Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2022 | Aug. 15, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2022 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Document Transition Report | false | |
Entity File Number | 001-40721 | |
Entity Registrant Name | FINWISE BANCORP | |
Entity Central Index Key | 0001856365 | |
Entity Incorporation, State or Country Code | UT | |
Entity Tax Identification Number | 83-0356689 | |
Entity Address, Address Line One | 756 East Winchester, Suite 100 | |
Entity Address, City or Town | Murray | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84107 | |
City Area Code | 801 | |
Local Phone Number | 501-7200 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | FINW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,884,821 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Cash and cash equivalents | ||
Cash and due from banks | $ 397 | $ 411 |
Interest-bearing deposits | 96,131 | 85,343 |
Total cash and cash equivalents | 96,528 | 85,754 |
Investment securities held-to-maturity, at cost | 12,463 | 11,423 |
Investment in Federal Home Loan Bank (FHLB) stock, at cost | 449 | 378 |
Strategic Program loans held-for-sale, at lower of cost or fair value | 31,599 | 60,748 |
Loans receivable, net | 189,670 | 198,102 |
Premises and equipment, net | 5,834 | 3,285 |
Accrued interest receivable | 1,422 | 1,548 |
Deferred taxes, net | 2,018 | 1,823 |
SBA servicing asset, net | 4,586 | 3,938 |
Investment in Business Funding Group (BFG), at fair value | 4,600 | 5,900 |
Investment in FinWise Investments, LLC | 80 | 80 |
Operating lease right-of-use ("ROU") assets | 6,935 | 0 |
Income tax receivable, net | 1,843 | 0 |
Other assets | 7,960 | 7,235 |
Total assets | 365,987 | 380,214 |
Deposits | ||
Noninterest-bearing | 83,490 | 110,548 |
Interest-bearing | 135,869 | 141,344 |
Total deposits | 219,359 | 251,892 |
Accrued interest payable | 34 | 48 |
Income taxes payable, net | 0 | 233 |
PPP Liquidity Facility | 376 | 1,050 |
Operating lease liabilities | 7,393 | 0 |
Other liabilities | 8,288 | 11,549 |
Total liabilities | 235,450 | 264,772 |
Commitments and contingencies (Note 8) | ||
Shareholders' equity | ||
Preferred stock, $0.001 par value, 4,000,000 authorized; no shares issued and outstanding as of June 30, 2022 and December 31, 2021 | 0 | 0 |
Common stock, $0.001 par value, 40,000,000 shares authorized; 12,884,821 and 12,772,010 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively | 13 | 13 |
Additional paid-in-capital | 55,015 | 54,836 |
Retained earnings | 75,509 | 60,593 |
Total shareholders' equity | 130,537 | 115,442 |
Total liabilities and shareholders' equity | $ 365,987 | $ 380,214 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2022 | Dec. 31, 2021 |
Shareholders' equity | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 4,000,000 | 4,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 40,000,000 | 40,000,000 |
Common stock, shares issued (in shares) | 12,884,821 | 12,772,010 |
Common stock, shares outstanding (in shares) | 12,884,821 | 12,772,010 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Interest income | ||||
Interest and fees on loans | $ 12,864 | $ 11,119 | $ 26,020 | $ 19,909 |
Interest on securities | 44 | 6 | 83 | 12 |
Other interest income | 105 | 10 | 133 | 20 |
Total interest income | 13,013 | 11,135 | 26,236 | 19,941 |
Interest expense | ||||
Interest on deposits | 244 | 291 | 505 | 588 |
Interest on PPP Liquidity Facility | 0 | 42 | 1 | 117 |
Total interest expense | 244 | 333 | 506 | 705 |
Net interest income | 12,769 | 10,802 | 25,730 | 19,236 |
Provision for loan losses | 2,913 | 1,536 | 5,860 | 2,169 |
Net interest income after provision for loan losses | 9,856 | 9,266 | 19,870 | 17,067 |
Non-interest income | ||||
Strategic Program fees | 6,221 | 3,942 | 12,844 | 6,895 |
Gain on sale of loans, net | 2,412 | 2,397 | 7,464 | 5,000 |
SBA loan servicing fees | 342 | 311 | 729 | 463 |
Change in fair value on investment in BFG | (575) | 1,501 | (973) | 1,861 |
Other miscellaneous income | 31 | 10 | 49 | 21 |
Total non-interest income | 8,431 | 8,161 | 20,113 | 14,240 |
Non-interest expense | ||||
Salaries and employee benefits | 7,182 | 5,488 | 14,274 | 10,383 |
Occupancy and equipment expenses | 419 | 203 | 721 | 397 |
(Recovery) impairment of SBA servicing asset | 1,135 | 0 | 1,076 | 0 |
Other operating expenses | 2,283 | 1,388 | 3,996 | 2,962 |
Total non-interest expense | 11,019 | 7,079 | 20,067 | 13,742 |
Income before income tax expense | 7,268 | 10,348 | 19,916 | 17,565 |
Provision for income taxes | 1,786 | 2,609 | 5,000 | 4,535 |
Net income | $ 5,482 | $ 7,739 | $ 14,916 | $ 13,030 |
Earnings per share, basic (in dollars per share) | $ 0.43 | $ 0.89 | $ 1.17 | $ 1.50 |
Earnings per share, diluted (in dollars per share) | $ 0.41 | $ 0.84 | $ 1.10 | $ 1.45 |
Weighted average shares outstanding, basic (in shares) | 12,716,010 | 8,183,774 | 12,698,714 | 8,137,736 |
Weighted average shares outstanding, diluted (in shares) | 13,417,390 | 8,650,956 | 13,444,347 | 8,412,187 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Total |
Beginning balance at Dec. 31, 2020 | $ 9 | $ 16,853 | $ 29,010 | $ 45,872 |
Beginning balance (in shares) at Dec. 31, 2020 | 8,660,334 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 1,255 | 0 | 1,255 |
Stock-based compensation expense (in shares) | 0 | |||
Stock options exercised | $ 0 | 166 | 0 | 166 |
Stock options exercised (in shares) | 55,776 | |||
Net income | $ 0 | 0 | 13,030 | 13,030 |
Ending balance at Jun. 30, 2021 | $ 9 | 18,274 | 42,040 | 60,323 |
Ending balance (in shares) at Jun. 30, 2021 | 8,716,110 | |||
Beginning balance at Mar. 31, 2021 | $ 9 | 18,000 | 34,301 | 52,310 |
Beginning balance (in shares) at Mar. 31, 2021 | 8,716,110 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 274 | 0 | 274 |
Stock-based compensation expense (in shares) | 0 | |||
Net income | $ 0 | 0 | 7,739 | 7,739 |
Ending balance at Jun. 30, 2021 | $ 9 | 18,274 | 42,040 | 60,323 |
Ending balance (in shares) at Jun. 30, 2021 | 8,716,110 | |||
Beginning balance at Dec. 31, 2021 | $ 13 | 54,836 | 60,593 | 115,442 |
Beginning balance (in shares) at Dec. 31, 2021 | 12,772,010 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 139 | 0 | 139 |
Stock-based compensation expense (in shares) | 96,011 | |||
Stock options exercised | $ 0 | 40 | 0 | 40 |
Stock options exercised (in shares) | 16,800 | |||
Net income | $ 0 | 0 | 14,916 | 14,916 |
Ending balance at Jun. 30, 2022 | $ 13 | 55,015 | 75,509 | 130,537 |
Ending balance (in shares) at Jun. 30, 2022 | 12,884,821 | |||
Beginning balance at Mar. 31, 2022 | $ 13 | 54,915 | 70,027 | 124,955 |
Beginning balance (in shares) at Mar. 31, 2022 | 12,788,810 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 100 | 0 | 100 |
Stock-based compensation expense (in shares) | 96,011 | |||
Net income | $ 0 | 0 | 5,482 | 5,482 |
Ending balance at Jun. 30, 2022 | $ 13 | $ 55,015 | $ 75,509 | $ 130,537 |
Ending balance (in shares) at Jun. 30, 2022 | 12,884,821 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 14,916 | $ 13,030 |
Adjustments to reconcile net income to net cash from operating activities | ||
Depreciation and amortization | 754 | 596 |
Provision for loan losses | 5,860 | 2,169 |
Amortization of operating lease ROU asset | 445 | 0 |
Net amortization in securities discounts and premiums | 18 | 14 |
Capitalized servicing assets | (2,243) | (1,760) |
Gain on sale of SBA loans, net | (7,464) | (5,000) |
Originations of Strategic Program loans held-for-sale | (4,436,343) | (2,317,739) |
Proceeds on Strategic Program loans held-for-sale | 4,465,492 | 2,279,911 |
Change in fair value of BFG | 973 | (1,861) |
Impairment of SBA servicing asset | 1,076 | 0 |
Stock-based compensation expense | 139 | 1,255 |
Deferred income tax benefit | (195) | (556) |
Net changes in: | ||
Accrued interest receivable | 126 | 417 |
Accrued interest payable | (14) | (111) |
Other assets | (725) | (1,519) |
Operating lease liabilities | 13 | 0 |
Other liabilities | (5,337) | 5,660 |
Net cash provided by (used in) operating activities | 37,491 | (25,494) |
Cash flows from investing activities: | ||
Net decrease in loans receivable | 10,036 | 67,067 |
Distributions from BFG | 327 | 431 |
Purchase of bank premises and equipment | (2,784) | (416) |
Proceeds from maturities and paydowns of securities held-to-maturity | 917 | 262 |
Purchases of securities held to maturity | (1,975) | 0 |
Purchase of FHLB stock | (71) | (172) |
Net cash provided by investing activities | 6,450 | 67,172 |
Cash flows from financing activities: | ||
Net increase (decrease) in deposits | (32,533) | 34,120 |
Proceeds from exercise of stock options | 40 | 166 |
Proceeds from PPP Liquidity Facility | 0 | 5,558 |
Repayment of PPP Liquidity Facility | (674) | (89,039) |
Net cash used in financing activities | (33,167) | (49,195) |
Net change in cash and cash equivalents | 10,774 | (7,517) |
Cash and cash equivalents, beginning of the period | 85,754 | 47,383 |
Cash and cash equivalents, end of the period | 96,528 | 39,866 |
Cash paid during the period | ||
Income taxes | 7,257 | 5,374 |
Interest | 520 | 816 |
Supplemental disclosures of noncash operating activities: | ||
