Loans (Tables)

9 Months Ended

Sep. 30, 2022

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 September 30, 2022 and December 31, 2021:

(In thousands)	September 30, 2022		December 31, 2021
SBA loans held for investment	$	30,747	$	36,075
SBA PPP loans		6,706		46,450
Commercial loans
SBA 504 loans		36,852		27,479
Commercial other		120,826		109,903
Commercial real estate		828,415		704,674
Commercial real estate construction		119,966		89,670
Residential mortgage loans		533,737		409,355
Consumer loans
Home equity		68,113		65,380
Consumer other		11,549		12,564
Residential construction loans		149,165		120,525
Total loans held for investment	$	1,906,076	$	1,622,075
SBA loans held for sale		36,338		27,373
Total loans	$	1,942,414	$	1,649,448

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 September 30, 2022:

	September 30, 2022
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	29,503	$	420	$	824	$	30,747
SBA PPP loans		6,706		—		—		6,706
Commercial loans
SBA 504 loans		36,852		—		—		36,852
Commercial other		113,245		6,361		1,220		120,826
Commercial real estate		816,121		9,475		2,819		828,415
Commercial real estate construction		119,966		—		—		119,966
Total commercial loans		1,086,184		15,836		4,039		1,106,059
Total SBA and commercial loans	$	1,122,393	$	16,256	$	4,863	$	1,143,512
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	530,333	$	3,404	$	533,737
Consumer loans
Home equity				68,113		—		68,113
Consumer other				11,549		—		11,549
Total consumer loans				79,662		—		79,662
Residential construction loans				147,174		1,991		149,165
Total residential mortgage, consumer and residential construction loans			$	757,169	$	5,395	$	762,564

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, 2021:

	December 31, 2021
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	34,959	$	745	$	371	$	36,075
SBA PPP loans		46,450		—		—		46,450
Commercial loans
SBA 504 loans		27,479		—		—		27,479
Commercial other		105,388		1,976		2,539		109,903
Commercial real estate		694,627		7,980		2,067		704,674
Commercial real estate construction		86,770		2,900		—		89,670
Total commercial loans		914,264		12,856		4,606		931,726
Total SBA and commercial loans	$	995,673	$	13,601	$	4,977	$	1,014,251
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	406,093	$	3,262	$	409,355
Consumer loans
Home equity				65,170		210		65,380
Consumer other				12,564		—		12,564
Total consumer loans				77,734		210		77,944
Residential construction loans				117,403		3,122		120,525
Total residential mortgage, consumer and residential construction loans			$	601,230	$	6,594	$	607,824

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 September 30, 2022 and December 31, 2021:

	September 30, 2022
					90+ days
	30‑59 days		60‑89 days		and still				Total past
(In thousands)	past due		past due		accruing		Nonaccrual		due		Current		Total loans
SBA loans held for investment	$	237	$	194	$	—	$	1,491	$	1,922	$	28,825	$	30,747
SBA PPP loans		—		—		—		—		—		6,706		6,706
Commercial loans
SBA 504 loans		—		—		—		—		—		36,852		36,852
Commercial other		416		18		—		777		1,211		119,615		120,826
Commercial real estate		896		596		—		370		1,862		826,553		828,415
Commercial real estate construction		—		—		—		—		—		119,966		119,966
Residential mortgage loans		634		42		—		3,404		4,080		529,657		533,737
Consumer loans
Home equity		—		—		—		—		—		68,113		68,113
Consumer other		73		112		75		—		260		11,289		11,549
Residential construction loans		—		—		—		1,991		1,991		147,174		149,165
Total loans held for investment		2,256		962		75		8,033		11,326		1,894,750		1,906,076
SBA loans held for sale		—		—		—		—		—		36,338		36,338
Total loans	$	2,256	$	962	$	75	$	8,033	$	11,326	$	1,931,088	$	1,942,414

	December 31, 2021
					90+ days
	30‑59 days		60‑89 days		and still				Total past
(In thousands)	past due		past due		accruing		Nonaccrual		due		Current		Total loans
SBA loans held for investment	$	1,558	$	—	$	—	$	510	$	2,068	$	34,007	$	36,075
SBA PPP loans		—		79		—		—		79		46,371		46,450
Commercial loans
SBA 504 loans		—		—		—		—		—		27,479		27,479
Commercial other		—		33		—		2,216		2,249		107,654		109,903
Commercial real estate		334		565		—		366		1,265		703,409		704,674
Commercial real estate construction		—		—		—		—		—		89,670		89,670
Residential mortgage loans		3,688		—		—		3,262		6,950		402,405		409,355
Consumer loans
Home equity		39		—		—		210		249		65,131		65,380
Consumer other		—		—		—		—		—		12,564		12,564
Residential construction loans		—		845		—		3,122		3,967		116,558		120,525
Total loans held for investment		5,619		1,522		—		9,686		16,827		1,605,248		1,622,075
SBA loans held for sale		—		—		—		—		—		27,373		27,373
Total loans	$	5,619	$	1,522	$	—	$	9,686	$	16,827	$	1,632,621	$	1,649,448

