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Loans and Allowance for Credit Losses
 12 Months Ended
Dec. 31, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
On January 1, 2023, the Company adopted ASU 2016-13 using the modified retrospective method through a cumulative-effect adjustment to retained earnings. Balance sheet information and results for reporting periods beginning with January 1, 2023 are presented under ASC 326, while prior period comparisons continue to be presented under legacy ASC 450 and ASC 310.
Loans Held-For-Investment
The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated.
December 31,
($ in thousands)20252024
Commercial real estate:
Commercial property
$1,071,396 $940,931 
Business property638,063 595,547 
Multifamily175,579 194,220 
Construction
18,561 21,854 
Total commercial real estate1,903,599 1,752,552 
Commercial and industrial508,662 472,763 
Consumer:
Residential mortgage401,337 392,456 
Other consumer6,802 11,616 
Total consumer408,139 404,072 
Loans held-for-investment
2,820,400 2,629,387 
Allowance for credit losses on loans(33,381)(30,628)
Net loans held-for-investment
$2,787,019 $2,598,759 
In the ordinary course of business, the Company may grant loans to certain officers and directors, and the companies with which they are associated. As of December 31, 2025 and 2024 , the Company had $0 and $0 of such loans outstanding, respectively.
During the year ended December 31, 2025, the Company reclassed business property loans of $4.8 million to commercial property loans due to the changes in owner occupancy and primary source of income for repayment
Allowance for Credit Losses on Loans
The following table presents a composition of provision (reversal) for credit losses for the periods indicated:
Year Ended December 31,
($ in thousands)202520242023
Provision for credit losses on loans $3,675 $3,488 $497 
Provision (reversal) for credit losses on off-balance sheet credit exposures
353 (87)(629)
Total provision (reversal) for credit losses$4,028 $3,401 $(132)
The following table presents the activities in ACL on loans for the periods indicated:
($ in thousands)Commercial PropertyBusiness PropertyMultifamilyConstructionCommercial and IndustrialResidential MortgageOther ConsumerTotal
Balance at January 1, 2023$8,502 $5,749 $1,134 $151 $5,502 $3,691 $213 $24,942 
Impact of ASC 326 adoption(1,762)896 256 — 4,344 (2,534)(133)1,067 
Charge-offs— (4)— — (45)— (83)(132)
Recoveries— 9 — — 1,107 — 43 1,159 
Provision (reversal) for credit losses on loans5,925 (1,911)51 (16)(4,663)1,069 42 497 
Balance at December 31, 202312,665 4,739 1,441 135 6,245 2,226 82 27,533 
Charge-offs— (104)(20)— (524)— (43)(691)
Recoveries— 4 — — 126 — 168 298 
Provision (reversal) for credit losses on loans258 (672)950 (54)2,866 280 (140)3,488 
Balance at December 31, 202412,923 3,967 2,371 81 8,713 2,506 67 30,628 
Charge-offs— (307)— — (919)— (82)(1,308)
Recoveries— 4 — — 377 — 5 386 
Provision (reversal) for credit losses on loans(3,575)683 (1,089)42 7,186 365 63 3,675 
Balance at December 31, 2025$9,348 $4,347 $1,282 $123 $15,357 $2,871 $53 $33,381 
The increase in overall ACL for the year ended December 31, 2025 was primarily due to increases in loans held-for-investment, quantitatively measured loss reserves and reserves on individually evaluated loans, partially offset by a decrease in overall reserve related to qualitative adjustment factors.
Credit Quality Indicators
The Company classifies loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans in regards to credit risk. This analysis typically includes non-homogeneous loans, such as commercial real estate and commercial and industrial loans, and is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings:
Pass - Loans classified as pass include non-homogeneous loans not meeting the risk ratings defined below and smaller, homogeneous loans not assessed on an individual basis.
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 the deterioration of repayment prospects for the loan or of the institution’s credit position at some future date.
Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some 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.
