v3.26.1
Loans Receivables, net
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Loans Receivables, net

7. Loans Receivables, net

 

Financing receivables are comprised of the following as of December 31, 2025 and 2024:

  

   December 31, 2025   December 31, 2024 
         
Loans receivable, gross  $61,683   $51,138 
Less: Deferred loan fees   (1,516)   (1,273)
Plus: Deferred origination costs   169    257 
Less: Allowance for credit losses   (1,113)   (868)
Loans receivable, net  $59,223   $49,254 

 

Commercial Construction and Development Loans

 

Construction Loan Portfolio Summary

 

As of December 31, 2025, the Company’s construction loan portfolio consisted of 53 borrowers, all of whom borrow money for the purpose of building new homes. The loans typically involve funding of the lot and a portion of construction costs, for a total of between 50% and 72.5% of the completed value of the new home. As the home is built during the course of the loan, the loan balance increases. The loans carry an interest rate of 2.5% above our cost of funds as determined monthly by management. In addition, we charge a loan fee as described in Note 2.

 

Our loans are demand loans and most have a refundable deposit from the builder during construction to help offset the risk of partially built homes, and some have refundable prepaid interest to offset payment of monthly interest risk.

 

 

Construction Loan Portfolio Summary

 

The following is a summary of our loan portfolio to builders for home construction loans as of December 31, 2025 and 2024:

  

Year 

Number

of

States

 

Number

of

Borrowers

 

Number

of

Loans

   Commitment Amount  

Gross

Amount

Outstanding

  

Loan to Value

Ratio(1)

 
2025  20  53  151   $65,897   $44,515    72% (2)
2024  20  59  177   $67,391   $48,004    68% (2)

 

(1) The loan to value ratio is calculated by taking the commitment amount and dividing by the appraised value.
   
(2) Represents the weighted average loan to value ratio of the loans.

 

Real Estate Development Loan Portfolio Summary

 

The following is a summary of our loan portfolio to builders for land development as of December 31, 2025 and 2024:

  

Year  Number of States  Number of Borrowers  Number of Loans    Commitment Amount   Gross Amount Outstanding   Loan to Value Ratio(1) 
2025  9  12  13    $19,342   $17,168    71 % (2)
2024  5  6  6    $6,262   $3,134    42% (2)

 

(1) The loan to value ratio is calculated by taking the outstanding amount and dividing by the appraised value calculated as described above.
   
(2) Represents the weighted average loan to value ratio of the loans.

 

The following is a roll forward of loan receivables, net of both construction and development loans:

   

  

December 31,

2025

  

December 31,

2024

 
         
Beginning balance  $49,254   $59,186 
Originations and modifications   59,571    40,729 
Principal collections   (48,205)   (48,578)
Transferred from loans receivables, net   (909)   (2,306)
Change in allowance for credit losses   (245)   (173)
Change in loan fees, net   (243)   396
           
Ending balance  $59,223   $49,254 

  

 

Credit Quality Information

 

The following table presents the Company’s gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of December 31, 2025.

  

   Loans
Receivable
Gross		   Commitment
Value		   ACL 
Construction Loans Collectively Evaluated:               
A Credit Risk  $23,490   $37,488   $122 
B Credit Risk   13,799    18,830    151 
C Credit Risk   828    1,099    12 
Individually Evaluated   6,399    8,480    745 
                
Development Loans Collectively Evaluated:               
A Credit Risk  $3,457   $4,390   $2 
B Credit Risk   13,072    14,366    79 
C Credit Risk   99    100    2 
Individually Evaluated   539    487    – 
                
Total  $61,683   $85,240   $1,113 

 

The following table presents the Company’s gross loans receivable, commitment value and ACL for each respective credit rank loan pool category as of December 31, 2024.

 

   Loans
Receivable
Gross		   Commitment
Value		   ACL 
Construction Loans Collectively Evaluated:               
A Credit Risk  $39,277   $55,872   $140 
B Credit Risk   2,817    3,883    40 
C Credit Risk   939    1,851    10 
Nonaccrual Loans Individually Evaluated   4,971    5,785    658 
                
Development Loans Collectively Evaluated:               
A Credit Risk  $2,485   $5,500   $2 
B Credit Risk   160    275    – 
C Credit Risk   489    487    18 
Individually Evaluated   –    –    – 
                
Total  $51,138   $73,653   $868 

 

 

The following table presents the amortized cost basis of loans individually evaluated and loans past due over 90 days nonaccruing as of December 31, 2025:

Schedule of Amortized Cost Basis of Loans on Nonaccrual Status and Loans  

   Individually Evaluated without ACL   Individually Evaluated with ACL   Accrual Loans Past Due Over 90 Days 
Construction Loans:               
Individually Evaluated  $3,239   $3,160   $           – 
Development Loans:               
Individually Evaluated  $539   $–   $– 
                
Total  $3,778   $3,160   $– 

 

The following table presents the amortized cost basis of loans individually evaluated and loans past due over 90 days nonaccruing as of December 31, 2024:

 

   Individually Evaluated without ACL   Individually Evaluated with ACL   Accrual Loans Past Due Over 90 Days 
Construction Loans:                             
Individually Evaluated  $1,427   $3,544   $– 
Development Loans:               
Individually Evaluated  $–   $–   $– 
                
Total  $1,427   $3,544   $– 

 

For loans greater than 12 months in age that are individually evaluated, appraisals are ordered and prepared if the current appraisal is greater than 13 months old and construction is greater than 90% complete. If construction is completed by less than 90% the Company uses the latest appraisal on file. At certain times the Company may choose to use a broker’s opinions of value (“BOV”) as a replacement for an appraisal if deemed more efficient by management. Appraised values are adjusted down for estimated costs associated with asset disposal. Broker’s opinion of selling price use currently valid sales contracts on the subject property or representative recent actual closings by the builder on similar properties may be used in place of a BOV.

 

In addition, our loan portfolio includes performing, forbearance and individually evaluated loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. The Company’s policies with respect to placing loans on non-accrual and individually evaluated if they are past due when the contractual payment of principal or interest becomes 90 days past due or when the loan is demanded unless management deems the loan an exception. A fair market value analysis is performed and an allowance for credit loss is established based on the results of the analysis.

 

The following is an aging of our gross loan portfolio as of December 31, 2025:

Schedule of Aging of Gross Loan Portfolio  

   Gross Loan   Current    Past Due   Past Due   Past Due 
   Value   0 - 89    90 - 179   180 - 269   >270 
Construction Loans:                          
A Credit Risk  $23,490   $23,490    $–   $             –   $– 
B Credit Risk   13,799    13,799     –    –    – 
C Credit Risk   828    828     –    –    – 
Individually Evaluated   6,399    

5,201

     618    

446		    134 
                           
Development Loans:                          
A Credit Risk   3,457    3,457     –    –    – 
B Credit Risk   13,072    13,072     –    –    – 
C Credit Risk   99    99     –    –    – 
Individually Evaluated   539    –     539    –    – 
                           
Total  $61,683   $59,946    $1,157   $446   $134 

 

 

The following is an aging of our gross loan portfolio as of December 31, 2024:

 

   Gross Loan   Current    Past Due   Past Due   Past Due 
   Value   0 - 89    90 - 179   180 - 269   >270 
Construction Loans:                          
A Credit Risk  $39,277   $39,277    $–   $–   $– 
B Credit Risk   2,817    2,817     –    –    – 
C Credit Risk   939    939     –    –    – 
Individually Evaluated   4,971    –     1,057    –    3,914 
                           
Development Loans:                          
A Credit Risk   2,485    2,485     –    –    – 
B Credit Risk   160    160     –    –    – 
C Credit Risk   489    489     –    –    – 
Individually Evaluated   –    –     –    –    – 
                           
Total  $51,138   $46,167    $1,057   $–   $3,914 

 

Below is an aging schedule of loans receivable as of December 31, 2025, on a recency basis:

Summary of Aging Schedule of Loans Receivables on a Recency Basis  

  

No.

Loans

  

Unpaid

Balances

   % 
Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.)   155   $58,507    94.9%
60-89 days   1    1,439    2.3%
90-179 days   5    1,157    1.8%
180-269 days   2    446    0.7%
>270 days   1    134    0.3%
                
Subtotal   164   $61,683    100.0%
                
Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days)   –   $–    –%
                
Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. “Total received” to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.)   –   $–    –%
                
Total   164   $61,683    100.0%

 

 

Below is an aging schedule of loans receivable as of December 31, 2024, on a recency basis:

 

  

No.

Loans

  

Unpaid

Balances

   % 
Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.)   162   $46,168    90.2%
60-89 days   –    –    –%
90-179 days   5    1,057    2.1%
180-269 days   –    –    –%
>270 days   16    3,913    7.7%
                
Subtotal   183   $51,138    100.0%
                
Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days)   –   $–    –%
                
Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. “Total received” to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.)   –   $–    –%
                
Total   183   $51,138    100.0%

 

Below is an aging schedule of loans receivable as of December 31, 2025, on a contractual basis:

  

  

No.

