XML 22 R11.htm IDEA: XBRL DOCUMENT

Loans and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2025

Loans and Allowance for Credit Losses

Loans and Allowance for Credit Losses

Note 4: Loans and Allowance for Credit Losses

The following table presents the components of the loan portfolio at September 30, 2025 and December 31, 2024:


		September 30,			December 31,
(dollars in thousands)		2025			2024
Commercial		$	533,476		$	497,662
Leases			43,186			44,291
Construction and Land Development			159,991			97,255
1-4 Family Construction			41,739			41,961
Real Estate Mortgage:
1-4 Family Mortgage			487,297			474,383
Multifamily			1,578,223			1,425,610
CRE Owner Occupied			192,966			191,248
CRE Nonowner Occupied			1,158,622			1,083,108
Total Real Estate Mortgage Loans			3,417,108			3,174,349
Consumer and Other			19,054			12,996
Total Loans, Gross			4,214,554			3,868,514
Allowance for Credit Losses			(56,390)			(52,277)
Net Deferred Loan Fees			(8,282)			(6,801)
Total Loans, Net		$	4,149,882		$	3,809,436

The following tables present the aging in past due loans and loans on nonaccrual status, with and without an ACL by loan segment, as of September 30, 2025 and December 31, 2024:


		Accruing Interest
					30-89 Days			90 Days or			Nonaccrual			Nonaccrual
(dollars in thousands)		Current			Past Due			More Past Due			with ACL			without ACL			Total
September 30, 2025
Commercial		$	532,193		$	—		$	—		$	1,250		$	33		$	533,476
Leases			43,167			—			—			—			19			43,186
Construction and Land Development			159,951			—			—			—			40			159,991
1-4 Family Construction			41,739			—			—			—			—			41,739
Real Estate Mortgage:
1-4 Family Mortgage			486,980			317			—			—			—			487,297
Multifamily			1,578,223			—			—			—			—			1,578,223
CRE Owner Occupied			191,218			1,748			—			—			—			192,966
CRE Nonowner Occupied			1,149,973			—			—			8,649			—			1,158,622
Consumer and Other			18,213			841			—			—			—			19,054
Totals		$	4,201,657		$	2,906		$	—		$	9,899		$	92		$	4,214,554


		Accruing Interest
					30-89 Days			90 Days or			Nonaccrual			Nonaccrual
(dollars in thousands)		Current			Past Due			More Past Due			with ACL			without ACL			Total
December 31, 2024
Commercial		$	497,432		$	59		$	—		$	171		$	—		$	497,662
Leases			44,257			—			—			34			—			44,291
Construction and Land Development			97,197			—			—			—			58			97,255
1-4 Family Construction			41,961			—			—			—			—			41,961
Real Estate Mortgage:
1-4 Family Mortgage			474,185			178			—			—			20			474,383
Multifamily			1,425,610			—			—			—			—			1,425,610
CRE Owner Occupied			190,197			1,051			—			—			—			191,248
CRE Nonowner Occupied			1,083,108			—			—			—			—			1,083,108
Consumer and Other			12,975			3			—			18			—			12,996
Totals		$	3,866,922		$	1,291		$	—		$	223		$	78		$	3,868,514

The Company aggregates loans into credit quality indicators based on relevant information about the ability of borrowers to service their debt by using internal reviews in which management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate, and the fair values of collateral securing the loans. The Company analyzes all loans individually to assign a risk rating, grouped into six major categories defined as follows:

Pass: A pass loan is a credit with no known or existing potential weaknesses deserving of management’s close attention.

Watch: Loans classified as watch have a credit where the borrower’s financial strength and performance has

been declining and may pose an elevated level of risk. Watch loans have been identified as having minor deterioration in loan quality or other credit weaknesses/circumstances meriting closer attention of management.

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s

close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. This is a transitional rating and loans should not be classified as special mention for more than one year.

Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Well defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. They are characterized by the distinct possibility that the Company will sustain loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loss: Loans classified as loss are considered uncollectible and charged-off immediately.