Right-of-use assets obtained in exchange for operating lease liabilities (ASC 842 adoption effective January 1, 2022) | $ 7,380 | $ 0 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 1 – Summary of Significant Accounting Policies Nature of business and organization – Bancorp is a Utah Corporation headquartered in Murray, Utah and operates all business activities through its wholly-owned banking subsidiary, FinWise Bank, f/k/a Utah Community Bank. FinWise Bank was incorporated in the state of Utah on May 7, 1999. FinWise Bancorp, f/k/a All West Bancorp, was incorporated in the state of Utah on October 22, 2002, after which, it acquired 100% of FinWise Bank. As of March 4, 2016, FinWise Bank’s articles of incorporation were amended to rename the entity FinWise Bank. As of March 15, 2021, FinWise Bancorp’s articles of incorporation were amended and restated to rename the entity FinWise Bancorp. References herein to “FinWise Bancorp,” “Bancorp” or the “holding company,” refer to FinWise Bancorp on a standalone basis. The word “Company” refers to FinWise Bancorp and FinWise Bank collectively and on a consolidated basis. References to the “Bank” refer to FinWise Bank on a standalone basis. On July 15, 2021, the Company publicly filed a Registration Statement on Form S-1 with the SEC in connection with its Initial Public Offering (“IPO”) (the “Registration Statement”), which was subsequently amended on July 30, 2021, August 4, 2021, November 1, 2021, and November 16, 2021. The Registration Statement was declared effective by the SEC on November 18, 2021. In connection with the IPO, the Company issued 4,025,000 shares of common stock, par value of $0.001, which included 525,000 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares. The securities were sold to the public at a price of $10.50 per share and began trading on the Nasdaq Stock Market LLC on November 19, 2021. On November 23, 2021, the closing date of the IPO, the Company received total net proceeds of $39.3 million. The net proceeds less other related expenses, including audit fees, legal fees, listing fees, and other expenses, totaled $35.6 million. The Bank provides a full range of banking services to individual and commercial customers. The Bank’s primary source of revenue is from loans including consumer, Small Business Administration (SBA), commercial, commercial real estate, and residential real estate. The Bank also has established Strategic Programs with various third-party loan origination platforms that use technology to streamline the origination of unsecured consumer and secured or unsecured business loans to borrowers within certain approved credit profiles. The Bank earns monthly program fees based on the volume of loans originated in these Strategic Programs, as well as interest during the time the Bank holds the loans. The Company is subject to competition from other financial institutions and to the regulations of certain federal and state agencies and undergoes periodic examinations by those agencies. COVID-19 On March 11, 2020, the World Health Organization declared COVID-19 to be a global pandemic. Local and national governments and regulatory authorities have systematically implemented remedial measures to try to slow and curb the spread of COVID-19, including business closures and operating restrictions, travel bans, shelter in place, stay home, and similar directives and orders. In response to the COVID-19 pandemic and in adherence with state and local guidelines, the Company has implemented the business continuity plan and other measures and activities to protect the Company’s employees and, at the same time, to assist the Company’s clients and the communities of which the Company is a part, including remote working for the majority of the Company’s employees, increased mobile banking and electronic transaction options for clients, payment deferral assistance to commercial and consumer borrowers, and participation in the SBA’s Paycheck Protection Program (“PPP”) for loans to qualifying small businesses. On March 22, 2020, the federal banking agencies issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus”. This guidance encourages financial institutions to work prudently with borrowers that may be unable to meet their contractual obligations because of the effects of COVID-19. The guidance goes on to explain that in consultation with the Financial Accounting Standards Board (“FASB”) staff that the federal banking agencies concluded that short-term modifications (e.g., six months) made on a good faith basis to borrowers who were current as of the implementation date of a relief program are not troubled debt restructurings (“TDRs”). The Coronavirus Aid, Relief and Economic Security (“CARES”) Act was passed by Congress on March 27, 2020. The CARES Act also addressed COVID-19 related modifications and specified that COVID-19 related modifications on loans that were current as of December 31, 2019 are not TDRs. The Bank has applied this guidance related to payment deferrals and other COVID-19 related loan modifications. The CARES Act also included a total allocation of $659 billion for loans to be issued by financial institutions through the Small Business Administration (“SBA”). This program is known as the Paycheck Protection Program (“PPP”). PPP loans are forgivable, in whole or in part, if the proceeds are used for eligible payroll costs and other permitted purposes in accordance with the requirements of the PPP. These loans carry a fixed rate of 1.00%. PPP loans originated prior to June 5, 2020 have a term of two years, while PPP loans originated on or after June 5, 2020 have a term of five years. Payments are deferred for at least the first six months of the loan and the loans are 100% guaranteed by the SBA. The SBA pays the originating bank a processing fee ranging from 1% to 5%, based on the size of the loan. At June 30, 2022, net deferred loan fees related to PPP loans was a de minimis de minimis Basis of Presentation Certain information and note disclosures usually included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC for the presentation of the Form 10-Q. The unaudited consolidated financial statements presented should be read in conjunction with the Company’s audited consolidated financial statements and notes to the audited consolidated financial statements included in the Company’s December 31, 2021 Annual Report on Form 10-K. Out-of-period adjustment Use of estimates Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities Leases (Topic 842): Targeted Improvements Accounting pronouncements to be adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures |
Investments
Investments | 6 Months Ended |
Jun. 30, 2022 | |
Investments [Abstract] | |
Investments | Note 2 – Investments Investment securities held-to-maturity, at cost The amortized cost, unrealized gains and losses, and estimated fair values of the Company’s held-to-maturity securities at June 30, 2022 and December 31, 2021, are summarized as follows: June 30, 2022 ($ in thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Mortgage-backed securities $ 12,463 $ — $ (1,393 ) $ 11,070 December 31, 2021 ($ in thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Mortgage-backed securities $ 11,423 $ 23 $ (114 ) $ 11,332 The Company had fifteen securities in an unrealized loss position at June 30, 2022 and nine securities in an unrealized loss position at December 31, 2021, as summarized in the following tables: June 30, 2022 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 11,070 $ (1,393 ) $ — $ — $ 11,070 $ (1,393 ) December 31, 2021 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 8,961 $ (114 ) $ — $ — $ 8,961 $ (114 ) The amortized cost and estimated market value of debt securities at June 30, 2022 and December 31, 2021, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2022 December 31, 2021 ($ in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Securities held-to-maturity Due in one year or less $ — $ — $ — $ — Due after one year through five years — — — — Due after five years through ten years 2,328 2,177 1,541 1,548 Due after ten years 10,135 8,893 9,882 9,784 Total Securities held-to-maturity $ 12,463 $ 11,070 $ 11,423 $ 11,332 At June 30, 2022, all held-to-maturity securities were pledged as collateral for a credit line held by the Bank. There were no sales or transfers of investment securities and no realized gains or losses on these securities during the six months ended June 30, 2022 or 2021. FHLB stock The Bank is a member of the FHLB system. Members are required to own FHLB stock of at least the greater of 1% of FHLB membership asset value or 2.7% of outstanding FHLB advances. At June 30, 2022 and December 31, 2021, the Bank owned $0.4 million, respectively, of FHLB stock, which is carried at cost. The Company evaluated the carrying value of its FHLB stock investment at June 30, 2022 and determined that it was not impaired. This evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment from recurring and special dividends, and the Company’s intent and ability to hold this investment for a period of time sufficient to recover our recorded investment. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2022 | |
Loans and Allowance for Loan Losses [Abstract] | |
Loans and Allowance for Loan Losses | Note 3 – Loans and Allowance for Loan Losses Loans are summarized as follows according to major risk category as of June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 ($ in thousands) SBA $ 124,477 $ 142,392 Commercial, non-real estate 7,847 3,428 Residential real estate 30,965 27,108 Strategic Program loans 59,066 85,850 Commercial real estate 4,722 2,436 Consumer 5,062 4,574 Total loans $ 232,139 $ 265,788 Loans held-for-sale (31,599 ) (60,748 ) Total loans held for investment $ 200,540 $ 205,040 Deferred loan costs (fees), net (268 ) 2,917 Allowance for loan losses (10,602 ) (9,855 ) Net loans $ 189,670 $ 198,102 Strategic Program Loans The Company generally retains the loans and/or receivables for a number of business days after origination before selling the loans and/or receivables to the Strategic Program platform or another investor. Interest income is recognized by the Company while holding the loans. These loans are classified as held-for-sale on the balance sheet. The Company may also hold a portion of the loans or receivable and sell the remainder directly to the Strategic Programs or other investors. The Company generally services the loans originated through the Strategic Programs in consideration of servicing fees equal to a percentage of the loans generated under the Strategic Programs. In turn, the Strategic Program service providers, subject to the Company’s approval and oversight, serve as sub-servicer and perform typical primary servicing duties including loan collections, modifications, charging-off, reporting and monitoring. Each Strategic Program establishes a “reserve” deposit account with the Company. The agreements generally require that the deposit reserve account balance does not fall below the dollar amount of the total loans outstanding currently held by the Company for the specific Strategic Program. If necessary, the Company has the right to withdraw amounts from the reserve account to fulfill loan purchaser obligations created under the program agreements. Total cash held in reserve by Strategic Programs at the Company at June 30, 2022 and December 31, 2021, was $24.4 million and $39.6 million, respectively. Strategic Program loans retained and held-for-sale as of June 30, 2022 and December 31, 2021, are summarized as follows: June 30, December 31, 2022 2021 ($ in thousands) Retained Strategic Program loans $ 27,467 $ 25,102 Strategic Program loans held-for-sale 31,599 60,748 Total Strategic Program loans $ 59,066 $ 85,850 Changes in the ALL are summarized as follows: Three Months Ended June 30, 2022 ($ in thousands) SBA Commercial, Non-Real Estate Residential Real Estate Strategic Program Loans Commercial Real Estate Consumer Total Beginning balance $ 3,064 $ 107 $ 411 $ 6,322 $ 21 $ 62 $ 9,987 Charge-offs (102 ) — — (2,560 ) — — (2,662 ) Recoveries 48 1 — 315 — — 364 Provision for loan losses 