XML 28 R12.htm IDEA: XBRL DOCUMENT

Loans, Net

12 Months Ended

Dec. 31, 2025

Note 5—Loans, net

The Company’s loans originate from several lending lines of business, including:

SBLs, or small business loans, are comprised primarily of Small Business Administration “SBA” loans.

Direct lease financing includes lease financing for commercial and government vehicle fleets and, to a lesser extent, provides lease financing for other equipment.

SBLOCs, or securities-backed lines of credit, are made to individuals, trusts and other entities and are secured by a pledge of marketable securities maintained in one or more accounts for which the Company obtains a securities account control agreement.

IBLOCs, or insurance policy cash value-backed lines of credit, are collateralized by the cash surrender value of eligible insurance policies.

Advisor financing are loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession.

REBL, or real estate bridge lending, are transitional commercial mortgage loans which are made to improve and rehabilitate existing properties which already have cash flow, and which are collateralized by those properties.

Fintech loans consist of short-term extensions of credit including secured credit card loans made in conjunction with marketers and servicers.

Other loans include warehouse financing related to loan sales to third-party purchasers of REBL loans, and commercial and HELOC which the Company generally no longer offers.

Major classifications of loans, excluding commercial loans, at fair value, are as follows (dollars in thousands):


	December 31,		December 31,
	2025		2024
Loans recorded at amortized cost:
SBL non-real estate	$	235,282	$	190,322
SBL commercial mortgage		749,234		662,091
SBL construction		22,382		34,685
SBLs		1,006,898		887,098
Direct lease financing		685,422		700,553
SBLOC / IBLOC⁽¹⁾		1,669,985		1,564,018
Advisor financing		294,236		273,896
Real estate bridge lending		2,188,952		2,109,041
Fintech		1,097,998		454,357
Other loans⁽²⁾		157,416		111,328
		7,100,907		6,100,291
Unamortized loan fees and costs		15,769		13,337
Total loans, net of deferred loan fees and costs	$	7,116,676	$	6,113,628

⁽¹⁾SBLOC are collateralized by marketable securities, while IBLOC are collateralized by the cash surrender value of insurance policies. At December 31, 2025 and December 31, 2024, IBLOC loans amounted to $467.5 million and $548.1 million, respectively.

⁽²⁾Includes warehouse financing related to loan sales to third-party purchasers of real estate bridge loans of $110.7 million and $65.5 million at December 31, 2025 and December 31, 2024, respectively. In addition, for December 31, 2025 includes CRA loans of $3.0 million and $3.7 million that were presented in SBL non-real estate and SBL commercial mortgage, respectively, at December 31, 2024.

The Company did not have loans acquired with deteriorated credit quality at either December 31, 2025, or December 31, 2024. During the years ended December 31, 2025 and 2024, the Company purchased $23.1 million and $46.7 million of SBLs, respectively, none of which were credit deteriorated. On December 31, 2024 the Company sold $82.0 million of REBL loans.

Generally, a bank may not make a loan or extend credit to a single or related group of borrowers in excess of 15% of its unimpaired capital and surplus. At December 31, 2025, the Bank’s limit on loans to one borrower was $138.9 million, and our highest concentration of lending with any individual sponsor was $103.7 million of REBL loans.

‎

Non-Accrual and Delinquency

A detail of the Company’s delinquent loans by loan category is as follows (dollars in thousands):


	December 31, 2025
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	1,515	$	344	$	—	$	8,639	$	10,498	$	224,784	$	235,282
SBL commercial mortgage		224		—		—		21,977		22,201		727,033		749,234
SBL construction		—		—		—		2,660		2,660		19,722		22,382
Direct lease financing		2,461		894		1,457		12,066		16,878		668,544		685,422
SBLOC / IBLOC		5,328		65		251		446		6,090		1,663,895		1,669,985
Advisor financing		—		—		—		—		—		294,236		294,236
Real estate bridge lending		—		—		14,459		9,755		24,214		2,164,738		2,188,952
Fintech		24,701		3,791		2,030		—		30,522		1,067,476		1,097,998
Other loans		209		111		2		142		464		156,952		157,416
Unamortized loan fees and costs		—		—		—		—		—		15,769		15,769
	$	34,438	$	5,205	$	18,199	$	55,685	$	113,527	$	7,003,149	$	7,116,676

