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Loans and Allowance for Loan Losses (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans Held-For-Investment
The following table presents, by recorded investment, the composition of the Company’s loans held-for-investment (net of deferred fees and costs) as of the dates indicated:
($ in thousands)
September 30, 2020
December 31, 2019
Real estate loans:
Commercial property
$853,708 $803,014 
Residential property
212,804 235,046 
SBA property
128,038 129,837 
Construction
19,803 19,164 
Total real estate loans
1,214,353 1,187,061 
Commercial and industrial loans:
Commercial term
90,867 103,380 
Commercial lines of credit
92,222 111,768 
SBA commercial term
23,011 25,332 
SBA PPP
136,418 — 
Total commercial and industrial loans
342,518 240,480 
Other consumer loans
21,933 23,290 
Loans held-for-investment
1,578,804 1,450,831 
Allowance for loan losses
(24,546)(14,380)
Net loans held-for-investment
$1,554,258 $1,436,451 
The following table presents a summary of SBA PPP loans as of September 30, 2020:
($ in thousands)Number of LoansAmount
Loan amount:
$50,000 or less1,043 $21,551 
Over $50,000 and less than $350,000499 60,679 
Over $350,000 and less than $2,000,000
69 45,813 
$2,000,000 or more
3 8,375 
Total
1,614 $136,418 
Schedule of Loan Modification Related to COVID-19 The following table presents a summary of loans under modified terms related to the COVID-19 pandemic by portfolio segment as of September 30, 2020:
Modification Type
($ in thousands)Payment DefermentInterest Only PaymentTotal
September 30, 2020
Real estate loans:
Commercial property
$135,165 $2,397 $137,562 
Residential property
19,233 — 19,233 
Commercial and industrial loans:
Commercial term
11,797 2,960 14,757 
SBA commercial term
— 72 72 
Total
$166,195 $5,429 $171,624 
Allowance for Loan Losses
The following table presents the activities in allowance for loan losses by portfolio segment, which is consistent with the Company’s methodology for determining allowance for loan losses, for the three months ended September 30, 2020 and 2019:
($ in thousands)Real EstateCommercial and IndustrialOther ConsumerTotal
Balance at July 1, 2020
$15,545 $4,337 $366 $20,248 
Charge-offs
— — (102)(102)
Recoveries on loans previously charged off
— 18 56 74 
Provision (reversal) for loan losses
2,556 1,686 84 4,326 
Balance at September 30, 2020
$18,101 $6,041 $404 $24,546 
Balance at July 1, 2019
$9,711 $3,426 $191 $13,328 
Charge-offs
— (179)(47)(226)
Recoveries on loans previously charged off
— 38 56 94 
Provision (reversal) for loan losses
(33)(6)(63)(102)
Balance at September 30, 2019
$9,678 $3,279 $137 $13,094 
The following table presents the activities in allowance for loan losses by portfolio segment, which is consistent with the Company’s methodology for determining allowance for loan losses, for the nine months ended September 30, 2020 and 2019:
($ in thousands)Real EstateCommercial and IndustrialOther ConsumerTotal
Balance at January 1, 2020
$9,854 $4,354 $172 $14,380 
Charge-offs
(138)(916)(241)(1,295)
Recoveries on loans previously charged off
56 223 105 384 
Provision for loan losses
8,329 2,380 368 11,077 
Balance at September 30, 2020
$18,101 $6,041 $404 $24,546 
Balance at January 1, 2019
$9,104 $3,877 $186 $13,167 
Charge-offs
(19)(347)(158)(524)
Recoveries on loans previously charged off
4 112 128 244 
Provision (reversal) for loan losses
589 (363)(19)207 
Balance at September 30, 2019
$9,678 $3,279 $137 $13,094 
The following tables present the information on allowance for loan losses and recorded investments by portfolio segment and impairment methodology as of the dates indicated:
($ in thousands)Real EstateCommercial and IndustrialOther ConsumerTotal
September 30, 2020