374 166 4 2,365 1 3 2,913 Balance at end of period $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Loans receivable $ 124,477 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 200,540 Ending balance individually evaluated for impairment 728 — — — — 728 Ending balance collectively evaluated for impairment $ 123,749 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 199,812 Six Months Ended June 30, 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 (133 ) — — (5,438 ) — — (5,571 ) Recoveries 48 2 — 408 — — 458 Provision for loan losses 730 140 63 4,923 1 3 5,860 Balance at end of period $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Loans receivable $ 124,477 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 200,540 Ending balance individually evaluated for impairment 728 — — — — 728 Ending balance collectively evaluated for impairment $ 123,749 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 199,812 Three Months Ended June 30, 2021 ($ in thousands) SBA Commercial, Non-Real Estate Residential Real Estate Strategic Program Loans Commercial Real Estate Consumer Total Beginning balance $ 924 $ 191 $ 855 $ 4,135 $ 19 $ 60 $ 6,184 Charge-offs (47 ) (22 ) — (541 ) — (1 ) (611 ) Recoveries — 81 — 48 — 1 130 Provision for loan losses 100 — — 1,436 — — 1,536 Balance at end of period $ 977 250 855 5,078 19 60 7,239 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Loans receivable $ 128,841 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 174,277 Ending balance individually evaluated for impairment 887 — — — — — 887 Ending balance collectively evaluated for impairment $ 127,954 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 173,390 Six Months Ended June 30, 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 (54 ) (63 ) — (1,199 ) — (3 ) (1,319 ) Recoveries 11 81 — 97 — 1 190 Provision for loan losses 100 — — 2,069 — — 2,169 Balance at end of period $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Loans receivable $ 128,841 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 174,277 Ending balance individually evaluated for impairment 887 — — — — — 887 Ending balance collectively evaluated for impairment $ 127,954 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 173,390 The following tables summarize impaired loans as of June 30, 2022 and December 31, 2021: June 30, 2022 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized ($ in thousands) With no related allowance recorded SBA $ 728 $ 728 $ — $ 850 $ 43 Commercial, non-real estate — — — — — Residential real estate — — — — — Strategic Program loans — — — — — Commercial real estate — — — — — Consumer — — — — — Total $ 728 $ 728 $ — $ 850 $ 43 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 are summarized below as of June 30, 2022 and December 31, 2021: June 30, 2022 ($ in thousands) Current 30-59 Days Past 60-89 Days Past Due 90+ Days Past Due & Still Accruing Total Past Due Non- Total SBA $ 123,844 $ — $ — $ — $ — $ 633 $ 124,477 Commercial, non-real estate 7,847 — — — — — 7,847 Residential real estate 30,965 — — — — — 30,965 Strategic Program loans 57,133 991 770 172 1,933 — 59,066 Commercial real estate 4,722 — — — — — 4,722 Consumer 5,059 — — 3 3 — 5,062 Total $ 229,570 $ 991 $ 770 $ 175 $ 1,936 $ 633 $ 232,139 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 The amount of interest income for the three and six months ended June 30, 2022 and 2021, that was not recorded on nonaccrual loans was de minimis In addition to past due and nonaccrual status criteria, the Company also evaluates loans using a loan grading system. Internal loan grades are based on current financial information, historical payment experience, and credit documentation, among other factors. Performance-based grades are summarized below: Pass (Loan Grades 1-4) Special Mention Classified Substandard Classified Doubtful Classified Loss (Loan Grade 8) – The Company does not currently grade retained Strategic Program loans Outstanding loan balances categorized by these credit quality indicators are summarized as follows at June 30, 2022 and December 31, 2021: June 30, 2022 ($ in thousands) Pass Grade 1-4 Special Mention Grade 5 Classified/ Doubtful/Loss Grade 6-8 Total SBA $ 122,338 $ 1,411 $ 728 $ 124,477 Commercial, non-real estate 7,847 — — 7,847 Residential real estate 30,965 — — 30,965 Commercial real estate 4,722 — — 4,722 Consumer 5,062 — — 5,062 Not Risk Graded Strategic Program loans 59,066 Total $ 170,934 $ 1,411 $ 728 $ 232,139 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 $ 177,485 $ 1,481 $ 972 $ 265,788 Loans modified and recorded as TDR’s at June 30, 2022 and December 31, 2021, consist of the following: ($ in thousands) Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment June 30, 2022 SBA 1 $ 95 $ 95 Total at June 30, 2022 1 $ 95 $ 95 December 31, 2021 SBA 2 $ 106 $ 106 Total at December 31, 2021 2 $ 106 $ 106 Non-Accrual SBA 1 $ 25 $ 25 At June 30, 2022 and December 31, 2021, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR. Loans modified and recorded as TDR’s included modifications to rate and term. There was one principal charge-off recorded related to TDRs during the six months ended June 30, 2022 for $0.01 million. There were no principal charge-offs recorded related to TDRs during the six months ended June 30, 2021. There was no principal charge-off recorded related to TDRs during the three months ended June 30, 2022. There were no principal charge-offs recorded related to TDRs during the three months ended June 30, 2021. During the three and six months ended June 30, 2022 and 2021, there were no loan modifications to TDRs. Separately, one restructured loan incurred a default within 12 months of the restructure date during the six months ended June 30, 2022. This same loan was paid in full with interest on June 2, 2022. One restructured loan incurred a default within 12 months of the restructure date during the six months ended June 30, 2021. This same loan was paid in full with interest on May 28, 2021. |
Premises and Equipment
Premises and Equipment | 6 Months Ended |
Jun. 30, 2022 | |
Premises and Equipment [Abstract] | |
Premises and Equipment | Note 4 – Premises and Equipment Premises and equipment at June 30, 2022 and December 31, 2021, consist of the following: June 30, December 31, 2022 2021 ($ in thousands) Leasehold improvements $ 80 $ 80 Furniture, fixtures, and equipment 3,315 2,219 Construction in progress 4,021 2,333 Total premises and equipment $ 7,416 $ 4,632 Less accumulated depreciation (1,582 ) (1,347 ) Premises and equipment, net $ 5,834 $ 3,285 Depreciation expense was approximately $0.2 million and $0.1 million for the six months ended June 30, 2022 and 2021, respectively. Lease Liabilities The Company leases its facilities under noncancelable operating leases. Rent expense for six months ended June 30, 2022 and 2021 was $0.6 million and $0.3 million, respectively. Future minimum annual rental payments for these operating leases are as follows ($ in thousands): Six Months Ended December 31, 2022 $ 441 Year Ended December 31, 2023 850 Year Ended December 31, 2024 1,104 Year Ended December 31, 2025 1,086 Year Ended December 31, 2026 1,118 Thereafter 3,355 Total 7,954 Less present value discount (561 ) Operating lease liabilities $ 7,393 The Company entered into one lease during the six months ended June 30, 2022 to provide additional space while the Murray office construction is completed. ASC 842 does not apply due to the short-term period of this lease and immateriality. The tables below present information regarding the Company’s lease assets and liabilities. Comparative periods and disclosures are not presented here due to adoption of ASC 842 on January 1, 2022. Six Months Ended June 30, 2022 Weighted-average remaining lease term – operating leases (in years) 7.2 Weighted-average discount rate – operating leases 1.9 % Supplemental cash flow information related to leases were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2022 ($ in thousands) Operating cash flows from operating leases $ 28 $ 56 Right-of-use assets obtained in exchange for operating lease liabilities — 7,380 The components of lease expense were as follows (in thousands): Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 (in thousands) Operating leases Operating lease cost $ 278 $ 514 Variable lease cost 4 8 Operating lease expense 282 522 Short-term lease rent expense 28 28 Net rent expense $ 310 $ 550 |
Deposits
Deposits | 6 Months Ended |
Jun. 30, 2022 | |
Deposits [Abstract] | |
Deposits | Note 5 – Deposits Major classes of deposits at June 30, 2022 and December 31, 2021, are as follows: June 30, December 31, 2022 2021 ($ in thousands) Demand $ 94,850 $ 115,947 Savings 7,462 6,685 Money markets 48,273 31,076 Time certificates of deposit 68,774 98,184 Total deposits $ 219,359 $ 251,892 At June 30, 2022, the scheduled maturities of time deposits are as follows ($ in thousands): Year Ended December 31, 2022 $ 12,666 Year Ended December 31, 2023 21,269 Year Ended December 31, 2024 16,374 Year Ended December 31, 2025 9,243 Year Ended December 31, 2026 8,338 Thereafter 884 Total 68,774 Time deposits with balances equal or greater than $250,000 totaled $3.5 million and $3.7 million at June 30, 2022 and December 31, 2021, respectively. |
SBA Servicing Asset
SBA Servicing Asset | 6 Months Ended |
Jun. 30, 2022 | |
SBA Servicing Asset [Abstract] | |
SBA Servicing Asset | Note 6 – SBA Servicing Asset The Company periodically sells portions of SBA loans and retains rights to service the loans. Loans serviced for others are not included in the accompanying balance sheet. The unpaid principal balances of SBA loans serviced for others was $273.9 million and $210.2 million at June 30, 2022 and December 31, 2021, respectively. The following table summarizes SBA servicing asset activity for the periods indicated: For the Six Months Ended June 30, ($ in thousands) 2022 2021 Beginning balance $ 3,938 $ 2,415 Additions to servicing asset 2,243 1,760 Impairment of SBA servicing asset (1,076 ) — Amortization of servicing asset (519 ) (450 ) Ending balance $ 4,586 $ 3,725 The fair market value of the SBA servicing asset as of June 30, 2022 and December 31, 2021, was $4.6 million and $3.9 million, respectively. Fair value adjustments to servicing rights are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates. A significant change in prepayments of the loans in the servicing portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of servicing rights. The Company assumed a weighted average prepayment rate of 14.12%, weighted average term of 4.30 years, and a weighted average discount rate of 15.78% at June 30, 2022. The Company assumed a weighted average prepayment rate of 14.37%, weighted average term of 4.02 years, and a weighted average discount rate of 11.38% at December 31, 2021. |