	December 31, 2024
	30-59 days		60-89 days		90+ days				Total past due				Total
	past due		past due		still accruing		Non-accrual		and non-accrual		Current		loans
SBL non-real estate	$	229	$	—	$	871	$	2,635	$	3,735	$	186,587	$	190,322
SBL commercial mortgage		—		—		336		4,885		5,221		656,870		662,091
SBL construction		—		—		—		1,585		1,585		33,100		34,685
Direct lease financing		7,069		1,923		1,088		6,026		16,106		684,447		700,553
SBLOC / IBLOC		20,991		1,808		3,322		503		26,624		1,537,394		1,564,018
Advisor financing		—		—		—		—		—		273,896		273,896
Real estate bridge lending		—		—		—		12,300		12,300		2,096,741		2,109,041
Fintech		13,419		681		213		—		14,313		440,044		454,357
Other loans		49		—		—		—		49		111,279		111,328
Unamortized loan fees and costs		—		—		—		—		—		13,337		13,337
	$	41,757	$	4,412	$	5,830	$	27,934	$	79,933	$	6,033,695	$	6,113,628

The following table summarizes non-accrual loans with and without an ACL as of the periods indicated (dollars in thousands):


	December 31, 2025								December 31, 2024
	Non-accrual loans with a related ACL		Related ACL		Non-accrual loans without a related ACL		Total non-accrual loans		Non-accrual loans with a related ACL		Related ACL		Non-accrual loans without a related ACL		Total non-accrual loans
SBL non-real estate	$	5,361	$	963	$	3,278	$	8,639	$	1,308	$	351	$	1,327	$	2,635
SBL commercial mortgage		3,009		801		18,968		21,977		1,922		1,039		2,963		4,885
SBL construction		710		35		1,950		2,660		1,585		118		—		1,585
Direct leasing		11,881		4,211		185		12,066		5,561		2,377		465		6,026
IBLOC		446		207		—		446		503		413		—		503
Real estate bridge lending		—		—		9,755		9,755		—		—		12,300		12,300
Other loans		—		—		142		142		—		—		—		—
	$	21,407	$	6,217	$	34,278	$	55,685	$	10,879	$	4,298	$	17,055	$	27,934

Interest which would have been earned on loans classified as non-accrual at December 31, 2025 and 2024, was $2.5 million and $1.1 million, respectively. No income on non-accrual loans was recognized during 2025 or 2024.

In 2025 amounts reversed from interest income totaled $2.1 million, and primarily consist of $1.2 million of REBL and $0.6 million of SBL commercial real estate. In 2024 amounts reversed from interest income totaled $1.3 million, and primarily consist of $1.0 million of REBL. In 2023 amounts reversed from interest income totaled $0.3 million, and primarily consist of $0.1 million of direct leasing. The interest reversals represent interest receivable balance on loans at the time of transfer into non-accrual status.

Loan Modifications

Loans modified to borrowers experiencing financial difficulty, and related information are as follows (dollars in thousands):


	Year ended December 31, 2025										Year ended December 31, 2024
	Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension and interest rate reduction		Total		Percent of total loan category		Payment delay as a result of a payment deferral		Interest rate reduction and payment deferral		Term extension		Total		Percent of total loan category
SBL non-real estate	$	4,480	$	1,288	$	—	$	5,768		2.45%	$	2,421	$	—	$	—	$	2,421		1.27%
SBL commercial mortgage		3,330		—		—		3,330		0.44%		3,255		—		—		3,255		0.49%
Direct lease financing		—		—		—		—		—		—		—		2,477		2,477		0.35%
Real estate bridge lending		—		—		9,576		9,576		0.44%		—		67,575		—		67,575		3.20%
Total	$	7,810	$	1,288	$	9,576	$	18,674		0.26%	$	5,676	$	67,575	$	2,477	$	75,728		1.24%