Loans

  

Unpaid

Balances

   % 
Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.)   155   $58,507    94.9%
60-89 days   1    1,439    2.3%
90-179 days   5    1,157    1.8%
180-269 days   2    446    0.7%
>270 days   1    134    0.3%
                
Subtotal   164   $61,683    100.0%
                
Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days)   –   $–    –%
                
Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. “Total received” to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.)   –   $–    –%
                
Total   164   $61,683    100.0%

 

 

Below is an aging schedule of loans receivable as of December 31, 2024, on a contractual basis:

 

  

No.

Loans

  

Unpaid

Balances

   % 
Contractual terms (All current Direct Loans and Sales Finance Contracts with installments past due less than 60 days from due date.)   162   $46,168    90.2%
60-89 days   –    –    –%
90-179 days   5    1,057    2.1%
180-269 days   –    –    –%
>270 days   16    3,913    7.7%
                
Subtotal   183   $51,138    100.0%
                
Interest only accounts (Accounts on which interest, deferment, extension and/or default charges were received in the last 60 days)   –   $–    –%
                
Partial payment accounts (Accounts on which the total received in the last 60 days was less than 50% of the original contractual monthly payment. “Total received” to include interest on simple interest accounts, as well as late charges on deferment charges on pre-computed accounts.)   –   $–    –%
                
Total   183   $51,138    100.0%

 

The company modifies loans for borrowers for various reasons, including but not limited to changes in what the builder is building versus what was appraised, changes in loan-to-value (“LTV”) or market conditions, and a builder’s inability to pay interest. This last grouping (builder’s inability to pay interest) is done through forbearance agreements which will allow the builder to have a specified period not to pay interest while the home is either completed or marketed. Typically, those interest amounts are collected at final payoff of the loan.

 

As of December 31, 2025, we had one loan with a commitment and loan balance of $258 currently not paying interest under a forbearance agreement. The amount of interest unpaid under the forbearance agreement is $40 and is included in our interest receivable. No loans were under a forbearance agreement as of December 31, 2024.

  

Allowance for Credit Losses on Loans

 

The following table provides a roll forward of the allowance for credit losses as of December 31, 2025:

  

   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Nonaccrual Loans   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Nonaccrual Loans   Total 
   Construction   Development     
   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Individually Evaluated    A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Individually Evaluated    Total 
Allowance for credit losses as of December 31, 2024  $(150)  $(28)  $(13)  $(658)  $(1)  $–   $(18)  $            –   $(868)
Charge-offs   –    –    –    822    –    –    –    –    822 
Recoveries   –    –    –    (53)   –    –    –    –    (53)
Provision (benefit) for credit losses on funded balances   28    (123)   1    (857)   (1)   (78)   16    –    (1,014)
Allowance for credit losses as of December 31, 2025  $(122)  $(151)  $(12)  $(746)  $(2)  $(78)  $(2)  $–   $(1,113)
                                              
Reserve for unfunded commitments as of December 31, 2024  $(65)  $(10)  $(12)  $–   $(1)  $–   $–   $–   $(88)
                                              
Provision (benefit) for credit losses on unfunded commitments   (8)   (45)   8    –    1    (8)   –    –    (52)
Reserve for unfunded commitments as of December 31, 2025  $(73)  $(55)  $(4)  $–   $-   $(8)  $–   $–   $(140)

 

 

The following table provides a roll forward of the allowance for credit losses as of December 31,2024:

 

   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Nonaccrual Loans   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Nonaccrual Loans   Total 
   Construction   Development     
   A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Individually Evaluated    A
Credit Risk		   B
Credit Risk		   C
Credit Risk		   Individually Evaluated    Total 
Allowance for credit losses as of December 31, 2023  $(211)  $(32)  $–   $(437)  $(5)  $–   $(10)  $–   $(695)
Reclassification of ACL on unfunded commitments   59    19    –    –    –    –    –    –    78 
Charge-offs   –    –    –    506    –    –    –    –    506 
Recoveries   –    –    –    (6)   –    –    –    –    (6)
Provision (benefit) for credit losses on funded balances   2    (15)   (13)   (721)   4    –    (8)   –    (751)
Allowance for credit losses as of December 31, 2024  $(150)  $(28)  $(13)  $(658)  $(1)  $–   $(18)  $–   $(868)
                                              