Capital Requirements
Capital Requirements | 6 Months Ended |
Jun. 30, 2022 | |
Capital Requirements [Abstract] | |
Capital Requirements | Note 7 – Capital Requirements The Bank is subject to various regulatory capital requirements administered by federal and State of Utah banking agencies (the regulators). Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off -balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk -weighting, and other factors. Prompt corrective action provisions are not applicable to the bank holding company. Beginning January 1, 2020, the bank qualified and elected to use the community bank leverage ratio (CBLR) framework for quantitative measures which requires the Bank to maintain minimum amounts and ratios of Tier 1 capital to average total consolidated assets. Management believes, as of June 30, 2022 and December 31, 2021, that the Bank meets all capital adequacy requirements to which it is subject. As of June 30, 2022 and December 31, 2021, the most recent notification from the FDIC categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action (there are no conditions or events since that notification that management believes have changed the Bank’s category). The following table sets forth the actual capital amounts and ratios for the Bank and the minimum ratio and amount of capital required to be categorized as well-capitalized and adequately capitalized as of the dates indicated. The Bank’s actual capital amounts and ratios are presented in the following table: Actual Well-Capitalized Requirement ($ in thousands) Amount Ratio Amount Ratio June 30, 2022 Leverage ratio (CBLR election) $ 82,381 21.4 % $ 34,625 * 9.0 % December 31, 2021 Leverage ratio (CBLR election) $ 65,503 17.7 % $ 31,442 * 8.5 % * On March 27, 2020 the CARES Act became law. Section 4012 of the CARES Act directs the agencies to issue an interim final rule reducing the CBLR ratio requirement from 9% to 8% for the last two quarters of the year 2020, 8.5% for the calendar year 2021, and 9% thereafter. Federal Reserve Board Regulations require maintenance of certain minimum reserve balances based on certain average deposits. The Bank had no reserve requirements as of June 30, 2022 and December 31, 2021. The Federal Reserve’s policy statement and supervisory guidance on the payment of cash dividends by a Bank Holding Company (“BHC”), such as FinWise Bancorp, expresses the view that a BHC should generally pay cash dividends on common stock only to the extent that (1) the BHC’s net income available over the past year is sufficient to cover the cash dividend, (2) the rate of earnings retention is consistent with the organization’s expected future needs and financial condition, and (3) the minimum regulatory capital adequacy ratios are met. Should an insured depository institution controlled by a bank holding company be “significantly undercapitalized” under the applicable federal bank capital ratios, or if the bank subsidiary is “undercapitalized” and has failed to submit an acceptable capital restoration plan or has materially failed to implement such a plan, federal banking regulators (in the case of the Bank, the FDIC) may choose to require prior Federal Reserve approval for any capital distribution by the BHC. In addition, since FinWise Bancorp is a legal entity separate and distinct from the Bank and does not conduct stand-alone operations, an ability to pay dividends depends on the ability of the Bank to pay dividends to FinWise Bancorp and the FDIC and the Utah Department of Financial Institutions (“UDFI”) may, under certain circumstances, prohibit the payment of dividends to FinWise Bancorp from the Bank. Utah corporate law also requires that dividends can only be paid out of funds legally available. The Company has not paid any cash dividends on its common stock since inception and it currently has no plans to pay cash dividends in the foreseeable future. However, the Company’s Board of Directors may declare a cash or stock dividend out of retained earnings provided the regulatory minimum capital ratios are met. The Company plans to maintain capital ratios that meet the well-capitalized standards per the regulations and, therefore, would limit dividends to amounts that are appropriate to maintain those well-capitalized regulatory capital ratios. |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingent Liabilities [Abstract] | |
Commitments and Contingent Liabilities | Note 8 – Commitments and Contingent Liabilities Federal Home Loan Bank Secured Line of Credit As of June 30, 2022 and December 31, 2021, the Bank’s available line of credit with the FHLB to borrow in overnight funds was $3.2 million and $4.1 million, respectively. All borrowings are short-term and the interest rate is equal to the correspondent bank’s daily federal funds purchase rate. As of June 30, 2022 and December 31, 2021, no amounts were outstanding under the line of credit. Loans totaling $5.0 million and $5.4 million were pledged to secure the FHLB line of credit as of June 30, 2022 and December 31, 2021, respectively. Line of Credit At June 30, 2022 and December 31, 2021, we had the ability to access $10.0 million and $10.9 million from the Federal Reserve Bank’s Discount Window on a collateralized basis. Through Zions Bank, the Bank had an available unsecured line available of $1.0 million at June 30, 2022 and December 31, 2021. The Bank had an available line of credit with Bankers’ Bank of the West to borrow up to $1.05 million in overnight funds at June 30, 2022 and December 31, 2021. We had no outstanding balances on such unsecured or secured lines of credit as of June 30, 2022 and December 31, 2021. Paycheck Protection Program Liquidity Facility On April 20, 2020, the Bank was approved by the Federal Reserve to access its SBA Paycheck Protection Program Liquidity Facility (“PPPLF”) through the discount window. The PPPLF enables the Company to fund PPP loans without taking on additional liquidity or funding risks because the Company is able to pledge PPP loans as collateral to secure extensions of credit under the PPPLF on a non-recourse basis. Borrowings under the PPPLF have a fixed-rate of 0.35%, with a term that matches the underlying loans. The Bank pledged $0.4 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at June 30, 2022. The Bank pledged $1.0 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at December 31, 2021. The average outstanding borrowings were $0.8 million during the six months ended June 30, 2022 and $67.8 million during the six months ended June 30, 2021. Commitments to Extend Credit In the ordinary course of business, the Bank has entered into commitments to extend credit to customers which have not yet been exercised. These financial instruments include commitments to extend credit in the form of loans. Those instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. At June 30, 2022 and December 31, 2021, financial instruments with off-balance-sheet risk were as follows: June 30, December 31, ($ in thousands) 2022 2021 Revolving, open-end lines of credit $ 1,290 $ 1,259 Commercial real estate 23,830 15,402 Other unused commitments 644 377 $ 25,764 $ 17,038 |
Investment in Business Funding
Investment in Business Funding Group, LLC | 6 Months Ended |
Jun. 30, 2022 | |
Investment in Business Funding Group, LLC [Abstract] | |
Investment in Business Funding Group, LLC | Note 9 – Investment in Business Funding Group, LLC On December 31, 2019, the Company purchased from certain members of BFG a 10% membership interest in exchange for an aggregate of 950,784 shares of par value $0.001 Common Stock of the Company. The exchange was accounted for at fair value based on the fair value of the Company’s shares of approximately $3.5 million. The Company’s 10% membership interests of BFG are comprised of Class A Voting Units representing 4.96% of the aggregate membership interests of BFG and Class B Non-Voting Units representing 5.04% of the aggregate membership interests of BFG. The other existing members of BFG jointly own the remaining 90% of the outstanding membership interests, on a fully-diluted basis – all of which membership interests are Class A Voting Units. Based on the Company’s accounting policy with respect to investments in limited liability companies, the Company concluded that its level of ownership was indicative of significant influence and, as a result, the investment would be accounted for using the equity method. However, the Company elected the fair value option for its investment due to cost-benefit considerations. The Company received distributions from BFG in the amounts of $0.3 million and $0.4 million for the six months ended June 30, 2022 and 2021, respectively. These distributions were recorded in the Consolidated Balance Sheets as decreases in the investment in BFG. On March 31, 2020, the Company entered into an agreement with BFG whereby the Company has the right of first refusal to purchase additional interests in BFG from any selling members. Additionally, the Company was granted an option to purchase all, but not less than all, of the interests in BFG from the remaining members for an earnings multiple between 10 times and 15 times net profit based on the fiscal year ended immediately prior to the exercise of the option. The option period begins on January 1, 2021 and expires on January 1, 2028. In consideration of granting the first right of refusal and the option, BFG members received 270,000 warrants in the aggregate. The warrants have an exercise price of $6.67 per share and the warrants expire on March 31, 2028. The warrants are free-standing equity instruments and, as a result, are classified within equity at the fair value on the issuance date. The fair value of the warrants was determined by our board of directors with input from management, relying in part upon valuation reports prepared by a third-party valuation firm using a Black-Scholes option pricing model adjusted for a lack of marketability since the Company’s stock is not publicly traded. The resulting fair value of the warrants was $0.19 per share. For further discussion on the Company’s investment in BFG, see Note 13 Related Parties. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 10 – Stock-Based Compensation Stock option plans The Company utilizes stock-based compensation plans, as well as discretionary grants, for employees, directors and consultants to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentives and to promote the success of the Company’s business. The 2019 Stock Option Plan (“2019 Plan”) was adopted on June 20, 2019 following approval by the Company’s Board of Directors and shareholders. The 2019 Plan provides for the issuance of non-statutory stock options and restricted stock to employees, directors and consultants. The 2019 Plan also provides for the issuance of incentive stock options only to employees. On April 19, 2022, the Company’s Board of Directors approved an amendment of the 2019 Plan to change its name from the All West Bancorporation 2019 Stock Option Plan to the FinWise Bancorp 2019 Stock Option Plan and to increase the number of shares of the Company’s common stock available for awards under the 2019 Plan by 500,000 shares to 1,280,000 shares, subject to shareholder approval. The Company’s shareholders approved the name change and increase in the number of shares at the Company’s 2022 Annual Meeting of Shareholders on June 9, 2022. The 2019 Plan will terminate as to future awards 10 years from the later of the effective date or the earlier of the most recent Board or stockholder approval of an increase in the number of shares reserved for issuance under the 2019 Plan. At June 30, 2022, 645,178 shares are available for future issuance. The 2016 Stock Option Plan (“2016 Plan”) was adopted on April 20, 2017 following approval by the Company’s Board of Directors and shareholders. The 2016 Plan provides for the issuance of non-statutory stock options and restricted stock to employees, directors and consultants. The 2016 Plan also provides for the issuance of incentive stock options only to employees. The 2016 Plan authorizes the issuance of 299,628 common shares. The 2016 Plan will terminate as to future awards 10 years from the later of the effective date or the earlier of the most recent Board or stockholder approval of an increase in the number of shares reserved for issuance under the 2016 Plan. At June 30, 2022, 54 shares under 2016 Plan are available for future issuance. The stock-based incentive awards for both the 2019 Plan and the 2016 Plan (collectively, the “Plans”) are granted at an exercise price not less than the fair market value of the shares on the date of grant, which is based on a Black-Scholes valuation model, in the case of options, or based on the fair value of the stock at the grant date, in the case of restricted stock. Vesting of the options vary by employee or director and can have a term no more than 10 years, with the options generally having vesting periods ranging from 1 to 5 years. No shares had been granted under the 2016 Plan prior to 2018. Under both Plans, if an award expires or becomes un-exercisable without having been exercised in full, or is surrendered pursuant to an exchange program, the unpurchased shares that were subject thereto shall become available for future grant or sale under the Plans. However, shares that have actually been issued under the Plans, upon exercise of an award, shall not be returned to the Plans and shall not become available for future distribution under the Plans, except that if unvested shares of restricted stock are repurchased by the Company at their original purchase price, such shares shall become available for future grant under the Plans. Other stock-based compensation On June 9, 2022, the Board approved a restricted stock discretionary grant of 96,011 shares with an aggregate fair value of $1.3 million from the 2019 Plan to certain executives. Granted shares vest ratably over three years based on achievement of specific levels of the Company’s return on average assets (ROAA) and, subject to the terms and conditions of the grant agreements, will be fully vested on June 9, 2025. On December 24, 2019, the Board approved a restricted stock discretionary grant of 1,072,746 shares to certain employees. Pursuant to the awards agreement, 351,852 shares vested on the grant date and were repurchased by the Company on December 31, 2019 to pay for employee withholding taxes. Pursuant to the awards agreement, 73,770 shares subsequently vested and were repurchased by the Company on April 6, 2020 to pay for employee income taxes. Granted shares vest based on the accelerated attribution method on a schedule where all shares would be fully vested on December 1, 2023. On November 18, 2021, pursuant to the awards agreement, the 424,458 remaining unvested shares became vested because the Company’s registration statement was declared effective. Stock options The grant date fair value is determined using the Black-Scholes option valuation model. The assumptions for expected life reflected management’s judgment and include consideration of historical experience. Expected volatility is based on data from comparable public companies for the expected option term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant for periods corresponding with the expected life of the option. Expected forfeitures are estimated based on the Company’s historical forfeiture experience. Management believes that the assumptions used in the option-pricing model are highly subjective and represent only one estimate of possible value, as there is no active market for the options granted. The table below summarizes the assumptions used: For the Six Months Ended June 30, 2022 2021 Risk-free interest rate 3.10 % 0.4% – 0.7 % Expected term in years 5.5 – 6.5 5.0 – 7.5 Expected volatility 45.8% – 46.7 % 45.7% – 47.6 % Expected dividend yield — — The following summarizes stock option activity for the three months and six months ended June 30, 2022: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at March 31, 2022 839,028 $ 4.46 8.0 $ 10,645,951 Options granted 89,415 13.04 9.9 — Options forfeited (3,160 ) 4.40 — 16,158 Outstanding at June 30, 2022 925,283 $ 5.29 8.0 $ 4,091,633 Options vested and exercisable at June 30, 2022 607,608 $ 4.56 7.8 $ 2,898,340 Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2021 862,488 $ 4.41 8.2 $ 8,088,660 Options granted 89,415 13.04 9.9 — Options exercised (16,800 ) 2.37 — 248,312 Options forfeited (9,820 ) 3.64 — 108,515 Outstanding at June 30 2022 925,283 $ 5.29 8.0 $ 4,091,633 Options vested and exercisable at June 30 2022 607,608 $ 4.56 7.8 $ 2,898,340 The weighted average grant-date fair value of options per share granted during the six months ended June 30, 2022 was $6.26 . The aggregate intrinsic value of options exercised during the six months ended June 30, 2022 was $0.2 million. During the six months ended June 30, 2022, the Company received de minimis de minimis The weighted average grant-date fair value of options per share granted during the six months ended June 30, 2021 was $1.48. The aggregate intrinsic value of options exercised during the six months ended June 30, 2021 was $0.3 million. During the six months ended June 30, 2021, the Company received $0.2 million de minimis Stock-based compensation expense The following tables present pre-tax and after-tax stock-based compensation expense recognized: For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Pre-tax Stock options $ 54 $ 75 $ 93 $ 822 Restricted shares 46 199 46 433 Total $ 100 $ 274 $ 139 $ 1,255 After-tax Stock options $ 53 $ 32 $ 91 $ 713 Restricted shares 46 153 46 631 Total $ 99 $ 185 $ 137 $ 1,344 As of June 30, 2022, the Company had unrecognized stock-based compensation expense related to stock options and restricted stock of approximately $0.7 million and $1.2 million, respectively, which is expected to be recognized over the remaining weighted average recognition period of 2.0 years. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 11 – Fair Value of Financial Instruments The Company measures and discloses certain assets and liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (that is, not a forced liquidation or distressed sale). GAAP establishes a consistent framework for measuring fair value and disclosure requirements about fair value measurements. Among other things, the standard requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s estimates for market assumptions. These two types of inputs create the following fair value hierarchy. Level 1 Level 2 Level 3 The estimated fair value amounts of financial instruments have been determined by the Company using available market information and appropriate valuation methodologies. However, considerable judgment is required to interpret data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize at a future date. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. In addition, reasonable comparability between financial institutions may not be likely due to the wide range of permitted valuation techniques and numerous estimates that must be made given the absence of active secondary markets for many of the financial instruments. This lack of uniform valuation methodologies also introduces a greater degree of subjectivity to these estimated fair values. Transfers between levels of the fair value hierarchy are deemed to occur at the end of the reporting period. The following methods were used to estimate the fair value of each class of financial instruments: Cash and cash equivalents Investment securities held-to-maturity Investment in Federal Home Loan Bank stock Strategic Program loans held-for-sale Loans held for investment SBA servicing asset Investment in BFG discount to non-voting shares to arrive at fair value as of June 30, 2022 and December 31, 2021. The calculation of fair value utilized significant unobservable inputs, including projected cash flows, growth rates, and discount rates. The fair value of the investment in BFG was $4.6 million and $5.9 million as of June 30, 2022 and December 31, 2021, respectively. The following table summarizes investment in BFG activity for the periods indicated: For the Six Months Ended June 30, ($ in thousands) 2022 2021 Beginning balance $ 5,900 $ 3,770 Distributions from BFG (327 ) (431 ) Change in fair value of BFG (973 ) 1,861 Ending balance $ 4,600 $ 5,200 Deposits Accrued interest receivable and payable PPP Liquidity Facility The fair value of PPPLF is estimated using a discounted cash flow based on the remaining contractual term and current borrowing rates for similar terms. June 30, 2022 December 31, 2021 ($ in thousands) Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets: Cash and cash equivalents 1 $ 96,528 $ 96,528 $ 85,754 $ 85,754 Investment securities held-to-maturity 2 12,463 11,070 11,423 11,332 Investment in FHLB stock 2 449 449 378 378 Loans held for investment 3 189,670 196,654 198,102 197,412 Loans held-for-sale 2 31,599 31,594 60,748 60,743 Accrued interest receivable 2 1,422 1,422 1,548 1,548 SBA servicing asset 2 4,586 4,586 3,938 3,938 Investment in BFG 3 4,600 4,600 5,900 5,900 Financial liabilities: Total deposits 2 219,359 204,221 251,892 249,488 Accrued interest payable 2 34 34 48 48 PPP Liquidity Facility 2 376 376 1,050 1,050 Assets measured at fair value on a nonrecurring basis are summarized as follows: ($ in thousands) Fair Value Measurements Using Description of Financial Instrument Fair Value Level 1 Level 2 Level 3 June 30 2022 Nonrecurring assets Impaired loans $ 728 $ — $ — $ 728 December 31, 2021 Nonrecurring assets Impaired loans $ 972 $ — $ — $ 972 Impaired loans Quantitative information for Level 3 fair value measurements The range and weighted average of the significant unobservable inputs used to fair value Level 3 nonrecurring assets as of June 30, 2022 and as of December 31, 2021, along with the valuation techniques used, are shown in the following table: ($ in thousands) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) June 30 2022 Impaired loans $ 728 Market comparable Adjustment to appraisal value 0.38 % December 31, 2021 Impaired loans $ 972 Market comparable Adjustment to appraisal value 0.50 % The range and weighted average of the significant unobservable inputs used to fair value the investment June 30, 2022 December 31, 2021 ($ in thousands) Range (Weighted Average) Range (Weighted Average) Discounted Cash Flows Revenue growth rate 14.6 % 16.6 % Expense growth rate 14.3 % 16.3 % Discount rate 30.0 % 25.0 % Guideline Public Company Multiples of enterprise value 3.0x to 5.0x 4.0x to 6.0x |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2022 | |
