Loans (Tables)

6 Months Ended

Jun. 30, 2021

Loans

Classification of Loans By Class

The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of June 30, 2021 and December 31, 2020:

(In thousands)	June 30, 2021		December 31, 2020
SBA loans held for investment	$	38,114	$	39,587
SBA PPP loans		132,375		118,257
Commercial loans
SBA 504 loans		22,155		19,681
Commercial other		113,778		118,280
Commercial real estate		676,383		630,423
Commercial real estate construction		73,250		71,404
Residential mortgage loans		422,188		467,586
Consumer loans
Home equity		63,390		62,549
Consumer other		1,167		3,551
Residential construction loans		99,874		87,164
Total loans held for investment	$	1,642,674	$	1,618,482
SBA loans held for sale		11,314		9,335
Total loans	$	1,653,988	$	1,627,817

Loan Portfolio by Class According to Their Credit Quality Indicators

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of June 30, 2021:

	June 30, 2021
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	36,714	$	524	$	876	$	38,114
SBA PPP loans		132,375		—		—		132,375
Commercial loans
SBA 504 loans		22,155		—		—		22,155
Commercial other		102,994		7,582		3,202		113,778
Commercial real estate		648,520		22,285		5,578		676,383
Commercial real estate construction		73,250		—		—		73,250
Total commercial loans		846,919		29,867		8,780		885,566
Total SBA and commercial loans	$	1,016,008	$	30,391	$	9,656	$	1,056,055
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	418,145	$	4,043	$	422,188
Consumer loans
Home equity				63,390		—		63,390
Consumer other				1,164		3		1,167
Total consumer loans				64,554		3		64,557
Residential construction loans				97,585		2,289		99,874
Total residential mortgage, consumer and residential construction loans			$	580,284	$	6,335	$	586,619

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2020:

	December 31, 2020
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	36,991	$	525	$	2,071	$	39,587
SBA PPP loans		118,257		—		—		118,257
Commercial loans
SBA 504 loans		19,681		—		—		19,681
Commercial other		109,672		5,533		3,075		118,280
Commercial real estate		603,482		25,206		1,735		630,423
Commercial real estate construction		71,404		—		—		71,404
Total commercial loans		804,239		30,739		4,810		839,788
Total SBA and commercial loans	$	959,487	$	31,264	$	6,881	$	997,632
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	462,369	$	5,217	$	467,586
Consumer loans
Home equity				61,254		1,295		62,549
Consumer other				3,551		—		3,551
Total consumer loans				64,805		1,295		66,100
Residential construction loans				85,414		1,750		87,164
Total residential mortgage, consumer and residential construction loans			$	612,588	$	8,262	$	620,850

Aging Analysis of Past Due And Nonaccrual Loans by Loan Class

The following tables set forth an aging analysis of past due and nonaccrual loans as of June 30, 2021 and December 31, 2020:

	June 30, 2021
					90+ days
	30‑59 days		60‑89 days		and still		Nonaccrual		Total past
(In thousands)	past due		past due		accruing		(1)		due		Current		Total loans
SBA loans held for investment	$	962	$	—	$	—	$	1,713	$	2,675	$	35,439	$	38,114
SBA PPP loans		—		—		—		—		—		132,375		132,375
Commercial loans
SBA 504 loans		—		—		—		—		—		22,155		22,155
Commercial other		201		71		—		132		404		113,374		113,778
Commercial real estate		625		572		—		1,505		2,702		673,681		676,383
Commercial real estate construction		—		—		—		—		—		73,250		73,250
Residential mortgage loans		4,772		155		574		4,043		9,544		412,644		422,188
Consumer loans
Home equity		1,325		178		—		—		1,503		61,887		63,390
Consumer other		—		—		—		3		3		1,164		1,167
Residential construction loans		1,435		—		—		2,289		3,724		96,150		99,874
Total loans held for investment		9,320		976		574		9,685		20,555		1,622,119		1,642,674
SBA loans held for sale		—		—		—		—		—		11,314		11,314
Total loans	$	9,320	$	976	$	574	$	9,685	$	20,555	$	1,633,433	$	1,653,988

(1) At June 30, 2021, nonaccrual loans included $139 thousand of loans guaranteed by the SBA.

	December 31, 2020
					90+ days
	30‑59 days		60‑89 days		and still		Nonaccrual		Total past
(In thousands)	past due		past due		accruing		(1)		due		Current		Total loans
SBA loans held for investment	$	792	$	1,280	$	—	$	2,473	$	4,545	$	35,042	$	39,587
SBA PPP loans		—		—		—		—				118,257		118,257
Commercial loans
SBA 504 loans		—		—		—		—		—		19,681		19,681
Commercial other		186		201		—		266		653		117,627		118,280
Commercial real estate		3,109		1,971		—		1,059		6,139		624,284		630,423
Commercial real estate construction		1,047		—		—		—		1,047		70,357		71,404
Residential mortgage loans		3,232		2,933		262		5,217		11,644		455,942		467,586
Consumer loans
Home equity		393		—		187		1,295		1,875		60,674		62,549
Consumer other		3		1		—		—		4		3,547		3,551
Residential construction loans		120		796		—		1,750		2,666		84,498		87,164
Total loans held for investment		8,882		7,182		449		12,060		28,573		1,589,909		1,618,482
SBA loans held for sale		448		—		—		—		448		8,887		9,335
Total loans	$	9,330	$	7,182	$	449	$	12,060	$	29,021	$	1,598,796	$	1,627,817

(1) At December 31, 2020, nonaccrual loans included $371 thousand of loans guaranteed by the SBA.

