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Loans and Allowance for Credit Losses on Loans
 6 Months Ended
Jun. 30, 2026
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans Loans and Allowance for Credit Losses on Loans
Loans Held-For-Investment
The following table presents the composition of the Company’s loans held-for-investment as of the dates indicated.
($ in thousands)
June 30, 2026
December 31, 2025
Commercial real estate:
Commercial property
$1,120,171 $1,071,396 
Business property697,627 638,063 
Multifamily208,797 175,579 
Construction
11,121 18,561 
Total commercial real estate2,037,716 1,903,599 
Commercial and industrial494,944 508,662 
Consumer:
Residential mortgage393,414 401,337 
Other consumer5,945 6,802 
Total consumer399,359 408,139 
Loans held-for-investment
2,932,019 2,820,400 
Allowance for credit losses on loans(34,738)(33,381)
Net loans held-for-investment
$2,897,281 $2,787,019 
In the ordinary course of business, the Company may grant loans to certain of its officers and directors, and the companies with which they are associated. As of June 30, 2026 and December 31, 2025, the Company had no such loans outstanding.
Allowance for Credit Losses on Loans
The following table presents a composition of provision for credit losses for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands)
2026
2025
2026
2025
Provision for credit losses on loans$798 $1,721 $1,416 $3,312 
Provision (reversal) for credit losses on off-balance sheet credit exposures128 66 (23)73 
Total provision for credit losses$926 $1,787 $1,393 $3,385 
The following tables present the activities in ACL on loans for the periods indicated:
($ in thousands)Commercial PropertyBusiness PropertyMultifamilyConstructionCommercial and IndustrialResidential MortgageOther ConsumerTotal
Balance at April 1, 2026
$10,716 $5,549 $1,518 $114 $13,122 $2,880 $44 $33,943 
Charge-offs— — — — (16)— (3)(19)
Recoveries— 1 — — 15 — — 16 
Provision (reversal) for credit losses on loans(576)(323)(101)(41)2,005 (180)14 798 
Balance at June 30, 2026
$10,140 $5,227 $1,417 $73 $15,126 $2,700 $55 $34,738 
Balance at April 1, 2025
$12,055 $4,192 $2,643 $46 $9,581 $3,379 $46 $31,942 
Charge-offs— — — — (46)— (74)(120)
Recoveries— 1 — — 9 — 1 11 
Provision (reversal) for credit losses on loans(1,299)1,013 350 33 1,671 (115)68 1,721 
Balance at June 30, 2025
$10,756 $5,206 $2,993 $79 $11,215 $3,264 $41 $33,554 
($ in thousands)Commercial PropertyBusiness PropertyMultifamilyConstructionCommercial and IndustrialResidential MortgageOther ConsumerTotal
Balance at January 1, 2026
$9,348 $4,347 $1,282 $123 $15,357 $2,871 $53 $33,381 
Charge-offs— — — — (92)— (3)(95)
Recoveries— 2 — — 34 — — 36 
Provision (reversal) for credit losses on loans792 878 135 (50)(173)(171)5 1,416 
Balance at June 30, 2026
$10,140 $5,227 $1,417 $73 $15,126 $2,700 $55 $34,738 
Balance at January 1, 2025
$12,923 $3,967 $2,371 $81 $8,713 $2,506 $67 $30,628 
Charge-offs— — — — (397)— (76)(473)
Recoveries— 2 — — 80 — 5 87 
Provision (reversal) for credit losses on loans(2,167)1,237 622 (2)2,819 758 45 3,312 
Balance at June 30, 2025
$10,756 $5,206 $2,993 $79 $11,215 $3,264 $41 $33,554 
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 property 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 presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of June 30, 2026 and gross write offs for the six months ended June 30, 2026. 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 the Term Loans by Origination Year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20262025202420232022PriorTotal
June 30, 2026
Commercial Real Estate:
Commercial property
Pass$137,386 $307,855 $173,803 $135,287 $192,580 $156,976 $4,581 $8,928 $1,117,396 
Special mention— — — — 919 — — — 919 