Income Taxes [Abstract] | |
Income Taxes | Note 12 – Income Taxes The Company accounts for income taxes by recognizing deferred tax assets and liabilities based upon temporary differences between the amounts for financial reporting purposes and tax basis of its assets and liabilities. Deferred tax assets increased $0.2 million during the six months ended June 30, 2022 as a result of changes to temporary timing differences associated with accounting for bad debts. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion, or all, of the deferred tax asset will not be realized. In assessing the realization of deferred tax assets, management evaluates both positive and negative evidence, including the forecasts of future income, applicable tax planning strategies, and assessments of current and future economic and business conditions. This analysis is updated quarterly and adjusted as necessary. Based on this analysis, management has determined that a valuation allowance for deferred tax assets was not required at June 30, 2022. For the six months ended June 30, 2022 and 2021, income tax expense was $5.0 million and $4.5 million, respectively, resulting in an effective income tax rate of 25.1% and 25.8%, respectively. The effective tax rate differs from the statutory rate of 24.9% during the six months ended June 30, 2022 and 2021 due primarily to state taxes and the tax effect of stock-based compensation. The Company had no unrecognized tax benefits at June 30, 2022. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2022 | |
Related Parties [Abstract] | |
Related Parties | Note 13 – Related Parties In the ordinary course of business, the Company may grant loans to certain executive officers and directors and the companies with which they are associated. The Company had loans outstanding to related parties of $0.0 million as of June 30, 2022 and December 31, 2021. Total deposits from certain executive officers and directors and the companies with which they are associated were $0.8 million and $0.5 million as of June 30, 2022 and December 31, 2021, respectively. BFG is a small business loan broker, primarily under the SBA’s 7(a) loan program. As noted in Note 9 Investments above, the Company has a 10% ownership in the outstanding membership units of BFG. The Company underwrites loans sourced by BFG in its normal course of business. If approved and funded, the Company pays BFG a commission fee based on the amount funded. There is no guarantee or commitment made by the Company to BFG to approve or fund loans referred by BFG. The Company is able to use its sole discretion in deciding to approve and fund loans referred by BFG. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Share [Abstract] | |
Earnings per Share | Note 14 – Earnings per Share The following table is a reconciliation of the components used to derive basic and diluted EPS for the three and six months ended June 30, 2022 and 2021 ($ in thousands, except share and per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Numerator: Net income $ 5,482 $ 7,739 $ 14,916 $ 13,030 Amount allocated to participating common shareholders (1) (41 ) (473 ) (112 ) (838 ) Net income allocate to common shareholders $ 5,441 $ 7,266 $ 14,804 $ 12,192 Denominator: Weighted average shares outstanding, basic 12,716,010 8,183,774 $ 12,698,714 8,137,736 Weighted average effect of dilutive securities: Stock options 558,855 408,841 589,091 245,280 Warrants 142,525 58,341 156,542 29,171 Weighted average shares outstanding, diluted 13,417,390 8,650,956 13,444,347 8,412,187 Earnings per share, basic $ 0.43 $ 0.89 $ 1.17 $ 1.50 Earnings per share, diluted $ 0.41 $ 0.84 $ 1.10 $ 1.45 (1) Represents earnings attributable to holders of unvested restricted stock issued outside of the 2016 Plan and 2019 Plan to the Company’s employees for the three or six months ended June 30, 2021. There were 336,192 and 684,648 anti-dilutive options for the six months ended June 30, 2022 and 2021, respectively, reported in the table above. There were 113,458 shares and 240,829 anti-dilutive warrants for the six months ended June 30, 2022 and 2021, respectively, reported in the table above. |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 15 – Revenue Recognition The following is a summary of the Company’s revenue disaggregated by contracts with customers and revenue outside the scope of ASC 606: For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Interest income Interest income, not-in-scope Interest and fees on loans $ 12,864 $ 11,119 $ 26,020 $ 19,909 Interest on securities 44 6 83 12 Other interest income 105 10 133 20 Total interest income $ 13,013 $ 11,135 $ 26,236 $ 19,941 Non-interest income Non-interest income, in-scope Service charges on deposit accounts $ 7 $ 7 $ 15 $ 13 Strategic Program set up fees 48 19 97 19 Non-interest income, not in-scope Strategic Program fees 5,878 3,847 12,044 6,720 Gain on sale of loans 2,412 2,397 7,464 5,000 SBA loan servicing fees 342 311 729 463 Change in fair value on investment in BFG (575 ) 1,501 (973 ) 1,861 Other miscellaneous income 24 3 34 8 Strategic Program service charges 295 76 703 156 Total non-interest income $ 8,431 $ 8,161 $ 20,113 $ 14,240 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 – Subsequent Events Subsequent events are events or transactions that occur after the date of the most recent balance sheet but before the financial statements are available to be issued. The Company recognizes in the financial statements the effects of all subsequent events that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing of the financial statements. The Company’s financial statements do not recognize subsequent events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after the date of the balance sheet and before the financial statements are available to be issued. The Company has evaluated subsequent events through August 15, 2022, which is the date the unaudited consolidated financial statements are available to be issued. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2022 | |
Summary of Significant Accounting Policies [Abstract] | |
Nature of business and organization | Nature of business and organization – Bancorp is a Utah Corporation headquartered in Murray, Utah and operates all business activities through its wholly-owned banking subsidiary, FinWise Bank, f/k/a Utah Community Bank. FinWise Bank was incorporated in the state of Utah on May 7, 1999. FinWise Bancorp, f/k/a All West Bancorp, was incorporated in the state of Utah on October 22, 2002, after which, it acquired 100% of FinWise Bank. As of March 4, 2016, FinWise Bank’s articles of incorporation were amended to rename the entity FinWise Bank. As of March 15, 2021, FinWise Bancorp’s articles of incorporation were amended and restated to rename the entity FinWise Bancorp. References herein to “FinWise Bancorp,” “Bancorp” or the “holding company,” refer to FinWise Bancorp on a standalone basis. The word “Company” refers to FinWise Bancorp and FinWise Bank collectively and on a consolidated basis. References to the “Bank” refer to FinWise Bank on a standalone basis. On July 15, 2021, the Company publicly filed a Registration Statement on Form S-1 with the SEC in connection with its Initial Public Offering (“IPO”) (the “Registration Statement”), which was subsequently amended on July 30, 2021, August 4, 2021, November 1, 2021, and November 16, 2021. The Registration Statement was declared effective by the SEC on November 18, 2021. In connection with the IPO, the Company issued 4,025,000 shares of common stock, par value of $0.001, which included 525,000 shares sold pursuant to the underwriters’ exercise of their option to purchase additional shares. The securities were sold to the public at a price of $10.50 per share and began trading on the Nasdaq Stock Market LLC on November 19, 2021. On November 23, 2021, the closing date of the IPO, the Company received total net proceeds of $39.3 million. The net proceeds less other related expenses, including audit fees, legal fees, listing fees, and other expenses, totaled $35.6 million. The Bank provides a full range of banking services to individual and commercial customers. The Bank’s primary source of revenue is from loans including consumer, Small Business Administration (SBA), commercial, commercial real estate, and residential real estate. The Bank also has established Strategic Programs with various third-party loan origination platforms that use technology to streamline the origination of unsecured consumer and secured or unsecured business loans to borrowers within certain approved credit profiles. The Bank earns monthly program fees based on the volume of loans originated in these Strategic Programs, as well as interest during the time the Bank holds the loans. The Company is subject to competition from other financial institutions and to the regulations of certain federal and state agencies and undergoes periodic examinations by those agencies. |
Basis of Presentation | Basis of Presentation Certain information and note disclosures usually included in financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the SEC for the presentation of the Form 10-Q. The unaudited consolidated financial statements presented should be read in conjunction with the Company’s audited consolidated financial statements and notes to the audited consolidated financial statements included in the Company’s December 31, 2021 Annual Report on Form 10-K. |