The following tables present loan balances classified by credit quality indicators by year of origination as of September 30, 2025 and December 31, 2024:


		September 30, 2025
(dollars in thousands)		2025			2024			2023			2022			2021			Prior			Revolving			Total
Commercial
Pass	$	127,366		$	88,485		$	29,477		$	57,803		$	16,507		$	27,330		$	170,940		$	517,908
Watch/Special Mention		94			—			610			164			—			8			555			1,431
Substandard		110			142			1,306			10,380			9			—			2,190			14,137
Total Commercial		127,570			88,627			31,393			68,347			16,516			27,338			173,685			533,476
Current Period Gross Write-offs		—			—			10			58			186			—			—			254

Leases
Pass		11,963			12,035			9,356			6,292			2,151			1,370			—			43,167
Substandard		—			—			—			19			—			—			—			19
Total Leases		11,963			12,035			9,356			6,311			2,151			1,370			—			43,186
Current Period Gross Write-offs		—			—			—			15			—			—			—			15

Construction and Land Development
Pass		84,744			60,287			1,604			337			434			—			12,545			159,951
Substandard		—			40			—			—			—			—			—			40
Total Construction and Land Development		84,744			60,327			1,604			337			434			—			12,545			159,991
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

1-4 Family Construction
Pass		20,093			9,104			227			201			187			—			11,927			41,739
Total 1-4 Family Construction		20,093			9,104			227			201			187			—			11,927			41,739
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Real Estate Mortgage:
1-4 Family Mortgage
Pass		71,539			73,348			47,161			90,200			68,477			56,564			78,865			486,154
Substandard		633			—			193			—			—			317			—			1,143
Total 1-4 Family Mortgage		72,172			73,348			47,354			90,200			68,477			56,881			78,865			487,297
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Multifamily
Pass		285,418			189,795			128,257			428,087			321,394			157,685			9,677			1,520,313
Watch/Special Mention		31,841			—			2,213			—			—			—			—			34,054
Substandard		—			—			—			10,561			—			13,295			—			23,856
Total Multifamily		317,259			189,795			130,470			438,648			321,394			170,980			9,677			1,578,223
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

CRE Owner Occupied
Pass		19,712			21,034			25,716			59,371			29,689			27,775			1,955			185,252
Watch/Special Mention		—			563			—			—			436			2,191			1,832			5,022
Substandard		152			—			792			—			1,748			—			—			2,692
Total CRE Owner Occupied		19,864			21,597			26,508			59,371			31,873			29,966			3,787			192,966
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

CRE Nonowner Occupied
Pass		262,084			316,755			91,792			219,899			127,344			120,235			4,191			1,142,300
Watch/Special Mention		—			—			—			—			—			135			—			135
Substandard		15,283			904			—			—			—			—			—			16,187
Total CRE Nonowner Occupied		277,367			317,659			91,792			219,899			127,344			120,370			4,191			1,158,622
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Total Real Estate Mortgage Loans		686,662			602,399			296,124			808,118			549,088			378,197			96,520			3,417,108

Consumer and Other
Pass		2,910			234			397			325			59			1,116			14,013			19,054
Total Consumer and Other		2,910			234			397			325			59			1,116			14,013			19,054
Current Period Gross Write-offs		—			—			—			—			—			—			25			25

Total Period Gross Write-offs		—			—			10			73			186			—			25			294
Total Loans	$	933,942		$	772,726		$	339,101		$	883,639		$	568,435		$	408,021		$	308,690		$	4,214,554


		December 31, 2024
(dollars in thousands)		2024			2023			2022			2021			2020			Prior			Revolving			Total
Commercial
Pass	$	135,665		$	45,089		$	67,579		$	23,353		$	13,349		$	19,794		$	178,293		$	483,122
Watch/Special Mention		—			—			76			96			29			—			1,716			1,917
Substandard		110			44			10,491			—			65			—			1,913			12,623
Total Commercial		135,775			45,133			78,146			23,449			13,443			19,794			181,922			497,662
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Leases
Pass		15,128			12,684			9,736			4,057			1,504			1,148			—			44,257
Substandard		—			—			34			—			—			—			—			34
Total Leases		15,128			12,684			9,770			4,057			1,504			1,148			—			44,291
Current Period Gross Write-offs		—			—			—			—			11			—			—			11

