Loans (Tables)

9 Months Ended

Sep. 30, 2022

Loans

Summary of components of loans

The following table presents the components of the loan portfolio at September 30, 2022 and December 31, 2021:

	September 30,		December 31,
(dollars in thousands)	2022		2021
Commercial	$	412,448	$	360,169
Paycheck Protection Program		1,192		26,162
Construction and Land Development		335,557		281,474
Real Estate Mortgage:
1-4 Family Mortgage		341,102		305,317
Multifamily		1,230,509		910,243
CRE Owner Occupied		151,088		111,096
CRE Nonowner Occupied		900,691		818,569
Total Real Estate Mortgage Loans		2,623,390		2,145,225
Consumer and Other		7,495		6,442
Total Loans, Gross		3,380,082		2,819,472
Allowance for Loan Losses		(46,491)		(40,020)
Net Deferred Loan Fees		(9,088)		(9,535)
Total Loans, Net	$	3,324,503	$	2,769,917

Summary of the activity in the allowance for loan losses by segment

The following table presents the activity in the allowance for loan losses, by segment, for the three months ended September 30, 2022 and 2021:

			Paycheck		Construction						CRE		CRE
			Protection		and Land		1--4 Family				Owner		Non-owner		Consumer
(dollars in thousands)	Commercial		Program		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Unallocated		Total
Three Months Ended September 30, 2022
Allowance for Loan Losses:
Beginning Balance	$	6,275	$	2	$	4,772	$	4,206	$	14,977	$	1,920	$	12,235	$	154	$	170	$	44,711
Provision for Loan Losses		70		(1)		(303)		(257)		1,845		107		47		13		(21)		1,500
Loans Charged-off		—		—		—		—		—		—		—		(5)		—		(5)
Recoveries of Loans		3		—		—		281		—		—		—		1		—		285
Total Ending Allowance Balance	$	6,348	$	1	$	4,469	$	4,230	$	16,822	$	2,027	$	12,282	$	163	$	149	$	46,491
Three Months Ended September 30, 2021
Allowance for Loan Losses:
Beginning Balance	$	6,525	$	50	$	3,427	$	3,502	$	11,150	$	1,244	$	11,018	$	220	$	455	$	37,591
Provision for Loan Losses		171		(23)		47		33		816		179		3		(37)		111		1,300
Loans Charged-off		(6)		—		—		—		—		—		—		(14)		—		(20)
Recoveries of Loans		12		—		—		18		—		—		—		—		—		30
Total Ending Allowance Balance	$	6,702	$	27	$	3,474	$	3,553	$	11,966	$	1,423	$	11,021	$	169	$	566	$	38,901

The following table presents the activity in the allowance for loan losses, by segment, for the nine months ended September 30, 2022 and 2021:

			Paycheck		Construction						CRE		CRE
			Protection		and Land		1--4 Family				Owner		Non-owner		Consumer
(dollars in thousands)	Commercial		Program		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Unallocated		Total
Nine Months Ended September 30, 2022
Allowance for Loan Losses:
Beginning Balance	$	6,256	$	13	$	3,757	$	3,757	$	12,610	$	1,495	$	11,335	$	147	$	650	$	40,020
Provision for Loan Losses		98		(12)		712		187		4,212		532		947		25		(501)		6,200
Loans Charged-off		(13)		—		—		—		—		—		—		(21)		—		(34)
Recoveries of Loans		7		—		—		286		—		—		—		12		—		305
Total Ending Allowance Balance	$	6,348	$	1	$	4,469	$	4,230	$	16,822	$	2,027	$	12,282	$	163	$	149	$	46,491
Nine Months Ended September 30, 2021
Allowance for Loan Losses:
Beginning Balance	$	5,703	$	70	$	2,491	$	3,972	$	9,517	$	1,162	$	10,991	$	203	$	732	$	34,841
Provision for Loan Losses		971		(43)		983		(437)		2,449		229		30		(16)		(166)		4,000
Loans Charged-off		(6)		—		—		(5)		—		—		—		(26)		—		(37)
Recoveries of Loans		34		—		—		23		—		32		—		8		—		97
Total Ending Allowance Balance	$	6,702	$	27	$	3,474	$	3,553	$	11,966	$	1,423	$	11,021	$	169	$	566	$	38,901

The following tables present the balance in the allowance for loan losses and the recorded investment in loans, by segment, based on impairment method as of September 30, 2022 and December 31, 2021:

