— $— $80 $— $149 $122 $— $— $351 
Consumer
Residential mortgage
Pass$27,812 $34,603 $68,011 $147,789 $71,736 $53,670 $— $— $403,621 
Special mention— — — — — — — — — 
Substandard— — 2,466 — — 687 — — 3,153 
Doubtful— — — — — — — — — 
Total$27,812 $34,603 $70,477 $147,789 $71,736 $54,357 $— $— $406,774 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$101 $— $2,565 $3,596 $1,187 $250 $3,287 $— $10,986 
Special mention— — — — — — — — — 
Substandard— — — 6 — — — — 6 
Doubtful— — — — — — — — — 
Total$101 $— $2,565 $3,602 $1,187 $250 $3,287 $— $10,992 
Year-to-date period gross write offs
$— $— $1 $— $1 $— $— $— $2 
Total loans held-for-investment
Pass$171,044 $396,753 $405,426 $576,042 $386,252 $364,390 $405,712 $8,701 $2,714,320 
Special mention— — — 5,010 — — — — 5,010 
Substandard— — 2,595 839 1,113 3,733 — — 8,280 
Doubtful— — — — — — — — — 
Total$171,044 $396,753 $408,021 $581,891 $387,365 $368,123 $405,712 $8,701 $2,727,610 
Year-to-date period gross write offs
$— $— $81 $— $150 $122 $— $— $353 
The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2024. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20242023202220212020PriorTotal
December 31, 2024
Commercial Real Estate:
Commercial property
Pass$196,454 $142,455 $259,222 $138,837 $76,462 $102,666 $21,031 $385 $937,512 
Special mention— — — — — — — — — 
Substandard— 131 399 258 — 2,631 — — 3,419 
Doubtful— — — — — — — — — 
Total$196,454 $142,586 $259,621 $139,095 $76,462 $105,297 $21,031 $385 $940,931 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$93,973 $100,337 $95,024 $148,382 $44,239 $95,372 $6,431 $3,750 $587,508 
Special mention— — 5,034 — — — — — 5,034 
Substandard— — 447 859 — 1,699 — — 3,005 
Doubtful— — — — — — — — — 
Total$93,973 $100,337 $100,505 $149,241 $44,239 $97,071 $6,431 $3,750 $595,547 
Year-to-date period gross write offs
$— $— $77 $— $— $27 $— $— $104 
Multifamily
Pass$34,104 $53,020 $39,870 $38,104 $25,751 $2,370 $1,001 $— $194,220 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$34,104 $53,020 $39,870 $38,104 $25,751 $2,370 $1,001 $— $194,220 
Year-to-date period gross write offs
$— $— $— $20 $— $— $— $— $20 
Construction
Pass$886 $7,589 $13,379 $— $— $— $— $— $21,854 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$886 $7,589 $13,379 $— $— $— $— $— $21,854 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20242023202220212020PriorTotal
December 31, 2024 (Continued)
Commercial and Industrial
Pass$46,644 $34,737 $21,700 $7,312 $3,125 $8,044 $347,605 $3,517 $472,684 
Special mention— — — — — — — — — 
Substandard— — — 8 — 71 — — 79 
Doubtful— — — — — — — — — 
Total$46,644 $34,737 $21,700 $7,320 $3,125 $8,115 $347,605 $3,517 $472,763 
Year-to-date period gross write offs
$— $— $— $— $— $126 $248 $150 $524 
Consumer
Residential mortgage
Pass$37,548 $73,833 $151,922 $73,183 $10,840 $44,727 $— $— $392,053 
Special mention— — — — — — — — — 
Substandard— — — — — 403 — — 403 
Doubtful— — — — — — — — — 
Total$37,548 $73,833 $151,922 $73,183 $10,840 $45,130 $— $— $392,456 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$346 $2,914 $4,243 $1,530 $394 $8 $2,157 $— $11,592 
Special mention— — — — — — — — — 
Substandard— — 23 — 1 — — — 24 
Doubtful— — — — — — — — — 
Total$346 $2,914 $4,266 $1,530 $395 $8 $2,157 $— $11,616 
Year-to-date period gross write offs
$— $18 $15 $— $10 $— $— $— $43 
Total loans held-for-investment
Pass$409,955 $414,885 $585,360 $407,348 $160,811 $253,187 $378,225 $7,652 $2,617,423 
Special mention— — 5,034 — — — — — 5,034 
Substandard— 131 869 1,125 1 4,804 — — 6,930 
Doubtful— — — — — — — — — 
Total$409,955 $415,016 $591,263 $408,473 $160,812 $257,991 $378,225 $7,652 $2,629,387 
Year-to-date period gross write offs
$— $18 $92 $20 $10 $153 $248 $150 $691 
Nonaccrual Loans
The following table presents the loans on nonaccrual status by loan segments as of the date indicated:
($ in thousands)Total Nonaccrual LoansNonaccrual Loans with ACLACL on Nonaccrual LoansCollateral Dependent Nonaccrual LoansACL on Collateral Dependent Nonaccrual Loans
March 31, 2025
Commercial real estate:
Commercial property
$1,538 $— $— $1,538 $— 
Business property1,485 — — 1,485 — 
Total commercial real estate3,023 — — 3,023 — 
Commercial and industrial66 — — 66 — 
Consumer:
Residential mortgage3,153 — — 3,153 — 
Other consumer6 6 — — — 
Total consumer3,159 6 — 3,153 — 
Total
$6,248 $6 $— $6,242 $— 
December 31, 2024
Commercial real estate:
Commercial property
$1,851 $— $— $1,851 $— 
Business property2,336 1,032 38 2,336 38 
Total commercial real estate4,187 1,032 38 4,187 38 
Commercial and industrial79 8 8 79 8 
Consumer:
Residential mortgage403 — — 403 — 
Other consumer24 24 — — — 
Total consumer427 24 — 403 — 
Total
$4,693 $1,064 $46 $4,669 $46 
There were no nonaccrual loans guaranteed by a U.S. government agency at March 31, 2025 and December 31, 2024.
