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Loans and Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2021
Receivables [Abstract]  
Loans and Allowance for Loan Losses Loans and Allowance for Loan Losses
The following table presents the composition of the loan portfolio as of December 31, 2021 and 2020:
($ in thousands)December 31, 2021December 31, 2020
Commercial real estate$701,450 $651,684 
SBA loans—real estate220,099 136,224 
SBA loans—non-real estate (1)55,759 75,151 
Commercial and industrial ("C&I")162,543 107,307 
Home mortgage173,303 128,212 
Consumer865 1,158 
Gross loans receivable1,314,019 1,099,736 
Allowance for loan losses(16,123)(15,352)
Loans receivable, net (2)$1,297,896 $1,084,384 
(1)As of December 31, 2021 and 2020, SBA loans - non-real estate balances include SBA Paycheck Protection Program ("PPP") loans of $40.6 million and $64.9 million, respectively.
(2)Includes net deferred loan fees or costs, unamortized premiums and unaccreted discounts of $(7.0) million and $(5.9) million as of December 31, 2021 and 2020, respectively.
No loans were outstanding to related parties as of December 31, 2021 or 2020.
The following table summarizes the activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2021, 2020, and 2019:
($ in thousands)
Commercial
Real Estate
SBA Loans—
Real Estate
SBA
Loans—Non-
Real Estate
C&I
Home
Mortgage
ConsumerTotal
Balance at January 1, 2019$4,805 $894 $505 $1,746 $1,653 $33 $9,636 
Provision for (reversal of) loan losses (1)1,195 734 (384)(457)14 — 1,102 
Charge-offs— (689)— — — — (689)
Recoveries— — — — — 1 1 
Balance at December 31, 2019$6,000 $939 $121 $1,289 $1,667 $34 $10,050 
Provision for (reversal of) loan losses (1)2,505 863 174 1,274 518 (16)5,318 
Charge-offs— — (45)— — — (45)
Recoveries— — 28 — — 1 29 
Balance at December 31, 2020$8,505 $1,802 $278 $2,563 $2,185 $19 $15,352 
(Reversal of) provision for loan losses (1)(355)279 54 285 706 (10)959 
Charge-offs— (59)(136)— — — (195)
Recoveries— — 3 — — 4 7 
Balance at December 31, 2021$8,150 $2,022 $199 $2,848 $2,891 $13 $16,123 
(1)Excludes provision for (reversal of) uncollectible accrued interest receivable of $205 thousand and $643 thousand for the years ended December 31, 2021, and 2020, respectively. There was no provision for uncollectible accrued interest receivable for the year ended December 31, 2019.
The following table presents the allowance for loan losses and recorded investment (not including accrued interest receivable) by portfolio segment and impairment methodology as of December 31, 2021 and 2020:
($ in thousands)
Individually
Evaluated
for Impairment
Collectively
Evaluated
for Impairment
Total
As of December 31, 2021
Allowance for loan losses (1):
Commercial real estate$— $8,150 $8,150 
SBA loans—real estate— 2,022 2,022 
SBA loans—non-real estate— 199 199 
C&I312 2,536 2,848 
Home mortgage— 2,891 2,891 
Consumer— 13 13 
Total$312 $15,811 $16,123 
Loans (2):
Commercial real estate$— $701,450 $701,450 
SBA loans—real estate812 219,287 220,099 
SBA loans—non-real estate— 55,759 55,759 
C&I312 162,231 162,543 
Home mortgage— 173,303 173,303 
Consumer— 865 865 
Total$1,124 $1,312,895 $1,314,019 
As of December 31, 2020
Allowance for loan losses (1):
Commercial real estate$— $8,505 $8,505 
SBA loans—real estate— 1,802 1,802 
SBA loans—non-real estate87 191 278 
C&I330 2,233 2,563 
Home mortgage— 2,185 2,185 
Consumer— 19 19 
Total$417 $14,935 $15,352 
Loans (2):
Commercial real estate$— $651,684 $651,684 
SBA loans—real estate— 136,224 136,224 
SBA loans—non-real estate174 74,977 75,151 
C&I330 106,977 107,307 
Home mortgage— 128,212 128,212 
Consumer— 1,158 1,158 
Total$504 $1,099,232 $1,099,736 
(1)Excludes allowance for uncollectible accrued interest receivable of $205 thousand and $643 thousand as of December 31, 2021, and 2020, respectively.
