v3.26.1
Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2026
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
Loans include loans held for investment that are accounted for at amortized cost net of allowance for credit losses. The classification for a loan is based on management’s strategy for the loan.
Loans held for investment
As of March 31, 2026 and December 31, 2025, the Company had 108 and 115 loans held for investment, respectively.
As of March 31, 2026 and December 31, 2025, the Company had direct reserves on outstanding principal for loans held for investment of $7.0 million and $6.3 million, respectively.
Loan portfolio
As of March 31, 2026 and December 31, 2025, loans held for investment on non-accrual status had an outstanding principal balance of $75.4 million and $117.6 million, respectively. The non-accrual loans are inclusive of loans pending foreclosure. The following table summarizes the Company’s loan portfolio by past due status:
Loans held for investment
(in thousands)Current30-59 days past due60-89 days past dueGreater than 90 daysTotal
As of March 31, 2026$259,192 $37,956 $1,360 $57,327 $355,835 
As of December 31, 2025$239,615 $20,218 $— $117,585 $377,418 
There are no greater than 90 days past due loans that are on accrual status as of March 31, 2026 and December 31, 2025. As of March 31, 2026 and December 31, 2025, there were loans greater than 90 days past due with gross principal balances of $37.3 million and $96.8 million, respectively, for which no specific allowance for credit losses was recorded. As of March 31, 2026 and December 31, 2025, there were loans greater than 90 days past due with gross principal balances of $20.0 million and $20.8 million, respectively, for which specific allowances were recorded.
The aggregate gross outstanding principal of loans in pending/pre-foreclosure as of March 31, 2026, and December 31, 2025, was $39.6 million and $37.5 million, respectively. As of March 31, 2026, and December 31, 2025, the Company had directly reserved against these loans in foreclosure in the amounts of $6.7 million and $4.2 million, respectively. Further, as of March 31, 2026 and December 31, 2025, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $0.3 million and $2.1 million, respectively.
As of March 31, 2026, the Company’s mortgage loan portfolio includes loans with stated interest rates ranging from 7.0% to 15.0%. The default interest rate is generally 18.0%, but could be more or less depending on state usury laws and other considerations deemed relevant by the Company.
As of March 31, 2026, no borrower exceeded 10% of the Company's outstanding mortgage loan portfolio. At December 31, 2025, the Company had one borrower representing 13.3% of the outstanding mortgage loan portfolio. These loans were included in our nonperforming loan portfolio at December 31, 2025.
The following table presents the Company’s loans held for investment by geographic location as of March 31, 2026 and December 31, 2025:
March 31, 2026December 31, 2025
(in thousands)Carrying Value% of PortfolioCarrying Value% of Portfolio
New England$154,922 43.5 %$163,049 43.2 %
Mid-Atlantic53,138 14.9 %40,483 10.7 %
South144,330 40.6 %170,441 45.2 %
West3,445 1.0 %3,445 0.9 %
Total$355,835 100.0 %$377,418 100.0 %
The following tables present the carrying value of the Company’s loans held for investment based on credit quality indicators in assessing estimated credit losses and year of origination at the dates indicated:
March 31, 2026
Year Originated (1)
FICO Score (2)(in thousands)
Carrying
Value		20262025202420232022Prior
Under 500$142 $— $— $142 $— $— $— 
501-55035 — — — — — 35 
551-600— — — — — — — 
601-65022,672 4,850 3,203 4,338 774 3,133 6,374 
651-70078,481 — 19,392 3,561 10,799 9,042 35,687 
701-750105,347 15,700 24,701 7,388 24,435 5,298 27,825 
751-800143,947 2,158 42,580 18,648 46,900 13,724 19,937 
801-8505,211 — — — — 5,211 — 
Total$355,835 $22,708 $89,876 $34,077 $82,908 $36,408 $89,858 
December 31, 2025
Year Originated (1)
FICO Score (2)(in thousands)
Carrying
Value		20252024202320222021Prior
Loans held for investment:
Under 500$142 $— $142 $— $— $— $— 
501-55035 — — — — — 35 
551-600— — — — — — — 
601-65017,665 2,914 4,250 1,025 3,102 — 6,374 
651-70081,859 18,654 4,017 10,594 9,010 38,375 1,209 
701-750125,603 24,082 7,226 23,721 5,299 64,348 927 
751-800137,725 42,340 15,795 46,339 13,449 19,802 — 
801-85014,389 — — 1,700 12,689 — — 
Total$377,418 $87,990 $31,430 $83,379 $43,549 $122,525 $8,545 
_______________________________________________________________
(1)Represents the year of origination or amendment where the loan was subject to a full re-underwriting.
(2)The FICO Scores are calculated at the inception of the loan and are updated if the loan is modified or on an as needed basis.