Collateral Dependent Loans
Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the date indicated:
($ in thousands)Hotel / MotelRestaurantCar WashRetailSingle Family ResidentialOtherTotal
March 31, 2025
Commercial real estate:
Commercial property$1,538 $— $— $— $— $— $1,538 
Business property— 196 666 589 — 34 1,485 
Total commercial real estate1,538 196 666 589 — 34 3,023 
Commercial and industrial10 — — — 56 — 66 
Consumer:
Residential mortgage— — — — 3,153 — 3,153 
Total consumer— — — — 3,153 — 3,153 
Total$1,548 $196 $666 $589 $3,209 $34 $6,242 
December 31, 2024
Commercial real estate:
Commercial property$1,851 $— $— $— $— $— $1,851 
Business property— — 1,695 606 — 35 2,336 
Total commercial real estate1,851 — 1,695 606 — 35 4,187 
Commercial and industrial11 — 8 — 60 — 79 
Consumer:
Residential mortgage— — — — 403 — 403 
Total consumer— — — — 403 — 403 
Total$1,862 $— $1,703 $606 $463 $35 $4,669 
Past Due Loans
The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of date indicated:
Still AccruingNonaccrual
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotal30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotalTotal Loans Past Due
March 31, 2025
Commercial real estate:
Commercial property$435 $— $— $435 $957 $— $— $957 $1,392 
Business property1,549 — — 1,549 690 — 701 1,391 2,940 
Total commercial real estate1,984 — — 1,984 1,647 — 701 2,348 4,332 
Commercial and industrial241 58 — 299 50 — 16 66 365 
Consumer:
Residential mortgage2,989 — — 2,989 — — 2,862 2,862 5,851 
Other consumer22 43 — 65 — — — — 65 
Total consumer3,011 43 — 3,054 — — 2,862 2,862 5,916 
Total$5,236 $101 $— $5,337 $1,697 $— $3,579 $5,276 $10,613 
December 31, 2024
Commercial real estate:
Commercial property$433 $— $— $433 $— $984 $269 $1,253 $1,686 
Business property333 — — 333 508 — 698 1,206 1,539 
Total commercial real estate766 — — 766 508 984 967 2,459 3,225 
Commercial and industrial— — — — — 71 — 71 71 
Consumer:
Residential mortgage3,679 303 — 3,982 — 403 — 403 4,385 
Other consumer154 — — 154 — — 24 24 178 
Total consumer3,833 303 — 4,136 — 403 24 427 4,563 
Total$4,599 $303 $— $4,902 $508 $1,458 $991 $2,957 $7,859 
Loan Modification
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of at above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.
There were no loans that the borrowers were both experiencing financial difficulty and modified for the three months ended March 31, 2025. The following tables present loans that the borrowers were both experiencing financial difficulty and modified during the period indicated by loan segments and modification type:
Three Months Ended
($ in thousands)
Combination of Other-Than-Insignificant Payment Delay and Term Extension
TotalPercentage to Each Loan Segment
March 31, 2024
Commercial and industrial$45 $45 0.1 %
Total$45 $45 0.1 %
The Company had no commitments to lend to any borrower included in the above table.
The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicates:
Three Months Ended
Combination of Other-Than-Insignificant Payment Delay and Term Extension
March 31, 2024
Commercial and industrial
6-month interest-only payment and 6-month term extension
The following table presents the performance of loans that the borrowers were both experiencing financial difficulty and modified in the last 12 months:
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotal
March 31, 2025
Commercial real estate:
Business property$495 $— $666 $1,161 
Total commercial real estate495 — 666 1,161 
Total$495 $— $666 $1,161 
December 31, 2024
Commercial real estate:
Business property$508 $— $664 $1,172 
Total commercial real estate508 — 664 1,172 
Total$508 $— $664 $1,172 
Purchases, Sales, and Transfers
The Company had no loans that were transferred from loans held-for-investment to loans held-for-sale during three months ended March 31, 2025 or 2024.
The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during three months ended March 31, 2025 or 2024.
The Company had no purchases of loans held-for-investment during three months ended March 31, 2025 or 2024.
Loans Held-For-Sale
The following table presents a composition of loans held-for-sale as of the date indicated:
($ in thousands)March 31, 2025December 31, 2024
Commercial real estate:
Commercial property$— $3,307 
Business property8,436 713 
Total commercial real estate8,436 4,020 
Commercial and industrial3,665 2,272 
Total$12,101 $6,292 
Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred to held-for-sale at the lower of cost or fair value. Certain loans are transferred to held-for-sale with write-downs to ACL on loans.