Construction and Land Development
Pass		74,967			6,027			6,791			585			—			—			8,827			97,197
Substandard		58			—			—			—			—			—			—			58
Total Construction and Land Development		75,025			6,027			6,791			585			—			—			8,827			97,255
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

1-4 Family Construction
Pass		29,378			488			1,164			363			—			—			10,568			41,961
Total 1-4 Family Construction		29,378			488			1,164			363			—			—			10,568			41,961
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Real Estate Mortgage:
1-4 Family Mortgage
Pass		89,561			58,054			102,627			77,293			55,936			18,289			71,097			472,857
Watch/Special Mention		298			196			—			—			324			—			—			818
Substandard		20			45			—			—			—			643			—			708
Total 1-4 Family Mortgage		89,879			58,295			102,627			77,293			56,260			18,932			71,097			474,383
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

Multifamily
Pass		219,162			133,916			486,854			336,859			161,626			57,679			6,624			1,402,720
Watch/Special Mention		9,953			2,245			10,692			—			—			—			—			22,890
Total Multifamily		229,115			136,161			497,546			336,859			161,626			57,679			6,624			1,425,610
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

CRE Owner Occupied
Pass		22,761			31,402			62,522			34,228			17,801			15,355			2,121			186,190
Watch/Special Mention		—			—			—			1,759			1,739			—			593			4,091
Substandard		—			967			—			—			—			—			—			967
Total CRE Owner Occupied		22,761			32,369			62,522			35,987			19,540			15,355			2,714			191,248
Current Period Gross Write-offs		—			—			—			—			—			—			—			—

CRE Nonowner Occupied
Pass		356,582			113,973			261,827			148,866			73,300			97,350			6,962			1,058,860
Watch/Special Mention		9,622			3,659			—			2,690			—			894			—			16,865
Substandard		7,261			122			—			—			—			—			—			7,383
Total CRE Nonowner Occupied		373,465			117,754			261,827			151,556			73,300			98,244			6,962			1,083,108
Current Period Gross Write-offs		1,236			—			—			—			—			—			—			1,236

Total Real Estate Mortgage Loans		715,220			344,579			924,522			601,695			310,726			190,210			87,397			3,174,349

Consumer and Other
Pass		921			3,061			498			157			1,301			5			7,035			12,978
Substandard		—			18			—			—			—			—			—			18
Total Consumer and Other		921			3,079			498			157			1,301			5			7,035			12,996
Current Period Gross Write-offs		17			—			—			—			—			—			2			19

Total Period Gross Write-offs		1,253			—			—			—			11			—			2			1,266
Total Loans	$	971,447		$	411,990		$	1,020,891		$	630,306		$	326,974		$	211,157		$	295,749		$	3,868,514

The following tables present the activity in the ACL, by segment, for the three and nine months ended September 30, 2025 and 2024:


					Provision for
					(Recovery of)
					Credit Losses			Loans and			Recoveries			Total Ending
		Beginning			for Loans			Leases			of Loans			Allowance
(dollars in thousands)		Balance			and Leases			Charged-off			and Leases			Balance
Three Months Ended September 30, 2025
Commercial		$	5,935		$	1,112		$	(254)		$	—		$	6,793
Leases			381			52			(15)			—			418
Construction and Land Development			1,104			176			—			—			1,280
1-4 Family Construction			278			16			—			—			294
Real Estate Mortgage:
1-4 Family Mortgage			2,413			19			—			—			2,432
Multifamily			23,921			(691)			—			—			23,230
CRE Owner Occupied			1,137			(25)			—			—			1,112
CRE Nonowner Occupied			20,443			207			—			—			20,650
Total Real Estate Mortgage Loans			47,914			(490)			—			—			47,424
Consumer and Other			153			34			(7)			1			181
Total		$	55,765		$	900		$	(276)		$	1		$	56,390