Impaired Loans with Associated Allowance Amount

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of June 30, 2021:

	June 30, 2021
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment (1)	$	739	$	640	$	—
Commercial loans
Commercial real estate		2,641		2,642		—
Total commercial loans		2,641		2,642		—
Residential mortgage loans		3,831		3,756		—
Consumer loans
Home equity		427		427		—
Residential construction loans		2,289		2,289		—
Total impaired loans with no related allowance		9,927		9,754		—
With an allowance:
SBA loans held for investment (1)		1,404		934		467
Commercial loans
Commercial other		2,745		2,745		2,745
Commercial real estate		994		146		146
Total commercial loans		3,739		2,891		2,891
Residential mortgage loans		287		287		30
Consumer loans
Consumer other		3		3		3
Total impaired loans with a related allowance		5,433		4,115		3,391
Total individually evaluated impaired loans:
SBA loans held for investment (1)		2,143		1,574		467
Commercial loans
Commercial other		2,745		2,745		2,745
Commercial real estate		3,635		2,788		146
Total commercial loans		6,380		5,533		2,891
Residential mortgage loans		4,118		4,043		30
Consumer loans
Home equity		427		427		—
Consumer other		3		3		3
Residential construction loans		2,289		2,289		—
Total individually evaluated impaired loans	$	15,360	$	13,869	$	3,391

(1) Balances are reduced by amount guaranteed by the SBA of $139 thousand at June 30, 2021.

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2020:

	December 31, 2020
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment (1)	$	1,799	$	1,698	$	—
Commercial loans
Commercial real estate		1,462		1,462		—
Total commercial loans		1,462		1,462		—
Residential mortgage loans		4,080		3,975		—
Consumer loans
Home equity		1,295		1,295		—
Residential construction loans		1,750		1,750		—
Total impaired loans with no related allowance		10,386		10,180		—
With an allowance:
SBA loans held for investment (1)		434		404		324
Commercial loans
Commercial other		3,160		3,160		3,106
Commercial real estate		1,730		1,080		576
Total commercial loans		4,890		4,240		3,682
Residential mortgage loans		1,242		1,242		101
Total impaired loans with a related allowance		6,566		5,886		4,107
Total individually evaluated impaired loans:
SBA loans held for investment (1)		2,233		2,102		324
Commercial loans
Commercial other		3,160		3,160		3,106
Commercial real estate		3,192		2,542		576
Total commercial loans		6,352		5,702		3,682
Residential mortgage loans		5,322		5,217		101
Consumer loans
Home equity		1,295		1,295		—
Residential construction loans		1,750		1,750		—
Total individually evaluated impaired loans	$	16,952	$	16,066	$	4,107

(1) Balances are reduced by amount guaranteed by the SBA of $371 thousand at December 31, 2020.

Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized

The following table presents the average recorded investments in impaired loans and the related amount of interest recognized during the time period in which the loans were impaired for the three and six months ended June 30, 2021 and 2020. The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized. The interest income recognized on impaired loans noted below represents primarily accruing TDRs and nominal amounts of income recognized on a cash basis for well-collateralized impaired loans.

	For the three months ended June 30,
	2021				2020
			Interest				Interest
			income				income
	Average		recognized		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment (1)	$	1,334	$	64	$	1,265	$	3
Commercial loans
Commercial other		271		6		99		12
Commercial real estate		2,121		30		1,282		33
Residential mortgage loans		4,983		—		6,054		52
Consumer loans
Home equity		444		5		505		4
Residential construction loans		2,805		10		—		—
Total	$	11,958	$	115	$	9,205	$	104

(1) Balances are reduced by the average amount guaranteed by the SBA of $139 thousand and $655 thousand for the three months ended June 30, 2021 and 2020, respectively.

	For the six months ended June 30,
	2021				2020
			Interest				Interest
			income				income
	Average		recognized		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment (1)	$	1,618	$	81	$	1,197	$	6
Commercial loans
SBA 504 loans		—		—		300		32
Commercial other		322		9		52		21
Commercial real estate		2,179		85		1,165		45
Residential mortgage loans		5,272		—		5,875		81
Consumer loans
Home equity		644		23		424		9
Consumer other		—		—		38		—
Residential construction loans		2,707		20		—		—
Total	$	12,742	$	218	$	9,051	$	194

(1) Balances are reduced by the average amount guaranteed by the SBA of $216 thousand and $418 thousand for the six months ended June 30, 2021 and 2020, respectively.

Loans modified as TDRs including number of modifications and recorded investment

	For the six months ended June 30, 2021
	Number of	Recorded investment
(In thousands, except number of contracts)	contracts	at time of modification
Home equity	2	$	427
Total	2	$	427