Loans by Type

3 Months Ended

Mar. 31, 2023

A summary of loans is as follows:


(In thousands)	March 31, 2023		December 31, 2022
Commercial and industrial	$	548,923	$	561,616
Real estate:
Commercial:
Mortgage	116,202		108,166
Construction	19,075		17,874
Faith-based:
Mortgage	376,630		387,114
Construction	9,538		8,094
Other	5		42
Total loans	$	1,070,373	$	1,082,906

The following table presents the aging of loans past due by category at March 31, 2023 and December 31, 2022:


	Performing						Nonperforming
(In thousands)	Current		30-59 Days		60-89 Days		90 Days and Over		Non- accrual		Total Loans
March 31, 2023
Commercial and industrial	$	548,923	$	—	$	—	$	—	$	—	$	548,923
Real estate
Commercial:
Mortgage	116,202		—		—		—		—		116,202
Construction	19,075		—		—		—		—		19,075
Faith-based:
Mortgage	376,630		—		—		—		—		376,630
Construction	9,538		—		—		—		—		9,538

Other	5		—		—		—		—		5
Total	$	1,070,373	$	—	$	—	$	—	$	—	$	1,070,373
December 31, 2022
Commercial and industrial	$	560,466	$	—	$	—	$	—	$	1,150	$	561,616
Real estate
Commercial:
Mortgage	108,166		—		—		—		—		108,166
Construction	17,874		—		—		—		—		17,874
Faith-based:
Mortgage	387,114		—		—		—		—		387,114
Construction	8,094		—		—		—		—		8,094

Other	42		—		—		—		—		42
Total	$	1,081,756	$	—	$	—	$	—	$	1,150	$	1,082,906

The following table presents the credit exposure of the loan portfolio by internally assigned credit grade as of March 31, 2023 and December 31, 2022:


(In thousands)	Loans Subject to Normal Monitoring1		Performing Loans Subject to Special Monitoring2		Nonperforming Loans Subject to Special Monitoring2		Total Loans
March 31, 2023
Commercial and industrial	$	537,698	$	11,225	$	—	$	548,923
Real estate
Commercial:
Mortgage	116,202		—		—		116,202
Construction	19,075		—		—		19,075
Faith-based:
Mortgage	372,951		3,679		—		376,630
Construction	9,538		—		—		9,538

Other	5		—		—		5
Total	$	1,055,469	$	14,904	$	—	$	1,070,373
December 31, 2022
Commercial and industrial	$	549,241	$	11,225	$	1,150	$	561,616
Real estate
Commercial:
Mortgage	108,166		—		—		108,166
Construction	17,874		—		—		17,874
Faith-based:
Mortgage	386,169		945		—		387,114
Construction	8,094		—		—		8,094

Other	42		—		—		42
Total	$	1,069,586	$	12,170	$	1,150	$	1,082,906


1 Loans subject to normal monitoring involve borrowers of acceptable-to-strong credit quality and risk, who have the apparent ability to satisfy their loan obligations.
2 Loans subject to special monitoring possess some credit deficiency or potential weakness which requires a high level of management attention.

The Company adopted Accounting Standards Update ("ASU") 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02") effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. In some cases, these modifications may result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, an interest rate reduction, an other-than-insignificant payment delay, a term extension, or a combination thereof, among other things.

The following table shows the amortized cost of loans at March 31, 2023 that were both experiencing financial difficulty and modified during the three months ended March 31, 2023, segregated by category and type of modification.


(In thousands)	Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Interest Rate Reduction		Percentage of Total Loans Held for Investment
March 31, 2023
Commercial and industrial	$	—	$	11,225	$	—	$	—	2.04	%









Total	$	—	$	11,225	$	—	$	—	1.05	%

There were two loans modified during the three months ended March 31, 2023. The terms were extended by periods of two and three years and there was not an interest rate reduction associated with the modifications.

The following table shows the performance of loans that have been modified to borrowers experiencing financial difficulty during the three months ended March 31, 2023.


(In thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due
March 31, 2023
Commercial and industrial	$	11,225	$	—	$	—	$	—	$	—









Total	$	11,225	$	—	$	—	$	—	$	—

There were no modified loans that had a payment default during the three months ended March 31, 2023 and that had been modified due to the borrower experiencing financial difficulty within the 12 previous months preceding the default.

Upon the Company's determination that a modified loan has subsequently been deemed uncollectible, the loan is written off. There were no loans written off during the three months ended March 31, 2023.

Prior to the adoption of ASU 2022-02, there were no loans considered troubled debt restructurings as of March 31, 2022 or December 31, 2022.

The Company had no loans evaluated for expected credit losses on an individual basis as of March 31, 2023 or December 31, 2022. There were no foreclosed loans recorded as other real estate owned as of March 31, 2023 or December 31, 2022.

A summary of the activity in the allowance for credit losses (“ACL”) by category for the three-month period ended March 31, 2023 and year-ended December 31, 2022 is as follows:


(In thousands)	C&I		CRE		Faith-based CRE		Construction		Total
Balance at December 31, 2021	$	5,034	$	1,031	$	5,684	$	292	$	12,041
Provision for (release of) credit losses	931		(91)		753		(108)		1,485
Recoveries	13		—		—		—		13
Balance at December 31, 2022	$	5,978	$	940	$	6,437	$	184	$	13,539

(Release of) provision for credit losses (1)	(68)		77		(314)		20		(285)
Recoveries	—		—		—		—		—
Balance at March 31, 2023	$	5,910	$	1,017	$	6,123	$	204	$	13,254


(1)			For the three-month period ended March 31, 2023 and year-ended December 31, 2022, there was a release of credit losses of $55,000 and $135,000, respectively, for unfunded commitments.