v3.26.1
Loans and Allowance for Credit Losses on Loans
 3 Months Ended
Mar. 31, 2026
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, 2026
December 31, 2025
Commercial real estate:
Commercial property
$1,091,823 $1,071,396 
Business property644,307 638,063 
Multifamily198,346 175,579 
Construction
18,972 18,561 
Total commercial real estate1,953,448 1,903,599 
Commercial and industrial520,894 508,662 
Consumer:
Residential mortgage392,680 401,337 
Other consumer6,529 6,802 
Total consumer399,209 408,139 
Loans held-for-investment
2,873,551 2,820,400 
Allowance for credit losses on loans(33,943)(33,381)
Net loans held-for-investment
$2,839,608 $2,787,019 
In the ordinary course of business, the Company may grant loans to certain of its officers and directors, and the companies with which they are associated. As of March 31, 2026 and December 31, 2025, the Company had no such loans outstanding.
Allowance for Credit Losses on Loans
The following table presents a composition of provision for credit losses for the periods indicated:
Three Months Ended March 31,
($ in thousands)
2026
2025
Provision for credit losses on loans$618 $1,591 
Provision (reversal) for credit losses on off-balance sheet credit exposures(151)7 
Total provision (reversal) for credit losses$467 $1,598 
The following tables present the activities in ACL on loans for the periods indicated:
($ in thousands)Commercial PropertyBusiness PropertyMultifamilyConstructionCommercial and IndustrialResidential MortgageOther ConsumerTotal
Balance at January 1, 2026
$9,348 $4,347 $1,282 $123 $15,357 $2,871 $53 $33,381 
Charge-offs— — — — (76)— — (76)
Recoveries— 1 — — 19 — — 20 
Provision (reversal) for credit losses on loans1,368 1,201 236 (9)(2,178)9 (9)618 
Balance at March 31, 2026
$10,716 $5,549 $1,518 $114 $13,122 $2,880 $44 $33,943 
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 
The increase in overall ACL for the three months ended March 31, 2026 was primarily due to increases in loans held-for-investment and overall reserve related to qualitative adjustment factors, partially offset by decreases in quantitatively measured loss reserve requirement and reserves on individually evaluated loans.
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 presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of March 31, 2026 and gross write offs for the three months ended March 31, 2026. 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)20262025202420232022PriorTotal
March 31, 2026
Commercial Real Estate:
Commercial property
Pass$60,169 $309,539 $174,921 $137,453 $194,402 $189,634 $14,877 $8,020 $1,089,015 
Special mention— — — — 924 — — — 924 
Substandard— — — 113 347 1,424 — — 1,884 
Doubtful— — — — — — — — — 
Total$60,169 $309,539 $174,921 $137,566 $195,673 $191,058 $14,877 $8,020 $1,091,823 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$22,522 $171,219 $87,702 $87,901 $75,226 $181,979 $6,850 $3,614 $637,013 
Special mention— — — — — 5,471 — — 5,471 
Substandard— — — — 960 863 — — 1,823 
Doubtful— — — — — — — — — 
Total$22,522 $171,219 $87,702 $87,901 $76,186 $188,313 $6,850 $3,614 $644,307 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Multifamily
Pass$25,119 $38,415 $30,307 $13,725 $37,868 $51,912 $1,000 $— $198,346 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$25,119 $38,415 $30,307 $13,725 $37,868 $51,912 $1,000 $— $198,346 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Construction
Pass$— $— $904 $— $18,068 $— $— $— $18,972 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $— $904 $— $18,068 $— $— $— $18,972 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20262025202420232022PriorTotal
March 31, 2026 (Continued)
Commercial and Industrial
Pass$6,276 $28,072 $32,875 $26,836 $13,039 $9,612 $353,847 $49,987 $520,544 
Special mention— — — — — — — — — 
Substandard— — — — 241 109 — — 350 
Doubtful— — — — — — — — — 
Total$6,276 $28,072 $32,875 $26,836 $13,280 $9,721 $353,847 $49,987 $520,894 
Year-to-date period gross write offs
$— $— $— $— $— $76 $— $— $76 
Consumer
Residential mortgage
Pass$7,884 $59,068 $28,640 $46,700 $135,369 $109,632 $— $— $387,293 
Special mention— — — — — — — — — 
Substandard— — — 4,689 — 698 — — 5,387 
Doubtful— — — — — — — — — 
Total$7,884 $59,068 $28,640 $51,389 $135,369 $110,330 $— $— $392,680 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$153 $— $— $1,461 $1,513 $259 $3,139 $— $6,525 
