Loans (Tables)

6 Months Ended

Jun. 30, 2022

Loans

Classification of Loans By Class

The following table sets forth the classification of loans by class, including unearned fees, deferred costs and excluding the allowance for loan losses as of June 30, 2022 and December 31, 2021:

(In thousands)	June 30, 2022		December 31, 2021
SBA loans held for investment	$	33,089	$	36,075
SBA PPP loans		14,216		46,450
Commercial loans
SBA 504 loans		35,066		27,479
Commercial other		112,189		109,903
Commercial real estate		776,687		704,674
Commercial real estate construction		102,371		89,670
Residential mortgage loans		481,687		409,355
Consumer loans
Home equity		66,582		65,380
Consumer other		13,063		12,564
Residential construction loans		134,460		120,525
Total loans held for investment	$	1,769,410	$	1,622,075
SBA loans held for sale		32,183		27,373
Total loans	$	1,801,593	$	1,649,448

Loan Portfolio by Class According to Their Credit Quality Indicators

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of June 30, 2022:

	June 30, 2022
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	32,535	$	229	$	325	$	33,089
SBA PPP loans		14,216		—		—		14,216
Commercial loans
SBA 504 loans		35,066		—		—		35,066
Commercial other		104,181		5,709		2,299		112,189
Commercial real estate		765,256		9,524		1,907		776,687
Commercial real estate construction		102,371		—		—		102,371
Total commercial loans		1,006,874		15,233		4,206		1,026,313
Total SBA and commercial loans	$	1,053,625	$	15,462	$	4,531	$	1,073,618
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	479,019	$	2,668	$	481,687
Consumer loans
Home equity				66,582		—		66,582
Consumer other				13,063		—		13,063
Total consumer loans				79,645		—		79,645
Residential construction loans				131,769		2,691		134,460
Total residential mortgage, consumer and residential construction loans			$	690,433	$	5,359	$	695,792

The tables below detail the Company’s loan portfolio by class according to their credit quality indicators discussed in the paragraphs above as of December 31, 2021:

	December 31, 2021
	SBA & Commercial loans - Internal risk ratings
(In thousands)	Pass		Special mention		Substandard		Total
SBA loans held for investment	$	34,959	$	745	$	371	$	36,075
SBA PPP loans		46,450		—		—		46,450
Commercial loans
SBA 504 loans		27,479		—		—		27,479
Commercial other		105,388		1,976		2,539		109,903
Commercial real estate		694,627		7,980		2,067		704,674
Commercial real estate construction		86,770		2,900		—		89,670
Total commercial loans		914,264		12,856		4,606		931,726
Total SBA and commercial loans	$	995,673	$	13,601	$	4,977	$	1,014,251
			Residential mortgage, Consumer & Residential construction loans - Performing/Nonperforming
(In thousands)			Performing		Nonperforming		Total
Residential mortgage loans			$	406,093	$	3,262	$	409,355
Consumer loans
Home equity				65,170		210		65,380
Consumer other				12,564		—		12,564
Total consumer loans				77,734		210		77,944
Residential construction loans				117,403		3,122		120,525
Total residential mortgage, consumer and residential construction loans			$	601,230	$	6,594	$	607,824

Aging Analysis of Past Due And Nonaccrual Loans by Loan Class

The following tables set forth an aging analysis of past due and nonaccrual loans as of June 30, 2022 and December 31, 2021:

	June 30, 2022
					90+ days
	30‑59 days		60‑89 days		and still				Total past
(In thousands)	past due		past due		accruing		Nonaccrual		due		Current		Total loans
SBA loans held for investment	$	242	$	—	$	—	$	604	$	846	$	32,243	$	33,089
SBA PPP loans		6		282		—		—		288		13,928		14,216
Commercial loans
SBA 504 loans		—		—		—		—		—		35,066		35,066
Commercial other		363		—		—		1,351		1,714		110,475		112,189
Commercial real estate		2,381		—		—		366		2,747		773,940		776,687
Commercial real estate construction		—		—		—		—		—		102,371		102,371
Residential mortgage loans		1,317		1,721		43		2,668		5,749		475,938		481,687
Consumer loans
Home equity		—		—		—		—		—		66,582		66,582
Consumer other		67		24		15		—		106		12,957		13,063
Residential construction loans		—		—		—		2,691		2,691		131,769		134,460
Total loans held for investment		4,376		2,027		58		7,680		14,141		1,755,269		1,769,410
SBA loans held for sale		48		—		—		—		48		32,135		32,183
Total loans	$	4,424	$	2,027	$	58	$	7,680	$	14,189	$	1,787,404	$	1,801,593

