v3.26.1
Loans and Allowance for Credit Losses
 6 Months Ended
Jun. 30, 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 June 30, 2026 and December 31, 2025, the Company had 100 and 115 loans held for investment, respectively.
As of June 30, 2026 and December 31, 2025, the Company had direct reserves on outstanding principal for loans held for investment of $8.9 million and $6.3 million, respectively.
Loan portfolio
As of June 30, 2026 and December 31, 2025, loans held for investment on non-accrual status had an outstanding principal balance of $95.8 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 due90 days and greater Total
As of June 30, 2026$255,512 $— $1,710 $80,335 $337,557 
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 
As of June 30, 2026 and December 31, 2025, there were no loans on accrual status that were 90 days or greater past due in their payment obligations. As of June 30, 2026 and December 31, 2025, there were loans 90 days and greater past due with gross principal balances of $60.3 million and $96.8 million, respectively, for which no specific allowance for credit losses was recorded. As of June 30, 2026 and December 31, 2025, there were loans 90 days and greater 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 June 30, 2026, and December 31, 2025, was $31.6 million and $37.5 million, respectively. As of June 30, 2026, and December 31, 2025, the Company had directly reserved against these loans in foreclosure in the amounts of $6.8 million and $4.2 million, respectively. Further, as of June 30, 2026 and December 31, 2025, the Company had direct reserves against non-performing loans held for investment that experienced declines in fair value of $2.1 million and $2.1 million, respectively.
As of June 30, 2026, the Company’s mortgage loan portfolio includes loans with stated interest rates ranging from 7.25% 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 June 30, 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 June 30, 2026 and December 31, 2025:
June 30, 2026December 31, 2025
(in thousands)Carrying Value% of PortfolioCarrying Value% of Portfolio
New England$137,801 40.9 %$163,049 43.2 %
Mid-Atlantic48,098 14.2 %40,483 10.7 %
South138,213 40.9 %170,441 45.2 %
West13,445 4.0 %3,445 0.9 %
Total$337,557 100.0 %$377,418 100.0 %
The following tables present the carrying value of the Company’s loans held for investment based on credit quality indicators in assessing estimated credit losses and year of origination at the dates indicated:
June 30, 2026
Year Originated (1)
FICO Score (2)(in thousands)
Carrying
Value		20262025202420232022Prior
Under 500$— $— $— $— $— $— $— 
501-55035 — — — — — 35 
551-600— — — — — — — 
601-65025,042 10,000 1,218 4,445 649 2,628 6,102 
651-70064,152 — 15,288 2,453 3,591 9,042 33,778 
701-750105,188 33,239 25,534 7,675 12,154 5,298 21,288 
751-800143,140 2,456 38,644 18,897 49,319 13,737 20,087 
801-850— — — — — — — 
Total$337,557 $45,695 $80,684 $33,470 $65,713 $30,705 $81,290
December 31, 2025
Year Originated (1)
FICO Score (2)(in thousands)
Carrying
Value		20252024202320222021Prior
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:
June 30, 2026December 31, 2025
(in thousands)
Collateral TypeCollateral Dependent LoansCollateral Dependent Loans
Residential$38,565 $65,077 
Commercial49,629 27,700 
Pre-Development Land6,320 12,832 
Mixed Use14,825 14,666 
Total$109,339 $120,275 
Loan modifications made to borrowers experiencing financial difficulty
The following tables present loan modifications during the periods indicated made to borrowers experiencing financial difficulty:
(in thousands)Three months ended June 30, 2026
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Principal modification, with no term extension$— — %Unpaid interest/taxes/charges added to principal balance
Term extension23,272 7.2 %
A weighted average of 8.5 months were added to the life of the loans
(in thousands)Three months ended June 30, 2025
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Principal modification, with no term extension$14,042 3.9 %Unpaid interest/taxes/charges added to principal balance
Term extension25,559 7.0 %
A weighted average of 7.7 months were added to the life of the loans
(in thousands)Six months ended June 30, 2026
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Principal modification, with no term extension$5,810 1.8 %Unpaid interest/taxes/charges added to principal balance
Term extension55,141 17.1 %
A weighted average of 3.6 months were added to the life of the loans
(in thousands)Six months ended June 30, 2025
Carrying Value% of Total
Carrying Value of
Loans held for investment, net		Financial Effect
Principal modification, with no term extension$14,042 3.9 %Unpaid interest/taxes/charges added to principal balance
Term extension47,702 13.1 %
A weighted average of 7.4 months were added to the life of the loans
As of June 30, 2026, the Company had commitments to fund an additional $2.0 million to borrowers experiencing financial difficulty. During the six months ended June 30, 2026, the Company modified the interest rate on five loans with an outstanding principal balance of $28.5 million. The change in the rate was due to taking the loan off default rate. As of June 30, 2025, the Company had committed to fund an additional $7.7 million to borrowers experiencing financial difficulty. During the six months ended June 30, 2025, the Company modified the interest rate on five loans with an outstanding principal balance of $18.9 million. The change in the rate was due to taking the loan off default rate.
