
	December 31, 2022
(dollars in thousands)	Total		% of Total Loans
Portfolio Loans:
Commercial real estate	$	1,232,826	67.69	%
Residential first mortgages	79,872		4.39	%
Residential rentals	338,292		18.58	%
Construction and land development	17,259		0.95	%
Home equity and second mortgages	25,602		1.41	%
Commercial loans	42,055		2.31	%
Consumer loans	6,272		0.34	%
Commercial equipment	78,890		4.33	%


Total portfolio loans (1)	1,821,068		100.00	%
Less: Allowance for Credit Losses	(22,890)		(1.26)	%
Total net portfolio loans	1,798,178
U.S. SBA PPP loans (1)	339
Total net loans	1,798,517

Portfolio loans are summarized by type as follows at December 31, 2021:
Portfolio Loans:	December 31, 2021
Commercial real estate	$	1,115,485	70.66	%
Residential first mortgages	91,120		5.77	%
Residential rentals	195,035		12.35	%
Construction and land development	35,590		2.25	%
Home equity and second mortgages	25,638		1.62	%
Commercial loans	50,574		3.20	%
Consumer loans	3,002		0.19	%
Commercial equipment	62,499		3.96	%
Gross portfolio loans (1)	1,578,943		100.00	%
Adjustments:
Net deferred costs	(133)		(0.01)	%
Allowance for loan losses	(18,417)		(1.17)	%
	(18,550)
Net portfolio loans	1,560,393

Gross U.S. SBA PPP loans (1)	27,276
Net deferred fees	(878)
Net U.S. SBA PPP Loans	26,398
Total net loans	$	1,586,791

Total gross loans	$	1,606,219

Portfolio net deferred fees of $3.0 million at December 31, 2022 included deferred fees paid by customers of $7.3 million offset by deferred costs of $4.3 million. Deferred loan costs include premiums paid for the purchase of residential first mortgages and deferred loan origination costs in accordance with ASC 310-20. Net deferred loan fees of $0.1 million at December 31, 2021 included deferred fees paid by customers of $4.1 million offset by deferred costs of $4.0 million. Deferred fees and costs are amortized into interest income as loans are repaid or forgiven.

U.S. SBA PPP loan net deferred fees of $9,000 at December 31, 2022 included deferred fees paid by the U.S. SBA of $9,000 partially offset by deferred costs of $1,000. U.S. SBA PPP net deferred loan fees of $0.2 million at December 31, 2021 included deferred fees paid by the SBA of $0.2 million offset by deferred costs of $18,000. The net deferred fees are being amortized as a component of interest income through the contractual maturity date of each U.S. SBA PPP loan. Net deferred fees include fees received by participant banks for each U.S. SBA PPP loan underwritten and funded net of costs incurred to underwrite the loans. Net deferred fees will be recognized in income when the U.S. SBA PPP loan is forgiven or paid.

Concentrations of Credit - Loans are made primarily within the Company’s operating footprint of Southern Maryland and the greater Fredericksburg area of Virginia. Real estate loans can be affected by the condition of the local real estate market. Commercial and industrial loans can be affected by the local economic conditions. The commercial loan portfolio has concentrations in business loans secured by real estate and real estate development loans. At December 31, 2022 and 2021, the Company had no loans outstanding with foreign entities.

Commercial and other real estate projects include office, medical and professional buildings, retail locations, churches, other special purpose buildings and commercial construction. Commercial construction balances were 6.9% and 6.5% of the CRE portfolio at December 31, 2022 and 2021, respectively. The primary security on a commercial real estate loan is the real property and the leases that produce income for the real property. Loans secured by commercial real estate are generally limited to 80% of the lower of the appraised value or sales price at origination and have an initial contractual loan payment period ranging from three to 20 years.

The annual and lifetime limitations on interest rate adjustments may constrain interest rate increases on these loans. There are also credit risks resulting from potential increased costs to the borrower as a result of repricing of adjustable-rate mortgage loans. During periods of rising interest rates, the risk of default on adjustable-rate mortgage loans may increase due to the upward adjustment of interest cost to the borrower. The Bank’s adjustable rate residential first mortgage portfolio was $13.1 million or 0.7% of total gross portfolio loans of $1.82 billion at December 31, 2022 compared to $18.9 million or 1.2% of total gross portfolio loans of $1.61 billion at December 31, 2021.