Substandard— — — 110 337 1,409 — — 1,856 
Doubtful— — — — — — — — — 
Total$137,386 $307,855 $173,803 $135,397 $193,836 $158,385 $4,581 $8,928 $1,120,171 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Business property
Pass$77,914 $170,412 $87,335 $87,264 $73,634 $164,141 $7,404 $22,232 $690,336 
Special mention— — — — — 5,493 — — 5,493 
Substandard— — — — 948 850 — — 1,798 
Doubtful— — — — — — — — — 
Total$77,914 $170,412 $87,335 $87,264 $74,582 $170,484 $7,404 $22,232 $697,627 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Multifamily
Pass$32,442 $37,094 $30,199 $13,635 $37,664 $49,593 $1,000 $7,170 $208,797 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$32,442 $37,094 $30,199 $13,635 $37,664 $49,593 $1,000 $7,170 $208,797 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Construction
Pass$— $— $2,102 $— $9,019 $— $— $— $11,121 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Total$— $— $2,102 $— $9,019 $— $— $— $11,121 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ in thousands)20262025202420232022PriorTotal
June 30, 2026 (Continued)
Commercial and Industrial
Pass$15,201 $25,028 $30,059 $25,426 $12,232 $8,498 $328,200 $48,881 $493,525 
Special mention— — — — — — — — — 
Substandard— — 2 5 235 42 1,135 — 1,419 
Doubtful— — — — — — — — — 
Total$15,201 $25,028 $30,061 $25,431 $12,467 $8,540 $329,335 $48,881 $494,944 
Year-to-date period gross write offs
$— $— $— $— $— $92 $— $— $92 
Consumer
Residential mortgage
Pass$24,537 $57,378 $25,279 $44,624 $130,437 $105,713 $— $— $387,968 
Special mention— — — — — — — — — 
Substandard— — — 4,691 — 755 — — 5,446 
Doubtful— — — — — — — — — 
Total$24,537 $57,378 $25,279 $49,315 $130,437 $106,468 $— $— $393,414 
Year-to-date period gross write offs
$— $— $— $— $— $— $— $— $— 
Other consumer
Pass$246 $— $— $1,214 $1,150 $118 $3,211 $— $5,939 
Special mention— — — — — — — — — 
Substandard— — — 3 3 — — — 6 
Doubtful— — — — — — — — — 
Total$246 $— $— $1,217 $1,153 $118 $3,211 $— $5,945 
Year-to-date period gross write offs
$— $— $— $— $3 $— $— $— $3 
Total loans held-for-investment
Pass$287,726 $597,767 $348,777 $307,450 $456,716 $485,039 $344,396 $87,211 $2,915,082 
Special mention— — — — 919 5,493 — — 6,412 
Substandard— — 2 4,809 1,523 3,056 1,135 — 10,525 
Doubtful— — — — — — — — — 
Total$287,726 $597,767 $348,779 $312,259 $459,158 $493,588 $345,531 $87,211 $2,932,019 
Year-to-date period gross write offs
$— $— $— $— $3 $92 $— $— $95 
The following table presents the Company’s loans held-for-investment by loan segment, internal risk ratings and vintage year as of December 31, 2025. The vintage year is the year of origination, renewal or major modification. Revolving loans that are converted to term loans presented in the table below are excluded from term loans by vintage year columns.
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term
($ 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 $— $— $1,308 
Nonaccrual Loans
The following table presents the loans on nonaccrual status by loan segments as of the dates indicated:
($ in thousands)Total Nonaccrual LoansNonaccrual Loans with ACLACL on Nonaccrual LoansCollateral Dependent Nonaccrual LoansACL on Collateral Dependent Nonaccrual Loans
June 30, 2026
Commercial real estate:
Commercial property
$1,331 $— $— $1,331 $— 
Business property1,330 616 104 1,330 104 
Total commercial real estate2,661 616 104 2,661 104 
Commercial and industrial607 — — 607 — 
Consumer:
Residential mortgage5,446 — — 5,446 — 
Other consumer6 6 — — — 
Total consumer5,452 6 — 5,446 — 
Total
$8,720 $622 $104 $8,714 $104 
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 $206 
There were no nonaccrual loans guaranteed by a U.S. government agency at June 30, 2026 and December 31, 2025.
