v3.26.1
Loans Held for Investment
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans Held for Investment
6. Loans Held for Investment
The majority of the Company’s Loans Held for Investment portfolio consists of property - buy to let loans, which is the purchase of property for the purpose of renting to a tenant, which makes up 99.9% and 99.9% of the total loan portfolio as of March 31, 2026 and December 31, 2025, respectively. As of March 31, 2026, the Company’s loans held for investment are included within assets of discontinued operations on the condensed consolidated balance sheets as they relate to the Birmingham Bank disposal group (see Note 3). Prior to classification as held for sale, the Company’s Loans
Held for Investment portfolio was summarized as follows:
(Amounts in thousands)March 31, 2026December 31, 2025
Property - Buy to Let$748,146 $736,807 
Other453 544 
Deferred fees, net(12,899)(13,713)
Fair value hedge basis adjustment(4,764)1,946 
Allowance for credit losses(2,652)(2,251)
Total Loans Held for Investment, net$728,284 $723,333 
The following table presents the activity in the allowance for credit losses related to loans held for investment:
Three Months Ended March 31,
(Amounts in thousands)20262025
Balance at beginning of period$(2,251)$(1,667)
Provision for credit losses(439)(1,282)
Effect of foreign currency exchange rate changes38 (51)
Balance at end of period$(2,652)$(3,000)
Accrued interest receivable on loans receivable totaled $1.2 million and $1.0 million, respectively, as of March 31, 2026 and December 31, 2025, which are included within assets of discontinued operations on the condensed consolidated balance sheets. The Company elected the practical expedient to exclude the applicable accrued interest receivable on loans receivable from the disclosed amortized cost basis.
The Company concluded that it has a non-accrual policy which allows for the timely reversal of accrued interest should an asset be placed on non-accrual; accordingly, there was no allowance for credit losses for accrued interest receivable on loans receivable as of March 31, 2026. When writing off uncollectible accrued interest receivables on its loans held for investment portfolio, the Company considers 90 days to be a timely manner.
Uncollectible amounts of accrued interest receivable are charged off by reversing interest income. The Company had no charge offs of uncollectible accrued interest on its outstanding loans held for investment during the three months ended March 31, 2026 and 2025.
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. As of March 31, 2026, there were ten loans with a total unpaid principal balance $2.0 million of loans held for investment past due. As of December 31, 2025, there was an immaterial amount of loans held for investment past due.
The Company considers loans for which the repayment is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, or where foreclosure is probable, to be collateral dependent. As of both March 31, 2026, and December 31, 2025, there was one loan with a total unpaid balance of $2.5 million in which formal foreclosure proceedings were in process.
Loans are placed on non-accrual status and the accrual of interest is discontinued if principal or interest payments become 90 days past due and/or management deems the collectability of the principal and/or interest to be in question. Loans to a customer whose financial condition has deteriorated are considered for non-accrual status whether or not the loan is 90 days or more past due. Generally, payments received on non-accrual loans are recorded as principal reductions. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. As of March 31, 2026 and December 31, 2025, there were no loans that were placed on non-accrual status.
During the three months ended March 31, 2026 and 2025, there were no modifications for loans to borrowers experiencing financial difficulty.
Loans are categorized into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation,
public information, and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk.
This analysis includes all loans with the exception of homogeneous loans, or loans that are evaluated together in pools of similar loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans). This analysis is performed at least on a quarterly basis. Homogeneous loans are not risk rated and credit risk is analyzed largely on the expected maturity of the loans.
The Company utilizes maturity bands to assess the probability of credit losses within the portfolio. The three main bands are as follows: 0-20 months, 21-40 months, and over 40 months. The following table presents amortized cost for outstanding loans, by class and year of origination/renewal, as of March 31, 2026 and December 31, 2025.
The tables below present loans by credit quality indicator and vintage year. The amounts presented by year of origination exclude fair value hedge accounting basis adjustments and net deferred fees, which are presented separately above:
March 31, 2026
(Amounts in thousands)20262025202420232022PriorTotal
Property - Buy to Let
0-20 Months$— $— $— $— $— $— $— 
21-40 Months— — 222 — — — 222 
Over 40 Months24,721 594,914 114,632 758 — — 735,025 
Total$24,721 $594,914 $114,854 $758 $— $— $735,247 
Other
0-20 Months$— $— $— $— $359 $79 $438 
21-40 Months— — — 15 — — 15 
Over 40 Months— — — — — — — 
Total$— $— $— $15 $359 $79 $453 
Total$24,721 $594,914 $114,854 $773 $359 $79 $735,700 
December 31, 2025
(Amounts in thousands)20252024202320222021PriorTotal
Property - Buy to Let
0-20 Months$— $— $— $— $— $— $— 
21-40 Months— 226 — — — — 226 
Over 40 Months605,424 116,675 769 — — — 722,868 
Total$605,424 $116,901 $769 $— $— $— $723,094 
Other
0-20 Months$— $— $— $406 $125 $— $531 
21-40 Months— — 13 — — — 13 
Over 40 Months— — — — — — — 
Total$— $— $13 $406 $125 $— $544 
Total$605,424 $116,901 $782 $406 $125 $— $723,638