Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2022

Loans and Allowance for Loan Losses [Abstract]

Loans Summarized to Major Risk Category

Loans are summarized as follows according to major risk category as of March 31, 2022 and December 31, 2021:

	March 31,			December 31,
	2022			2021
($ in thousands)
SBA	$	127,778		$	142,392
Commercial, non-real estate		3,285			3,428
Residential real estate		30,772			27,108
Strategic Program loans		101,819			85,850
Commercial real estate		4,187			2,436
Consumer		4,711			4,574
Total loans	$	272,552		$	265,788
Loans held-for-sale		(73,805	)		(60,748	)
Total loans held for investment	$	198,747		$	205,040
Deferred loan costs (fees), net		789			2,917
Allowance for loan losses		(9,987	)		(9,855	)
Net loans	$	189,549		$	198,102

Strategic Program Loans Retained and Held-for-sale

Strategic Program loans retained and held-for-sale as of March 31, 2022 and December 31, 2021, are summarized as follows:

	March 31,		December 31,
	2022		2021
($ in thousands)
Retained Strategic Program loans	$	28,014	$	25,102
Strategic Program loans held-for-sale		73,805		60,748
Total Strategic Program loans	$	101,819	$	85,850

Changes in Allowance for Loan Losses

Changes in the ALL are summarized as follows:

Three Months Ended March 31, 2022
($ in thousands)	SBA			Commercial, Non-Real Estate			Residential Real Estate		Strategic Program Loans			Commercial Real Estate		Consumer		Total
Beginning balance	$	2,739		$	132		$	352	$	6,549		$	21	$	62	$	9,855
Charge-offs		(31	)		—			—		(2,878	)		—		—		(2,909	)
Recoveries		—			1			—		93			—		—		94
Provision (recapture)		356			(26	)		59		2,558			—		—		2,947
Balance at end of period	$	3,064		$	107		$	411	$	6,322		$	21	$	62	$	9,987
Ending balance individually evaluated for impairment		—			—			—		—			—		—		—
Ending balance collectively evaluated for impairment	$	3,064		$	107		$	411	$	6,322		$	21	$	62	$	9,987
Loans receivable	$	127,778		$	3,285		$	30,772	$	28,014		$	4,187	$	4,711	$	198,747
Ending balance individually evaluated for impairment		951			—			200		—			—		—		1,151
Ending balance collectively evaluated for impairment	$	126,827		$	3,285		$	30,572	$	28,014		$	4,187	$	4,711	$	197,596

Three Months Ended March 31, 2021
($ in thousands)	SBA			Commercial, Non-Real Estate			Residential Real Estate		Strategic Program Loans			Commercial Real Estate		Consumer			Total
Beginning balance	$	920		$	232		$	855	$	4,111		$	19	$	62		$	6,199
Charge-offs		(7	)		(41	)		—		(741	)		—		(2	)		(791	)
Recoveries		11			—			—		132			—		—			143
Provision		—			—			—		633			—		—			633
Balance at end of period	$	924		$	191		$	855	$	4,135		$	19	$	60		$	6,184
Ending balance individually evaluated for impairment		—			—			—		—			—		—			—
Ending balance collectively evaluated for impairment	$	924		$	191		$	855	$	4,135		$	19	$	60		$	6,184
Loans receivable	$	167,824		$	3,867		$	21,712	$	6,580		$	2,589	$	4,807		$	207,379
Ending balance individually evaluated for impairment		890			—			756		—			—		—			1,646
Ending balance collectively evaluated for impairment	$	166,934		$	3,867		$	20,956	$	6,580		$	2,589	$	4,807		$	205,733

Impaired Loans

The following tables summarize impaired loans as of March 31, 2022 and December 31, 2021:

March 31, 2022
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
($ in thousands)
With no related allowance recorded
SBA	$	951	$	951	$	—	$	962	$	48
Commercial, non-real estate		—		—		—		—		—
Residential real estate		200		200		—		100		—
Strategic Program loans		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Total	$	1,151	$	1,151	$	—	$	1,062	$	48