The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2025 and gross write offs for the year ended December 31, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
December 31, 2025
Commercial Real Estate:
Commercial property
Pass$312,704 $176,824 $138,914 $203,311 $118,797 $96,119 $14,306 $7,563 $1,068,538 
Special mention— — — 923 — — — — 923 
Substandard— — 116 357 229 1,233 — — 1,935 
Doubtful— — — — — — — — — 
Total$312,704 $176,824 $139,030 $204,591 $119,026 $97,352 $14,306 $7,563 $1,071,396 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$172,213 $89,840 $94,519 $77,382 $116,412 $71,607 $5,530 $3,640 $631,143 
Special mention— — — — 5,512 — — — 5,512 
Substandard— — — 442 377 589 — — 1,408 
Doubtful— — — — — — — — — 
Total$172,213 $89,840 $94,519 $77,824 $122,301 $72,196 $5,530 $3,640 $638,063 
Year-to-date period gross write offs
$— $— $— $307 $— $— $— $— $307 
Multifamily
Pass$38,551 $30,423 $13,793 $38,482 $37,071 $16,259 $1,000 $— $175,579 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$38,551 $30,423 $13,793 $38,482 $37,071 $16,259 $1,000 $— $175,579 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Construction
Pass$— $503 $— $18,058 $— $— $— $— $18,561 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $503 $— $18,058 $— $— $— $— $18,561 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20252024202320222021PriorTotal
December 31, 2025 (Continued)
Commercial and Industrial
Pass$30,047 $35,290 $28,031 $15,873 $4,753 $6,413 $336,748 $51,099 $508,254 
Special mention— — — — — — — — — 
Substandard— — — 247 — 161 — — 408 
Doubtful— — — — — — — — — 
Total$30,047 $35,290 $28,031 $16,120 $4,753 $6,574 $336,748 $51,099 $508,662 
Year-to-date period gross write offs
$247 $202 $125 $— $149 $196 $— $— $919 
Consumer
Residential mortgage
Pass$62,595 $29,032 $52,641 $137,472 $67,078 $47,116 $— $— $395,934 
Special mention— — — — — — — — — 
Substandard— — 4,689 — — 714 — — 5,403 
Doubtful— — — — — — — — — 
Total$62,595 $29,032 $57,330 $137,472 $67,078 $47,830 $— $— $401,337 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$262 $— $1,788 $1,932 $429 $39 $2,347 $— $6,797 
Special mention— — — — — — — — — 
Substandard— — — 5 — — — — 5 
Doubtful— — — — — — — — — 
Total$262 $— $1,788 $1,937 $429 $39 $2,347 $— $6,802 
Year-to-date period gross write offs
$— $77 $1 $— $4 $— $— $— $82 
Total loans held-for-investment
Pass$616,372 $361,912 $329,686 $492,510 $344,540 $237,553 $359,931 $62,302 $2,804,806 
Special mention— — — 923 5,512 — — — 6,435 
Substandard— — 4,805 1,051 606 2,697 — — 9,159 
Doubtful— — — — — — — — — 
Total$616,372 $361,912 $334,491 $494,484 $350,658 $240,250 $359,931 $62,302 $2,820,400 
Year-to-date period gross write offs
$247 $279 $126 $307 $153 $196 $— $— $1,308 
The following table summarizes the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2024. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20242023202220212020PriorTotal
December 31, 2024
Commercial Real Estate:
Commercial property
Pass$196,454 $142,455 $259,222 $138,837 $76,462 $102,666 $21,031 $385 $937,512 
Special mention— — — — — — — — — 
Substandard— 131 399 258 — 2,631 — — 3,419 
Doubtful— — — — — — — — — 
Total$196,454 $142,586 $259,621 $139,095 $76,462 $105,297 $21,031 $385 $940,931 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$93,973 $100,337 $95,024 $148,382 $44,239 $95,372 $6,431 $3,750 $587,508 