Residential rental mortgage loans are amortizing long-term loans. The loans are secured by income-producing 1-4 family units and apartments. Loans secured by residential rental properties are generally limited to 80% of the lower of the appraised value or sales price at origination and have initial contractual loan payment periods ranging from three to 20 years.

Loans secured by residential rental properties involve greater risks than 1-4 family residential mortgage loans. Although, there are similar risk characteristics shared with commercial real estate loans, the balances for the loans secured by residential rental properties are generally smaller. Payments on loans secured by residential rental properties are dependent on the successful operation of the properties and repayment of these loans may be subject to adverse conditions in the rental real estate market or the economy to a greater extent than similar owner-occupied properties.

Development loans are dependent on the successful completion of the underlying project, or the borrowers guarantee to repay the loan. As such, they are subject to the risks of the project including the borrower's ability to successfully manage construction and development activities. The repayment of these loans is also dependent on the borrower’s ability to successfully manage the construction and development activities.

Consumer loans consist of loans secured by automobiles, boats, recreational vehicles and trucks. The Bank also makes home improvement loans and offers both secured and unsecured personal lines of credit and credit card loans. The repayment of these loans is dependent on the continued financial stability of the customer.

These loans consist primarily of fixed-rate, short-term loans collateralized by a commercial customer’s equipment or secured by real property, accounts receivable, or other security. Commercial loans are of higher risk and these loans are dependent on the success of the underlying business or the strength of the guarantor.


	December 31, 2022
(dollars in thousands)	Nonaccrual with No Allowance for Credit Losses		Nonaccrual with Allowance for Credit Losses		Total Nonaccrual Loans
Commercial real estate	$	4,521	$	81	$	4,602

Residential rentals	1,142		—		1,142

Home equity and second mortgages	206		—		206


Commercial equipment	137		28		165


Total	$	6,006	$	109	$	6,115

Interest Income on Nonaccrual Loans	$	121	$	—	$	121


	December 31, 2022
(dollars in thousands)	Non- accrual Delinquent Loans		Non-accrual Current Loans		Total Non-accrual Loans
Commercial real estate	$	—	$	4,602	$	4,602

Residential rentals	449		693		1,142

Home equity and second mortgages	206		—		206


Commercial equipment	—		165		165
	$	655	$	5,460	$	6,115


	December 31, 2021
(dollars in thousands)	Non- accrual Delinquent Loans		Non-accrual Current Loans		Total Non-accrual Loans
Commercial real estate	$	—	$	4,890	$	4,890
Residential first mortgages	450		—		450
Residential rentals	252		690		942

Home equity and second mortgages	202		399		601


Commercial equipment	—		691		691

U.S. SBA PPP loans	57		—		57
	$	961	$	6,670	$	7,631

Non-accrual loans which did not have a specific allowance for impairment, amounted to $6.0 million and $7.4 million at December 31, 2022 and 2021, respectively. Interest due but not recognized on these balances at December 31, 2022 and 2021 was $22,000 and $0.1 million, respectively. Non-accrual loans with a specific allowance for impairment on which the recognition of interest has been discontinued amounted to $0.1 million and $0.3 million at December 31, 2022 and 2021, respectively. Interest due but not recognized on these balances at December 31, 2022 and 2021 was $1,000 and $1,000, respectively.

The Company considers a loan to be past due or delinquent when the terms of the contractual obligation are not met by the borrower. Regardless of payment status, as long as cash flows can be reasonably estimated, the associated discount on these loan pools results in income recognition. An analysis of days past due ("DPD") loans as of December 31, 2022 follows:


	December 31, 2022
(dollars in thousands)	31-60 DPD		61-89 DPD**		90 DPD and Still Accruing		90 DPD and Not Accruing		Total Past Due		Current Non-Accrual Loans		Current Accrual Loans		Total Loans
Commercial real estate	$	147	$	—	$	—	$	—	$	147	$	4,602	$	1,228,077	$	1,232,826
Residential first mortgages	—		—		—		—		—		—		79,872		79,872
Residential rentals	—		177		—		272		449		693		337,150		338,292
Construction and land dev.	—		—		—		—		—		—		17,259		17,259
Home equity and second mtg.	53		160		—		116		329				25,273		25,602
Commercial loans	—		—		—		—		—		—		42,055		42,055
Consumer loans	21		35		50		—		106		—		6,166		6,272
Commercial equipment	11		—		—		—		11		165		78,714		78,890