The following table presents the performance of loans that have been modified during the twelve-month period ended June 30, 2026 to borrowers experiencing financial difficulty, of which none of 23 defaulted during the period.
(in thousands)Current90-119 days past due120+ days past dueTotal
Principal modification, with no term extension$5,810 $— $— $5,810 
Term extension77,986 9,571 — 87,557 
The following table presents the performance of loans that have been modified during the twelve-month period ended June 30, 2025 to borrowers experiencing financial difficulty, of which none of 31 defaulted during the period.
(in thousands)Current90-119 days past due120+ days past dueTotal
Principal modification, with no term extension$15,268 $— $— $15,268 
Term extension61,692 12,895 — 74,587 
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 June 30, 2026:
Balance as of March 31, 2026Provision for (recovery of) credit
losses related to loans		Charge-offsBalance as of
June 30, 2026
(in thousands)
Loans held for investment$12,401 $1,102 $(12)$13,491 
Interest and fees receivable922 497 (186)1,233 
Due from borrower1,791 753 (501)2,043 
Unfunded commitments588 199 — 787 
Total allowance for credit losses$15,702 $2,551 $(699)$17,554 
The following table presents the financial statement line items that are impacted by the allowance for credit losses for the six months ended June 30, 2026:
Balance as of December 31, 2025Provision for (recovery of) credit
losses related to loans		Charge-offsBalance as of
June 30, 2026
(in thousands)
Loans held for investment$11,510 $5,873 $(3,892)$13,491 
Interest and fees receivable2,598 473 (1,838)1,233 
Due from borrower1,084 1,460 (501)2,043 
Unfunded commitments670 117 — 787 
Total allowance for credit losses$15,862 $7,923 $(6,231)$17,554 

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 June 30, 2026:
Balance as of March 31, 2026Provision for
(recovery of) credit losses
related to loans		Charge-offsAllowance for credit losses
as of June 30,
2026
(in thousands)
New England$6,599 $1,065 $— $7,664 
Mid-Atlantic2,411 (158)— 2,253 
South1,803 (55)(12)1,736 
West1,588 250 — 1,838 
Total$12,401 $1,102 $(12)$13,491 
The following table presents activity in the allowance for credit losses by geographic location with respect to loans held for investment for the six months ended June 30, 2026:
Balance as of December 31, 2025Provision for
(recovery of) credit losses
related to loans		Charge-offsAllowance for credit losses
as of June 30,
2026
(in thousands)
New England$6,429 $1,235 $— $7,664 
Mid-Atlantic1,770 483 — 2,253 
South1,681 3,947 (3,892)1,736 
West1,630 208 — 1,838 
Total$11,510 $5,873 $(3,892)$13,491 
The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the three months ended June 30, 2026:
20262025202420232022PriorTotal
(in thousands)
Current period charge-offs$— $— $— $— $— $12 $12 
Total$— $— $— $— $— $12 $12 
The following table presents charge-offs on loan principal related to loans held for investment by fiscal year of origination for the six months ended June 30, 2026:
20262025202420232022PriorTotal
(in thousands)
Current period charge-offs$— $— $— $— $— $3,892 $3,892 
Total$— $— $— $— $— $3,892 $3,892