

($ in thousands)	September 30, 2021		December 31, 2020
Commercial real estate	$	688,430	$	651,684
SBA loans—real estate	218,491		136,224
SBA loans—non-real estate (1)	85,134		75,151
Commercial and industrial	123,422		107,307
Home mortgage	115,255		128,212
Consumer	1,089		1,158
Gross loans receivable	1,231,821		1,099,736
Allowance for loan losses	(14,134)		(15,352)
Loans receivable, net (2)	$	1,217,687	$	1,084,384



($ in thousands)	Three months ended September 30, 2021
	Commercial Real Estate		SBA Loans Real Estate		SBA Loans Non- Real Estate		Commercial and Industrial		Home Mortgage		Consumer		Total
Beginning balance	$	8,456	$	1,997	$	228	$	2,286	$	1,704	$	16	$	14,687
(Reversal of) provision for loan losses (1)	(241)		99		(35)		(332)		(46)		(2)		(557)
Charge-offs	—		—		—		—		—		—		—
Recoveries	—		—		3		—		—		1		4
Ending balance	$	8,215	$	2,096	$	196	$	1,954	$	1,658	$	15	$	14,134

	Three months ended September 30, 2020
Beginning balance	$	7,145	$	1,346	$	253	$	1,920	$	2,074	$	26	$	12,764
(Reversal of) provision for loan losses (1)	994		412		18		(5)		(15)		(5)		1,399
Charge-offs	—		—		—		—		—		—		—
Recoveries	—		—		—		—		—		1		1
Ending balance	$	8,139	$	1,758	$	271	$	1,915	$	2,059	$	22	$	14,164

(1)Excludes (reversal of) provision for uncollectible accrued interest receivable of $(327) thousand for the three months ended September 30, 2021. There was no provision for uncollectible accrued interest receivable for the three months ended September 30, 2020.



	Nine Months Ended September 30, 2021
($ in thousands)	Commercial Real Estate		SBA Loans Real Estate		SBA Loans Non- Real Estate		Commercial and Industrial		Home Mortgage		Consumer		Total
Beginning balance	$	8,505	$	1,802	$	278	$	2,563	$	2,185	$	19	$	15,352
(Reversal of) provision for loan losses (1)	(290)		294		(58)		(609)		(527)		(8)		(1,198)
Charge-offs	—		—		(27)		—		—		—		(27)
Recoveries	—		—		3		—		—		4		7
Ending balance	$	8,215	$	2,096	$	196	$	1,954	$	1,658	$	15	$	14,134

	Nine Months Ended September 30, 2020
Beginning balance	$	6,000	$	939	$	121	$	1,289	$	1,667	$	34	$	10,050
(Reversal of) provision for loan losses (1)	2,139		819		167		626		392		(13)		4,130
Charge-offs	—		—		(45)		—		—		—		(45)
Recoveries	—		—		28		—		—		1		29
Ending balance	$	8,139	$	1,758	$	271	$	1,915	$	2,059	$	22	$	14,164

(1)Excludes (reversal of) provision for uncollectible accrued interest receivable of ($178) thousand for the nine months ended September 30, 2021. There was no provision for uncollectible accrued interest receivable for the nine months ended September 30, 2020.



	September 30, 2021
($ in thousands)	Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Total
Allowance for loan losses (1):
Commercial real estate	$	—	$	8,215	$	8,215
SBA loans—real estate	109		1,987		2,096
SBA loans—non-real estate	—		196		196
Commercial and industrial	320		1,634		1,954
Home mortgage	—		1,658		1,658
Consumer	—		15		15
Total	$	429	$	13,705	$	14,134
Loans (2):
Commercial real estate	$	—	$	690,391	$	690,391
SBA loans—real estate	552		218,950		219,502
SBA loans—non-real estate	—		85,644		85,644
Commercial and industrial	320		123,384		123,704
Home mortgage	—		115,653		115,653
Consumer	—		1,051		1,051
Total	$	872	$	1,235,073	$	1,235,945

	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 estate	87		191		278
Commercial and industrial	330		2,233		2,563
Home mortgage	—		2,185		2,185
Consumer	—		19		19
Total	$	417	$	14,935	$	15,352
Loans (2):
Commercial real estate	$	—	$	654,235	$	654,235
SBA loans—real estate	—		136,873		136,873
SBA loans—non-real estate	174		75,477		75,651
Commercial and industrial	330		107,175		107,505
Home mortgage	—		128,683		128,683
Consumer	—		1,161		1,161
Total	$	504	$	1,103,604	$	1,104,108



($ in thousands)	September 30, 2021								December 31, 2020 (1)
	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Related Allowance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Related Allowance
SBA loans—real estate	$	786	$	396	$	156	$	109	$	—	$	—	$	—
SBA loans—non-real estate	—		—		—		—		—		174		87
Commercial and industrial	320		—		320		320		—		330		330
Total	$	1,106	$	396	$	476	$	429	$	—	$	504	$	417

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 three and nine months ended September 30, 2021 and 2020. The difference between interest income recognized and cash basis interest recognized was immaterial.