U.S. SBA PPP loans	—		—		—		—		—		—		339		339
Total portfolio loans	$	232	$	372	$	50	$	388	$	1,042	$	5,460	$	1,814,905	$	1,821,407

Purchase Credit Impaired ("PCI") loans are included as a single category in the table below as management believes, there is a lower likelihood of aggregate loss related to these loan pools. Additionally, PCI loans are discounted to allow for the accretion of income on a level yield basis over the life of the loan based on expected cash flows. Regardless of payment status, as long as cash flows can be reasonably estimated, the associated discount on these loan pools results in income recognition.


	December 31, 2021
(dollars in thousands)	31-60 Days		61-89 Days		90 or Greater Days		Total Past Due		PCI Loans		Current		Total Loan Receivables
Commercial real estate	$	—	$	—	$	—	$	—	$	1,116	$	1,114,369	$	1,115,485
Residential first mortgages	—		277		450		727		—		90,393		91,120
Residential rentals	—		42		252		294		—		194,741		195,035
Construction and land dev.	—		—		—		—		—		35,590		35,590
Home equity and second mtg.	200		—		202		402		—		25,236		25,638
Commercial loans	—		—		—		—		—		50,574		50,574
Consumer loans	—		—		—		—		—		3,002		3,002
Commercial equipment	—		—		—		—		—		62,499		62,499
Total portfolio loans	$	200	$	319	$	904	$	1,423	$	1,116	$	1,576,404	$	1,578,943

U.S. SBA PPP loans	$	9	$	40	$	57	$	106	$	—	$	27,170	$	27,276


Year Ended	December 31, 2022
(dollars in thousands)	Beginning Balance		Impact of ASC 326 Adoption		Charge-offs		Recoveries		Provisions		Ending Balance
Commercial real estate	$	13,095	$	3,734	$	(280)	$	16	$	1,085	$	17,650
Residential first mortgages	1,002		(679)		(111)		14		(19)		207
Residential rentals	2,175		(586)		—		—		1,472		3,061
Construction and land development	260		(82)		—		—		(18)		160
Home equity and second mortgages	274		(86)		—		1		(63)		126
Commercial loans	582		(290)		(99)		2		(5)		190
Consumer loans	58		2		(49)		—		143		154
Commercial equipment	971		483		(29)		75		(158)		1,342


Total	$	18,417	$	2,496	$	(568)	$	108	$	2,437	$	22,890


Year Ended	December 31, 2021
(dollars in thousands)	Beginning Balance		Charge-offs		Recoveries		Provisions		Ending Balance
Commercial real estate	$	13,744	$	(1,920)	$	6	$	1,265	$	13,095
Residential first mortgages	1,305		(142)		—		(161)		1,002
Residential rentals	1,413		(46)		—		808		2,175
Construction and land development	401		—		—		(141)		260
Home equity and second mortgages	261		—		5		8		274
Commercial loans	1,222		(76)		543		(1,107)		582
Consumer loans	20		—		—		38		58
Commercial equipment	1,058		(34)		71		(124)		971




Total	$	19,424	$	(2,218)	$	625	$	586	$	18,417


	Term Loans by Origination Year
(dollars in thousands)	Prior		2018		2019		2020		2021		2022		Revolving Loans		Total
Commercial Real Estate
Pass	$	329,575	$	73,742	$	107,264	$	184,263	$	272,567	$	256,622	$	—	$	1,224,033

Special Mention	—		4,191		—		—		—		—		—		4,191
Substandard	792		—		2,967		—		843		—		—		4,602
Total	$	330,367	$	77,933	$	110,231	$	184,263	$	273,410	$	256,622	$	—	$	1,232,826

Residential Rentals
Pass	$	44,257	$	4,429	$	20,690	$	48,237	$	65,889	$	153,648	$	—	$	337,150