			Paycheck		Construction						CRE		CRE
			Protection		and Land		1--4 Family				Owner		Non-owner		Consumer
(dollars in thousands)	Commercial		Program		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Unallocated		Total
Allowance for Loan Losses at September 30, 2022
Individually Evaluated for Impairment	$	12	$	—	$	—	$	—	$	—	$	—	$	222	$	—	$	—	$	234
Collectively Evaluated for Impairment		6,336		1		4,469		4,230		16,822		2,027		12,060		163		149		46,257
Totals	$	6,348	$	1	$	4,469	$	4,230	$	16,822	$	2,027	$	12,282	$	163	$	149	$	46,491
Allowance for Loan Losses at December 31, 2021
Individually Evaluated for Impairment	$	607	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	607
Collectively Evaluated for Impairment		5,649		13		3,757		3,757		12,610		1,495		11,335		147		650		39,413
Totals	$	6,256	$	13	$	3,757	$	3,757	$	12,610	$	1,495	$	11,335	$	147	$	650	$	40,020

			Paycheck		Construction						CRE		CRE
			Protection		and Land		1--4 Family				Owner		Non-owner		Consumer
(dollars in thousands)	Commercial		Program		Development		Mortgage		Multifamily		Occupied		Occupied		and Other		Total
Loans at September 30, 2022
Individually Evaluated for Impairment	$	10,273	$	—	$	110	$	280	$	—	$	1,667	$	18,437	$	—	$	30,767
Collectively Evaluated for Impairment		402,175		1,192		335,447		340,822		1,230,509		149,421		882,254		7,495		3,349,315
Totals	$	412,448	$	1,192	$	335,557	$	341,102	$	1,230,509	$	151,088	$	900,691	$	7,495	$	3,380,082
Loans at December 31, 2021
Individually Evaluated for Impairment	$	14,512	$	—	$	130	$	1,390	$	—	$	2,421	$	4,188	$	—	$	22,641
Collectively Evaluated for Impairment		345,657		26,162		281,344		303,927		910,243		108,675		814,381		6,442		2,796,831
Totals	$	360,169	$	26,162	$	281,474	$	305,317	$	910,243	$	111,096	$	818,569	$	6,442	$	2,819,472

Summary of impaired loans by loan segment

The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of September 30, 2022 and December 31, 2021:

	September 30, 2022						December 31, 2021
	Recorded		Principal		Related		Recorded		Principal		Related
(dollars in thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
Loans With No Related Allowance for Loan Losses:
Commercial	$	10,190	$	10,190	$	—	$	4,545	$	4,545	$	—
Construction and Land Development		110		717		—		130		737		—
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		—		—		—		933		933		—
1st REM - Rentals		280		280		—		457		457		—
CRE Owner Occupied		1,667		1,744		—		2,421		2,466		—
CRE Nonowner Occupied		6,302		6,302		—		4,188		4,188		—
Totals		18,549		19,233		—		12,674		13,326		—
Loans With An Allowance for Loan Losses:
Commercial		83		83		12		9,967		9,967		607
Real Estate Mortgage:
CRE Nonowner Occupied		12,135		12,135		222		—		—		—
Totals		12,218		12,218		234		9,967		9,967		607
Grand Totals	$	30,767	$	31,451	$	234	$	22,641	$	23,293	$	607

The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three and nine months ended September 30, 2022 and 2021:

	Three Months Ended September 30,								Nine Months Ended September 30,
	2022				2021				2022				2021
	Average		Interest		Average		Interest		Average		Interest		Average		Interest
(dollars in thousands)	Investment		Recognized		Investment		Recognized		Investment		Recognized		Investment		Recognized
Loans With No Related Allowance for Loan Losses:
Commercial	$	9,929	$	187	$	50	$	1	$	11,343	$	519	$	50	$	3
Construction and Land Development		114		—		137		—		120		—		144		—
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		—		—		884		12		—		—		884		34
1st REM - Rentals		282		4		465		6		286		11		470		18
CRE Owner Occupied		1,751		17		867		3		1,762		49		868		9
CRE Nonowner Occupied		6,333		85		4,232		54		6,431		249		4,262		161
Totals		18,409		293		6,635		76		19,942		828		6,678		225
Loans With An Allowance for Loan Losses:
Commercial		84		—		1,154		14		86		1		1,155		40
Real Estate Mortgage:
CRE Nonowner Occupied		12,135		127		—		—		12,135		370		—		—
Totals		12,219		127		1,154		14		12,221		371		1,155		40
Grand Totals	$	30,628	$	420	$	7,789	$	90	$	32,163	$	1,199	$	7,833	$	265