Allowance for loan losses:
Individually evaluated for impairment
$9 $79 $— $88 
Collectively evaluated for impairment
18,092 5,962 404 24,458 
Total
$18,101 $6,041 $404 $24,546 
Loans receivable:
Individually evaluated for impairment
$1,535 $1,940 $— $3,475 
Collectively evaluated for impairment
1,212,818 340,578 21,933 1,575,329 
Total
$1,214,353 $342,518 $21,933 $1,578,804 
December 31, 2019
Allowance for loan losses:
Individually evaluated for impairment
$4 $15 $— $19 
Collectively evaluated for impairment
9,850 4,339 172 14,361 
Total
$9,854 $4,354 $172 $14,380 
Loans receivable:
Individually evaluated for impairment
$2,158 $2,401 $— $4,559 
Collectively evaluated for impairment
1,184,903 238,079 23,290 1,446,272 
Total
$1,187,061 $240,480 $23,290 $1,450,831 
Risk Categories for Loans by Portfolio Segment
The following table presents the risk categories for the recorded investment in loans by portfolio segment as of dates indicated:
($ in thousands)PassSpecial MentionSubstandardDoubtfulTotal
September 30, 2020
Real estate loans:
Commercial property
$852,325 $1,048 $335 $— $853,708 
Residential property
212,804 — — — 212,804 
SBA property
125,497 — 2,541 — 128,038 
Construction
19,803 — — — 19,803 
Commercial and industrial loans:
Commercial term
87,241 3,626 — — 90,867 
Commercial lines of credit
90,697 — 1,525 — 92,222 
SBA commercial term
22,547 72 392 — 23,011 
SBA PPP
136,418 — — — 136,418 
Other consumer loans
21,866 — 67 — 21,933 
Total
$1,569,198 $4,746 $4,860 $— $1,578,804 
December 31, 2019
Real estate loans:
Commercial property
$802,373 $— $641 $— $803,014 
Residential property
235,046 — — — 235,046 
SBA property
124,135 72 5,630 — 129,837 
Construction
17,453 1,711 — — 19,164 
Commercial and industrial loans:
Commercial term
103,380 — — — 103,380 
Commercial lines of credit
109,880 — 1,888 — 111,768 
SBA commercial term
24,677 — 655 — 25,332 
Other consumer loans
23,242 — 48 — 23,290 
Total
$1,440,186 $1,783 $8,862 $— $1,450,831 
The following table presents the risk categories for the recorded investment in loans under modified terms related to the COVID-19 pandemic by portfolio segment as of the date indicated:
($ in thousands)PassSpecial MentionSubstandardDoubtfulTotal
September 30, 2020
Real estate loans:
Commercial property
$137,219 $343 $— $— $137,562 
Residential property
19,233 — — — 19,233 
Commercial and industrial loans:
Commercial term
11,131 3,626 — — 14,757 
SBA commercial term
— 72 — — 72 
Total
$167,583 $4,041 $— $— $171,624 
Aging of Past Due Accruing Loans and Nonaccrual Loans by Segment
The following table presents the aging of past due recorded investment in accruing loans and nonaccrual loans by portfolio segment as of dates indicated:
Still Accruing
($ in thousands)30 to 59 Days Past Due60 to 89 Days Past Due90 or More Days Past Due NonaccrualTotal Past Due and Nonaccrual
September 30, 2020
Real estate loans:
Residential property
$189 $— $699 $— $888 
SBA property
— — — 923 923 
Commercial and industrial loans:
Commercial lines of credit
— — — 1,525 1,525 
SBA commercial term
— — — 378 378 
Other consumer loans
108 3 — 67 178 
Total
$298 $3 $699 $2,893 $3,893 
December 31, 2019
Real estate loans:
Residential property
$— $697 $— $— $697 
SBA property
794 — — 442 1,236 
Commercial and industrial loans:
Commercial lines of credit
— — — 1,888 1,888 
SBA commercial term
— 189 287 159 635 
Other consumer loans
99 39 — 48 186 
Total
$893 $925 $287 $2,537 $4,642 
Impairment by Portfolio Segment
The following table presents loans individually evaluated for impairment by portfolio segment as of the dates indicated. The recorded investment presents customer balances net of any partial charge-offs recognized on the loans and net of any deferred fees and costs.
