Schedule of changes in the company's allowance for loan losses

Changes in the Company’s allowance for loan losses were as follows for the years ended December 31, 2024, 2023 and 2022 ($ in thousands):


	General Allowance
					Held to
	Construction				Maturity Debt		Specific
Year Ended December 31, 2024	Loans		Loans		Securities		Allowance		Total
Allowance for loan losses at beginning of period	$	—	$	497	$	—	$	—	$	497
Provision for (recovery of) loan losses⁽¹⁾		—		621		—		—		621
Allowance for loan losses at end of period	$	—	$	1,118	$	—	$	—	$	1,118

Year Ended December 31, 2023
Allowance for loan losses at beginning of period	$	92	$	437	$	—	$	396	$	925
Provision for (recovery of) loan losses⁽¹⁾		(92)		60		—		(396)		(428)
Allowance for loan losses at end of period	$	—	$	497	$	—	$	—	$	497

Year Ended December 31, 2022
Allowance for loan losses at beginning of period	$	1,213	$	676	$	2,304	$	576	$	4,769
Provision for (recovery of) loan losses⁽¹⁾		(725)		(239)		—		46,034		45,070
Transfers		(396)		—		(2,304)		2,700		—
Charge-offs⁽¹⁾		—		—		—		(48,914)		(48,914)
Allowance for loan losses at end of period	$	92	$	437	$	—	$	396	$	925

(1)

During the year ended December 31, 2024, the Company recorded a provision for loan losses of $0.6 million, which was due primarily to the origination of a loan in October 2024 (refer to Note 5). During the year ended December 31, 2023, the Company recorded a provision for loan losses of $1.7 million in its combined and consolidated statements of operations. The provision in 2023 was due primarily to a $2.2 million provision on the sale of a loan held for sale, which was partially offset by a recovery of loan losses due to the repayment of loans during the year ended December 31, 2023. During the year ended December 31, 2022, the Company recorded a provision for loan losses of $45.0 million in its combined and consolidated statements of operations. The provision in 2022 was due primarily to a $22.2 million specific provision on the Company’s held-to-maturity debt security, which was recorded at its repayment proceeds and a provision of $23.8 million on one loan prior to it being transferred to held for sale.

Schedule of investment in performing loans, presented by class and by credit quality, as indicated by risk rating

The Company’s amortized cost basis in performing senior mortgages and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, was as follows as of December 31, 2024 ($ in thousands):


	Year of Origination
	2024		2023		2022		2021		2020		Prior to 2020		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		17,750		3,050		—		—		—		—		20,800
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	17,750	$	3,050	$	—	$	—	$	—	$	—	$	20,800
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		15,266		15,266
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	15,266	$	15,266
Total	$	17,750	$	3,050	$	—	$	—	$	—	$	15,266	$	36,066

The Company’s amortized cost basis in performing senior mortgages and subordinate mortgages, presented by year of origination and by credit quality, as indicated by risk rating, was as follows as of December 31, 2023 ($ in thousands):


	Year of Origination
	2023		2022		2021		2020		2019		Prior to 2019		Total
Senior mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		2,550		—		—		—		—		—		2,550
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal⁽¹⁾	$	2,550	$	—	$	—	$	—	$	—	$	—	$	2,550
Subordinate mortgages
Risk rating
1.0	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1.5		—		—		—		—		—		—		—
2.0		—		—		—		—		—		—		—
2.5		—		—		—		—		—		—		—
3.0		—		—		—		—		—		14,266		14,266
3.5		—		—		—		—		—		—		—
4.0		—		—		—		—		—		—		—
4.5		—		—		—		—		—		—		—
5.0		—		—		—		—		—		—		—
Subtotal	$	—	$	—	$	—	$	—	$	—	$	14,266	$	14,266
Total	$	2,550	$	—	$	—	$	—	$	—	$	14,266	$	16,816

Schedule of other lending investments - securities

Other lending investments—Other lending investments includes the following securities ($ in thousands):


					Net				Net
			Amortized		Unrealized		Estimated		Carrying
	Face Value		Cost Basis		Gain (Loss)		Fair Value		Value
As of December 31, 2024
Available-for-sale securities
Municipal debt securities⁽¹⁾	$	15,480	$	15,480	$	(104)	$	15,376	$	15,376
Total	$	15,480	$	15,480	$	(104)	$	15,376	$	15,376
As of December 31, 2023
Available-for-Sale Securities
Municipal debt securities⁽¹⁾	$	4,220	$	4,220	$	359	$	4,579	$	4,579
Total	$	4,220	$	4,220	$	359	$	4,579	$	4,579

(1)

In September 2023, the Company acquired two securities for $4.2 million. In February 2024, the Company acquired one security for $0.8 million. In May 2024, the Company acquired three securities for $8.2 million. In October 2024, the Company acquired one security for $2.3 million. During the year ended December 31, 2022, the Company sold available-for-sale securities and recognized a gain of $2.9 million, which is recorded in “Other income” in the Company’s combined and consolidated statements of operations. During the year ended December 31, 2022, the Company received $75.0 million of repayments and recorded a $22.2 million provision in ‘Provision for (recovery of) loan losses” in its combined and consolidated statements of operations on a debt security.