Nine Months Ended September 30, 2025
Commercial		$	5,630		$	1,416		$	(254)		$	1		$	6,793
Leases			368			65			(15)			—			418
Construction and Land Development			866			414			—			—			1,280
1-4 Family Construction			331			(37)			—			—			294
Real Estate Mortgage:
1-4 Family Mortgage			2,795			(363)			—			—			2,432
Multifamily			23,120			110			—			—			23,230
CRE Owner Occupied			1,290			(178)			—			—			1,112
CRE Nonowner Occupied			17,735			2,915			—			—			20,650
Total Real Estate Mortgage Loans			44,940			2,484			—			—			47,424
Consumer and Other			142			58			(25)			6			181
Total		$	52,277		$	4,400		$	(294)		$	7		$	56,390


					Provision for
					(Recovery of)
					Credit Losses			Loans and			Recoveries			Total Ending
		Beginning			for Loans			Leases			of Loans			Allowance
(dollars in thousands)		Balance			and Leases			Charged-off			and Leases			Balance
Three Months Ended September 30, 2024
Commercial		$	6,018		$	(350)		$	—		$	5		$	5,673
Construction and Land Development			1,220			(141)			—			—			1,079
1-4 Family Construction			522			(128)			—			—			394
Real Estate Mortgage:
1-4 Family Mortgage			2,774			5			—			—			2,779
Multifamily			22,480			(125)			—			—			22,355
CRE Owner Occupied			1,258			(25)			—			—			1,233
CRE Nonowner Occupied			17,581			730			(935)			—			17,376
Total Real Estate Mortgage Loans			44,093			585			(935)			—			43,743
Consumer and Other			96			34			(2)			1			129
Total		$	51,949		$	—		$	(937)		$	6		$	51,018

Nine Months Ended September 30, 2024
Commercial		$	5,398		$	265		$	—		$	10		$	5,673
Construction and Land Development			2,156			(1,077)			—			—			1,079
1-4 Family Construction			558			(164)			—			—			394
Real Estate Mortgage:
1-4 Family Mortgage			2,651			125			—			3			2,779
Multifamily			22,217			138			—			—			22,355
CRE Owner Occupied			1,184			49			—			—			1,233
CRE Nonowner Occupied			16,225			2,086			(935)			—			17,376
Total Real Estate Mortgage Loans			42,277			2,398			(935)			3			43,743
Consumer and Other			105			28			(14)			10			129
Total		$	50,494		$	1,450		$	(949)		$	23		$	51,018

The following tables present the balance in the ACL and the recorded investment in loans, by segment, as of September 30, 2025 and December 31, 2024:


		Individually			Collectively
		Evaluated for			Evaluated for
(dollars in thousands)		Credit Loss			Credit Loss			Total
ACL at September 30, 2025
Commercial		$	1,317		$	5,476		$	6,793
Leases			—			418			418
Construction and Land Development			—			1,280			1,280
1-4 Family Construction			—			294			294
Real Estate Mortgage:
1-4 Family Mortgage			—			2,432			2,432
Multifamily			226			23,004			23,230
CRE Owner Occupied			—			1,112			1,112
CRE Nonowner Occupied			2,889			17,761			20,650
Total Real Estate Mortgage Loans			3,115			44,309			47,424
Consumer and Other			—			181			181
Total		$	4,432		$	51,958		$	56,390


		Individually			Collectively
		Evaluated for			Evaluated for
(dollars in thousands)		Credit Loss			Credit Loss			Total
ACL at December 31, 2024
Commercial		$	133		$	5,497		$	5,630
Leases			6			362			368
Construction and Land Development			—			866			866
1-4 Family Construction			—			331			331
Real Estate Mortgage:
1-4 Family Mortgage			—			2,795			2,795
Multifamily			—			23,120			23,120
CRE Owner Occupied			—			1,290			1,290
CRE Nonowner Occupied			—			17,735			17,735
Total Real Estate Mortgage Loans			—			44,940			44,940
Consumer and Other			5			137			142
Total		$	144		$	52,133		$	52,277