Special mention— — — — — — — — — 
Substandard— — — — 4 — — — 4 
Doubtful— — — — — — — — — 
Total$153 $— $— $1,461 $1,517 $259 $3,139 $— $6,529 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Total loans held-for-investment
Pass$122,123 $606,313 $355,349 $314,076 $475,485 $543,028 $379,713 $61,621 $2,857,708 
Special mention— — — — 924 5,471 — — 6,395 
Substandard— — — 4,802 1,552 3,094 — — 9,448 
Doubtful— — — — — — — — — 
Total$122,123 $606,313 $355,349 $318,878 $477,961 $551,593 $379,713 $61,621 $2,873,551 
Year-to-date period gross write offs
$— $— $— $— $— $76 $— $— $76 
The following table presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
December 31, 2025
Commercial Real Estate:
Commercial property
Pass$312,704 $176,824 $138,914 $203,311 $118,797 $96,119 $14,306 $7,563 $1,068,538 
Special mention— — — 923 — — — — 923 
Substandard— — 116 357 229 1,233 — — 1,935 
Doubtful— — — — — — — — — 
Total$312,704 $176,824 $139,030 $204,591 $119,026 $97,352 $14,306 $7,563 $1,071,396 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$172,213 $89,840 $94,519 $77,382 $116,412 $71,607 $5,530 $3,640 $631,143 
Special mention— — — — 5,512 — — — 5,512 
Substandard— — — 442 377 589 — — 1,408 
Doubtful— — — — — — — — — 
Total$172,213 $89,840 $94,519 $77,824 $122,301 $72,196 $5,530 $3,640 $638,063 
Year-to-date period gross write offs
$— $— $— $307 $— $— $— $— $307 
Multifamily
Pass$38,551 $30,423 $13,793 $38,482 $37,071 $16,259 $1,000 $— $175,579 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$38,551 $30,423 $13,793 $38,482 $37,071 $16,259 $1,000 $— $175,579 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Construction
Pass$— $503 $— $18,058 $— $— $— $— $18,561 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $503 $— $18,058 $— $— $— $— $18,561 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
December 31, 2025 (Continued)
Commercial and Industrial
Pass$30,047 $35,290 $28,031 $15,873 $4,753 $6,413 $336,748 $51,099 $508,254 
Special mention— — — — — — — — — 
Substandard— — — 247 — 161 — — 408 
Doubtful— — — — — — — — — 
Total$30,047 $35,290 $28,031 $16,120 $4,753 $6,574 $336,748 $51,099 $508,662 
Year-to-date period gross write offs
$247 $202 $125 $— $149 $196 $— $— $919 
Consumer
Residential mortgage
Pass$62,595 $29,032 $52,641 $137,472 $67,078 $47,116 $— $— $395,934 
Special mention— — — — — — — — — 
Substandard— — 4,689 — — 714 — — 5,403 
Doubtful— — — — — — — — — 
Total$62,595 $29,032 $57,330 $137,472 $67,078 $47,830 $— $— $401,337 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$262 $— $1,788 $1,932 $429 $39 $2,347 $— $6,797 
Special mention— — — — — — — — — 
Substandard— — — 5 — — — — 5 
Doubtful— — — — — — — — — 
Total$262 $— $1,788 $1,937 $429 $39 $2,347 $— $6,802 
Year-to-date period gross write offs
$— $77 $1 $— $4 $— $— $— $82 
Total loans held-for-investment
Pass$616,372 $361,912 $329,686 $492,510 $344,540 $237,553 $359,931 $62,302 $2,804,806 
Special mention— — — 923 5,512 — — — 6,435 
Substandard— — 4,805 1,051 606 2,697 — — 9,159 
Doubtful— — — — — — — — — 
Total$616,372 $361,912 $334,491 $494,484 $350,658 $240,250 $359,931 $62,302 $2,820,400 
Year-to-date period gross write offs
$247 $279 $126 $307 $153 $196 $— $— $1,308 
Nonaccrual Loans
The following table presents the loans on nonaccrual status by loan segments as of the date indicated:
($ in thousands)Total Nonaccrual LoansNonaccrual Loans with ACLACL on Nonaccrual LoansCollateral Dependent Nonaccrual LoansACL on Collateral Dependent Nonaccrual Loans
March 31, 2026
Commercial real estate:
Commercial property
$1,356 $— $— $1,356 $— 
Business property1,355 628 120 1,355 120 
Total commercial real estate2,711 628 120 2,711 120 
Commercial and industrial83 — — 83 — 
Consumer:
Residential mortgage5,387 — — 5,387 — 
Other consumer4 4 — — — 
Total consumer5,391 4 — 5,387 — 
Total
$8,185 $632 $120 $8,181 $120 
December 31, 2025
Commercial real estate:
Commercial property
$1,403 $— $— $1,403 $— 
Business property938 642 134 938 134 
Total commercial real estate2,341 642 134 2,341 134 
Commercial and industrial161 71 72 161 72 
Consumer:
Residential mortgage5,403 — — 5,403 — 
Other consumer5 5 — — — 
Total consumer5,408 5 — 5,403 — 
Total
$7,910 $718 $206 $7,905 $206 
There were no nonaccrual loans guaranteed by a U.S. government agency at March 31, 2026 and December 31, 2025.