The following table shows an analysis of loans that were modified during the year-to-date periods ended December 31, 2025, and December 31, 2024 presented by loan classification (dollars in thousands):


	Year ended December 31, 2025
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	1,288	$	1,288	$	4,480	$	5,768
SBL commercial mortgage		—		—		—		3,330		3,330		—		3,330
Direct lease financing		—		—		—		—		—		—		—
Real estate bridge lending		—		—		—		—		—		9,576		9,576
	$	—	$	—	$	—	$	4,618	$	4,618	$	14,056	$	18,674

	Year ended December 31, 2024
	Payment Status (Amortized Cost Basis)
	30-59 days		60-89 days		90+ days				Total
	past due		past due		still accruing		Non-accrual		delinquent		Current		Total
SBL non-real estate	$	—	$	—	$	—	$	1,022	$	1,022	$	1,399	$	2,421
SBL commercial mortgage		—		—		—		—		—		3,255		3,255
Direct lease financing		—		2,477		—		—		2,477		—		2,477
Real estate bridge lending		—		—		—		—		—		67,575		67,575
	$	—	$	2,477	$	—	$	1,022	$	3,499	$	72,229	$	75,728

The following table describes the financial effect of modifications made:


	Year ended December 31, 2025			Year ended December 31, 2024
	Combined Rate and Maturity			Combined Rate and Maturity
	Weighted average interest rate reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾	Weighted average interest rate reduction	Weighted average term extension (in months)	More-than-insignificant-payment delay⁽¹⁾
SBL non-real estate	1.00%	—	2.45%	—	—	1.27%
SBL commercial mortgage	—	—	0.44%	—	—	0.49%
Direct lease financing	—	—	—	—	12.0	—
Real estate bridge lending	0.25%	12.0	—	1.08%	—	1.28%

⁽¹⁾Percentage represents the principal of loans deferred divided by the principal of the total loan portfolio.

There were no loans that received a term extension modification which had a payment default during the period and were modified in the twelve months before default. The Company had no commitments to extend additional credit to loans classified as modified as of either December 31, 2025 or 2024.

As of December 31, 2025, there were $18.7 million of loans classified as modified with no specific reserves, while there were $75.7 million of loans classified as modified as of December 31, 2024 with specific reserves of $768,000.

Allowance for Credit Loss

A summary of the Company’s accounting policy and quantitative and qualitative methodology used in measuring the allowance for credit losses is presented in Note 2, “Summary of Significant Accounting Policies”. The Company’s estimate of credit loss for each portfolio segment includes consideration of different portfolio segments and qualitative factors, as follows:

Real estate bridge loans. Real estate bridge loans are primarily collateralized by apartment buildings, or other commercial real estate. As charge-offs have generally not been experienced for multifamily (apartment building loans) which comprise the REBL portfolio, the ACL is determined by qualitative factors. Qualitative factors focus on historical industry losses, changes in classified loan balances, changes in economic conditions and underlying collateral and portfolio performance. In the third quarter of 2024, as a result of increased levels of loans classified as special mention or substandard, a new qualitative factor related to the level of such classified loans was added.

Fintech loans. Fintech loans included $729.1 million and $201.1 million of secured credit card accounts as of December 31, 2025 and 2024, respectively, which are backed dollar for dollar by cash collateral by each individual cardholder and are required to be repaid in-full monthly. The remaining fintech loans consist of cashflow underwritten short-term liquidity products to individual borrowers ranging in maturities from 30 to 365 days.