Collateral Dependent Loans
Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following table presents the collateral dependent loans by loan segments as of the dates indicated:
($ in thousands)Hotel / MotelRestaurantRetailSingle Family ResidentialOtherTotal
June 30, 2026
Commercial real estate:
Commercial property$1,331 $— $— $— $— $1,331 
Business property— 884 415 — 31 1,330 
Total commercial real estate1,331 884 415 — 31 2,661 
Commercial and industrial6 566 — 35 — 607 
Consumer:
Residential mortgage— — — 5,446 — 5,446 
Total consumer— — — 5,446 — 5,446 
Total$1,337 $1,460 $415 $5,471 $31 $8,714 
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 $7,905 
Past Due Loans
The following table presents the aging of past due in accruing loans and nonaccrual loans by loan segments as of the dates indicated:
Still AccruingNonaccrual
($ 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
June 30, 2026
Commercial real estate:
Commercial property$— $— $— $— $— $— $502 $502 $502 
Business property70 — — 70 415 — 408 823 893 
Total commercial real estate70 — — 70 415 — 910 1,325 1,395 
Commercial and industrial— 55 — 55 — — 583 583 638 
Consumer:
Residential mortgage255 — — 255 — 676 4,770 5,446 5,701 
Other consumer14 — — 14 — — 1 1 15 
Total consumer269 — — 269 — 676 4,771 5,447 5,716 
Total$339 $55 $— $394 $415 $676 $6,264 $7,355 $7,749 
December 31, 2025
Commercial real estate:
Commercial property$— $— $— $— $— $— $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 $7,455 
Loan Modification
Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay, interest rate reduction or combination of at above mentioned modifications. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL. These loans are placed on nonaccrual status at the time of such modification.
The following tables present loans that the borrowers were both experiencing financial difficulty and modified during the period indicated by loan segments and modification type:
Three Months Ended
($ in thousands)
Combination of Other-Than-Insignificant Payment Delay and Term Extension
TotalPercentage to Each Loan Segment
June 30, 2026
Total$— $— — %
June 30, 2025
Commercial and industrial$52 $52 0.1 %
Total$52 $52 0.1 %
Six Months Ended
($ in thousands)
Combination of Other-Than-Insignificant Payment Delay and Term Extension
TotalPercentage to Each Loan Segment
June 30, 2026
Total$— $— — %
June 30, 2025
Commercial and industrial52 52 0.1 %
Total$52 $52 0.1 %
The Company had no commitments to lend to any borrower included in the above table.
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the periods indicated:
Three Months Ended
Six Months Ended
Combination of Other-Than-Insignificant Payment Delay and Term Extension
Combination of Other-Than-Insignificant Payment Delay and Term Extension
June 30, 2025
Commercial and industrial
6-month interest-only payment and 6-month term extension
6-month interest-only payment and 6-month term extension
The following table presents the performance of loans that the borrowers were both experiencing financial difficulty and modified in the last 12 months:
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past DueTotal
June 30, 2026
Total$— $— $— $— 
December 31, 2025
Total$— $— $— $— 
Purchases, Sales, and Transfers
The following table presents a summary of loans that were transferred from loans held-for-investment to loans held-for-sale for the periods indicated:
Three Months Ended June 30,
Six Months Ended June 30,
($ in thousands)
2026
2025
2026
2025
Commercial real estate:
Commercial property
$— $— $1,091 $— 
Total commercial real estate— — 1,091 — 
Total$— $— $1,091 $— 
The Company had no loans that were transferred from loans held-for-sale to loans held-for investment during the three and six months ended June 30, 2026 or 2025.
The Company had no purchases of loans held-for-investment during the three and six months ended June 30, 2026 or 2025.
Loans Held-For-Sale
The following table presents a composition of loans held-for-sale as of the dates indicated:
($ in thousands)
June 30, 2026
December 31, 2025
Commercial real estate:
Commercial property$— $3,750 
Business property1,500 2,734 
Total commercial real estate1,500 6,484 
Commercial and industrial1,437 5,593 
Total$2,937 $12,077 
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.