Special Mention	—		—		—		—		—		—		—		—
Substandard	1,142		—		—		—		—		—		—		1,142
Total	$	45,399	$	4,429	$	20,690	$	48,237	$	65,889	$	153,648	$	—	$	338,292

Construction and Land Development
Pass	$	2,355	$	7,788	$	4,255	$	729	$	2,020	$	112	$	—	$	17,259

Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	2,355	$	7,788	$	4,255	$	729	$	2,020	$	112	$	—	$	17,259

Commercial Loans
Pass	$	23,225	$	4,298	$	2,463	$	1,872	$	6,420	$	3,777	$	—	$	42,055

Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Total	$	23,225	$	4,298	$	2,463	$	1,872	$	6,420	$	3,777	$	—	$	42,055

Commercial Equipment
Pass	$	8,206	$	4,411	$	14,329	$	7,346	$	12,948	$	31,315	$	—	$	78,555

Special Mention	—		170		—		—		—		—		—		170
Substandard	—		—		137		—		—		28		—		165
Total	$	8,206	$	4,581	$	14,466	$	7,346	$	12,948	$	31,343	$	—	$	78,890








Total loans by risk category	$	409,552	$	99,029	$	152,105	$	242,447	$	360,687	$	445,502	$	—	$	1,709,322


	Term Loans by Origination Year
(dollars in thousands)	Prior		2018		2019		2020		2021		2022		Revolving Loans		Total
Residential First Mortgages
Performing	$	37,428	$	3,584	$	19,411	$	8,523	$	5,235	$	5,691	$	—	$	79,872
Non-performing	—		—		—		—		—		—		—		—
Total	$	37,428	$	3,584	$	19,411	$	8,523	$	5,235	$	5,691	$	—	$	79,872

Home Equity and Second Mortgages
Performing	$	14,319	$	1,622	$	1,041	$	1,441	$	3,812	$	3,161	$	—	$	25,396
Non-performing	206		—		—		—		—		—		—		206
Total	$	14,525	$	1,622	$	1,041	$	1,441	$	3,812	$	3,161	$	—	$	25,602

Consumer Loans
Performing	$	49	$	2	$	96	$	118	$	618	$	881	$	4,508	$	6,272
Non-performing	—		—		—		—		—		—		—		—
Total	$	49	$	2	$	96	$	118	$	618	$	881	$	4,508	$	6,272

U.S. SBA PPP Loans
Performing	$	—	$	—	$	—	$	—	$	339	$	—	$	—	$	339
Non-performing	—		—		—		—		—		—		—		—
Total	$	—	$	—	$	—	$	—	$	339	$	—	$	—	$	339

Total loans evaluated by performing status	$	52,002	$	5,208	$	20,548	$	10,082	$	10,004	$	9,733	$	4,508	$	112,085

Total Recorded Investment	$	461,554	$	104,237	$	172,653	$	252,529	$	370,691	$	455,235	$	4,508	$	1,821,407


(dollars in thousands)	Commercial Real Estate		Construction and Land Development		Residential Rentals		Commercial Loans		Commercial Equipment		Total Commercial Portfolios
	12/31/2021		12/31/2021		12/31/2021		12/31/2021		12/31/2021		12/31/2021
Unrated	$	—	$	—	$	—	$	—	$	—	$	—
Pass	1,111,857		35,590		194,093		50,574		62,326		1,454,440
Special mention	—		—		—		—		—		—
Substandard	3,628		—		942		—		173		4,743
Doubtful	—		—		—		—		—		—
Loss	—		—		—		—		—		—
Total	$	1,115,485	$	35,590	$	195,035	$	50,574	$	62,499	$	1,459,183


(dollars in thousands)	Non-Commercial Portfolios **		U.S. SBA PPP Loans		Total All Portfolios
	12/31/2021		12/31/2021		12/31/2021
Unrated	$	100,403	$	27,276	$	127,679
Pass	18,889		—		1,473,329
Special mention	—		—		—
Substandard	468		—		5,211
Doubtful	—		—		—
Loss	—		—		—
Total	$	119,760	$	27,276	$	1,606,219

Home equity, second mortgages, consumer loans, and residential first mortgages are evaluated for creditworthiness in underwriting and are monitored based on borrower payment history. Residential first mortgages, home equity, second mortgages and consumer loans are classified as unrated unless they are part of a larger commercial relationship that requires grading or are loans with an Other Assets Especially Mentioned (“OAEM”) or ("Special Mention") or higher risk rating due to a delinquency payment history.

