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Loans and Allowance for Credit Losses on Loans
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans Loans and Allowance for Credit Losses on Loans
The following table presents the composition of the loan portfolio as of December 31, 2024 and 2023:

December 31,
($ in thousands)20242023
Commercial real estate$980,247 $885,585 
SBA—real estate231,962 224,695 
SBA—non-real estate21,748 14,997 
C&I213,097 120,970 
Home mortgage509,524 518,024 
Consumer274 1,574 
Gross loans receivable1,956,852 1,765,845 
Allowance for credit losses(24,796)(21,993)
Loans receivable, net(1)
$1,932,056 $1,743,852 
(1)Includes net deferred loan fees and net unamortized discounts of $702 thousand as of December 31, 2024 and net deferred loan costs and net unamortized premiums of $140 thousand as of December 31, 2023.
No loans were outstanding to related parties as of December 31, 2024 and 2023.
The following table summarizes the activity in the allowance for credit losses on loans by portfolio segment for the years ended December 31, 2024, 2023 and 2022:

($ in thousands)
Commercial
Real Estate
SBA—
Real Estate
SBA —Non-
Real Estate
C&I
Home Mortgage
ConsumerTotal
Balance as of January 1, 2022$8,150 $2,022 $199 $2,848 $2,891 $13 $16,123 
Provision for (reversal of) credit losses(1,199)(409)66 (1,205)5,935 (7)3,181 
Charge-offs— (14)(127)— — — (141)
Recoveries— 8 69 — — 1 78 
Balance as of December 31, 20226,951 1,607 207 1,643 8,826 7 19,241 
Impact of CECL adoption875 (238)(142)(320)1,753 (4)1,924 
Provision for (reversal of) credit losses723 321 73 (11)466 10 1,582 
Charge-offs(686)(46)(35)(97)— — (864)
Recoveries52 13 44 — — 1 110 
Balance as of December 31, 20237,915 1,657 147 1,215 11,045 14 21,993 
Provision for (reversal of) credit losses1,375 3,966 271 673 (3,361)(11)2,913 
Charge-offs— (66)(27)(44)— — (137)
Recoveries— — 27 — — — 27 
Balance as of December 31, 2024$9,290 $5,557 $418 $1,844 $7,684 $3 $24,796 

Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. The estimated credit losses for these loans are based on the collateral’s fair value less selling costs. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less selling costs at the time of foreclosure.

As of December 31, 2024 and 2023, there were $7.7 million and $5.2 million, respectively, of collateral-dependent loans which are primarily secured by SBA—real estate and residential real estate. The allowance for credit losses allocated to these loans as of December 31, 2024 and 2023 was $1.2 million and $355 thousand, respectively.

The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2024 and 2023, for which repayment is expected to be obtained through the sale of the underlying collateral.

($ in thousands)Hotel / MotelRetailSingle-Family Residential
Total(1)
As of December 31, 2024
Commercial real estate$1,580 $363 $— $1,943 
SBA—real estate3,702 2,006 — 5,708 
Total$5,282 $2,369 $— $7,651 
As of December 31, 2023
SBA—real estate$2,923 $— $— $2,923 
Home mortgage— — 2,241 2,241 
Total$2,923 $— $2,241 $5,164 
(1)    Excludes guaranteed portion of SBA loans of $15.2 million as of December 31, 2024. There was no guaranteed portion of SBA loans as of December 31, 2023.
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, 2024 and 2023:

($ in thousands)Nonaccrual Loans with a Related Allowance for Credit LossesNonaccrual Loans without a Related Allowance for Credit LossesTotal Nonaccrual Loans
90 or More
Days
Past Due &
Still Accruing
Total(1)
As of December 31, 2024
Commercial real estate$363 $1,580 $1,943 $— $1,943 
SBA—real estate2,006 3,702 5,708 — 5,708 
SBA—non-real estate169 — 169 — 169 
Total$2,538 $5,282 $7,820 $— $7,820 
As of December 31, 2023
SBA—real estate$2,302 $1,136 $3,438 $— $3,438 
SBA—non-real estate154 — 154 — 154 
Home mortgage249 2,241 2,490 — 2,490 
Total$2,705 $3,377 $6,082 $— $6,082 
(1)    Excludes guaranteed portion of loans of $16.3 million and $2.0 million as of December 31, 2024 and 2023, respectively.
Nonaccrual loans and loans past due 90 or more days and still accruing interest include both homogeneous loans that are collectively and individually evaluated for impairment and individually classified impaired loans.