In addition, all fintech loans are covered by credit enhancement agreements. The Company has an agreement with a partner to originate and service fintech loans, which includes credit enhancement provisions through which incurred losses on fintech loans are covered by the partner. The Company recognizes an estimate of loss on this portfolio through its allowance for credit losses on its fintech loans on the Consolidated Balance Sheets, with provision for credit losses on fintech loans recognized on the Consolidated Statements of Operations. In addition, the Company recognizes a corresponding amount of credit enhancement asset on the Consolidated Balance Sheets and non-interest income — fintech loan credit enhancement in the Consolidated Statements of Operations. The measurement of the expected loan losses and the related credit enhancement are based on the same estimate and are equal and correlate to like amounts in the Consolidated Statements of Operations. The Company has recognized a credit enhancement asset on the Consolidated Balance Sheets related to the estimated recovery of its realized losses on fintech loans of $31.1 million and $12.9 million as of December 31, 2025 and December 31, 2024, respectively. All fintech loans are covered by credit enhancement agreements as of December 31, 2025.

SBL. The Company segments the SBL portfolio into pools to capture the risk characteristics including: non-real estate, commercial mortgage and construction. The qualitative factors for SBL loans focus on pool loan performance, underlying collateral for collateral dependent loans and changes in economic conditions. Additionally, the construction segment adds a qualitative factor for general construction risk, such as construction delays resulting from labor shortages or availability/pricing of construction materials.

Direct lease financing. The qualitative factors for direct lease financing focus on underlying collateral for collateral dependent loans, portfolio loan performance, loan concentrations and changes in economic conditions.

SBLOC. The maximum SBLOC line amounts are determined based on the underlying securities collateral, which is monitored on a daily basis to confirm the composition of the client portfolio and its daily market value. The primary qualitative factor in the SBLOC analysis is the ratio of loans outstanding to market value. Significant losses have not been incurred since inception of this line of business, as the advance rates were established to provide the Company with protection from declines in market conditions from the origination date of the lines of credit.

IBLOC. Significant losses have not been incurred since inception of the IBLOC line of business. The qualitative factors for IBLOC primarily focus on the concentration risk with insurance companies.

Advisor financing. The Bank originates loans to investment advisors for purposes of debt refinancing, acquisition of another firm or internal succession. As credit losses have not been experienced, the ACL is determined by qualitative factors. The qualitative factors for investment advisor financing focus on historical industry losses, changes in lending policies and procedures, portfolio performance and economic conditions.

Other loans. Other loans include warehouse financing related to REBL loan sales to third-party purchasers, and commercial and home equity lines of credit which the Company generally no longer offers. Qualitative factors focus on changes in the underlying collateral for collateral dependent loans, portfolio loan performance, loan concentrations and changes in economic conditions.

A summary of the Company’s primary portfolio pools and loans accordingly classified, by year of origination, at December 31, 2025 and December 31, 2024 is as follows (dollars in thousands):


As of December 31, 2025	2025		2024		2023		2022		2021		Prior		Revolving loans at amortized cost		Total
SBL non real estate
Pass	$	70,191	$	50,083	$	60,331	$	17,797	$	12,295	$	6,765	$	—	$	217,462
Special mention		—		262		992		1,480		—		71		—		2,805
Substandard		—		1,171		6,635		4,276		1,360		1,573		—		15,015
Total SBL non-real estate		70,191		51,516		67,958		23,553		13,655		8,409		—		235,282

SBL commercial mortgage
Pass		107,357		156,610		83,047		105,359		69,554		166,921		—		688,848
Special mention		—		2,749		2,708		4,406		4,275		7,459		—		21,597
Substandard		—		706		9,622		14,656		8,579		5,226		—		38,789
Total SBL commercial mortgage		107,357		160,065		95,377		124,421		82,408		179,606		—		749,234

SBL construction
Pass		4,769		10,449		4,504		—		—		—		—		19,722
Substandard		—		—		—		—		1,950		710		—		2,660
Total SBL construction		4,769		10,449		4,504		—		1,950		710		—		22,382

Direct lease financing
Non-rated		1,777		—		—		—		—		—		—		1,777
Pass		253,367		177,838		121,969		87,456		20,241		4,269		—		665,140
Special mention		719		410		759		295		3		—		—		2,186
Substandard		16		2,741		7,321		4,335		1,839		67		—		16,319
Total direct lease financing		255,879		180,989		130,049		92,086		22,083		4,336		—		685,422