	December 31, 2021
					90+ days
	30‑59 days		60‑89 days		and still				Total past
(In thousands)	past due		past due		accruing		Nonaccrual		due		Current		Total loans
SBA loans held for investment	$	1,558	$	—	$	—	$	510	$	2,068	$	34,007	$	36,075
SBA PPP loans		—		79		—		—		79		46,371		46,450
Commercial loans
SBA 504 loans		—		—		—		—		—		27,479		27,479
Commercial other		—		33		—		2,216		2,249		107,654		109,903
Commercial real estate		334		565		—		366		1,265		703,409		704,674
Commercial real estate construction		—		—		—		—		—		89,670		89,670
Residential mortgage loans		3,688		—		—		3,262		6,950		402,405		409,355
Consumer loans
Home equity		39		—		—		210		249		65,131		65,380
Consumer other		—		—		—		—		—		12,564		12,564
Residential construction loans		—		845		—		3,122		3,967		116,558		120,525
Total loans held for investment		5,619		1,522		—		9,686		16,827		1,605,248		1,622,075
SBA loans held for sale		—		—		—		—		—		27,373		27,373
Total loans	$	5,619	$	1,522	$	—	$	9,686	$	16,827	$	1,632,621	$	1,649,448

Impaired Loans with Associated Allowance Amount

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of June 30, 2022:

	June 30, 2022
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment	$	642	$	542	$	—
Commercial loans
Commercial other		153		93		—
Commercial real estate		3,254		2,319		—
Total commercial loans		3,407		2,412		—
Residential mortgage loans		1,323		1,323		—
Consumer loans
Home equity		—		—		—
Residential construction loans		1,873		1,873		—
Total impaired loans with no related allowance		7,245		6,150		—
With an allowance:
SBA loans held for investment		93		62		62
Commercial loans
Commercial other		2,110		1,610		1,610
Commercial real estate		—		—		—
Total commercial loans		2,110		1,610		1,610
Residential mortgage loans		1,385		1,345		90
Consumer loans
Home equity		417		417		46
Residential construction loans		818		818		200
Total impaired loans with a related allowance		4,823		4,252		2,008
Total individually evaluated impaired loans:
SBA loans held for investment		735		604		62
Commercial loans
Commercial other		2,263		1,703		1,610
Commercial real estate		3,254		2,319		—
Total commercial loans		5,517		4,022		1,610
Residential mortgage loans		2,708		2,668		90
Consumer loans
Home equity		417		417		46
Residential construction loans		2,691		2,691		200
Total individually evaluated impaired loans	$	12,068	$	10,402	$	2,008

The following table provides detail on the Company’s impaired loans that are individually evaluated for impairment with the associated allowance amount, if applicable, as of December 31, 2021:

	December 31, 2021
	Unpaid
	principal		Recorded		Specific
(In thousands)	balance		investment		reserves
With no related allowance:
SBA loans held for investment	$	606	$	506	$	—
Commercial loans
Commercial other		71		70
Commercial real estate		1,493		1,493		—
Total commercial loans		1,564		1,563		—
Residential mortgage loans		1,630		1,630		—
Consumer loans
Home equity		210		210		—
Residential construction loans		2,636		2,636		—
Total impaired loans with no related allowance		6,646		6,545		—
With an allowance:
SBA loans held for investment		35		4		4
Commercial loans
Commercial other		2,832		2,531		2,490
Commercial real estate		973		126		125
Total commercial loans		3,805		2,657		2,615
Residential mortgage loans		1,632		1,632		80
Consumer loans
Home Equity		427		427		56
Residential construction loans		486		486		68
Total impaired loans with a related allowance		6,385		5,206		2,823
Total individually evaluated impaired loans:
SBA loans held for investment		641		510		4
Commercial loans
Commercial other		2,903		2,601		2,490
Commercial real estate		2,466		1,619		125
Total commercial loans		5,369		4,220		2,615
Residential mortgage loans		3,262		3,262		80
Consumer loans
Home equity		637		637		56
Residential construction loans		3,122		3,122		68
Total individually evaluated impaired loans	$	13,031	$	11,751	$	2,823

Average Recorded Investments in Impaired Loans and Related Amount of Interest Recognized

The following tables present the average recorded investments in impaired loans and the related amount of interest received during the time period in which the loans were impaired for the three and six months ended June 30, 2022 and 2021. The average balances are calculated based on the month-end balances of impaired loans. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method, and therefore no interest income is recognized.

	For the three months ended June 30,
	2022				2021
							Interest
			Interest				income
	Average		received		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment	$	(416)	$	2	$	1,334	$	64
Commercial loans
Commercial other		1,735		20		271		6
Commercial real estate		1,823		66		2,121		30
Residential mortgage loans		2,615		3		4,983		—
Consumer loans
Home equity		554		10		444		5
Residential construction loans		3,102		—		2,805		10
Total	$	9,413	$	101	$	11,958	$	115

	For the six months ended June 30,
	2022				2021
							Interest
			Interest				income
	Average		received		Average		recognized
	recorded		on impaired		recorded		on impaired
(In thousands)	investment		loans		investment		loans
SBA loans held for investment	$	540	$	20	$	1,618	$	81
Commercial loans
SBA 504 loans		—		—		—		—
Commercial other		1,961		45		322		9
Commercial real estate		2,163		87		2,179		85
Residential mortgage loans		2,721		15		5,272		—
Consumer loans
Home equity		563		19		644		23
Consumer other		—		—		—		—
Residential construction loans		3,653		33		2,707		20
Total	$	11,601	$	219	$	12,742	$	218

Loans modified as TDRs including number of modifications and recorded investment

	For the six months ended June 30, 2022
	Number of	Recorded investment
(In thousands, except number of contracts)	contracts	at time of modification
Home equity	2	$	872
Total	2	$	872