The following table presents the amortized cost of collateral dependent loans:
March 31, 2026December 31, 2025
(in thousands)
Collateral TypeCollateral Dependent LoansCollateral Dependent Loans
Residential$41,291 $65,077 
Commercial29,250 27,700 
Pre-Development Land12,832 12,832 
Mixed Use5,527 14,666 
Total$88,900 $120,275 
Loan modifications made to borrowers experiencing financial difficulty
The following tables present loan modifications during the periods indicated made to borrowers experiencing financial difficulty:
(in thousands)Rolling twelve months ended March 31, 2026
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Principal modification, with no term extension$5,776 1.7 %Unpaid interest/taxes/charges added to principal balance
Term extension$96,748 28.4 %
A weighted average of 10.4 months were added to the life of the loans
(in thousands)Rolling twelve months ended March 31, 2025
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Term extension$23,922 6.2 %
A weighted average of 6.7 months were added to the life of the loans
As of March 31, 2026, the Company had commitments to lend additional amounts totaling approximately $4.5 million to borrowers experiencing financial difficulty. During the twelve months ended March 31, 2026, the Company modified the interest rate on twelve loans with an outstanding principal balance of $42.3 million. The change in the rate was due to taking the loan off default rate. As of March 31, 2025, the Company had committed to lend additional amounts totaling approximately $0.8 million to borrowers experiencing financial difficulty. Of the loans that were modified that experienced financial difficulties during the period ended March 31, 2025, one loan with an outstanding principal balance of $0.6 million experienced a rate decrease due to the modification. The change in the rate was taking the loan off default rate.
The following table presents the performance of loans that have been modified during the twelve-month period ended March 31, 2026 to borrowers experiencing financial difficulty. Of the loans that were modified during the twelve-month period ended March 31, 2026 to borrowers experiencing financial difficulty, four loans defaulted during the period.
(in thousands)Current90-119 days past due120+ days past dueTotal
Principal modification, with no term extension5,776 — — 5,776 
Term extension96,748 — — 96,748 
The following table presents the performance of loans that have been modified during the twelve-month period ended March 31, 2025 to borrowers experiencing financial difficulty. Of the loans that were modified during the twelve-month period ended March 31, 2025 to borrowers experiencing financial difficulty, no loans defaulted during the period.
(in thousands)Current90-119 days past due120+ days past dueTotal
Term extension$23,922 $— $— $— 
Allowance for credit losses
The following table presents the financial statement line items that are impacted by the allowance for credit losses for the three months ended March 31, 2026:
Balance as of December 31, 2025Provision for (recovery of) credit
losses related to loans		Charge-offsBalance as of
March 31, 2026
(in thousands)
Loans held for investment$11,510 $4,771 $(3,880)$12,401 
Interest and fees receivable2,598 (24)(1,652)922 
Due from borrower1,084 707 — 1,791 
Unfunded commitments670 (82)— 588 
Total allowance for credit losses$15,862 $5,372 $(5,532)$15,702 
The following table presents the financial statement line items that are impacted by the allowance for credit losses for the three months ended March 31, 2025:
Balance as of December 31, 2024Provision for (recovery of) credit
losses related to loans		Charge-offsBalance as of
March 31, 2025
(in thousands)
Loans held for investment$18,470 $273 $(621)$18,122 
Interest and fees receivable3,133 (152)— 2,981 
Due from borrower1,135 991 (170)1,956 
Unfunded commitments924 (60)— 864 
Total allowance for credit losses$23,662 $1,052 $(791)$23,923 

The following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the three months ended March 31, 2026:
Allowance for credit losses as of December 31, 2025Provision for
(recovery of) credit losses
related to loans		Reclassification of loans held for sale to loans held for investmentCharge-offsAllowance for credit losses
as of March 31,
2026
(in thousands)
New England$6,429 $170 $— $— $6,599 
Mid-Atlantic1,770 641 — — 2,411 
South1,681 4,002 — (3,880)1,803 
West1,630 (42)— — 1,588 
Total$11,510 $4,771 $— $(3,880)$12,401 
The following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the three months ended March 31, 2025:
Allowance for credit losses as of
December 31, 2024		Provision for
(recovery of) credit losses
related to loans		Charge-offsAllowance for credit losses
as of March 31,
2025
(in thousands)
New England$12,844 $34 $— $12,878 
Mid-Atlantic1,857 7 — 1,864 
South1,802 279 (621)1,460 
West1,967 (47)— 1,920 
Total$18,470 $273 $(621)$18,122 
The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended March 31, 2026:
20262025202420232022PriorTotal
(in thousands)
Current period charge-offs$— $— $— $— $— $3,880 $3,880 
Total$— $— $— $— $— $3,880 $3,880 
The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended March 31, 2025
20252024202320222021PriorTotal
(in thousands)
Current period charge-offs$— $134 $— $487 $— $— $621 
Total$— $134 $— $487 $— $— $621