(2)Excludes accrued interest receivables of $4.4 million and $4.4 million as of December 31, 2021, and 2020, respectively.
The following table presents the recorded investment of individually impaired loans and the specific allowance for loan losses as of December 31, 2021 and 2020:
December 31, 2021 (1)December 31, 2020 (1)
($ in thousands)Unpaid Principal BalanceRecorded
Investment
With No
Allowance		Recorded
Investment
With
Allowance		Related
Allowance		Unpaid Principal BalanceRecorded
Investment
With No
Allowance		Recorded
Investment
With
Allowance		Related
Allowance
SBA loans—real estate$812 $812 $— $— $— $— $— $— 
SBA loans—non-real estate— — — — 174 — 174 87 
C&I313 — 313 313 330 — 330 330 
Total$1,125 $812 $313 $313 $504 $— $504 $417 
(1)    The difference between the unpaid principal balance (net of partial charge-offs) and the recorded investment in the loans was not considered to be material.
The following table presents the average recorded investment in impaired loans and the amount of interest income recognized on impaired loans by portfolio segment for the years ended December 31, 2021, 2020, and 2019. The difference between interest income recognized and cash basis interest recognized was immaterial.
($ in thousands)Average
Recorded
Investment		Interest
Income
Recognized
2021
SBA loans—real estate$597 $— 
Commercial and industrial322 — 
Total$919 $— 
2020
SBA loans—non-real estate$182 $41 
C&I331 14 
Total$513 $55 
2019
SBA loans—real estate$503 $— 
SBA loans—non-real estate45 — 
C&I338 20 
Total$886 $20 

The following table presents the recorded investment in nonaccrual loans and loans past due 90 or more days and still accruing interest, by portfolio as of December 31, 2021 and 2020:
($ in thousands)Nonaccrual
90 or More
Days
Past Due &
Still Accruing
Total
As of December 31, 2021
SBA loans—real estate$812 $— $812 
SBA loans—non-real estate837 200 1,037 
Commercial and industrial313 — 313 
Home mortgage1,038 — 1,038 
Total$3,000 $200 $3,200 
As of December 31, 2020
SBA loans—real estate$56 $— $56 
SBA loans—non-real estate330 — 330 
Home mortgage599 — 599 
Total$985 $— $985 
Nonaccrual loans and loans past due 90 or more days and still accruing interest include both homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.
The following table represents the aging analysis of the recorded investment in past due loans at December 31, 2021 and 2020:
($ in thousands)
30-59
Days
Past Due
60-89
Days
Past Due
> 90 Days
Past Due
Total
Past Due
Loans Not
Past Due
Total (1)
As of December 31, 2021
Commercial real estate$— $— $— $— $701,450 $701,450 
SBA—real estate— — 419 419 219,680 220,099 
SBA—non-real estate76 336 881 1,293 54,466 55,759 
C&I— — — — 162,543 162,543 
Home mortgage— — 893 893 172,410 173,303 
Consumer— — — — 865 865 
Total$76 $336 $2,193 $2,605 $1,311,414 $1,314,019 
As of December 31, 2020
Commercial real estate$— $— $— $— $651,684 $651,684 
SBA—real estate— — — — 136,224 136,224 
SBA—non-real estate— — — — 75,151 75,151 
C&I— — — — 107,307 107,307 
Home mortgage— — 599 599 127,613 128,212 
Consumer— — — — 1,158 1,158 
Total$— $— $599 $599 $1,099,137 $1,099,736 
(1)Excludes accrued interest receivables of $4.4 million and $4.4 million as of December 31, 2021, and 2020, respectively.