The following table represents the aging analysis of the recorded investment in past due loans as of December 31, 2024 and 2023:

($ in thousands)
30-59 Days
Past Due
60-89 Days
Past Due
> 90 Days
Past Due
Total
Past Due(1)
Loans Not
Past Due
Total(2)
As of December 31, 2024
Commercial real estate$— $— $362 $362 $979,885 $980,247 
SBA—real estate237 75 2,006 2,318 229,644 231,962 
SBA—non-real estate254 138 2 394 21,354 21,748 
C&I15 — — 15 213,082 213,097 
Home mortgage2,774 5,594 — 8,368 501,156 509,524 
Consumer— — — — 274 274 
Total$3,280 $5,807 $2,370 $11,457 $1,945,395 $1,956,852 
As of December 31, 2023
Commercial real estate$— $— $— $— $885,585 $885,585 
SBA—real estate1,868 932 1,983 4,783 219,912 224,695 
SBA—non-real estate154 — — 154 14,843 14,997 
C&I— — — — 120,970 120,970 
Home mortgage4,076 2,730 2,491 9,297 508,727 518,024 
Consumer— — — — 1,574 1,574 
Total$6,098 $3,662 $4,474 $14,234 $1,751,611 $1,765,845 
(1)Excludes guaranteed portion of loans of $8.7 million and $1.9 million as of December 31, 2024 and 2023, respectively.
(2)Excludes accrued interest receivables of $8.1 million and $7.3 million as of December 31, 2024 and 2023, respectively.

Loan Modifications to Borrowers Experiencing Financial Difficult: On January 1, 2023, the Company adopted ASU No. 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”, which eliminated the accounting guidance for troubled debt restructurings (“TDRs”) while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Upon adoption of this guidance, the Company no
longer establishes a specific reserve for modifications to borrowers experiencing financial difficulty, unless those loans do not share the same risk characteristics with other loans in the portfolio. Provided that is not the case, these modifications are included in their respective cohort and the allowance for credit losses is estimated on a pooled basis consistent with the other loans with similar risk characteristics.

Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, other than insignificant payment deferrals, other than insignificant term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. No charge-offs of previously modified loans were recorded for the years ended December 31, 2024 and 2023.

The following table presents the amortized cost of modified loans and the financial effects of the modification for the years ended December 31, 2024 and 2023 by loan class and modification type:

Year Ended December 31, 2024
Modification TypePercentage to Each Loan Segment
($ in thousands)Payment DelayInterest OnlyTerm ExtensionTotal
Commercial real estate$1,580 $— $— $1,580 0.16 %
SBA—real estate(1)
3,702 391 — 4,093 1.76 %
C&I— — 400 400 0.19 %
Total$5,282 $391 $400 $6,073 
(1)Excludes guaranteed portion of SBA loans of $7.4 million.

Year Ended December 31, 2023
Modification TypePercentage to Each Loan Segment
($ in thousands)Payment DelayTerm ExtensionTotal
Commercial real estate$— $625 $625 0.07 %
SBA—real estate(1)
2,969 — 2,969 0.57 %
SBA—non-real estate131 — 131 0.87 %
C&I354 — 354 0.16 %
Total$354 $625 $4,079 
(1)Excludes guaranteed portion of SBA loans of $2.4 million.

The Company tracks the performance of modified loans. A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. There were no loans that received a modification within the last 12 months at December 31, 2024 that subsequently defaulted.

The Company had no additional commitments to lend to borrowers whose loans were modified as of December 31, 2024. The Company had additional commitments totaling $3.6 million to lend to borrowers whose loans were modified as of December 31, 2023.

