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Loans and Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2020

The following table presents, by recorded investment, the composition of the Company’s loans held-for-investment (net of deferred fees and costs) as of the dates indicated:


	December 31,
($ in thousands)	2020		2019
Real estate loans:
Commercial property	$	880,736	$	803,014
Residential property	198,431		235,046
SBA property	126,570		129,837
Construction	15,199		19,164
Total real estate loans	1,220,936		1,187,061
Commercial and industrial loans:
Commercial term	87,250		103,380
Commercial lines of credit	96,087		111,768
SBA commercial term	21,878		25,332
SBA PPP	135,654		—
Total commercial and industrial loans	340,869		240,480
Other consumer loans	21,773		23,290
Loans held-for-investment	1,583,578		1,450,831


Allowance for loan losses	(26,510)		(14,380)
Net loans held-for-investment	$	1,557,068	$	1,436,451

The following table presents a summary of SBA PPP loans as of December 31, 2020:


	December 31, 2020
($ in thousands)	Number of Loans	Amount
Loan amount:
$50,000 or less	1,017	$	20,518
Over $50,000 and less than $350,000	496	60,692
Over $350,000 and less than $2,000,000	69	46,054
$2,000,000 or more	3	8,390
Total	1,585	$	135,654

Schedule of Loan Modification Related to COVID-19

The following table presents a summary of loans under modified terms related to the COVID-19 pandemic by portfolio segment as of December 31, 2020:


	December 31, 2020
	Modification Type
($ in thousands)	Payment Deferment		Interest Only Payment		Total

Real estate loans:
Commercial property	$	9,688	$	14,444	$	24,132
Residential property	425		—		425
SBA property	—		4,192		4,192

Commercial and industrial loans:
Commercial term	2,462		3,065		5,527

SBA commercial term	—		1,841		1,841


Total	$	12,575	$	23,542	$	36,117

Allowance for Loan Losses

he following table presents the activities in allowance for loan losses by portfolio segment, which is consistent with the Company’s methodology for determining allowance for loan losses, for the periods indicated:


($ in thousands)	Real Estate		Commercial and Industrial		Consumer		Total
Balance at January 1, 2018	$	8,507	$	3,548	$	169	$	12,224
Charge-offs	(381)		(272)		(356)		(1,009)
Recoveries on loans previously charged off	213		356		152		721
Provision (reversal) for loan losses	765		245		221		1,231
Balance at December 31, 2018	9,104		3,877		186		13,167
Charge-offs	(31)		(3,350)		(198)		(3,579)
Recoveries on loans previously charged off	6		378		171		555
Provision for loan losses	775		3,449		13		4,237
Balance at December 31, 2019	9,854		4,354		172		14,380
Charge-offs	(175)		(1,104)		(250)		(1,529)
Recoveries on loans previously charged off	58		236		146		440
Provision for loan losses	9,157		3,736		326		13,219
Balance at December 31, 2020	$	18,894	$	7,222	$	394	$	26,510

The following tables present the information on allowance for loan losses and recorded investments by portfolio segment and impairment methodology as of the dates indicated:


($ in thousands)	Real Estate		Commercial and Industrial		Consumer		Total
December 31, 2020
Allowance for loan losses:
Individually evaluated for impairment	$	3	$	2	$	—	$	5
Collectively evaluated for impairment	18,891		7,220		394		26,505
Total	$	18,894	$	7,222	$	394	$	26,510
Loans receivable:
Individually evaluated for impairment	$	2,200	$	1,531	$	—	$	3,731
Collectively evaluated for impairment	1,218,736		339,338		21,773		1,579,847
Total	$	1,220,936	$	340,869	$	21,773	$	1,583,578
December 31, 2019
Allowance for loan losses:
Individually evaluated for impairment	$	4	$	15	$	—	$	19
Collectively evaluated for impairment	9,850		4,339		172		14,361
Total	$	9,854	$	4,354	$	172	$	14,380
Loans receivable:
Individually evaluated for impairment	$	2,158	$	2,401	$	—	$	4,559
Collectively evaluated for impairment	1,184,903		238,079		23,290		1,446,272
Total	$	1,187,061	$	240,480	$	23,290	$	1,450,831

Risk Categories for Loans by Portfolio Segment

The following table presents the risk categories for the recorded investment in loans by portfolio segment as of dates indicated:


($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2020
Real estate loans:
Commercial property	$	866,508	$	10,268	$	3,960	$	—	$	880,736
Residential property	198,242		—		189		—		198,431
SBA property	123,147		251		3,172		—		126,570
Construction	15,199		—		—		—		15,199
Commercial and industrial loans:
Commercial term	81,724		4,362		1,164		—		87,250
Commercial lines of credit	93,884		1,299		904		—		96,087
SBA commercial term	20,922		281		675		—		21,878
SBA PPP	135,654		—		—		—		135,654
Other consumer loans	21,707		—		66		—		21,773
Total	$	1,556,987	$	16,461	$	10,130	$	—	$	1,583,578
December 31, 2019
Real estate loans:
Commercial property	$	802,373	$	—	$	641	$	—	$	803,014
Residential property	235,046		—		—		—		235,046
SBA property	124,135		72		5,630		—		129,837
Construction	17,453		1,711		—		—		19,164
Commercial and industrial loans:
Commercial term	103,380		—		—		—		103,380
Commercial lines of credit	109,880		—		1,888		—		111,768
SBA commercial term	24,677		—		655		—		25,332

Other consumer loans	23,242		—		48		—		23,290
Total	$	1,440,186	$	1,783	$	8,862	$	—	$	1,450,831

The following table presents the risk categories for the recorded investment in loans under modified terms related to the COVID-19 pandemic by portfolio segment as of dates indicated:


($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2020
Real estate loans:
Commercial property	$	13,158	$	10,268	$	706	$	—	$	24,132
Residential property	425		—		—		—		425
SBA property	3,941		251		—		—		4,192

Commercial and industrial loans:
Commercial term	—		4,362		1,165		—		5,527

SBA commercial term	1,769		—		72		—		1,841


Total	$	19,293	$	14,881	$	1,943	$	—	$	36,117

Aging of Past Due Accruing Loans and Nonaccrual Loans by Segment

The following table presents the aging of past due recorded investment in accruing loans and nonaccrual loans by portfolio segment as of dates indicated:


	Still Accruing
($ in thousands)	30 to 59 Days Past Due		60 to 89 Days Past Due		90 or More Days Past Due		Nonaccrual		Total Past Due and Nonaccrual
December 31, 2020
Real estate loans:
Commercial property	$	—	$	—	$	—	$	524	$	524
Residential property	182		—		—		189		371
SBA property	—		—		—		885		885

Commercial and industrial loans:

Commercial lines of credit	—		—		—		904		904
SBA commercial term	—		—		—		595		595

Other consumer loans	120		36		—		66		222
Total	$	302	$	36	$	—	$	3,163	$	3,501
December 31, 2019
Real estate loans:

Residential property	$	—	$	697	$	—	$	—	$	697
SBA property	794		—		—		442		1,236

Commercial and industrial loans:

Commercial lines of credit	—		—		—		1,888		1,888
SBA commercial term	—		189		287		159		635

Other consumer loans	99		39		—		48		186
Total	$	893	$	925	$	287	$	2,537	$	4,642

Impairment by Portfolio Segment

The following table presents loans individually evaluated for impairment by portfolio segment as of the dates indicated. The recorded investment presents customer balances net of any partial charge-offs recognized on the loans and net of any deferred fees and costs.


	With No Allowance Recorded				With an Allowance Recorded
($ in thousands)	Recorded Investment		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Related Allowance
December 31, 2020
Real estate loans:
Commercial property	$	856	$	855	$	—	$	—	$	—
Residential property	189		189		—		—		—
SBA property	1,108		1,198		47		45		3

Commercial and industrial loans:
Commercial term	18		18		—		—		—
Commercial lines of credit	904		904		—		—		—
SBA commercial term	593		633		16		18		2


Total	$	3,668	$	3,797	$	63	$	63	$	5
December 31, 2019
Real estate loans:
Commercial property	$	339	$	338	$	—	$	—	$	—

SBA property	1,699		1,828		120		154		4

Commercial and industrial loans:
Commercial term	28		28		—		—		—
Commercial lines of credit	1,888		1,888		—		—		—
SBA commercial term	457		495		28		28		15


Total	$	4,411	$	4,577	$	148	$	182	$	19

The following table presents information on the recorded investment in impaired loans by portfolio segment for the periods indicated:


	Year Ended December 31,
	2020				2019				2018
($ in thousands)	Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income
Real estate loans:
Commercial property	$	467	$	23	$	170	$	12	$	199	$	—
Residential property	47		—		38		—		281		—
SBA property	1,459		17		1,685		41		1,245		22

Commercial and industrial loans:
Commercial term	24		1		47		3		112		8
Commercial lines of credit	1,869		—		921		—		5		—
SBA commercial term	499		1		224		9		382		8


Total	$	4,365	$	42	$	3,085	$	65	$	2,224	$	38

The following presents a summary of interest foregone on impaired loans for the periods indicated:


	Year Ended December 31,
($ in thousands)	2020		2019		2018
Interest income that would have been recognized had impaired loans performed in accordance with their original terms	$	256	$	213	$	191
Less: interest income recognized on impaired loans on a cash basis	(42)		(65)		(38)
Interest income foregone on impaired loans	$	214	$	148	$	153

Modified TDRs by Portfolio Segment

The following table presents the composition of loans that were modified as TDRs by portfolio segment as of the dates indicated:


	December 31,
	2020						2019
($ in thousands)	Accruing		Nonaccrual		Total		Accruing		Nonaccrual		Total
Real estate loans:
Commercial property	$	333	$	—	$	333	$	339	$	—	$	339

SBA property	270		5		275		294		121		415

Commercial and industrial loans:
Commercial term	18		—		18		28		—		28

SBA commercial term	13		—		13		39		—		39


Total	$	634	$	5	$	639	$	700	$	121	$	821

The following table presents new loans that were modified as TDRs by portfolio segment for the periods indicated:


	Year Ended December 31,
	2020					2019					2018
($ in thousands)	Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Post-Modification Recorded Investment
Real estate loans:
Commercial property	—	$	—	$	—	1	$	341	$	341	—	$	—	$	—

SBA property	—	—		—		2	254		254		—	—		—

Commercial and industrial loans:


SBA commercial term	2	37		37		2	15		15		—	—		—


Total	2	$	37	$	37	5	$	610	$	610	—	$	—	$	—

The following table summarized the TDRs by modification type for the periods indicated:


	Principal (1)			Principal and Interest (2)			Total
($ in thousands)	Number of Loans	Pre-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment		Number of Loans	Pre-Modification Recorded Investment
Year ended December 31, 2020:





Commercial and industrial loans:


SBA commercial term	2	$	37	—	$	—	2	$	37


Total	2	$	37	—	$	—	2	$	37
Year ended December 31, 2019:
Real estate loans:
Commercial property	—	$	—	1	$	341	1	$	341

SBA property	2	254		—	—		2	254

Commercial and industrial loans:


SBA commercial term	2	15		—	—		2	15


Total	4	$	269	1	$	341	5	$	610

(1) Includes forbearance payments, term extensions and principal deferments that modify the terms of the loan from principal and interest payment to interest only payment.

(2) Includes principal and interest deferments or reductions.

Loans Held-for-Sale

The following table presents a summary of loans held-for-investment transferred to loans held-for-sale for the periods indicated:


	Year Ended December 31,
($ in thousands)	2020		2019		2018
Real estate loans:
Commercial property	$	—	$	—	$	2,112
Residential property	1,125		824		5,950


Commercial and industrial loans:


SBA commercial term	230		—		—

Total	$	1,355	$	824	$	8,062

The following table presents a summary of loans held-for-sale transferred to loans held-for-investment for the periods indicated:


	Year Ended December 31,
($ in thousands)	2020		2019		2018
Real estate loans:

Residential property	$	697	$	—	$	—







Total	$	697	$	—	$	—

The following table presents a summary of purchases of loans held-for-investment for the periods indicated:


	Year Ended December 31,
($ in thousands)	2020		2019		2018
Real estate loans:

Residential property	$	—	$	1,539	$	—







Total	$	—	$	1,539	$	—

The following table presents a composition of loans held-for-sale as of the dates indicated:


	December 31,
($ in thousands)	2020		2019
Real estate loans:

Residential property	$	300	$	760
SBA property	1,411		150

Commercial and industrial loans:


SBA commercial term	268		1,065


Total	$	1,979	$	1,975