v3.25.2
Loans (Tables)
 6 Months Ended
Jun. 30, 2025
Loans and Leases Receivable Disclosure [Abstract]  
Schedule of Loans Outstanding by General Ledger Classification
Loans held-for-investment outstanding by general ledger classification as of June 30, 2025 and December 31, 2024, consisted of the following:
June 30,December 31,
20252024
($ in thousands)  
SBA(1)
$246,903 $255,056 
Commercial leases88,957 70,153 
Commercial, non-real estate5,510 3,691 
Residential real estate54,132 51,574 
Strategic Program loans:
 
 
Strategic Program loans - with credit enhancement
11,730 891 
Strategic Program loans - without credit enhancement
18,969 19,231 
Commercial real estate:
     Owner occupied77,871 41,046 
     Non-owner occupied1,417 1,379 
Consumer24,555 22,212 
Total loans held-for-investment, gross$530,044 $465,233 
Deferred loan fees, net(7,294)(4,245)
Allowance for credit losses(16,247)(13,176)
Loans held-for-investment, net$506,503 $447,812 
(1) Included in the SBA loans held-for-investment above are $144.3 million and $158.7 million of loans guaranteed by the SBA as of June 30, 2025 and December 31, 2024, respectively.
These classifications, which in general are based upon the nature of the collateral and type of borrower, are different than the classifications adopted for other financial reporting purposes, which are based upon the proposed use of the loan proceeds. The following pool segments were identified as of June 30, 2025 and December 31, 2024 for the purposes of estimating the ACL:
June 30, 2025December 31, 2024
($ in thousands)
Construction and land development $46,900 $42,331 
Residential real estate59,937 61,316 
Residential real estate multifamily1,792 1,692 
Commercial real estate:
Owner occupied224,016 190,286 
Non-owner occupied12,093 12,849 
Commercial and industrial39,504 44,329 
Consumer 24,498 22,155 
Lease financing receivables90,605 70,153 
Retained Strategic Program loans:
 
 
Strategic Program loans - with credit enhancement11,730 891 
Strategic Program loans - without credit enhancement18,969 19,231 
Total loans held-for-investment, gross$530,044 $465,233 
The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of the periods indicated:

As of June 30, 2025Collateral Type
($ in thousands)Allowance for Credit LossesReal EstatePersonal PropertyTotal
Construction and land development$— $— $— $— 
Residential real estate1 9,782 — 9,782 
Commercial real estate:
Owner occupied6 24,670 — 24,670 
Non-owner occupied— 2,786 — 2,786 
Commercial and industrial— — 1,567 1,567 
Consumer19 — 84 84 
Commercial leases92 — 341 341 
Total$118 $37,238 $1,992 $39,230 
The amount of collateral-dependent loans as of June 30, 2025 include $20.9 million of SBA 7(a) loan balances that are guaranteed by the SBA.
As of December 31, 2024Collateral Type
($ in thousands)Allowance for Credit LossesReal EstatePersonal PropertyTotal
Construction and land development$— $— $— $— 
Residential real estate10 7,242 — 7,242 
Commercial real estate:
Owner occupied9 23,537 — 23,537 
Non-owner occupied— 2,796 — 2,796 
Commercial and industrial— — 1,788 1,788 
Commercial leases36 — 360 360 
Total$55 $33,575 $2,148 $35,723 
The amount of collateral-dependent loans as of December 31, 2024 include $18.9 million of SBA 7(a) loan balances that are guaranteed by the SBA.
Schedule of Strategic Program Loans Retained and Held-for-sale
Strategic Program loans retained and held-for-sale as of June 30, 2025 and December 31, 2024, are summarized as follows:
June 30, 2025December 31, 2024
($ in thousands)  
Retained Strategic Program loans(1)
$30,699 $20,122 
Strategic Program loans held-for-sale147,282 91,588 
Total Strategic Program loans$177,981 $111,710 
(1) Includes $11.7 million and $0.9 million of credit enhanced loans at June 30, 2025 and December 31, 2024, respectively.