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents financial performance of such loans that have been modified in the last 12 months as of December 31, 2024 and 2023:

Payment Performance as of December 31, 2024
($ in thousands)Current30 - 89 Days Past Due90+ Days Past DueTotal
Commercial real estate$1,580 $— $— $1,580 
SBA—real estate(1)
4,093 — — 4,093 
C&I400 — — 400 
Total$6,073 $— $— $6,073 
(1)Excludes guaranteed portion of SBA loans of $7.4 million.

Payment Performance as of December 31, 2023
($ in thousands)Current30 - 89 Days Past Due90+ Days Past DueTotal
Commercial real estate$625 $— $— $625 
SBA—real estate(1)
2,232 — 737 2,969 
SBA—non-real estate131 — — 131 
Home mortgage354 — — 354 
Total$3,342 $— $737 $4,079 
(1)Excludes guaranteed portion of SBA loans of $2.4 million.

The following tables describe the financial effect of the loan modifications made to borrowers experiencing financial difficulty for the periods presented:

Financial Effect
Modification & Loan TypesDescription of Financial EffectYear Ended December 31, 2024
Payment Delay:
Commercial real estateDeferment of Payment by a weighted average of:0.5 years
SBA—real estateDeferment of Payment by a weighted average of:0.9 years
Term Extension:
C&IExtended term by a weighted average of:0.6 years
Interest Only:
SBA—real estateInterest only Payment by a weighted average of:0.5 years

Financial Effect
Modification & Loan TypesDescription of Financial EffectYear Ended December 31, 2023
Payment Delay:
SBA—real estateDeferment of Payment by a weighted average of:0.7 years
SBA—non-real estateDeferment of Payment by a weighted average of:0.2 years
Home mortgageDeferment of Payment by a weighted average of:0.5 years
Term Extension:
Commercial real estateExtended term by a weighted average of:1.0 year

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.