The overall quality of the Bank’s loan portfolio is assessed using the Bank’s risk-grading scale, the level and trends of net charge-offs, nonperforming loans and delinquencies, the performance of TDRs and the general economic conditions in the Company’s geographical market. This review process is assisted by frequent internal reporting of loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and potential problem loans. Credit quality indicators and allowance factors are adjusted based on management’s judgment during the monthly and quarterly review process. Loans subject to risk ratings are graded on a scale of one to ten. The Company considers loans rated substandard, doubtful and loss as classified assets for regulatory and financial reporting.

Ratings 1 thru 6 have asset risks ranging from excellent-low to adequate. The specific rating assigned considers customer history of earnings, cash flows, liquidity, leverage, capitalization, consistency of debt service coverage, the nature and extent of customer relationship and other relevant specific business factors such as the stability of the industry or market area, changes to management, litigation or unexpected events that could have an impact on risks.

These credits, while protected by the financial strength of the borrowers, guarantors or collateral, have reduced quality due to economic conditions, less than adequate earnings performance or other factors which require the lending officer to direct more than normal attention to the credit. Financing alternatives may be limited and/or command higher risk interest rates. OAEM loans relationships are reviewed at least quarterly.

Substandard assets are assets that are inadequately protected by the sound worth or paying capacity of the borrower or of the collateral pledged. Substandard loans are the first adversely classified loans on the Bank's watchlist. These assets have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that the Bank will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. The loans may have a delinquent history or combination of weak collateral, weak guarantor strength or operating losses. When a loan is assigned to this category the Bank may estimate a specific reserve in the loan loss allowance analysis. These assets listed may include assets with histories of repossessions or some that are non-performing bankruptcies. These relationships will be reviewed at least quarterly.

Doubtful assets have many of the same characteristics of Substandard with the exception that the Bank has determined that loss is not only possible but is probable and the risk is close to certain that loss will occur. When a loan is assigned to this category the Bank will identify the probable loss and the loan will receive a specific reserve in the loan loss allowance analysis. These relationships will be reviewed at least quarterly.

Once an asset is identified as a definite loss to the Bank, it will receive the classification of “loss.” There may be some future potential recovery; however, it is more practical to write off the loan at the time of classification. Losses will be taken in the period in which they are determined to be non-collectable.


	December 31, 2022			December 31, 2021
(dollars in thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial real estate	—	$	—	—	$	—






Commercial equipment	2	457		1	447


Total TDRs	2	$	457	1	$	447
Less: TDRs included in non-accrual loans	1	28		—	—
Total accrual TDR loans	1	$	429	1	$	447

TDRs increased from $0.4 million at December 31, 2021 to $0.5 million at December 31, 2022. TDRs that are included in non-accrual are classified as non-accrual loans solely for the calculation of financial ratios. The Company had specific reserve of $28,000 for one TDR of $28,000 at December 31, 2022. There were no specific reserves for the one TDR of $0.4 million at December 31, 2021.

During the year ended December 31, 2022, there were no TDR disposals, which included payoffs and refinancing. TDR loan principal curtailment was $18,000 for the year ended December 31, 2022. There was one TDR of $28,000 added during the year ended December 31, 2022. During the year ended December 31, 2021, TDR disposals, which included payoffs and refinancing decreased by five loans totaling $1.6 million. TDR loan principal curtailment was $18,000 for the year ended December 31, 2021. There were no TDRs added during the year ended December 31, 2021. There were no TDRs that defaulted during the twelve months ended December 31, 2022 and December 31, 2021.

Interest income of $16,000 and $16,000 was recognized on outstanding TDR loans for the years ended December 31, 2022 and 2021, respectively. The Bank’s TDRs are performing according to the terms of their agreements at market interest rates appropriate for the level of credit risk of each TDR loan. The average contractual interest rate on performing TDRs at December 31, 2022 and 2021 was 3.62% and 3.62%, respectively.