Schedule of Changes in Allowance for Loan Losses
Activity in the ACL by common characteristic loan pools was as follows for the periods indicated:
Three Months Ended June 30, 2025
($ in thousands)Beginning BalanceProvision for (Reversal of) Credit LossesCharge-OffsRecoveriesEnding Balance
Construction and land development $988 $(7)$— $— $981 
Residential real estate598 244 (210)3 635 
Residential real estate multifamily38 2 — — 40 
Commercial real estate:
Owner occupied3,632 (395)(309)19 2,947 
Non-owner occupied126 (22)— — 104 
Commercial and industrial431 18 — — 449 
Consumer 676 245 (210)7 718 
Lease financing receivables1,587 224 (133)7 1,685 
Retained Strategic Program loans:
Strategic Program loans - with credit enhancement194 2,275 — — 2,469 
Strategic Program loans - without credit enhancement5,965 2,212 (2,279)321 6,219 
Total allowance for credit losses on financing receivables
$14,235 $4,796 $(3,141)$357 $16,247 
Unfunded lending commitments493 (70)— — 423 
Total allowance for credit losses$14,728 $4,726 $(3,141)$357 $16,670 
Six Months Ended June 30, 2025
($ in thousands)Beginning BalanceProvision for (Reversal of) Credit LossesCharge-OffsRecoveriesEnding Balance
Construction and land development$374 $607 $— $— $981 
Residential real estate788 58 (217)6 635 
Residential real estate multifamily38 2 — — 40 
Commercial real estate: — 
    Owner occupied2,834 448 (370)35 2,947 
    Non-owner occupied113 (9)— — 104 
Commercial and industrial700 (182)(83)14 449 
Consumer638 298 (228)10 718 
Lease financing receivables1,387 493 (169)(26)1,685 
Retained Strategic Program loans:
Strategic Program loans - with credit enhancement109 2,360 — — 2,469 
Strategic Program loans - without credit enhancement6,195 4,028 (4,663)659 6,219 
Total allowance for credit losses
$13,176 $8,103 $(5,730)$698 $16,247 
Unfunded lending commitments464 (41)— — 423 
Total allowance for credit losses$13,640 $8,062 $(5,730)$698 $16,670 
Three Months Ended June 30, 2024
($ in thousands)Beginning BalanceProvision for Credit LossesCharge-OffsRecoveriesEnding Balance
Construction and land development$333 $(3)$— $— $330 
Residential real estate999 27 — 3 1,029 
Residential real estate multifamily8 3 — — 11 
Commercial real estate:
Owner occupied3,910 184 — — 4,094 
Non-owner occupied318 62 — — 380 
Commercial and industrial482 110 (184)15 423 
Consumer265 13 (18)1 261 
Lease financing receivables556 156 (69)7 650 
Retained Strategic Program loans5,761 1,841 (1,962)309 5,949 
Total allowance for credit losses on financing receivables
$12,632 $2,393 $(2,233)$335 $13,127 
Unfunded lending commitments148 (8)— — 140 
Total allowance for credit losses$12,780 $2,385 $(2,233)$335 $13,267 
Six Months Ended June 30, 2024
($ in thousands)Beginning BalanceProvision for Credit LossesCharge-OffsRecoveriesEnding Balance
Construction and land development$316 $14 $— $— $330 
Residential real estate956 81 (64)56 1,029 
Residential real estate multifamily6 5 — — 11 
Commercial real estate:— 
Owner occupied3,336 1,280 (525)3 4,094 
Non-owner occupied282 98 — — 380 
Commercial and industrial361 285 (238)15 423 
Consumer211 108 (59)1 261 
Lease financing receivables355 468 (180)7 650 
Retained Strategic Program loans7,065 3,199 (4,908)593 5,949 
Total allowance for credit losses$12,888 $5,538 $(5,974)$675 $13,127 
Unfunded lending commitments139 1 — — 140 
Total allowance for credit losses$13,027 $5,539 $(5,974)$675 $13,267 
Schedule of Nonaccrual and Past Due Loans
Nonaccrual and past due loans are summarized below as of June 30, 2025 and December 31, 2024:
June 30, 2025
Loans Past Due and Still Accruing
($ in thousands)30-89
Days
Past
Due		 90 Days
and Greater		 Total 
Nonaccrual Loans with no ACL(1)
 Nonaccrual Loans with ACLCurrent Loans Total Loans
Construction and land development$— $— $— $— $— $46,900 $46,900 
Residential real estate— — — 9,770 12 50,155 59,937 
Residential real estate multifamily— — — — — 1,792 1,792 
Commercial real estate:
Owner occupied3,016 — 3,016 22,394 2,276 196,330 224,016 
Non-owner occupied— — — 2,786 — 9,307 12,093 
Commercial and industrial— — — 1,567 — 37,937 39,504 
Consumer73 — 73 65 19 24,341 24,498 
Commercial leases62 — 62 137 204 90,202 90,605 
Retained Strategic Program loans1,578 16 1,594 — — 29,105 30,699 
Total$4,729 $16 $4,745 

$36,719 $2,511 $486,069 $530,044 
(1) Included in the nonaccrual loan balances are $20.9 million of SBA 7(a) loan balances guaranteed by the SBA.
