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Loans and Allowance For Credit Losses (Tables)

9 Months Ended

Sep. 30, 2021

Loans and Leases Receivable Disclosure [Line Items]

Outstanding loans as of September 30, 2021 and December 31, 2020 are summarized below. Certain loans have been pledged to secure borrowing arrangements (see Note 4). Additionally, SBA loans include loans funded under the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), which was enacted as a result of the

COVID-19

pandemic (see Note 7).


	September 30,			December 31,
(Dollars in thousands)	2021			2020
Commercial and industrial	$	428,169		$	414,548
Real estate - other		664,202			550,690
Real estate - construction and land		41,312			37,193
SBA		107,096			317,564
Other		61,193			49,075

Total loans, gross		1,301,972			1,369,070
Deferred loan origination costs, net		760			523
Allowance for credit losses		(13,571	)		(14,111	)

Total loans, net	$	1,289,161		$	1,355,482

Summary of Information Related to Impaired Loans

The following table reflects information related to impaired loans as of September 30, 2021 and December 31, 2020.


			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
(Dollars in thousands)	Investment		Balance		Allowance		Investment		Recognized
As of September 30, 2021
With no related allowance recorded:
Real estate - other	$	1,000	$	1,000	$	—	$	1,000	$	8
SBA	$	233	$	755	$	—	$	1,973	$	14
Total:
Real estate - other	$	1,000	$	1,000	$	—	$	1,000	$	8
SBA	$	233	$	755	$	—	$	1,973	$	14
As of December 31, 2020
With no related allowance recorded:
SBA	$	234	$	479	$	—	$	1,917	$	—
With an allowance recorded:
Commercial and industrial	$	2,288	$	2,288	$	41	$	2,137	$	148
SBA	$	455	$	455	$	259	$	3,921	$	57
Total:
Commercial and industrial	$	2,288	$	2,288	$	41	$	2,137	$	148
SBA	$	689	$	934	$	259	$	5,838	$	57

Loans Receivable [Member]

Loans and Leases Receivable Disclosure [Line Items]

Summary of Financing Receivable and Related Impairment Methodology

The following table reflects the impairment methodology applied to gross loans by portfolio segment and the related allowance for credit losses as of September 30, 2021 and December 31, 2020.


	Commercial				Real Estate
	and		Real Estate		Construction
(Dollars in thousands)	Industrial		Other		and Land		SBA		Other		Total
As of September 30, 2021
Gross loans:
Loans individually evaluated for impairment	$	—	$	1,000	$	—	$	233	$	—	$	1,233
Loans collectively evaluated for impairment		428,169		663,202		41,312		106,863		61,193		1,300,739

Total gross loans	$	428,169	$	664,202	$	41,312	$	107,096	$	61,193	$	1,301,972

Allowance for loan losses:
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		8,209		4,393		675		273		21		13,571

Total allowance for loan losses	$	8,209	$	4,393	$	675	$	273	$	21	$	13,571

As of December 31, 2020
Gross loans:
Loans individually evaluated for impairment	$	2,288	$	—	$	—	$	689	$	—	$	2,977
Loans collectively evaluated for impairment		412,260		550,690		37,193		316,875		49,075		1,366,093

Total loans	$	414,548	$	550,690	$	37,193	$	317,564	$	49,075	$	1,369,070

Allowance for loan losses:
Loans individually evaluated for impairment	$	41	$	—	$	—	$	259	$	—	$	300
Loans collectively evaluated for impairment		8,882		3,877		681		345		26		13,811

Total allowance for loan losses	$	8,923	$	3,877	$	681	$	604	$	26	$	14,111

Summary of Allowance for Loan Losses

The following table reflects the changes in, and allocation of, the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2021 and 2020.