SBLOC/IBLOC
Non-rated		—		—		—		—		—		—		6,882		6,882
Pass		—		—		—		—		—		—		1,662,616		1,662,616
Substandard		—		—		—		—		—		—		487		487
Total SBLOC/IBLOC		—		—		—		—		—		—		1,669,985		1,669,985

Advisor financing
Pass		68,249		69,705		70,411		48,197		16,471		12,253		—		285,286
Special mention		—		—		—		979		7,971		—		—		8,950
Total advisor financing		68,249		69,705		70,411		49,176		24,442		12,253		—		294,236

Real estate bridge lending
Pass		689,651		453,603		271,554		569,730		120,938		—		—		2,105,476
Special mention		—		—		—		—		9,576		—		—		9,576
Substandard		—		42,735		—		21,411		9,754		—		—		73,900
Total real estate bridge lending		689,651		496,338		271,554		591,141		140,268		—		—		2,188,952

Fintech
Non-rated		141,605		—		—		—		—		—		954,364		1,095,969
Substandard		2,029		—		—		—		—		—		—		2,029
Total fintech		143,634		—		—		—		—		—		954,364		1,097,998

Other loans
Non-rated		494		—		—		—		—		8,852		—		9,346
Pass		56,998		54,458		160		252		343		34,621		1,096		147,928
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		142		—		142
Total other loans		57,492		54,458		160		252		343		43,615		1,096		157,416

	$	1,397,222	$	1,023,520	$	640,013	$	880,629	$	285,149	$	248,929	$	2,625,445	$	7,100,907

Unamortized loan fees and costs																15,769
Total															$	7,116,676


As of December 31, 2024	2024		2023		2022		2021		2020		Prior		Revolving loans at amortized cost		Total
SBL non real estate
Pass	$	46,766	$	74,772	$	27,794	$	18,103	$	5,321	$	5,353	$	—	$	178,109
Special mention		—		—		—		—		—		130		—		130
Substandard		—		2,437		2,480		1,234		573		1,097		—		7,821
Total SBL non-real estate		46,766		77,209		30,274		19,337		5,894		6,580		—		186,060

SBL commercial mortgage
Pass		140,314		84,538		130,233		84,026		58,524		140,165		—		637,800
Special mention		—		—		528		1,104		—		7,690		—		9,322
Substandard		—		—		1,380		4,942		163		4,104		—		10,589
Total SBL commercial mortgage		140,314		84,538		132,141		90,072		58,687		151,959		—		657,711

SBL construction
Pass		12,392		13,846		2,899		3,609		—		—		—		32,746
Substandard		—		—		—		1,229		—		710		—		1,939
Total SBL construction		12,392		13,846		2,899		4,838		—		710		—		34,685
		.
Direct lease financing
Non-rated		5,184		—		—		—		—		—		—		5,184
Pass		271,791		193,663		136,601		45,594		15,846		4,269		—		667,764
Special mention		1,866		2,294		2,618		1,783		73		83		—		8,717
Substandard		3,892		6,657		6,462		1,733		92		52		—		18,888
Total direct lease financing		282,733		202,614		145,681		49,110		16,011		4,404		—		700,553

SBLOC/IBLOC
Non-rated		—		—		—		—		—		—		3,466		3,466
Pass		—		—		—		—		—		—		1,559,614		1,559,614
Substandard		—		—		—		—		—		—		938		938
Total SBLOC/IBLOC		—		—		—		—		—		—		1,564,018		1,564,018

Advisor financing
Pass		84,414		84,908		54,064		22,560		18,588		—		—		264,534
Special mention		—		—		1,021		8,341		—		—		—		9,362
Total advisor financing		84,414		84,908		55,085		30,901		18,588		—		—		273,896

Real estate bridge lending
Pass		432,609		418,326		761,331		278,031		—		—		—		1,890,297
Special mention		16,913		—		36,318		31,153		—		—		—		84,384
Substandard		54,485		—		55,947		23,928		—		—		—		134,360
Total real estate bridge lending		504,007		418,326		853,596		333,112		—		—		—		2,109,041