	Three Months Ended September 30,								Nine Months Ended September 30,
	2021				2020				2021				2020
($ in thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
SBA loans—real estate	$	540	$	—	$	—	$	—	$	450	$	—	$	—	$	—
SBA loans—non-real estate	—		—		122		2		—		—		124		5
Commercial and industrial	322		—		330		3		326		—		331		10
Total	$	862	$	—	$	452	$	5	$	776	$	—	$	455	$	15



	September 30, 2021
($ in thousands)	Nonaccrual		Loans 90 or More Days Past Due & Still Accruing		Total
SBA loans—real estate	$	544	$	—	$	544
SBA loans—non-real estate	188		—		188
Commercial and industrial	320		—		320
Total	$	1,052	$	—	$	1,052

	December 31, 2020
SBA loans—non-real estate	$	56	$	—	$	56
Commercial and industrial	330		—		330
Home mortgage	599		—		599
Total	$	985	$	—	$	985



	September 30, 2021
($ in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Total Current or Less Than 30 Days Past Due		Total
Commercial real estate	$	—	$	—	$	—	$	—	$	690,391	$	690,391
SBA—real estate	52		396		148		596		218,906		219,502
SBA—non-real estate	213		20		162		395		85,249		85,644
Commercial and industrial	—		—		—		—		123,704		123,704
Home mortgage	—		1,056		—		$	1,056	114,597		115,653
Consumer	—		—		—		—		1,051		1,051
	$	265	$	1,472	$	310	$	2,047	$	1,233,898	$	1,235,945

	December 31, 2020
Commercial real estate	$	—	$	—	$	—	$	—	$	654,235	$	654,235
SBA—real estate	—		—		—		—		136,873		136,873
SBA—non-real estate	—		—		—		—		75,651		75,651
Commercial and industrial	—		—		—		—		107,505		107,505
Home mortgage	—		—		599		599		128,084		128,683
Consumer	—		—		—		—		1,161		1,161
	$	—	$	—	$	599	$	599	$	1,103,509	$	1,104,108

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 $320 thousand and $330 thousand as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021 and December 31, 2020, the Company has allocated $320 thousand and $330 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 when the loan was previously identified as TDRs. There were no new loans identified as TDRs during the three and nine months ended September 30, 2021 or 2020. There were no payment defaults during the three and nine months ended September 30, 2021, or 2020, of loans that had been modified as TDRs within the previous twelve months.

Loan Payment Deferrals: Through September 30, 2021, the Company has processed loan deferments for borrowers across multiple industries representing 225 loan accounts, with an aggregate loan balance of $250.7 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.



Loan Deferment Status Change by Loan Type
	September 30, 2021
($ in thousands)	Total deferments under the CARES Act			Payment resumed or paid off			Remaining deferments
Loan Type	Number of accounts	Balance		Number of accounts	Balance		Number of accounts	Balance
Loans, excluding home mortgage and consumer loans	156	$	220,522	152	$	213,774	4	$	6,748
Home mortgage loans	69	30,205		69	30,205		—	—
Total	225	$	250,727	221	$	243,979	4	$	6,748

Paycheck Protection Program loans: A provision in the CARES Act created the PPP, which is administered by the Small Business Administration (“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 September 30, 2021, the Company had loans outstanding with a carrying value of $69.3 million, which were recorded in the SBA – non-real estate. Since the PPP’s inception through September 30, 2021, we have funded $154.5 million, and $88.8 million of principal forgiveness has been provided on qualifying PPP loans.

Credit Quality Indicators: The Company monitor credit quality by evaluating various attributes and utilize such information in the evaluation of the appropriateness of the allowance for loan losses. 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 according to their 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.



($ in thousands)	September 30, 2021
	Pass		Special Mention		Substandard		Doubtful		Total
Commercial real estate	$	690,391	$	—	$	—	$	—	$	690,391
SBA loans—real estate	217,999		—		1,503		—		219,502
SBA loans—non-real estate	85,266		—		347		31		85,644
Commercial and industrial	123,384		—		320		—		123,704
Home mortgage	115,653		—		—		—		115,653
Consumer	1,051		—		—		—		1,051
	$	1,233,744	$	—	$	2,170	$	31	$	1,235,945

	December 31, 2020
Commercial real estate	$	654,235	$	—	$	—	$	—	$	654,235
SBA loans—real estate	134,815		535		1,523		—		136,873
SBA loans—non-real estate	75,453		—		198		—		75,651
Commercial and industrial	102,500		—		5,005		—		107,505
Home mortgage	128,084		—		599		—		128,683
Consumer	1,161		—		—		—		1,161
	$	1,096,248	$	535	$	7,325	$	—	$	1,104,108