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 September 30, 2022:

	September 30, 2022
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment	$	641	$	494	$	—
Commercial loans
Commercial other		16		16		—
Commercial real estate		3,224		2,268		—
Total commercial loans		3,240		2,284		—
Residential mortgage loans		1,553		1,540		—
Consumer loans
Home equity		—		—		—
Residential construction loans		92		92		—
Total impaired loans with no related allowance		5,526		4,410		—
With an allowance:
SBA loans held for investment		457		350		129
Commercial loans
Commercial other		2,085		963		915
Commercial real estate		—		—		—
Total commercial loans		2,085		963		915
Residential mortgage loans		570		544		56
Consumer loans
Home equity		407		407		58
Residential construction loans		2,694		2,694		99
Total impaired loans with a related allowance		6,213		4,958		1,257
Total individually evaluated impaired loans:
SBA loans held for investment		1,098		844		129
Commercial loans
Commercial other		2,101		979		915
Commercial real estate		3,224		2,268		—
Total commercial loans		5,325		3,247		915
Residential mortgage loans		2,123		2,084		56
Consumer loans
Home equity		407		407		58
Residential construction loans		2,786		2,786		99
Total individually evaluated impaired loans	$	11,739	$	9,368	$	1,257

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, 2021:

	December 31, 2021
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment	$	606	$	506	$	—
Commercial loans
Commercial other		71		70		—
Commercial real estate		1,493		1,493		—
Total commercial loans		1,564		1,563		—
Residential mortgage loans		1,630		1,630		—
Consumer loans
Home equity		210		210		—
Residential construction loans		2,636		2,636		—
Total impaired loans with no related allowance		6,646		6,545		—
With an allowance:
SBA loans held for investment		35		4		4
Commercial loans
Commercial other		2,832		2,531		2,490
Commercial real estate		973		126		125
Total commercial loans		3,805		2,657		2,615
Residential mortgage loans		1,632		1,632		80
Consumer loans
Home Equity		427		427		56
Residential construction loans		486		486		68
Total impaired loans with a related allowance		6,385		5,206		2,823
Total individually evaluated impaired loans:
SBA loans held for investment		641		510		4
Commercial loans
Commercial other		2,903		2,601		2,490
Commercial real estate		2,466		1,619		125
Total commercial loans		5,369		4,220		2,615
Residential mortgage loans		3,262		3,262		80
Consumer loans
Home equity		637		637		56
Residential construction loans		3,122		3,122		68
Total individually evaluated impaired loans	$	13,031	$	11,751	$	2,823

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

The following tables present the average recorded investments in impaired loans and the related amount of interest received during the time period in which the loans were impaired for the three and nine months ended September 30, 2022 and 2021. 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.

	For the three months ended September 30,
	2022				2021
							Interest
			Interest				income
	Average		received		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment	$	1,369	$	6	$	917	$	18
Commercial loans
Commercial other		1,151		38		727		1
Commercial real estate		1,813		21		1,355		42
Residential mortgage loans		2,647		3		3,571		13
Consumer loans
Home equity		414		7		427		5
Consumer other		—		—		2		—
Residential construction loans		1,935		16		2,659		18
Total	$	9,329	$	91	$	9,658	$	97

	For the nine months ended September 30,
	2022				2021
							Interest
			Interest				income
	Average		received		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment	$	816	$	26	$	1,384	$	99
Commercial loans
Commercial other		1,691		83		457		11
Commercial real estate		2,046		89		1,904		119
Residential mortgage loans		2,696		18		4,705		13
Consumer loans
Home equity		513		19		572		23
Consumer other		—		—		2,691		—
Residential construction loans		3,080		49		1		38
Total	$	10,842	$	284	$	11,714	$	303

Loans modified as TDRs including number of modifications and recorded investment

	For the nine months ended September 30, 2022
	Number of	Recorded investment
(In thousands, except number of contracts)	contracts	at time of modification
Commercial real estate	1	$	25
Commercial other	1		857
Total	2	$	882