Use of estimates | Use of estimates |
Out-of-period adjustment | Out-of-period adjustment |
Recently adopted and to be adopted accounting pronouncements | Recently adopted accounting pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain Entities Leases (Topic 842): Targeted Improvements Accounting pronouncements to be adopted In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326) In March 2022, the FASB issued ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Investments [Abstract] | |
Amortized Cost, Unrealized Gains and Losses, and Estimated Fair Values of Held-to-Maturity Securities | The amortized cost, unrealized gains and losses, and estimated fair values of the Company’s held-to-maturity securities at June 30, 2022 and December 31, 2021, are summarized as follows: June 30, 2022 ($ in thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Mortgage-backed securities $ 12,463 $ — $ (1,393 ) $ 11,070 December 31, 2021 ($ in thousands) Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value Mortgage-backed securities $ 11,423 $ 23 $ (114 ) $ 11,332 |
Fair Value and Unrealized Losses of Securities in Unrealized Loss Position | The Company had fifteen securities in an unrealized loss position at June 30, 2022 and nine securities in an unrealized loss position at December 31, 2021, as summarized in the following tables: June 30, 2022 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 11,070 $ (1,393 ) $ — $ — $ 11,070 $ (1,393 ) December 31, 2021 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Mortgage-backed securities $ 8,961 $ (114 ) $ — $ — $ 8,961 $ (114 ) |
Amortized Cost and Estimated Market Value of Debt Securities | The amortized cost and estimated market value of debt securities at June 30, 2022 and December 31, 2021, by contractual maturity are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2022 December 31, 2021 ($ in thousands) Amortized Cost Estimated Fair Value Amortized Cost Estimated Fair Value Securities held-to-maturity Due in one year or less $ — $ — $ — $ — Due after one year through five years — — — — Due after five years through ten years 2,328 2,177 1,541 1,548 Due after ten years 10,135 8,893 9,882 9,784 Total Securities held-to-maturity $ 12,463 $ 11,070 $ 11,423 $ 11,332 |
Loans and Allowance for Loan _2
Loans and Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 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 June 30, 2022 and December 31, 2021: June 30, December 31, 2022 2021 ($ in thousands) SBA $ 124,477 $ 142,392 Commercial, non-real estate 7,847 3,428 Residential real estate 30,965 27,108 Strategic Program loans 59,066 85,850 Commercial real estate 4,722 2,436 Consumer 5,062 4,574 Total loans $ 232,139 $ 265,788 Loans held-for-sale (31,599 ) (60,748 ) Total loans held for investment $ 200,540 $ 205,040 Deferred loan costs (fees), net (268 ) 2,917 Allowance for loan losses (10,602 ) (9,855 ) Net loans $ 189,670 $ 198,102 |
Strategic Program Loans Retained and Held-for-sale | Strategic Program loans retained and held-for-sale as of June 30, 2022 and December 31, 2021, are summarized as follows: June 30, December 31, 2022 2021 ($ in thousands) Retained Strategic Program loans $ 27,467 $ 25,102 Strategic Program loans held-for-sale 31,599 60,748 Total Strategic Program loans $ 59,066 $ 85,850 |
Changes in Allowance for Loan Losses | Changes in the ALL are summarized as follows: Three Months Ended June 30, 2022 ($ in thousands) SBA Commercial, Non-Real Estate Residential Real Estate Strategic Program Loans Commercial Real Estate Consumer Total Beginning balance $ 3,064 $ 107 $ 411 $ 6,322 $ 21 $ 62 $ 9,987 Charge-offs (102 ) — — (2,560 ) — — (2,662 ) Recoveries 48 1 — 315 — — 364 Provision for loan losses 374 166 4 2,365 1 3 2,913 Balance at end of period $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Loans receivable $ 124,477 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 200,540 Ending balance individually evaluated for impairment 728 — — — — 728 Ending balance collectively evaluated for impairment $ 123,749 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 199,812 Six Months Ended June 30, 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 (133 ) — — (5,438 ) — — (5,571 ) Recoveries 48 2 — 408 — — 458 Provision for loan losses 730 140 63 4,923 1 3 5,860 Balance at end of period $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 3,384 $ 274 $ 415 $ 6,442 $ 22 $ 65 $ 10,602 Loans receivable $ 124,477 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 200,540 Ending balance individually evaluated for impairment 728 — — — — 728 Ending balance collectively evaluated for impairment $ 123,749 $ 7,847 $ 30,965 $ 27,467 $ 4,722 $ 5,062 $ 199,812 Three Months Ended June 30, 2021 ($ in thousands) SBA Commercial, Non-Real Estate Residential Real Estate Strategic Program Loans Commercial Real Estate Consumer Total Beginning balance $ 924 $ 191 $ 855 $ 4,135 $ 19 $ 60 $ 6,184 Charge-offs (47 ) (22 ) — (541 ) — (1 ) (611 ) Recoveries — 81 — 48 — 1 130 Provision for loan losses 100 — — 1,436 — — 1,536 Balance at end of period $ 977 250 855 5,078 19 60 7,239 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Loans receivable $ 128,841 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 174,277 Ending balance individually evaluated for impairment 887 — — — — — 887 Ending balance collectively evaluated for impairment $ 127,954 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 173,390 Six Months Ended June 30, 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 (54 ) (63 ) — (1,199 ) — (3 ) (1,319 ) Recoveries 11 81 — 97 — 1 190 Provision for loan losses 100 — — 2,069 — — 2,169 Balance at end of period $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Ending balance individually evaluated for impairment — — — — — — — Ending balance collectively evaluated for impairment $ 977 $ 250 $ 855 $ 5,078 $ 19 $ 60 $ 7,239 Loans receivable $ 128,841 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 174,277 Ending balance individually evaluated for impairment 887 — — — — — 887 Ending balance collectively evaluated for impairment $ 127,954 $ 3,627 $ 22,410 $ 12,459 $ 2,316 $ 4,624 $ 173,390 |
Impaired Loans | The following tables summarize impaired loans as of June 30, 2022 and December 31, 2021: June 30, 2022 Recorded Investment Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized ($ in thousands) With no related allowance recorded SBA $ 728 $ 728 $ — $ 850 $ 43 Commercial, non-real estate — — — — — Residential real estate — — — — — Strategic Program loans — — — — — Commercial real estate — — — — — Consumer — — — — — Total $ 728 $ 728 $ — $ 850 $ 43 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 June 30, 2022 and December 31, 2021: June 30, 2022 ($ in thousands) Current 30-59 Days Past 60-89 Days Past Due 90+ Days Past Due & Still Accruing Total Past Due Non- Total SBA $ 123,844 $ — $ — $ — $ — $ 633 $ 124,477 Commercial, non-real estate 7,847 — — — — — 7,847 Residential real estate 30,965 — — — — — 30,965 Strategic Program loans 57,133 991 770 172 1,933 — 59,066 Commercial real estate 4,722 — — — — — 4,722 Consumer 5,059 — — 3 3 — 5,062 Total $ 229,570 $ 991 $ 770 $ 175 $ 1,936 $ 633 $ 232,139 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 June 30, 2022 and December 31, 2021: June 30, 2022 ($ in thousands) Pass Grade 1-4 Special Mention Grade 5 Classified/ Doubtful/Loss Grade 6-8 Total SBA $ 122,338 $ 1,411 $ 728 $ 124,477 Commercial, non-real estate 7,847 — — 7,847 Residential real estate 30,965 — — 30,965 Commercial real estate 4,722 — — 4,722 Consumer 5,062 — — 5,062 Not Risk Graded Strategic Program loans 59,066 Total $ 170,934 $ 1,411 $ 728 $ 232,139 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 $ 177,485 $ 1,481 $ 972 $ 265,788 |
Loans Modified and Recorded as TDR's | Loans modified and recorded as TDR’s at June 30, 2022 and December 31, 2021, consist of the following: ($ in thousands) Number of Contracts Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment June 30, 2022 SBA 1 $ 95 $ 95 Total at June 30, 2022 1 $ 95 $ 95 December 31, 2021 SBA 2 $ 106 $ 106 Total at December 31, 2021 2 $ 106 $ 106 Non-Accrual SBA 1 $ 25 $ 25 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Premises and Equipment [Abstract] | |
Components of Premises and Equipment | Premises and equipment at June 30, 2022 and December 31, 2021, consist of the following: June 30, December 31, 2022 2021 ($ in thousands) Leasehold improvements $ 80 $ 80 Furniture, fixtures, and equipment 3,315 2,219 Construction in progress 4,021 2,333 Total premises and equipment $ 7,416 $ 4,632 Less accumulated depreciation (1,582 ) (1,347 ) Premises and equipment, net $ 5,834 $ 3,285 |
Future Minimum Annual Rental Payments for Operating Leases | Future minimum annual rental payments for these operating leases are as follows ($ in thousands): Six Months Ended December 31, 2022 $ 441 Year Ended December 31, 2023 850 Year Ended December 31, 2024 1,104 Year Ended December 31, 2025 1,086 Year Ended December 31, 2026 1,118 Thereafter 3,355 Total 7,954 Less present value discount (561 ) Operating lease liabilities $ 7,393 |
Information Regarding Lease Assets and Liabilities | The tables below present information regarding the Company’s lease assets and liabilities. Comparative periods and disclosures are not presented here due to adoption of ASC 842 on January 1, 2022. Six Months Ended June 30, 2022 Weighted-average remaining lease term – operating leases (in years) 7.2 Weighted-average discount rate – operating leases 1.9 % |
Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases were as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2022 2022 ($ in thousands) Operating cash flows from operating leases $ 28 $ 56 Right-of-use assets obtained in exchange for operating lease liabilities — 7,380 |
Components of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended June 30, 2022 Six Months Ended June 30, 2022 (in thousands) Operating leases Operating lease cost $ 278 $ 514 Variable lease cost 4 8 Operating lease expense 282 522 Short-term lease rent expense 28 28 Net rent expense $ 310 $ 550 |
Deposits (Tables)
Deposits (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Deposits [Abstract] | |
Major Classes of Deposits | Major classes of deposits at June 30, 2022 and December 31, 2021, are as follows: June 30, December 31, 2022 2021 ($ in thousands) Demand $ 94,850 $ 115,947 Savings 7,462 6,685 Money markets 48,273 31,076 Time certificates of deposit 68,774 98,184 Total deposits $ 219,359 $ 251,892 |