Reserve for unfunded commitments as of December 31, 2023  $—   $—   $—   $—   $—   $—   $—   $—   $— 
Reclassification of ACL on unfunded commitments   (59)   (19)   –    –    –    –    –    –    (78)
Provision (benefit) for credit losses on unfunded commitments   (6)   9    (12)   –    (1)   –    –    –    (10)
Reserve for unfunded commitments as of December 31, 2024  $(65)  $(10)  $(12)  $–   $(1)  $–   $–   $–   $(88)

 

Allowance for Credit Losses on Unfunded Loan Commitments

 

Unfunded commitments to extend credit, which have similar collateral, credit and market risk to our outstanding loans, were $23,557 and $22,515 as of December 31, 2025 and 2024, respectively. The ACL is calculated at an estimated loss rate on the total commitment value for loans in our portfolio. The ACL on unfunded commitments is calculated as the difference between the ACL on commitment value less the estimated loss rate and the total gross loan value for loans in our portfolio. The ACL for unfunded commitments was $140 and $88 as of December 31, 2025 and 2024, respectively.

 

 

Loan Portfolio by Year of Origination

 

The table below presents the Company’s loan portfolio by year of origination, category, and credit quality indicator as of December 31, 2025. Loans acquired are shown in the tables by origination year.

 

   2025   2024   2023   2022   2021   Prior   Total 
Construction loans Collectively Evaluated:                                   
A Credit Risk  $15,907   $3,786   $2,277   $939   $581   $-   $23,490 
B Credit Risk   7,228    4,938    620    1,013    -    -    13,799 
C Credit Risk   -    827    -    -    -    -    827 
Individually Evaluated   2,323    2,429    1,050    597    -    -    6,399 
Construction loans  $25,458   $11,980   $3,947   $2,549   $581   $-   $44,515 
                                    
Current Period Charge Offs  $-   $-   $-   $(125)  $(27)  $(670)  $(822)
                                    
Development Loans Collectively Evaluated:                                   
A Credit Risk  $3,020   $438   $-   $-   $-   $-   $3,458 
B Credit Risk   11,602    -    -    -    -    1,470    13,072 
C Credit Risk   -    -    99    -    -    -    99 
Individually Evaluated   -    -    -    -    -    539    539 
Development loans  $14,622   $438   $99   $-   $-   $2,009   $17,168 
                                    
Current Period Charge Offs  $-   $-   $-   $-   $-   $-   $- 
                                    
Total  $40,080   $12,418   $4,046   $2,424   $554   $1,339   $60,861 

 

The table below presents the Company’s loan portfolio by year of origination, category, and credit quality indicator as of December 31, 2024. Loans acquired are shown in the tables by origination year.

 

   2024   2023   2022   2021   2020   Prior   Total 
Construction loans Collectively Evaluated:                                   
A Credit Risk  $24,336   $9,980   $4,961   $-   $-   $-   $39,277 
B Credit Risk   1,936    300    -    581    -    -    2,817 
C Credit Risk   840    99    -    -    -    -    939 
Individually Evaluated   -    1,552    794    446    1,781    398    4,971 
Construction loans  $27,112   $11,931   $5,755   $1,027   $1,781   $398   $48,004 
                                    
Current Period Charge Offs   -    (138)   (356)   -    -    (12)   (506)
                                    
Development Loans Collectively Evaluated:                                   
A Credit Risk  $300   $229   $-   $37   $-   $1,919   $2,485 
B Credit Risk   160    -    -    -    -    -    160 
C Credit Risk   -    -    -    -    -    489    489 
Individually Evaluated   -    -    -    -    -    -    - 
Development loans  $460   $229   $-   $37   $-   $2,408   $3,134 
                                    
Current Period Charge Offs  $-   $-   $-   $-   $-   $-   $- 
                                    
Total  $27,572   $12,022   $5,399   $1,064   $1,781   $2,794   $50,632 

 

Concentration of Risk

 

Financial instruments that potentially subject the Company to concentration of credit risk consist principally of loans receivable. Our concentration risks for our top three customers listed by geographic real estate market are summarized in the table below:

 

   December 31, 2025  December 31, 2024
      Percent of      Percent of 
   Borrower  Loan   Borrower  Loan 
   City  Commitments   City  Commitments 
               
Highest concentration risk  Pittsburgh, PA   36%  Pittsburgh, PA   20%
Second highest concentration risk  Central and Southwest FL   7%  Cape Coral, FL   4%
Third highest concentration risk  St. George, UT   6%  Greenville, SC   3%