Collateral Dependent Loans
Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the date indicated:
($ in thousands)Hotel / MotelRestaurantRetailSingle Family ResidentialOtherTotal
March 31, 2026
Commercial real estate:
Commercial property$1,356 $— $— $— $— $1,356 
Business property— 895 429 — 31 1,355 
Total commercial real estate1,356 895 429 — 31 2,711 
Commercial and industrial6 — — 77 — 83 
Consumer:
Residential mortgage— — — 5,387 — 5,387 
Total consumer— — — 5,387 — 5,387 
Total$1,362 $895 $429 $5,464 $31 $8,181 
December 31, 2025
Commercial real estate:
Commercial property$1,403 $— $— $— $— $1,403 
Business property— 377 529 — 32 938 
Total commercial real estate1,403 377 529 — 32 2,341 
Commercial and industrial8 — — 82 71 161 
Consumer:
Residential mortgage— — — 5,403 — 5,403 
Total consumer— — — 5,403 — 5,403 
Total$1,411 $377 $529 $5,485 $103 $7,905 
Past Due Loans
The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of date indicated:
Still AccruingNonaccrual
($ 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, 2026
Commercial real estate:
Commercial property$— $— $— $— $501 $— $— $501 $501 
Business property239 — — 239 429 — 407 836 1,075 
Total commercial real estate239 — — 239 930 — 407 1,337 1,576 
Commercial and industrial742 — — 742 6 — — 6 748 
Consumer:
Residential mortgage348 — — 348 265 — 5,123 5,388 5,736 
Other consumer23 19 — 42 — — — — 42 
Total consumer371 19 — 390 265 — 5,123 5,388 5,778 
Total$1,352 $19 $— $1,371 $1,201 $— $5,530 $6,731 $8,102 
December 31, 2025
Commercial real estate:
Commercial property$— $— $— $— $— $— $524 $524 $524 
Business property140 — — 140 86 178 230 494 634 
Total commercial real estate140 — — 140 86 178 754 1,018 1,158 
Commercial and industrial21 5 — 26 — — 78 78 104 
Consumer:
Residential mortgage674 — — 674 2,269 273 2,862 5,404 6,078 
Other consumer108 7 — 115 — — — — 115 
Total consumer782 7 — 789 2,269 273 2,862 5,404 6,193 
Total$943 $12 $— $955 $2,355 $451 $3,694 $6,500 $7,455 
Loan Modification
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of at above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.
There were no loans that the borrowers were both experiencing financial difficulty and modified for the three months ended March 31, 2026 and 2025.
There were no loans that had a payment default during the three months ended March 31, 2026 and 2025 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.
The following table presents the performance of loans that the borrowers were both experiencing financial difficulty and modified in the last 12 months:
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotal
March 31, 2026
Total$— $— $— $— 
December 31, 2025
Total$— $— $— $— 
Purchases, Sales, and Transfers
The following table presents a summary of loans that were transferred from loans held-for-investment to loans held-for-sale for the periods indicate:
Three Months Ended March 31,
($ in thousands)
2026
2025
Commercial real estate:
Commercial property
$1,091 $— 
Total commercial real estate1,091 — 
Total$1,091 $— 
The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during the three months ended March 31, 2026 or 2025.
The Company had no purchases of loans held-for-investment during the three months ended March 31, 2026 or 2025.
Loans Held-For-Sale
The following table presents a composition of loans held-for-sale as of the date indicated:
($ in thousands)
March 31, 2026
December 31, 2025
Commercial real estate:
Commercial property$1,091 $3,750 
Business property715 2,734 
Total commercial real estate1,806 6,484 
Commercial and industrial1,798 5,593 
Total$3,604 $12,077 
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.