	December 31, 2021
(dollars in thousands)	Unpaid Contractual Principal Balance		Recorded Investment with No Allowance		Recorded Investment with Allowance		Total Recorded Investment		Related Allowance		YTD Average Recorded Investment		YTD Interest Income Recognized
Commercial real estate	$	4,994	$	4,797	$	93	$	4,890	$	93	$	4,866	$	254
Residential first mortgages	879		866		—		866		—		874		32
Residential rentals	982		942		—		942		—		959		48

Home equity and second mtg.	626		601		—		601		—		604		14


Commercial equipment	1,200		1,022		173		1,195		173		2,184		99
Total	$	8,681	$	8,228	$	266	$	8,494	$	266	$	9,487	$	447


	December 31, 2021
(dollars in thousands)	Ending balance: individually evaluated for impairment		Ending balance: collectively evaluated for impairment		Purchase Credit Impaired		Total
Loan Receivables:
Commercial real estate	$	4,890	$	1,109,479	$	1,116	$	1,115,485
Residential first mortgages	866		90,254		—		91,120
Residential rentals	942		194,093		—		195,035
Construction and land development	—		35,590		—		35,590
Home equity and second mortgages	601		25,037		—		25,638
Commercial loans	—		50,574		—		50,574
Consumer loans	—		3,002		—		3,002
Commercial equipment	1,195		61,304		—		62,499
	$	8,494	$	1,569,333	$	1,116	$	1,578,943

Allowance for credit losses:
Commercial real estate	$	93	$	13,002	$	—	$	13,095
Residential first mortgages	—		1,002		—		1,002
Residential rentals	—		2,175		—		2,175
Construction and land development	—		260		—		260
Home equity and second mortgages	—		274		—		274
Commercial loans	—		582		—		582
Consumer loans	—		58		—		58
Commercial equipment	173		798		—		971
	$	266	$	18,151	$	—	$	18,417

PCI loans had an unpaid principal balance of $1.5 million and a carrying values of $1.1 million at December 31, 2021. Determining the fair value of the PCI loans at the time of acquisition required the Company to estimate cash flows expected to result from those loans and to discount expected cash flows at appropriate rates of interest considering prepayment assumptions. For such loans, the excess of cash flows expected at acquisition over the estimated fair value is recognized as interest income over the remaining lives of the loans and is called accretable yield. The difference between contractually required payments at acquisition and the cash flows expected to be collected at acquisition reflects the impact of estimated credit losses and is called the nonaccretable difference. In accordance with GAAP upon the adoption of CECL, there was no carryover of a previously established allowance for credit losses from acquisition. A summary of changes in the accretable yield for PCI loans for the year ended December 31, 2021 are as follows:

Accounting standards require a periodic recast of the expected cash flows on the PCI loan portfolio. The recast was performed during the s fourth quarter of 2021 and resulted in a reclassification of $43,000 from the credit (nonaccretable) portion of the discount to the liquidity (accretable) portion of the discount.


BY ACQUIRED AND NON-ACQUIRED	December 31, 2021		%
Acquired loans - performing	$	41,066	2.56	%
Acquired loans - purchase credit impaired ("PCI")	1,116		0.07	%
Total acquired loans	42,182		2.63	%
Non-acquired loans**	1,536,761		95.68	%
U.S. SBA PPP loans	27,276		1.70	%
Gross loans	1,606,219
Net deferred costs (fees)	(1,011)		(0.06)	%
Total loans, net of deferred costs	$	1,605,208

Included in loans receivable were loans made to executive officers and directors and their affiliates. These loans were made in the ordinary course of business at substantially the same terms and conditions as those prevailing at the time for comparable transactions with persons not affiliated with the Bank and are not considered to involve more than the normal risk of collectability. For the years ended December 31, 2022 and 2021 all loans to directors and executive officers of the Bank performed according to original loan terms. Activity in loans outstanding to executive officers and directors and their related interests are summarized as follows:

The Bank sells portions of commercial, commercial real estate and commercial construction loans to other lenders. The Bank's sold participated loans with other lenders at December 31, 2022 and 2021 were $21.0 million and $11.8 million, respectively. The Bank may also buy loans, portions of loans, or participation certificates from other lenders to limit overall exposure. The Bank only purchases loans or portions of loans after reviewing loan documents, underwriting support, and completing other procedures, as necessary.