Special mention— — 5,034 — — — — — 5,034 
Substandard— — 447 859 — 1,699 — — 3,005 
Doubtful— — — — — — — — — 
Total$93,973 $100,337 $100,505 $149,241 $44,239 $97,071 $6,431 $3,750 $595,547 
Year-to-date period gross write offs
$— $— $77 $— $— $27 $— $— $104 
Multifamily
Pass$34,104 $53,020 $39,870 $38,104 $25,751 $2,370 $1,001 $— $194,220 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$34,104 $53,020 $39,870 $38,104 $25,751 $2,370 $1,001 $— $194,220 
Year-to-date period gross write offs
$— $— $— $20 $— $— $— $— $20 
Construction
Pass$886 $7,589 $13,379 $— $— $— $— $— $21,854 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$886 $7,589 $13,379 $— $— $— $— $— $21,854 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20242023202220212020PriorTotal
December 31, 2024 (Continued)
Commercial and Industrial
Pass$46,644 $34,737 $21,700 $7,312 $3,125 $8,044 $347,605 $3,517 $472,684 
Special mention— — — — — — — — — 
Substandard— — — 8 — 71 — — 79 
Doubtful— — — — — — — — — 
Total$46,644 $34,737 $21,700 $7,320 $3,125 $8,115 $347,605 $3,517 $472,763 
Year-to-date period gross write offs
$— $— $— $— $— $126 $248 $150 $524 
Consumer
Residential mortgage
Pass$37,548 $73,833 $151,922 $73,183 $10,840 $44,727 $— $— $392,053 
Special mention— — — — — — — — — 
Substandard— — — — — 403 — — 403 
Doubtful— — — — — — — — — 
Total$37,548 $73,833 $151,922 $73,183 $10,840 $45,130 $— $— $392,456 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$346 $2,914 $4,243 $1,530 $394 $8 $2,157 $— $11,592 
Special mention— — — — — — — — — 
Substandard— — 23 — 1 — — — 24 
Doubtful— — — — — — — — — 
Total$346 $2,914 $4,266 $1,530 $395 $8 $2,157 $— $11,616 
Year-to-date period gross write offs
$— $18 $15 $— $10 $— $— $— $43 
Total loans held-for-investment
Pass$409,955 $414,885 $585,360 $407,348 $160,811 $253,187 $378,225 $7,652 $2,617,423 
Special mention— — 5,034 — — — — — 5,034 
Substandard— 131 869 1,125 1 4,804 — — 6,930 
Doubtful— — — — — — — — — 
Total$409,955 $415,016 $591,263 $408,473 $160,812 $257,991 $378,225 $7,652 $2,629,387 
Year-to-date period gross write offs
$— $18 $92 $20 $10 $153 $248 $150 $691 
Nonaccrual Loans
The following table presents loans on nonaccrual status by loan segments as of the date indicated:
($ in thousands)Total Nonaccrual LoansNonaccrual Loans with ACLACL on Nonaccrual LoansCollateral Dependent Nonaccrual LoansACL on Collateral Dependent Nonaccrual Loans
December 31, 2025
Commercial real estate:
Commercial property
$1,403 $— $— $1,403 $— 
Business property938 642 134 938 134 
Total commercial real estate2,341 642 134 2,341 134 
Commercial and industrial161 71 72 161 72 
Consumer:
Residential mortgage5,403 — — 5,403 — 
Other consumer5 5 — — — 
Total consumer5,408 5 — 5,403 — 
Total$7,910 $718 $206 $7,905 $206 
December 31, 2024
Commercial real estate:
Commercial property$1,851 $— $— $1,851 $— 
Business property2,336 1,032 38 2,336 38 
Total commercial real estate4,187 1,032 38 4,187 38 
Commercial and industrial79 8 8 79 8 
Consumer:
Residential mortgage403 — — 403 — 
Other consumer24 24 — — — 
Total consumer427 24 — 403 — 
Total$4,693 $1,064 $46 $4,669 $46 
There were no nonaccrual loans guaranteed by a U.S. government agency at December 31, 2025 and 2024.