		Individually			Collectively
		Evaluated for			Evaluated for
(dollars in thousands)		Credit Loss			Credit Loss			Total
Loans at September 30, 2025
Commercial		$	14,205		$	519,271		$	533,476
Leases			19			43,167			43,186
Construction and Land Development			40			159,951			159,991
1-4 Family Construction			—			41,739			41,739
Real Estate Mortgage:
1-4 Family Mortgage			1,143			486,154			487,297
Multifamily			23,857			1,554,366			1,578,223
CRE Owner Occupied			4,525			188,441			192,966
CRE Nonowner Occupied			16,187			1,142,435			1,158,622
Total Real Estate Mortgage Loans			45,712			3,371,396			3,417,108
Consumer and Other			—			19,054			19,054
Total		$	59,976		$	4,154,578		$	4,214,554


		Individually			Collectively
		Evaluated for			Evaluated for
(dollars in thousands)		Credit Loss			Credit Loss			Total
Loans at December 31, 2024
Commercial		$	14,045		$	483,617		$	497,662
Leases			34			44,257			44,291
Construction and Land Development			58			97,197			97,255
1-4 Family Construction			—			41,961			41,961
Real Estate Mortgage:
1-4 Family Mortgage			708			473,675			474,383
Multifamily			—			1,425,610			1,425,610
CRE Owner Occupied			1,558			189,690			191,248
CRE Nonowner Occupied			8,278			1,074,830			1,083,108
Total Real Estate Mortgage Loans			10,544			3,163,805			3,174,349
Consumer and Other			18			12,978			12,996
Total		$	24,699		$	3,843,815		$	3,868,514

The following tables present the amortized cost basis of collateral dependent loans by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans, as of September 30, 2025 and December 31, 2024:


		Primary Type of Collateral
					Business									ACL
(dollars in thousands)		Real Estate			Assets			Other			Total			Allocation
September 30, 2025
Commercial		$	—		$	2,525		$	11,680		$	14,205		$	1,317
Leases			—			—			19			19			—
Construction and Land Development			40			—			—			40			—
Real Estate Mortgage:
1-4 Family Mortgage			1,143			—			—			1,143			—
Multifamily			23,857			—			—			23,857			226
CRE Owner Occupied			4,525			—			—			4,525			—
CRE Nonowner Occupied			16,187			—			—			16,187			2,889
Totals		$	45,752		$	2,525		$	11,699		$	59,976		$	4,432


		Primary Type of Collateral
					Business									ACL
(dollars in thousands)		Real Estate			Assets			Other			Total			Allocation
December 31, 2024
Commercial		$	—		$	3,688		$	10,357		$	14,045		$	133
Leases			—			—			34			34			6
Construction and Land Development			58			—			—			58			—
Real Estate Mortgage:
1-4 Family Mortgage			708			—			—			708			—
CRE Owner Occupied			1,558			—			—			1,558			—
CRE Nonowner Occupied			8,278			—			—			8,278			—
Consumer and Other			—			—			18			18			5
Totals		$	10,602		$	3,688		$	10,409		$	24,699		$	144

Accrued interest receivable on loans, which is recorded within accrued interest on the balance sheet, totaled $12.1 million and $11.4 million at September 30, 2025 and December 31, 2024, respectively, and was excluded from the estimate of credit losses.

For both the three months ended September 30, 2025 and September 30, 2024, there were no modified loans to borrowers experiencing financial difficulty. For the nine months ended September 30, 2025, the Company modified one commercial real estate (“CRE”), nonowner occupied loan, with an outstanding balance of $8.6 million, for a borrower experiencing financial difficulty by granting a 3-year extension of the loan at a below market rate. For the nine months ended September 30, 2024, there were no modified loans to borrowers experiencing financial difficulty.