The following table presents the loan portfolio's amortized cost by loan type, risk rating and year of origination as of December 31, 2024 and 2023:
December 31, 2024
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term Loans
Total(1)
($ in thousands)20242023
2022
20212020Prior
Commercial real estate
Pass$201,141 $85,056 $190,968 $137,425 $88,993 $250,291 $17,012 $— $970,886 
Special mention— — 579 2,246 — — — — 2,825 
Substandard— 1,580 319 — — 4,637 — — 6,536 
Doubtful— — — — — — — — — 
Subtotal$201,141 $86,636 $191,866 $139,671 $88,993 $254,928 $17,012 $— $980,247 
Current period charge-offs$— $— $— $— $— $— $— $— $— 
SBA— real estate
Pass$31,441 $26,508 $41,375 $18,819 $16,166 $72,440 $— $— $206,749 
Special mention— — 2,345 — — 739 — — 3,084 
Substandard— 1,182 9,965 2,868 — 8,114 — — 22,129 
Doubtful— — — — — — — — — 
Subtotal$31,441 $27,690 $53,685 $21,687 $16,166 $81,293 $— $— $231,962 
Current period charge-offs$— $— $— $66 $— $— $— $— $66 
SBA—non-real estate
Pass$10,443 $4,498 $1,837 $154 $1,303 $2,621 $— $— $20,856 
Special mention— — — — — — — — — 
Substandard— — 483 — 157 154 — — 794 
Doubtful— — — — — 98 — — 98 
Subtotal$10,443 $4,498 $2,320 $154 $1,460 $2,873 $— $— $21,748 
Current period charge-offs$— $— $— $— $— $27 $— $— $27 
C&I
Pass$19,712 $11,525 $14,016 $18,122 $3,356 $2,664 $140,278 $3,024 $212,697 
Special mention— — — — — — 400 — 400 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Subtotal$19,712 $11,525 $14,016 $18,122 $3,356 $2,664 $140,678 $3,024 $213,097 
Current period charge-offs$— $44 $— $— $— $— $— $— $44 
Home mortgage
Pass$42,112 $63,000 $284,208 $70,326 $17,749 $32,129 $— $— $509,524 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Subtotal$42,112 $63,000 $284,208 $70,326 $17,749 $32,129 $— $— $509,524 
Current period charge-offs$— $— $— $— $— $— $— $— $— 
Consumer
Pass$27 $— $— $— $— $— $247 $— $274 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Subtotal$27 $— $— $— $— $— $247 $— $274 
Current period charge-offs$— $— $— $— $— $— $— $— $— 
Total loans
Pass$304,876 $190,587 $532,404 $244,846 $127,567 $360,145 $157,537 $3,024 $1,920,986 
Special mention— — 2,924 2,246 — 739 400 — 6,309 
Substandard— 2,762 10,767 2,868 157 12,905 — — 29,459 
Doubtful— — — — — 98 — — 98 
Subtotal$304,876 $193,349 $546,095 $249,960 $127,724 $373,887 $157,937 $3,024 $1,956,852 
Current period charge-offs$— $44 $— $66 $— $27 $— $— $137 
(1)Excludes accrued interest receivables of $8.1 million as of December 31, 2024.
December 31, 2023
Term Loans by Origination YearRevolving LoansRevolving Loans Converted to Term Loans
Total(1)
($ in thousands)2023
2022
202120202019Prior
Commercial real estate
Pass$97,114 $207,860 $154,872 $97,137 $138,908 $163,320 $21,059 $— $880,270 
Special mention— — — — — — — — — 
Substandard— 319 — — — 4,996 — — 5,315 
Doubtful— — — — — — — — — 
Subtotal$97,114 $208,179 $154,872 $97,137 $138,908 $168,316 $21,059 $— $885,585 
Current period charge-offs$— $457 $121 $— $91 $17 $— $— $686 
SBA— real estate
Pass$31,920 $44,504 $26,188 $22,732 $28,244 $64,442 $— $— $218,030 
Special mention— — — — — 1,428 — — 1,428 
Substandard— 1,787 1,079 1,136 — 1,235 — — 5,237 
Doubtful— — — — — — — — — 
Subtotal$31,920 $46,291 $27,267 $23,868 $28,244 $67,105 $— $— $224,695 
Current period charge-offs$— $— $46 $— $— $— $— $— $46 
SBA—non-real estate
Pass$5,408 $2,584 $200 $1,556 $950 $3,423 $— $— $14,121 
Special mention— — — — — — — — — 
Substandard— 591 — — — 187 — — 778 
Doubtful— — — — — 98 — — 98 
Subtotal$5,408 $3,175 $200 $1,556 $950 $3,708 $— $— $14,997 
Current period charge-offs$— $— $— $— $— $35 $— $— $35 
C&I
Pass$15,117 $17,939 $22,098 $4,695 $1,720 $1,734 $55,106 $2,561 $120,970 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Subtotal$15,117 $17,939 $22,098 $4,695 $1,720 $1,734 $55,106 $2,561 $120,970 
Current period charge-offs$17 $— $80 $— $— $— $— $— $97 
Home mortgage
Pass$72,182 $304,346 $79,585 $18,634 $8,939 $31,848 $— $— $515,534 
Special mention— — — — — — — — — 
Substandard— 2,241 249 — — — — — 2,490 
Doubtful— — — — — — — — — 
Subtotal$72,182 $306,587 $79,834 $18,634 $8,939 $31,848 $— $— $518,024 
Current period charge-offs$— $— $— $— $— $— $— $— $— 
Consumer
Pass$4 $— $— $— $77 $— $1,493 $— $1,574 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Doubtful— — — — — — — — — 
Subtotal$4 $— $— $— $77 $— $1,493 $— $1,574 
Current period charge-offs$— $— $— $— $— $— $— $— $— 
Total loans
Pass$221,745 $577,233 $282,943 $144,754 $178,838 $264,767 $77,658 $2,561 $1,750,499 
Special mention— — — — — 1,428 — — 1,428 
Substandard— 4,938 1,328 1,136 — 6,418 — — 13,820 
Doubtful— — — — — 98 — — 98 
Subtotal$221,745 $582,171 $284,271 $145,890 $178,838 $272,711 $77,658 $2,561 $1,765,845 
Current period charge-offs$17 $457 $247 $— $91 $52 $— $— $864 
(1)Excludes accrued interest receivables of $7.3 million as of December 31, 2023.