Loans and Allowance for Credit Losses for Loans (Tables)

6 Months Ended

Jun. 30, 2023

Loans and Allowance for Credit Losses for Loans [Abstract]


	At		At
	June 30,		December 31,
	2023		2022
(In thousands)	Amount		Amount
Commercial real estate	$	438,029	$	453,592
Commercial		187,965		216,931
Enterprise value		436,574		438,745
Digital asset (1)		16,768		40,781
Residential real estate		7,490		8,165
Construction and land development		96,757		72,267
Consumer		207		391
Mortgage warehouse		173,755		213,244
		1,357,545		1,444,116
Allowance for credit losses - loans		(23,981)		(28,069)
Net loans	$	1,333,564	$	1,416,047

(1)Includes $16.8 million and $26.5 million in loans secured by cryptocurrency mining rigs at June 30, 2023 and December 31, 2022, respectively.

Schedule of Allowance for Loan Losses and Related Loan Balances by Portfolio Segment



	For the three months ended June 30,
(In thousands)	Commercial Real Estate		Commercial		Enterprise value		Digital asset		Residential ‎Real ‎Estate		Construction and Land Development		Consumer		Mortgage Warehouse		Total
Balance at March 31, 2023	$	4,249	$	2,615	$	10,161	$	7,219	$	57	$	470	$	3	$	38	$	24,812
Charge-offs		—		(126)		—		—		—		—		(13)		—		(139)
Recoveries		—		—		45		—		—		—		3		—		48
Provision (credit)		(180)		(112)		(512)		—		(2)		51		9		6		(740)
Balance at June 30, 2023	$	4,069	$	2,377	$	9,694	$	7,219	$	55	$	521	$	2	$	44	$	23,981

Balance at March 31, 2022	$	4,935	$	5,380	$	6,076	$	1,868	$	14	$	565	$	123	$	335	$	19,296
Charge-offs		—		(1,338)		—		—		—		—		(7)		—		(1,345)
Recoveries		—		5		—		—		—		—		11		—		16
Provision (credit)		(133)		189		407		502		—		173		(38)		(95)		1,005
Balance at June 30, 2022	$	4,802	$	4,236	$	6,483	$	2,370	$	14	$	738	$	89	$	240	$	18,972



	For the six months ended June 30,
(In thousands)	Commercial Real Estate		Commercial		Enterprise value		Digital asset		Residential ‎Real ‎Estate		Construction and Land Development		Consumer		Mortgage Warehouse		Total
Balance at December 31, 2022	$	5,062	$	3,582	$	7,712	$	10,493	$	43	$	909	$	55	$	213	$	28,069
Impact of adopting ASC 326		(745)		(711)		(270)		(157)		18		(513)		(51)		(159)		(2,588)
Charge-offs		—		(167)		(3,560)		—		—		—		(29)		—		(3,756)
Recoveries		—		10		45		—		—		—		6		—		61
Provision (credit)		(248)		(337)		5,767		(3,117)		(6)		125		21		(10)		2,195
Balance at June 30, 2023	$	4,069	$	2,377	$	9,694	$	7,219	$	55	$	521	$	2	$	44	$	23,981

Balance at December 31, 2021	$	4,889	$	5,371	$	6,158	$	2,012	$	38	$	479	$	168	$	381	$	19,496
Charge-offs		—		(1,338)		(351)		—		—		—		(35)		—		(1,724)
Recoveries		—		6		87		—		—		—		19		—		112
Provision (credit)		(87)		197		589		358		(24)		259		(63)		(141)		1,088
Balance at June 30, 2022	$	4,802	$	4,236	$	6,483	$	2,370	$	14	$	738	$	89	$	240	$	18,972

Schedule of Loan Delinquencies by Portfolio Segment


					90 Days		Total
	30 - 59		60 - 89		or More		Past		Total		Total
(In thousands)	Days		Days		Past Due		Due		Current		Loans
June 30, 2023
Commercial real estate	$	—	$	—	$	1	$	1	$	438,028	$	438,029
Commercial		—		—		32		32		187,933		187,965
Enterprise value		—		—		92		92		436,482		436,574
Digital asset		—		—		—		—		16,768		16,768
Residential real estate		117		2		213		332		7,158		7,490
Construction and
land development		—		—		—		—		96,757		96,757
Consumer		—		1		—		1		206		207
Mortgage warehouse		—		—		—		—		173,755		173,755
Total	$	117	$	3	$	338	$	458	$	1,357,087	$	1,357,545