Collateral Dependent Loans
Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the date indicated:
($ in thousands)Hotel / MotelRestaurantsCar WashRetailSingle Family Residential
Other
Total
December 31, 2025
Commercial real estate:
Commercial property$1,403 $— $— $— $— $— $1,403 
Business property— 377 — 529 — 32 938 
Total commercial real estate1,403 377 — 529 — 32 2,341 
Commercial and industrial8 — — — 82 71 161 
Consumer:
Residential mortgage— — — — 5,403 — 5,403 
Total consumer— — — — 5,403 — 5,403 
Total$1,411 $377 $— $529 $5,485 $103 $7,905 
December 31, 2024
Commercial real estate:
Commercial property$1,851 $— $— $— $— $— $1,851 
Business property— — 1,695 606 — 35 2,336 
Total commercial real estate1,851 — 1,695 606 — 35 4,187 
Commercial and industrial11 — 8 — 60 — 79 
Consumer:
Residential mortgage— — — — 403 — 403 
Total consumer— — — — 403 — 403 
Total$1,862 $— $1,703 $606 $463 $35 $4,669 
Past Due Loans
The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of date indicated:
Still AccruingNonaccrual
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotal30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotalTotal Loans Past Due
December 31, 2025
Commercial real estate:
Commercial property$— $— $— $— $— $— $524 $524 $524 
Business property140 — — 140 86 178 230 494 634 
Total commercial real estate140 — — 140 86 178 754 1,018 1,158 
Commercial and industrial21 5 — 26 — — 78 78 104 
Consumer:
Residential mortgage674 — — 674 2,269 273 2,862 5,404 6,078 
Other consumer108 7 — 115 — — — — 115 
Total consumer782 7 — 789 2,269 273 2,862 5,404 6,193 
Total$943 $12 $— $955 $2,355 $451 $3,694 $6,500 $7,455 
December 31, 2024
Commercial real estate:
Commercial property$433 $— $— $433 $— $984 $269 $1,253 $1,686 
Business property333 — — 333 508 — 698 1,206 1,539 
Total commercial real estate766 — — 766 508 984 967 2,459 3,225 
Commercial and industrial— — — — — 71 — 71 71 
Consumer:
Residential mortgage3,679 303 — 3,982 — 403 — 403 4,385 
Other consumer154 — — 154 — — 24 24 178 
Total consumer3,833 303 — 4,136 — 403 24 427 4,563 
Total$4,599 $303 $— $4,902 $508 $1,458 $991 $2,957 $7,859 
Loan Modifications
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of the above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.
The following tables present loans that the borrowers were both experiencing financial difficulty and modified during the periods indicated by loan segments and modification type:
Year Ended
($ in thousands)
Combination of Other-Than-Insignificant Payment Delay and Term Extension
TotalPercentage to Each Loan Segment
December 31, 2025
Commercial and industrial$49 $49 0.1 %
Total$49 $49 0.1 %
December 31, 2024
Commercial real estate:
Commercial property$399 $399 0.1 %
Business property2,204 2,204 0.2 %
Total commercial real estate2,603 2,603 0.1 %
Total$2,603 $2,603 0.1 %
December 31, 2023
Total$— $— — %
The Company had no commitments to lend to the borrowers included in the above table.
There were no loans that had a payment default during the years ended December 31, 2025 and 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.
The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the period indicates:
Year Ended
Combination of Other-Than-Insignificant Payment Delay and Term Extension
December 31, 2025
Commercial and industrial
6-month interest-only payment and 6-month term extension
December 31, 2024
Commercial property
6-month fixed payment and 6-month term extension
Business property
6-month fixed payment and 6-month term extension
The following table presents the performance of such loans that have been modified in the last 12 months:
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due
90 or More Days Past Due
Total Past Due
December 31, 2025
Total$— $— $— $— 
December 31, 2024
Commercial real estate:
Business property$508 $— $664 $1,172 
Total commercial real estate508 — 664 1,172 
Total$508 $— $664 $1,172 
Purchases, Sales, and Transfers
The following table presents a summary of loans that were transferred from loans held-for-investment to loans held-for-sale for the periods indicated:
Year Ended December 31,
($ in thousands)202520242023
Consumer:
Residential mortgage$— $676 $— 
Total consumer— 676 — 
Total$— $676 $— 
The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during the years ended December 31, 2025 and 2024.
The following table presents a summary of purchases of loans held-for-investment for the periods indicated:
Year Ended December 31,
($ in thousands)202520242023
Consumer:
Residential mortgage$— $— $15,741 
Total consumer— — 15,741 
Total$— $— $15,741 
The Company had no sales of loans held-for-investment during the year ended December 31, 2025, 2024 and 2023. When the Company changes its intent to hold loans for investment, the loans are transferred to held-for-sale.
Loans Held-For-Sale
The following table presents a composition of loans held-for-sale as of the dates indicated:
December 31,
($ in thousands)20252024
Commercial real estate:
Commercial property$3,750 $3,307 
Business property2,734 713 
Total commercial real estate6,484 4,020 
Commercial and industrial5,593 2,272 
Total$12,077 $6,292 
Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred to held-for-sale at the lower of cost or fair value. Certain loans are transferred to held-for-sale with write-downs to ACL on loans.