Fintech
Non-rated		18,119		—		—		—		—		—		436,025		454,144
Substandard		—		—		—		—		—		—		213		213
Total fintech		18,119		—		—		—		—		—		436,238		454,357

Other loans
Non-rated		1,187		—		—		—		—		10,394		—		11,581
Pass		66,267		163		256		351		2,606		37,133		1,381		108,157
Special mention		—		—		—		—		—		232		—		232
Total other loans⁽¹⁾		67,454		163		256		351		2,606		47,759		1,381		119,970

Total	$	1,156,199	$	881,604	$	1,219,932	$	527,721	$	101,786	$	211,412	$	2,001,637	$	6,100,291

Unamortized loan fees and costs																13,337
Total															$	6,113,628

⁽¹⁾Included in Other loans are $8.6 million of SBA loans purchased for CRA purposes as of December 31, 2024. These loans are classified as SBL in the Company’s loan table, which classifies loans by type, as opposed to risk characteristics.

In the above tables, the special mention classification indicates weaknesses that may, if not cured, threaten the borrower’s future repayment ability. A substandard classification reflects an existing weakness indicating the possible inadequacy of net worth and other repayment sources. These classifications are used both by regulators and peers, as they have been correlated with an increased probability of credit losses.

A detail of the changes in the ACL by loan category and summary of loans evaluated individually and collectively for credit deterioration is as follows (dollars in thousands):


	December 31, 2025
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2025	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	12,909	$	450	$	—	$	44,853
Charge-offs⁽¹⁾		(785)		—		(221)		(4,750)		—		—		—		(195,644)		(1,008)		—		(202,408)
Recoveries		85		—		4		793		—		—		—		44,578		20		—		45,480
Provision (credit)⁽¹⁾		2,065		(85)		110		6,507		(154)		153		(654)		169,294		1,039		—		178,275
Ending balance	$	6,337	$	3,118	$	235	$	15,675	$	1,041	$	2,207	$	5,949	$	31,137	$	501	$	—	$	66,200

Allowance:
Individually evaluated	$	963	$	801	$	35	$	4,211	$	207	$	—	$	—	$	—	$	—	$	—	$	6,217
Collectively evaluated		5,374		2,317		200		11,464		834		2,207		5,949		31,137		501		—		59,983
Total allowance	$	6,337	$	3,118	$	235	$	15,675	$	1,041	$	2,207	$	5,949	$	31,137	$	501	$	—	$	66,200

Loans:
Individually evaluated	$	8,639	$	21,977	$	2,660	$	12,066	$	446	$	—	$	9,755	$	—	$	142	$	—	$	55,685
Collectively evaluated		226,643		727,257		19,722		673,356		1,669,539		294,236		2,179,197		1,097,998		157,274		15,769		7,060,991
Total loans, net of deferred loan fees and costs	$	235,282	$	749,234	$	22,382	$	685,422	$	1,669,985	$	294,236	$	2,188,952	$	1,097,998	$	157,416	$	15,769	$	7,116,676

⁽¹⁾Lending agreements related to fintech loans resulted in the Company recording a $169.3 million provision for credit losses and a correlated amount of increases to the credit enhancement asset in non-interest income, resulting in no impact to net income.


	December 31, 2024
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2024	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	—	$	545	$	—	$	27,378
Charge-offs⁽¹⁾		(708)		—		—		(4,575)		—		—		—		(19,619)		(18)		—		(24,920)
Recoveries		229		—		—		318		—		—		—		1,877		1		—		2,425
Provision (credit)⁽¹⁾		(608)		383		57		6,928		382		392		1,863		30,651		(78)		—		39,970
Ending balance	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	12,909	$	450	$	—	$	44,853

Allowance:
Individually evaluated	$	403	$	1,039	$	118	$	2,377	$	413	$	—	$	—	$	—	$	—	$	—	$	4,350
Collectively evaluated		4,569		2,164		224		10,748		782		2,054		6,603		12,909		450		—		40,503
Total allowance	$	4,972	$	3,203	$	342	$	13,125	$	1,195	$	2,054	$	6,603	$	12,909	$	450	$	—	$	44,853