With No Allowance RecordedWith an Allowance Recorded
($ in thousands)Recorded InvestmentUnpaid Principal BalanceRecorded InvestmentUnpaid Principal BalanceRelated Allowance
September 30, 2020
Real estate loans:
Commercial property
$335 $334 $— $— $— 
SBA property
977 1,071 223 221 9 
Commercial and industrial loans:
Commercial term
22 22 — — — 
Commercial lines of credit
1,231 1,231 294 294 79 
SBA commercial term
393 417 — — — 
Total
$2,958 $3,075 $517 $515 $88 
December 31, 2019
Real estate loans:
Commercial property
$339 $338 $— $— $— 
SBA property
1,699 1,828 120 154 4 
Commercial and industrial loans:
Commercial term
28 28 — — — 
Commercial lines of credit
1,888 1,888 — — — 
SBA commercial term
457 495 28 28 15 
Total
$4,411 $4,577 $148 $182 $19 
The following table presents information on the recorded investment in impaired loans by portfolio segment for the three months ended September 30, 2020 and 2019:
Three Months Ended September 30,
20202019
($ in thousands)Average Recorded InvestmentInterest IncomeAverage Recorded InvestmentInterest Income
Real estate loans:
Commercial property
$336 $6 $341 $6 
SBA property
1,203 4 1,896 5 
Commercial and industrial loans:
Commercial term
24 — 43 1 
Commercial lines of credit
1,747 — 327 — 
SBA commercial term
395 — 105 1 
Total
$3,705 $10 $2,712 $13 
The following table presents information on the recorded investment in impaired loans by portfolio segment for the nine months ended September 30, 2020 and 2019:
Nine Months Ended September 30,
20202019
($ in thousands)Average Recorded InvestmentInterest IncomeAverage Recorded InvestmentInterest Income
Real estate loans:
Commercial property
$337 $17 $114 $6 
Residential property
— — 50 — 
SBA property
1,554 13 1,637 17 
Commercial and industrial loans:
Commercial term
25 1 52 3 
Commercial lines of credit
2,085 — 109 — 
SBA commercial term
451 1 135 3 
Total
$4,452 $32 $2,097 $29 
The following presents a summary of interest foregone on impaired loans for the periods indicated:
Three Months Ended September 30,
Nine Months Ended September 30,
($ in thousands)2020201920202019
Interest income that would have been recognized had impaired loans performed in accordance with their original terms
$53 $49 $198 $113 
Less: interest income recognized on impaired loans on a cash basis
(10)(13)(32)(29)
Interest income foregone on impaired loans
$43 $36 $166 $84 
Modified TDRs by Portfolio Segment
The following table presents the composition of loans that were modified as TDRs by portfolio segment as of the dates indicated:
September 30, 2020December 31, 2019
($ in thousands)AccruingNonaccrualTotalAccruingNonaccrualTotal
Real estate loans:
Commercial property
$335 $— $335 $339 $— $339 
SBA property
277 38 315 294 121 415 
Commercial and industrial loans:
Commercial term
22 — 22 28 — 28 
SBA commercial term
15 — 15 39 — 39 
Total
$649 $38 $687 $700 $121 $821 
The following table presents information on new loans that were modified as TDRs for the three months ended September 30, 2020 and 2019:
Three Months Ended September 30,
20202019
($ in thousands)
Number of Loans
Pre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentNumber of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Real estate loans:
Commercial property
— $— $— 1 $341 $341 
SBA property (1)
— — — 1 123 123 
Total
— $— $— 2 $464 $464 
(1)    Modified by deferral of principal payment.
The following table presents information on new loans that were modified as TDRs for the nine months ended September 30, 2020 and 2019:
Nine Months Ended September 30,
20202019
($ in thousands)Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentNumber of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded Investment
Real estate loans:
Commercial property
— $— $— 1 $341 $341 
SBA property (1)
— — — 2 254 254 
Commercial and industrial loans:
SBA commercial term (1)
2 $37 $37 — $— $— 
Total
2 $37 $37 3 $595 $595 
(1)    Modified by deferral of principal payment.
The following table presents information on loans that were modified as TDRs for which there was a payment default within twelve months following the modification for the nine months ended September 30, 2020 and 2019:
Nine Months Ended September 30,
20202019
($ in thousands)Number of LoansRecorded Investment at Date of DefaultNumber of LoansRecorded Investment at Date of Default
Commercial and industrial loans:
SBA commercial term
1 $26 — $— 
Total
1 $26 — $— 
Loans Held-for-Sale
The following table presents a summary of loans held-for-investment transferred to loans held-for-sale for the periods indicated:
Three Months Ended September 30,
Nine Months Ended September 30,
($ in thousands)2020201920202019
Real estate loans:
Residential property
$— $522 $1,125 $824 
Commercial and industrial loans:
SBA commercial term
— — 230 — 
Total
$— $522 $1,355 $824 
The following table presents a summary of loans held-for-sale transferred to loans held-for-investment for the periods indicated:
Three Months Ended September 30,
Nine Months Ended September 30,
($ in thousands)2020201920202019
Real estate loans:
Residential property
$— $— $697 $— 
Total
$— $— $697 $— 
The following table presents a composition of loans held-for-sale as of the dates indicated:
($ in thousands)
September 30, 2020
December 31, 2019
Real estate loans:
Residential property
$4,047 $760 
SBA property
24,197 150 
Commercial and industrial loans:
SBA commercial term
2,634 1,065 
Total
$30,878 $1,975