Troubled Debt Restructurings: When, for economic or legal reasons related to a borrower’s financial difficulties, the Company grants a concession for other than an insignificant period of time to a borrower that the Company would not otherwise consider, the related loan is classified as a troubled debt restructuring (“TDR”), the balance of which totaled $313 thousand and $333 thousand as of December 31, 2021 and 2020, respectively. As of December 31, 2021 and 2020, the Company has allocated $313 thousand and $333 thousand of specific reserves to the loans classified as TDRs, respectively. The Company has not committed to lend any additional amounts to customers with outstanding loans that are classified as TDRs.
Modifications made were primarily extensions of existing payment modifications on loans previously identified as TDRs. There were no new loans identified as TDRs during the years ended December 31, 2021, 2020, or 2019. There were no payment defaults during the years ended December 31, 2021, 2020, or 2019 of loans that had been modified as TDRs within the previous twelve months.
Loan Payment Deferrals: Through December 31, 2021, the Company has processed loan deferments for borrowers across multiple industries representing 226 loan accounts, with an aggregate loan balance of $250.8 million under the interagency guidance and Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). COVID-19 related modifications are generally not classified as TDRs due to the relief under the CARES Act and the interagency guidance, both of which the Company elected to apply. Additionally, the Company’s election to apply the TDR relief provided by the CARES Act and the interagency guidance impacts our regulatory capital ratios as these loan modifications related to COVID-19 are not adjusted to a higher risk-weighting normally required with TDR classification.

Through December 31, 2021, 223 loans with an aggregate balance of $245.7 million, including 69 home mortgage loans with an aggregate balance of $30.2 million, have resumed regular payments. As of December 31, 2021, 3 loans with an aggregate balance of $5.0 million remain in deferments.
The following table represents the loan deferment status change by loan type as of December 31, 2021:
December 31, 2021
($ in thousands)Total deferments
under the CARES Act		Payment resumed
or paid off		Remaining deferments
Loan TypeNumber
of
Accounts		BalanceNumber
of
Accounts		BalanceNumber
of
Accounts		Balance
Loans, excluding home mortgage and consumer
157 $220,553 154 $215,509 3 $5,044 
Home mortgage69 30,205 69 30,205 — — 
Total226 $250,758 223 $245,714 3 $5,044 
Paycheck Protection Program loans: A provision in the CARES Act created the PPP, which is administered by the SBA. The PPP is intended to provide loans to small businesses to pay expenses related to their employees, rent, mortgage interest, and utilities. The loans may be forgiven conditioned upon the client providing applicable documentation evidencing their compliant with the terms of the program, including compliance regarding the use of funds. The Bank is an approved SBA lender and began accepting applications for the program on April 3, 2020.
As of December 31, 2021, the Company had loans outstanding with a carrying value of $40.6 million, which were recorded in the SBA – non-real estate. Since the PPP’s inception through December 31, 2021, the Company has funded $154.5 million, and $118.7 million of principal forgiveness has been provided on qualifying PPP loans.
Credit Quality Indicators: The Company categorizes 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, credit documentation, public information, and current economic trends, among other factors. For consumer loans, a credit grade is established at inception, and generally only adjusted based on performance. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
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.
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 so classified 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 liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans.
As of December 31, 2021 and 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
($ in thousands)Pass
Special
Mention
SubstandardDoubtfulTotal (1)
As of December 31, 2021
Commercial real estate$701,450 $— $— $— $701,450 
SBA loans—real estate218,408 — 1,691 — 220,099 
SBA loans—non-real estate54,762 — 966 31 55,759 
C&I162,230 — 313 — 162,543 
Home mortgage172,265 — 1,038 — 173,303 
Consumer865 — — — 865 
Total$1,309,980 $— $4,008 $31 $1,314,019 
As of December 31, 2020
Commercial real estate$651,684 $— $— $— $651,684 
SBA loans—real estate134,166 535 1,523 — 136,224 
SBA loans—non-real estate74,953 — 198 — 75,151 
C&I102,302 — 5,005 — 107,307 
Home mortgage127,613 — 599 — 128,212 
Consumer1,158 — — — 1,158 
Total$1,091,876 $535 $7,325 $— $1,099,736 
(1)Excludes accrued interest receivables of $4.4 million and $4.4 million as of December 31, 2021, and 2020, respectively.