Loans:
Individually evaluated	$	2,693	$	4,885	$	1,585	$	6,026	$	503	$	—	$	12,300	$	—	$	219	$	—	$	28,211
Collectively evaluated		187,629		657,206		33,100		694,527		1,563,515		273,896		2,096,741		454,357		111,109		13,337		6,085,417
Total loans, net of deferred loan fees and costs	$	190,322	$	662,091	$	34,685	$	700,553	$	1,564,018	$	273,896	$	2,109,041	$	454,357	$	111,328	$	13,337	$	6,113,628

⁽¹⁾Lending agreements related to fintech loans resulted in the Company recording a $30.7 million provision for credit losses and a correlated amount of increases to the credit enhancement asset in non-interest income, resulting in no impact to net income.


	December 31, 2023
	SBL non-real estate		SBL commercial mortgage		SBL construction		Direct lease financing		SBLOC / IBLOC		Advisor financing		Real estate bridge lending		Fintech		Other loans		Deferred fees and costs		Total
Beginning 1/1/2023	$	5,028	$	2,585	$	565	$	7,972	$	1,167	$	1,293	$	3,121	$	—	$	643	$	—	$	22,374
Charge-offs		(871)		(76)		—		(3,666)		(24)		—		—		—		(3)		—		(4,640)
Recoveries		475		75		—		330		—		—		—		—		299		—		1,179
Provision (credit)		1,427		236		(280)		5,818		(330)		369		1,619		—		(394)		—		8,465
Ending balance	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	—	$	545	$	—	$	27,378

Allowance:
Individually evaluated	$	670	$	343	$	44	$	1,827	$	—	$	—	$	—	$	—	$	4	$	—	$	2,888
Collectively evaluated		5,389		2,477		241		8,627		813		1,662		4,740		—		541		—		24,490
Total allowance	$	6,059	$	2,820	$	285	$	10,454	$	813	$	1,662	$	4,740	$	—	$	545	$	—	$	27,378

Loans:
Individually evaluated	$	1,919	$	2,381	$	3,385	$	3,785	$	—	$	—	$	—	$	—	$	362	$	—	$	11,832
Collectively evaluated		135,833		604,605		19,242		681,872		1,627,285		221,612		1,999,782		311		49,965		8,800		5,349,307
Total loans, net of deferred loan fees and costs	$	137,752	$	606,986	$	22,627	$	685,657	$	1,627,285	$	221,612	$	1,999,782	$	311	$	50,327	$	8,800	$	5,361,139

Total net charge-offs increased $134.4 million, to $156.9 million for the year ended December 31, 2025, from $22.5 million for 2024. The increase in charge-offs is driven by growth in consumer fintech, which have a $133.3 million increase in net-charge offs. Fintech lending started significant activity in the fourth quarter of 2024, and such loans have a higher expected loss rate then the remainder of our loan portfolio. Losses on consumer fintech loans are covered by credit enhancement agreements as discussed further above under “Allowance for credit loss—Consumer fintech loans”.

Excluding consumer fintech, net charge-offs on the remaining portfolio were $5.9 million for the year ended December 31, 2025 and $4.8 million for the year ended December 31, 2024.

‎

A summary of the Company’s net charge-offs for the years ended December 31, 2025 and December 31, 2024, classified by portfolio segment and year of origination are as follows (dollars in thousands):


	Year ended December 31, 2025
		2025		2024		2023		2022		2021		Prior	Revolving loans at amortized cost			Total
SBL non-real estate
Charge-offs	$	—	$	(137)	$	—	$	(294)	$	—	$	(354)	$	—	$	(785)
Recoveries		—		14		1		13		7		50		—		85
Net charge-offs		—		(123)		1		(281)		7		(304)		—		(700)