December 31, 2024
Loans Past Due and Still Accruing
($ in thousands)30-89
Days
Past
Due		90 Days
and Greater		Total
Nonaccrual Loans with no ACL(1)
Nonaccrual Loans with ACLCurrent LoansTotal Loans
Construction and land development$— $— $— $— $— $42,331 $42,331 
Residential real estate— — — 7,141 101 54,074 61,316 
Residential real estate multifamily— — — — — 1,692 1,692 
Commercial real estate:
Owner occupied2,070 — 2,070 17,435 6,102 164,679 190,286 
Non-owner occupied— — — 2,796 — 10,053 12,849 
Commercial and industrial— — — 1,788 — 42,541 44,329 
Consumer286 13 299 — — 21,856 22,155 
Commercial leases279 — 279 158 202 69,514 70,153 
Retained Strategic Program loans1,553 62 1,615 — — 18,507 20,122 
Total$4,188 $75 $4,263 

$29,318 $6,405 $425,247 $465,233 
(1) Included in the nonaccrual loan balances are $18.9 million of SBA 7(a) loan balances guaranteed by the SBA.
Schedule of Outstanding Loan Balances Categorized by Credit Quality Indicators
The following table presents the amortized cost of the Company's loan and lease portfolio by collateral type, risk rating and origination year as of June 30, 2025, in addition to the gross writeoff by collateral type for the six months ended June 30, 2025. The loans are grouped based on how they are assessed under CECL.
Loans and Leases Amortized Cost Basis by Origination Year
June 30, 202520252024202320222021PriorRevolving LoansTotal
($ in thousands)  
Construction and land development
   Pass$15,421 $19,886 $4,563 $4,916 $2,114 $— $— $46,900 
   Watch— — — — — — — — 
   Special Mention— — — — — — — — 
   Substandard— — — — — — — — 
   Total 15,421 19,886 4,563 4,916 2,114 — — 46,900 
Current period gross writeoff— — — — — — — — 
Residential real estate
Pass676 1,622 1,804 947 504 1,647 — 7,200 
Watch5,927 10,101 16,801 3,958 961 1,216 — 38,964 
Special Mention3,810 — — — — 37 — 3,847 
Substandard— — 2,655 7,027 44 200 — 9,926 
Total10,413 11,723 21,260 11,932 1,509 3,100 — 59,937 
Current period gross writeoff— — (210)— (7)— — (217)
Residential real estate multifamily
   Pass56 1,035 344 254 78 — — 1,767 
   Watch— — — — — 25 — 25 
   Special Mention— — — — — — — — 
   Substandard— — — — — — — — 
   Total56 1,035 344 254 78 25 — 1,792 
Current period gross writeoff— — — — — — — — 
Commercial real estate - owner occupied
   Pass44,956 23,286 5,328 3,532 1,775 7,029 — 85,906 
   Watch25,681 19,935 35,613 16,353 4,334 3,715 — 105,631 
   Special Mention— — 2,483 4,354 — 972 — 7,809 
   Substandard— 161 11,744 9,231 740 2,794 — 24,670 
   Total70,637 43,382 55,168 33,470 6,849 14,510 — 224,016 
Current period gross writeoff— — (99)(194)(56)(21)— (370)
Commercial real estate - non-owner occupied
Pass39 — — 1,233 — 319 — 1,591 
Watch— 1,176 3,678 1,764 975 123 — 7,716 
Special Mention— — — — — — — — 
Substandard— — — 2,786 — — — 2,786 
Total39 1,176 3,678 5,783 975 442 — 12,093 
Current period gross writeoff— — — — — — — — 
Commercial and industrial
   Pass617 2,565 986 857 259 337 — 5,621 
   Watch4,956 15,324 8,100 2,404 361 467 — 31,612 
   Special Mention— — 312 — — 28 — 340 
   Substandard— — 1,188 379 — 364 — 1,931 
Total5,573 17,889 10,586 3,640 620 1,196 — 39,504 
Current period gross writeoff— — — (54)— (29)— (83)
Consumer
   Pass7,908 11,931 3,233 798 204 227 — 24,301 
   Watch— 46 8 6 — — — 60 
   Special Mention— — — — — — — — 
   Substandard71 60 4 — 2 — — 137 
Total7,979 12,037 3,245 804 206 227 — 24,498 
Current period gross writeoff— (110)(96)(19)(1)(2)— (228)
Lease financing receivables
   Pass31,119 38,568 17,859 3,059 — — — 90,605 
   Watch— — — — — — — — 
   Special Mention— — — — — — — — 
   Substandard— — — — — — — — 
Total31,119 38,568 17,859 3,059 — — — 90,605 
Current period gross writeoff— — (169)— — — — (169)
Retained Strategic Program loans
   Pass— — — — — — — — 
   Watch— — — — — — — — 
   Special Mention— — — — — — — — 
   Substandard— — — — — — — — 
   Not Rated22,881 6,468 498 615 237 — — 30,699 
Total22,881 6,468 498 615 237 — — 30,699 
Current period gross writeoff(523)(3,596)(314)(138)(92)— — (4,663)
Total portfolio loans receivable, gross$164,118 $152,164 $117,201 $64,473 $12,588 $19,500 $— $530,044 
Total current period gross writeoff$(523)$(3,706)$(888)$(405)$(156)$(52)$— $(5,730)
The following table presents the amortized cost of the Company's loan and lease portfolio by collateral type, risk rating and origination year as of December 31, 2024, in addition to the gross writeoff by collateral type for the year ended December 31, 2024. The loans are grouped based on how they are assessed under CECL.