December 31, 2021
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
($ in thousands)
With no related allowance recorded
SBA	$	972	$	972	$	—	$	945	$	47
Commercial, non-real estate		—		—		—		—		—
Residential real estate		—		—		—		189		—
Strategic Program loans		—		—		—		—		—
Commercial real estate		—		—		—		—		—
Consumer		—		—		—		—		—
Total	$	972	$	972	$	—	$	1,134	$	47

Nonaccrual and Past Due Loans

Nonaccrual and past due loans are summarized below as of March 31, 2022 and December 31, 2021:

March 31, 2022
($ in thousands)	Current		30-59 Days Past  Due		60-89 Days Past Due		90+ Days Past Due & Still Accruing		Total Past Due		Non- Accrual		Total
SBA	$	126,894	$	227	$	—	$	—	$	227	$	657	$	127,778
Commercial, non-real estate		3,285		—		—		—		—		—		3,285
Residential real estate		30,572		—		—		200		200		—		30,772
Strategic Program loans		100,105		981		573		159		1,713		1		101,819
Commercial real estate		4,187		—		—		—		—		—		4,187
Consumer		4,707		4		—		—		4		—		4,711
Total	$	269,750	$	1,212	$	573	$	359	$	2,144	$	658	$	272,552

December 31, 2021
($ in thousands)	Current		30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due & Still Accruing		Total Past Due		Non- Accrual		Total
SBA	$	141,488	$	247	$	—	$	—	$	247	$	657	$	142,392
Commercial, non-real estate		3,428		—		—		—		—		—		3,428
Residential real estate		27,108		—		—		—		—		—		27,108
Strategic Program loans		84,065		1,041		690		54		1,785		—		85,850
Commercial real estate		2,436		—		—		—		—		—		2,436
Consumer		4,554		20		—		—		20		—		4,574
Total	$	263,079	$	1,308	$	690	$	54	$	2,052	$	657	$	265,788

Outstanding Loan Balances Categorized by Credit Quality Indicators

Outstanding loan balances categorized by these credit quality indicators are summarized as follows at March 31, 2022 and December 31, 2021:

March 31, 2022
($ in thousands)	Pass Grade 1-4		Special Mention Grade 5		Classified/ Doubtful/Loss Grade 6-8		Total
SBA	$	125,366	$	1,461	$	951	$	127,778
Commercial, non-real estate		3,285		—		—		3,285
Residential real estate		30,572		—		200		30,772
Commercial real estate		4,187		—		—		4,187
Consumer		4,711		—		—		4,711
Not Risk Graded
Strategic Program loans								101,819
Total at March 31, 2022	$	168,121	$	1,461	$	1,151	$	272,552

December 31, 2021
($ in thousands)	Pass Grade 1-4		Special Mention Grade 5		Classified/ Doubtful/Loss Grade 6-8		Total
SBA	$	139,985	$	1,435	$	972	$	142,392
Commercial, non-real estate		3,382		46		—		3,428
Residential real estate		27,108		—		—		27,108
Commercial real estate		2,436		—		—		2,436
Consumer		4,574		—		—		4,574
Not Risk Graded
Strategic Program loans								85,850
Total at December 31, 2021	$	177,485	$	1,481	$	972	$	265,788

Loans Modified and Recorded as TDR's

Loans modified and recorded as TDR’s during the three months ended March 31, 2022 and March 31, 2021, consist of the following:

($ in thousands)	Number of Contracts		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
March 31, 2022
SBA		1	$	96	$	96
Total at March 31, 2022		1	$	96	$	96
Non-Accrual
SBA		1	$	25	$	25
March 31, 2021
SBA		3	$	114	$	114
Residential real estate		1		756		756
Total at March 31, 2021		4	$	870	$	870
Non-Accrual
SBA		1	$	53	$	53