SBL construction
Charge-offs		—		—		—		—		(221)		—		—		(221)
Recoveries		—		—		—		—		4		—		—		4
Net charge-offs		—		—		—		—		(217)		—		—		(217)

Direct lease financing
Charge-offs		(25)		(279)		(2,352)		(1,626)		(454)		(14)		—		(4,750)
Recoveries		—		23		163		446		158		3		—		793
Net charge-offs		(25)		(256)		(2,189)		(1,180)		(296)		(11)		—		(3,957)

Fintech
Charge-offs		(9,474)		(2,263)		—		—		—		—		(183,907)		(195,644)
Recoveries		590		334		—		—		—		—		43,654		44,578
Net charge-offs		(8,884)		(1,929)		—		—		—		—		(140,253)		(151,066)

Other loans
Charge-offs		—		—		—		—		—		(1,008)		—		(1,008)
Recoveries		—		—		—		—		—		15		5		20
Net charge-offs		—		—		—		—		—		(993)		5		(988)

Total
Charge-offs		(9,499)		(2,679)		(2,352)		(1,920)		(675)		(1,376)		(183,907)		(202,408)
Recoveries		590		371		164		459		169		68		43,659		45,480
Net charge-offs	$	(8,909)	$	(2,308)	$	(2,188)	$	(1,461)	$	(506)	$	(1,308)	$	(140,248)	$	(156,928)

	Year ended December 31, 2024
		2024		2023		2022		2021		2020		Prior	Revolving loans at amortized cost			Total
SBL non-real estate
Charge-offs	$	(14)	$	(53)	$	(149)	$	(101)	$	(320)	$	(71)	$	—	$	(708)
Recoveries		—		7		—		7		63		152		—		229
Net charge-offs		(14)		(46)		(149)		(94)		(257)		81		—		(479)

Direct lease financing
Charge-offs		(3)		(744)		(2,739)		(1,015)		(61)		(13)		—		(4,575)
Recoveries		—		39		177		85		8		9		—		318
Net charge-offs		(3)		(705)		(2,562)		(930)		(53)		(4)		—		(4,257)

Fintech
Charge-offs		—		—		—		—		—		—		(19,619)		(19,619)
Recoveries		—		—		—		—		—		—		1,877		1,877
Net charge-offs		—		—		—		—		—		—		(17,742)		(17,742)

Other loans
Charge-offs		—		(6)		—		—		—		(12)		—		(18)
Recoveries		—		—		—		—		—		1		—		1
Net charge-offs		—		(6)		—		—		—		(11)		—		(17)

Total
Charge-offs		(17)		(803)		(2,888)		(1,116)		(381)		(96)		(19,619)		(24,920)
Recoveries		—		46		177		92		71		162		1,877		2,425
Net charge-offs	$	(17)	$	(757)	$	(2,711)	$	(1,024)	$	(310)	$	66	$	(17,742)	$	(22,495)

Direct lease financing

The Company provides lease financing for commercial and government vehicle fleets and, to a lesser extent, provides lease financing for other equipment. Leases are either open-end or closed-end. An open-end lease is one in which, at the end of the lease term, the lessee must pay the difference between the amount at which the Company sells the leased asset and the stated termination value. Termination value is a contractual value agreed to by the parties at the inception of a lease as to the value of the leased asset at the end of the lease term. A closed-end lease is one for which no such payment is due on lease termination. In a closed-end lease, the risk that the amount received on a sale of the leased asset will be less than the residual value is assumed by the Bank, as lessor.

The scheduled undiscounted cash flows of the direct financing leases reconciled to the total lease receivables as of December 31, 2025 are as follows (dollars in thousands):


2026	$	238,574
2027		160,408
2028		87,947
2029		47,154
2030		16,775
2031 and thereafter		3,836
Total undiscounted cash flows		554,694
Residual value⁽¹⁾		220,231
Difference between undiscounted cash flows and discounted cash flows		(89,503)
Present value of lease payments recorded as lease receivables	$	685,422

⁽¹⁾Of the total residual value, $45.1 million is not guaranteed by the lessee or other guarantors.
‎