Loans and Leases Amortized Cost Basis by Origination Year
December 31, 20242024202320222021PriorRevolving LoansTotal
($ in thousands)  
Construction and land development
   Pass$18,008 $9,080 $12,687 $2,556 $— $— $42,331 
   Watch— — — — — — — 
   Special Mention— — — — — — — 
   Substandard— — — — — — — 
   Total 18,008 9,080 12,687 2,556 — — 42,331 
Current period gross writeoff— — — — — — — 
Residential real estate
Pass4,025 1,172 575 1,332 1,655 — 8,759 
Watch14,268 18,766 4,134 1,103 1,333 — 39,604 
Special Mention— 3,719 1,758 — 80 — 5,557 
Substandard— — 7,129 50 217 — 7,396 
Total18,293 23,657 13,596 2,485 3,285 — 61,316 
Current period gross writeoff— — — (252)(45)— (297)
Residential real estate multifamily
   Pass1,039 293 256 78 — — 1,666 
   Watch— — — — 26 — 26 
   Special Mention— — — — — — — 
   Substandard— — — — — — — 
   Total1,039 293 256 78 26 — 1,692 
Current period gross writeoff— — — — — — — 
Commercial real estate - owner occupied
   Pass26,160 3,897 3,468 1,180 9,112 — 43,817 
   Watch25,137 51,350 28,462 5,904 3,342 — 114,195 
   Special Mention— 4,553 1,736 — 2,207 — 8,496 
   Substandard— 16,150 5,142 1,414 1,072 — 23,778 
   Total51,297 75,950 38,808 8,498 15,733 — 190,286 
Current period gross writeoff— (364)(369)(109)(197)— (1,039)
Commercial real estate - non-owner occupied
Pass36 — 1,254 — 343 — 1,633 
Watch1,215 4,111 1,841 1,117 136 — 8,420 
Special Mention— — — — — — — 
Substandard— — 2,796 — — — 2,796 
Total1,251 4,111 5,891 1,117 479 — 12,849 
Current period gross writeoff— — (221)— — — (221)
Commercial and industrial
   Pass3,588 336 529 322 463 — 5,238 
   Watch23,559 9,134 2,945 442 606 — 36,686 
   Special Mention— — 217 — 32 — 249 
   Substandard— 1,438 351 — 367 — 2,156 
Total27,147 10,908 4,042 764 1,468 — 44,329 
Current period gross writeoff— (393)(227)(178)(91)— (889)
Consumer
   Pass15,951 4,294 1,257 319 286 — 22,107 
   Watch43 5 — — — — 48 
   Special Mention— — — — — — — 
   Substandard— — — — — — — 
Total15,994 4,299 1,257 319 286 — 22,155 
Current period gross writeoff— (65)(31)(19)(19)— (134)
Lease financing receivables
   Pass43,279 22,456 4,338 — 80 — 70,153 
   Watch— — — — — — — 
   Special Mention— — — — — — — 
   Substandard— — — — — — — 
Total43,279 22,456 4,338 — 80 — 70,153 
Current period gross writeoff— (293)— — — — (293)
Retained Strategic Program loans
   Pass— — — — — — — 
   Watch— — — — — — — 
   Special Mention— — — — — — — 
   Substandard— — — — — — — 
   Not Rated17,084 1,540 1,109 389 — — 20,122 
Total17,084 1,540 1,109 389 — — 20,122 
Current period gross writeoff(3,801)(4,683)(927)(385)— — (9,796)
Total portfolio loans receivable, gross$193,392 $152,294 $81,984 $16,206 $21,357 $— $465,233 
Total current period gross writeoff$(3,801)$(5,798)$(1,775)$(943)$(352)$— $(12,669)
Schedule of Loans Modified and Recorded as TDR's The following table presents the outstanding balance of modified loans as of June 30,
2024, the percentage of the loans modified to the total class of loans, and the financial effect of modified loans to troubled borrowers that were experiencing financial difficulty during the six months ended June 30, 2024:
($ in thousands)
Principal Deferment (Months)
Outstanding Balance at June 30, 2024% of Total Loan Type
Commercial real estate:
Owner occupied11 months$243 0.13 %
Non-owner occupied11 months$173 0.94 %
Residential11 months$156 0.27 %
Total principal$572