	Commercial					Real Estate
	and			Real Estate		Construction
(Dollars in thousands)	Industrial			Other		and Land			SBA			Other			Total
Three months ended September 30, 2021
Beginning balance	$	8,133		$	4,069	$	697		$	317		$	24		$	13,240
Provision for loan losses		45			324		(22	)		(44	)		(3	)		300
Charge-offs		—			—		—			—			—			—
Recoveries		31			—		—			—			—			31

Ending balance	$	8,209		$	4,393	$	675		$	273		$	21		$	13,571

Three months ended September 30, 2020
Beginning balance	$	7,851		$	3,332	$	956		$	366		$	19		$	12,524
Provision for loan losses		772			276		(280	)		79			3			850
Charge-offs		—			—		—			—			—			—
Recoveries		11			—		—			—			—			11

Ending balance	$	8,634		$	3,608	$	676		$	445		$	22		$	13,385

Nine months ended September 30, 2021
Beginning balance	$	8,923		$	3,877	$	681		$	604		$	26		$	14,111
Provision for loan losses		(952	)		516		(6	)		(53	)		(5	)		(500	)
Charge-offs		—			—		—			(278	)		—			(278	)
Recoveries		238			—		—			—			—			238

Ending balance	$	8,209		$	4,393	$	675		$	273		$	21		$	13,571

Nine months ended September 30, 2020
Beginning balance	$	6,708		$	3,281	$	1,022		$	50		$	14		$	11,075
Provision for loan losses		3,688			327		(346	)		503			8			4,180
Charge-offs		(1,868	)		—		—			(108	)		—			(1,976	)
Recoveries		106			—		—			—			—			106

Ending balance	$	8,634		$	3,608	$	676		$	445		$	22		$	13,385

Summary of Loan Portfolio Allocated by Management's Internal Risk Ratings

The following table reflects the loan portfolio allocated by management’s internal risk ratings at September 30, 2021 and December 31, 2020.


	Commercial				Real Estate
	and		Real Estate		Construction
(Dollars in thousands)	Industrial		Other		and Land		SBA		Other		Total
As of September 30, 2021
Grade:
Pass	$	413,292	$	653,813	$	37,220	$	105,164	$	61,193	$	1,270,682
Special Mention		10,933		4,661		1,288		1,000		—		17,882
Substandard		3,944		5,728		2,804		932		—		13,408

Total	$	428,169	$	664,202	$	41,312	$	107,096	$	61,193	$	1,301,972

As of December 31, 2020
Grade:
Pass	$	401,629	$	540,153	$	34,543	$	315,277	$	49,075	$	1,340,677
Special Mention		9,013		2,911		872		859		—		13,655
Substandard		3,906		7,626		1,778		1,428		—		14,738

Total	$	414,548	$	550,690	$	37,193	$	317,564	$	49,075	$	1,369,070

Summary of Aging Analysis of the Loan Portfolio by the Time Past Due

The following table reflects an aging analysis of the loan portfolio by the time past due at September 30, 2021 and December 31, 2020.


(Dollars in thousands)	30 Days		60 Days		90+ Days		Non-Accrual		Current		Total
As of September 30, 2021
Commercial and industrial	$	134	$	—	$	—	$	—	$	428,035	$	428,169
Real estate - other		—		191		—		1,000		663,011		664,202
Real estate - construction and land		—		—		—		—		41,312		41,312
SBA		—		—		—		233		106,863		107,096
Other		—		—		—		—		61,193		61,193

Total loans, gross	$	134	$	191	$	—	$	1,233	$	1,300,414	$	1,301,972

As of December 31, 2020
Commercial and industrial	$	—	$	—	$	—	$	—	$	414,548	$	414,548
Real estate - other		1,505		—		—		—		549,185		550,690
Real estate - construction and land		—		—		—		—		37,193		37,193
SBA		—		—		—		234		317,330		317,564
Other		—		—		—		—		49,075		49,075

Total loans, gross	$	1,505	$	—	$	—	$	234	$	1,367,331	$	1,369,070