Summary of risk category of loans by loan segment, based on the most recent analysis performed by management

The following tables present the risk category of loans by loan segment as of September 30, 2022 and December 31, 2021, based on the most recent analysis performed by management:

	September 30, 2022
(dollars in thousands)	Pass		Watch		Substandard		Total
Commercial	$	396,736	$	5,439	$	10,273	$	412,448
Paycheck Protection Program		1,192		—		—		1,192
Construction and Land Development		335,447		—		110		335,557
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		29,981		—		—		29,981
1st REM - 1-4 Family		51,246		678		—		51,924
LOCs and 2nd REM - Rentals		25,164		10		—		25,174
1st REM - Rentals		233,743		—		280		234,023
Multifamily		1,230,509		—		—		1,230,509
CRE Owner Occupied		149,421		—		1,667		151,088
CRE Nonowner Occupied		865,622		16,632		18,437		900,691
Consumer and Other		7,495		—		—		7,495
Totals	$	3,326,556	$	22,759	$	30,767	$	3,380,082

	December 31, 2021
(dollars in thousands)	Pass		Watch		Substandard		Total
Commercial	$	336,939	$	8,718	$	14,512	$	360,169
Paycheck Protection Program		26,162		—		—		26,162
Construction and Land Development		281,344		—		130		281,474
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		30,327		—		933		31,260
1st REM - 1-4 Family		48,024		689		—		48,713
LOCs and 2nd REM - Rentals		21,625		16		—		21,641
1st REM - Rentals		203,246		—		457		203,703
Multifamily		910,243		—		—		910,243
CRE Owner Occupied		108,675		—		2,421		111,096
CRE Nonowner Occupied		774,474		39,907		4,188		818,569
Consumer and Other		6,442		—		—		6,442
Totals	$	2,747,501	$	49,330	$	22,641	$	2,819,472

Summary of aging of the recorded investment in past due loans by loan segment

The following tables present the aging of the recorded investment in past due loans by loan segment as of September 30, 2022 and December 31, 2021:

	Accruing Interest
			30-89 Days		90 Days or
(dollars in thousands)	Current		Past Due		More Past Due		Nonaccrual		Total
September 30, 2022
Commercial	$	412,448	$	—	$	—	$	—	$	412,448
Paycheck Protection Program		1,155		37		—		—		1,192
Construction and Land Development		335,447		—		—		110		335,557
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		29,981		—		—		—		29,981
1st REM - 1-4 Family		51,924		—		—		—		51,924
LOCs and 2nd REM - Rentals		25,174		—		—		—		25,174
1st REM - Rentals		234,023		—		—		—		234,023
Multifamily		1,230,509		—		—		—		1,230,509
CRE Owner Occupied		150,535		—		—		553		151,088
CRE Nonowner Occupied		900,691		—		—		—		900,691
Consumer and Other		7,494		1		—		—		7,495
Totals	$	3,379,381	$	38	$	—	$	663	$	3,380,082

	Accruing Interest
			30-89 Days		90 Days or
(dollars in thousands)	Current		Past Due		More Past Due		Nonaccrual		Total
December 31, 2021
Commercial	$	360,169	$	—	$	—	$	—	$	360,169
Paycheck Protection Program		26,162		—		—		—		26,162
Construction and Land Development		281,344		—		—		130		281,474
Real Estate Mortgage:
HELOC and 1-4 Family Junior Mortgage		31,211		49		—		—		31,260
1st REM - 1-4 Family		48,713		—		—		—		48,713
LOCs and 2nd REM - Rentals		21,641		—		—		—		21,641
1st REM - Rentals		203,703		—		—		—		203,703
Multifamily		910,243		—		—		—		910,243
CRE Owner Occupied		110,504		—		—		592		111,096
CRE Nonowner Occupied		818,569		—		—		—		818,569
Consumer and Other		6,442		—		—		—		6,442
Totals	$	2,818,701	$	49	$	—	$	722	$	2,819,472

Summary of closed loan modifications

The following table presents a summary of active loan modifications made in response to the COVID-19 pandemic, by loan segment and modification type, as of September 30, 2022:

	Interest-Only			Extended Amortization			Total
(dollars in thousands)	Amount		# of Loans	Amount		# of Loans	Amount		# of Loans
Real Estate Mortgage:
CRE Nonowner Occupied	$	10,623	1	$	—	—	$	10,623	1
Totals	$	10,623	1	$	—	—	$	10,623	1