December 31, 2022
Commercial real estate	$	240	$	—	$	1	$	241	$	453,351	$	453,592
Commercial		—		—		41		41		216,890		216,931
Enterprise value		—		—		92		92		438,653		438,745
Digital asset		—		—		—		—		40,781		40,781
Residential real estate		—		—		73		73		8,092		8,165
Construction and
land development		—		—		—		—		72,267		72,267
Consumer		—		9		—		9		382		391
Mortgage warehouse		—		—		—		—		213,244		213,244
Total	$	240	$	9	$	207	$	456	$	1,443,660	$	1,444,116

Schedule of Non-Accrual Loans and Loan Past Due Over 89 Days But Still Accruing



	Non-accrual				90 Days
	With No				or More
	Allowance		Non-accrual		Past Due
(In thousands)	for Credit Loss		Loans		and Accruing
June 30, 2023
Commercial real estate	$	160	$	160	$	—
Commercial		70		70		—
Enterprise value		92		4,310		—
Digital asset		—		16,768		—
Residential real estate		—		361		—
Construction and
land development		—		—		—
Consumer		—		—		—
Mortgage warehouse		—		—		—
Total	$	322	$	21,669	$	—

December 31, 2022
Commercial real estate	$	56	$	56	$	—
Commercial		101		101		—
Enterprise value		92		92		—
Digital asset		—		26,488		—
Residential real estate		(70)		227		—
Construction and
land development		—		—		—
Consumer		—		—		—
Mortgage warehouse		—		—		—
Total	$	179	$	26,964	$	—

Schedule of Amortized Cost Basis of Collateral Dependent Loans


	Commercial				Cryptocurrency
	Real		Business		Mining Rigs
(In thousands)	Estate		Assets		and Other (1)		Cash
Commercial real estate	$	19,849	$	—	$	—	$	—
Commercial		37		1		—		—
Enterprise value		—		4,218		—		92
Digital asset		—		—		16,768		—
Residential real estate		—		—		—		—
Construction and land development		—		—		—		—
Consumer		—		—		—		—
Mortgage warehouse		—		—		—		—
	$	19,886	$	4,219	$	16,768	$	92

(1)Other collateral includes the USD value of Bitcoin held in control accounts as well as cash accounts held at the Bank.

Schedule of Loans Modifies to Borrowers in Financial Distress


(Dollars in thousands)	Principal Forgiveness		Other-Than-Insignificant Payment Delay		Term Extension		Interest Rate Reduction		Term Extension and Interest Rate Reduction		Total Class of Financing Receivable $		Total Class of Financing Receivable %
June 30, 2023
Commercial	$	—	$	—	$	—	$	—	$	21	$	21	0.01	%
Enterprise value		—		21,023		—		—		—		21,023	4.82
Digital asset		—		—		16,580		—		—		16,580	98.88
Total	$	—	$	21,023	$	16,580	$	—	$	21	$	37,624	2.77	%

The Company has committed to lend an additional $50,000 based on fund availability through an existing line of credit to a borrower experiencing financial difficulty whose loans had been modified during the six months ended June 30, 2023.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the six months ended June 30, 2023:


	Weighted-Average Payment Delay	Weighted-Average Term Extension	Weighted-Average Term Extension and Interest Rate Reduction
	Months	Months	Months	Percentage
June 30, 2023
Commercial	—	—	4	3.25	%
Enterprise value	5	—	—	—	%
Digital asset	—	3	—	—	%

Schedule of Most Recent Analysis Performed, the Risk Category of Loans

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:


	Term Loans at Amortized Cost by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost		Revolving Loans Converted to Term Loans		Total
Commercial Real Estate
Pass	$	18,014	$	54,463	$	73,090	$	31,353	$	62,710	$	138,942	$	19,420	$	—	$	397,992
Special mention		—		—		—		—		3,133		9,764		—		—		12,897
Substandard		—		—		—		1,048		4,518		21,573		—		—		27,139
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		1		—		—		—		—		—		1
Total commercial real estate		18,014		54,463		73,091		32,401		70,361		170,279		19,420		—		438,029
Commercial real estate
Current period gross write offs		—		—		—		—		—		—		—		—		—
Commercial
Pass		3,173		12,389		54,060		15,151		17,563		29,048		42,689		—		174,073
Special mention		—		—		—		—		11		9,955		1,295		—		11,261
Substandard		—		—		205		—		1,959		239		225		—		2,628
Doubtful		—		—		—		—		1		—		—		—		1
Loss		—		—		—		—		—		2		—		—		2
Total commercial		3,173		12,389		54,265		15,151		19,534		39,244		44,209		—		187,965
Commercial
Current period gross write offs		—		—		—		—		101		66		—		—		167

Enterprise Value
Pass	35,659	118,822	132,858	54,563	29,175	7,716	15,886	—	394,679
Special mention	—	12,658	6,473	4,827	2,763	1,662	9,201	—	37,584
Substandard	—	—	—	—	—	3,438	780	—	4,218
Doubtful	—	—	—	—	—	92	—	—	92
Loss	—	—	—	2	1	(2)	—	—	1
Total enterprise value	35,659	131,480	139,331	59,392	31,939	12,906	25,867	—	436,574
Enterprise value
Current period gross write offs	—	3,560	—	—	—	—	—	—	3,560
Digital Asset
Pass	—	—	—	—	—	—	—	—	—
Special mention	—	—	—	—	—	—	—	—	—
Substandard	—	16,580	188	—	—	—	—	—	16,768
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total digital asset	—	16,580	188	—	—	—	—	—	16,768
Digital asset
Current period gross write offs	—	—	—	—	—	—	—	—	—
Residential Real Estate
Pass	—	—	—	—	193	3,868	2,716	347	7,124
Substandard	—	—	—	5	—	291	70	—	366
Total residential real estate	—	—	—	5	193	4,159	2,786	347	7,490
Residential real estate
Current period gross write offs	—	—	—	—	—	—	—	—	—
Construction and Land Development
Pass	12	44,761	49,394	—	—	1,539	1,051	—	96,757
Special mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total construction and land development	12	44,761	49,394	—	—	1,539	1,051	—	96,757
Construction and land development
Current period gross write offs	—	—	—	—	—	—	—	—	—
Consumer
Not formally rated	—	—	—	—	119	—	88	—	207
Total consumer	—	—	—	—	119	—	88	—	207
Consumer
Current period gross write offs	—	—	—	—	12	17	—	—	29
Mortgage Warehouse
Pass	—	—	—	—	—	—	173,755	—	173,755
Special mention	—	—	—	—	—	—	—	—	—
Substandard	—	—	—	—	—	—	—	—	—
Doubtful	—	—	—	—	—	—	—	—	—
Loss	—	—	—	—	—	—	—	—	—
Total mortgage warehouse	—	—	—	—	—	—	173,755	—	173,755

Mortgage warehouse

Current period gross write offs

—

The following table presents the Company’s loans by risk rating and portfolio segment at December 31, 2022:



(In thousands)	Commercial Real Estate		Commercial		Enterprise Value		Digital Asset		Residential Real Estate			Construction ‎and Land ‎Development	Consumer		Mortgage Warehouse		Total
December 31, 2022
Grade:
Pass	$	399,455	$	202,895	$	408,616	$	4,724	$	7,938	$	72,267	$	—	$	213,244	$	1,309,139
Special mention		26,995		11,015		20,091		9,569		—		—		—		—		67,670
Substandard		27,141		2,854		9,946		26,488		227		—		—		—		66,656
Doubtful		—		165		92		—		—		—		—		—		257
Loss		1		2		—		—		—		—		—		—		3
Not formally rated		—		—		—		—		—		—		391		—		391
Total	$	453,592	$	216,931	$	438,745	$	40,781	$	8,165	$	72,267	$	391	$	213,244	$	1,444,116