Maturities of Time Deposits | At June 30, 2022, the scheduled maturities of time deposits are as follows ($ in thousands): Year Ended December 31, 2022 $ 12,666 Year Ended December 31, 2023 21,269 Year Ended December 31, 2024 16,374 Year Ended December 31, 2025 9,243 Year Ended December 31, 2026 8,338 Thereafter 884 Total 68,774 |
SBA Servicing Asset (Tables)
SBA Servicing Asset (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
SBA Servicing Asset [Abstract] | |
SBA Servicing Asset Activity | The following table summarizes SBA servicing asset activity for the periods indicated: For the Six Months Ended June 30, ($ in thousands) 2022 2021 Beginning balance $ 3,938 $ 2,415 Additions to servicing asset 2,243 1,760 Impairment of SBA servicing asset (1,076 ) — Amortization of servicing asset (519 ) (450 ) Ending balance $ 4,586 $ 3,725 |
Capital Requirements (Tables)
Capital Requirements (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Capital Requirements [Abstract] | |
Capital Amounts and Ratios | The Bank’s actual capital amounts and ratios are presented in the following table: Actual Well-Capitalized Requirement ($ in thousands) Amount Ratio Amount Ratio June 30, 2022 Leverage ratio (CBLR election) $ 82,381 21.4 % $ 34,625 * 9.0 % December 31, 2021 Leverage ratio (CBLR election) $ 65,503 17.7 % $ 31,442 * 8.5 % * On March 27, 2020 the CARES Act became law. Section 4012 of the CARES Act directs the agencies to issue an interim final rule reducing the CBLR ratio requirement from 9% to 8% for the last two quarters of the year 2020, 8.5% for the calendar year 2021, and 9% thereafter. |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Commitments and Contingent Liabilities [Abstract] | |
Financial Instruments with Off-balance Sheet Risk | At June 30, 2022 and December 31, 2021, financial instruments with off-balance-sheet risk were as follows: June 30, December 31, ($ in thousands) 2022 2021 Revolving, open-end lines of credit $ 1,290 $ 1,259 Commercial real estate 23,830 15,402 Other unused commitments 644 377 $ 25,764 $ 17,038 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Stock-Based Compensation [Abstract] | |
Summary of Assumptions Used | The table below summarizes the assumptions used: For the Six Months Ended June 30, 2022 2021 Risk-free interest rate 3.10 % 0.4% – 0.7 % Expected term in years 5.5 – 6.5 5.0 – 7.5 Expected volatility 45.8% – 46.7 % 45.7% – 47.6 % Expected dividend yield — — |
Stock Option Activity | The following summarizes stock option activity for the three months and six months ended June 30, 2022: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at March 31, 2022 839,028 $ 4.46 8.0 $ 10,645,951 Options granted 89,415 13.04 9.9 — Options forfeited (3,160 ) 4.40 — 16,158 Outstanding at June 30, 2022 925,283 $ 5.29 8.0 $ 4,091,633 Options vested and exercisable at June 30, 2022 607,608 $ 4.56 7.8 $ 2,898,340 Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2021 862,488 $ 4.41 8.2 $ 8,088,660 Options granted 89,415 13.04 9.9 — Options exercised (16,800 ) 2.37 — 248,312 Options forfeited (9,820 ) 3.64 — 108,515 Outstanding at June 30 2022 925,283 $ 5.29 8.0 $ 4,091,633 Options vested and exercisable at June 30 2022 607,608 $ 4.56 7.8 $ 2,898,340 |
Pre-Tax and After-Tax Stock-Based Compensation Expense | The following tables present pre-tax and after-tax stock-based compensation expense recognized: For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Pre-tax Stock options $ 54 $ 75 $ 93 $ 822 Restricted shares 46 199 46 433 Total $ 100 $ 274 $ 139 $ 1,255 After-tax Stock options $ 53 $ 32 $ 91 $ 713 Restricted shares 46 153 46 631 Total $ 99 $ 185 $ 137 $ 1,344 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Fair Value of Financial Instruments [Abstract] | |
Investment in BFG Activity | The following table summarizes investment in BFG activity for the periods indicated: For the Six Months Ended June 30, ($ in thousands) 2022 2021 Beginning balance $ 5,900 $ 3,770 Distributions from BFG (327 ) (431 ) Change in fair value of BFG (973 ) 1,861 Ending balance $ 4,600 $ 5,200 |
Estimated Fair Value and Carrying Value of Financial Instrument | The fair value of PPPLF is estimated using a discounted cash flow based on the remaining contractual term and current borrowing rates for similar terms. June 30, 2022 December 31, 2021 ($ in thousands) Level Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Financial assets: Cash and cash equivalents 1 $ 96,528 $ 96,528 $ 85,754 $ 85,754 Investment securities held-to-maturity 2 12,463 11,070 11,423 11,332 Investment in FHLB stock 2 449 449 378 378 Loans held for investment 3 189,670 196,654 198,102 197,412 Loans held-for-sale 2 31,599 31,594 60,748 60,743 Accrued interest receivable 2 1,422 1,422 1,548 1,548 SBA servicing asset 2 4,586 4,586 3,938 3,938 Investment in BFG 3 4,600 4,600 5,900 5,900 Financial liabilities: Total deposits 2 219,359 204,221 251,892 249,488 Accrued interest payable 2 34 34 48 48 PPP Liquidity Facility 2 376 376 1,050 1,050 |
Assets Measured at Fair Value on a Nonrecurring Basis | Assets measured at fair value on a nonrecurring basis are summarized as follows: ($ in thousands) Fair Value Measurements Using Description of Financial Instrument Fair Value Level 1 Level 2 Level 3 June 30 2022 Nonrecurring assets Impaired loans $ 728 $ — $ — $ 728 December 31, 2021 Nonrecurring assets Impaired loans $ 972 $ — $ — $ 972 |
Quantitative Information for Level 3 Fair Value Measurements | The range and weighted average of the significant unobservable inputs used to fair value Level 3 nonrecurring assets as of June 30, 2022 and as of December 31, 2021, along with the valuation techniques used, are shown in the following table: ($ in thousands) Fair Value Valuation Technique Unobservable Input Range (Weighted Average) June 30 2022 Impaired loans $ 728 Market comparable Adjustment to appraisal value 0.38 % December 31, 2021 Impaired loans $ 972 Market comparable Adjustment to appraisal value 0.50 % |
Significant Unobservable Inputs Used to Fair Value Investment in BFG on Recurring Asset | The range and weighted average of the significant unobservable inputs used to fair value the investment June 30, 2022 December 31, 2021 ($ in thousands) Range (Weighted Average) Range (Weighted Average) Discounted Cash Flows Revenue growth rate 14.6 % 16.6 % Expense growth rate 14.3 % 16.3 % Discount rate 30.0 % 25.0 % Guideline Public Company Multiples of enterprise value 3.0x to 5.0x 4.0x to 6.0x |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Earnings per Share [Abstract] | |
Basic and Diluted EPS | The following table is a reconciliation of the components used to derive basic and diluted EPS for the three and six months ended June 30, 2022 and 2021 ($ in thousands, except share and per share amounts): For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Numerator: Net income $ 5,482 $ 7,739 $ 14,916 $ 13,030 Amount allocated to participating common shareholders (1) (41 ) (473 ) (112 ) (838 ) Net income allocate to common shareholders $ 5,441 $ 7,266 $ 14,804 $ 12,192 Denominator: Weighted average shares outstanding, basic 12,716,010 8,183,774 $ 12,698,714 8,137,736 Weighted average effect of dilutive securities: Stock options 558,855 408,841 589,091 245,280 Warrants 142,525 58,341 156,542 29,171 Weighted average shares outstanding, diluted 13,417,390 8,650,956 13,444,347 8,412,187 Earnings per share, basic $ 0.43 $ 0.89 $ 1.17 $ 1.50 Earnings per share, diluted $ 0.41 $ 0.84 $ 1.10 $ 1.45 (1) Represents earnings attributable to holders of unvested restricted stock issued outside of the 2016 Plan and 2019 Plan to the Company’s employees for the three or six months ended June 30, 2021. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2022 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | The following is a summary of the Company’s revenue disaggregated by contracts with customers and revenue outside the scope of ASC 606: For the Three Months Ended June 30, For the Six Months Ended June 30, ($ in thousands) 2022 2021 2022 2021 Interest income Interest income, not-in-scope Interest and fees on loans $ 12,864 $ 11,119 $ 26,020 $ 19,909 Interest on securities 44 6 83 12 Other interest income 105 10 133 20 Total interest income $ 13,013 $ 11,135 $ 26,236 $ 19,941 Non-interest income Non-interest income, in-scope Service charges on deposit accounts $ 7 $ 7 $ 15 $ 13 Strategic Program set up fees 48 19 97 19 Non-interest income, not in-scope Strategic Program fees 5,878 3,847 12,044 6,720 Gain on sale of loans 2,412 2,397 7,464 5,000 SBA loan servicing fees 342 311 729 463 Change in fair value on investment in BFG (575 ) 1,501 (973 ) 1,861 Other miscellaneous income 24 3 34 8 Strategic Program service charges 295 76 703 156 Total non-interest income $ 8,431 $ 8,161 $ 20,113 $ 14,240 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies, Nature of Business and Organization (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 23, 2021 | Jul. 15, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Nov. 19, 2021 |
Nature of Business and Organization [Abstract] | |||||
Common stock, shares issued (in shares) | 12,884,821 | 12,772,010 | |||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Net proceeds | $ 39.3 | ||||
Other expenses | $ 35.6 | ||||
Initial Public Offering [Member] | |||||
Nature of Business and Organization [Abstract] | |||||
Common stock, shares issued (in shares) | 4,025,000 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Number of shares sold pursuant to the underwriters (in shares) | 525,000 | ||||
Sale of stock, share price (in dollars per share) | $ 10.50 | ||||
FinWise Bank [Member] | |||||
Nature of Business and Organization [Abstract] | |||||
Percentage of business acquired | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, COVID-19 (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
COVID-19 [Abstract] | ||
Principal outstanding | $ 189,670 | $ 198,102 |
PPP Loans [Member] | ||
COVID-19 [Abstract] | ||
Percentage of guaranteed payments by SBA | 100% | |
Forgiveness of loan received from SBA | $ 125,200 | |
Amount of principal payments made | 400 | 300 |
Principal outstanding | $ 700 | $ 1,100 |
PPP Loans [Member] | Minimum [Member] | ||
COVID-19 [Abstract] | ||
Percentage of loan processing fee | 1% | |
PPP Loans [Member] | Maximum [Member] | ||
COVID-19 [Abstract] | ||
Percentage of loan processing fee | 5% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Out-of-Period Adjustment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Out-of-Period Adjustment [Abstract] | |||||
Interest and fee on loans and loans receivable, net | $ 12,864 | $ 11,119 | $ 26,020 | $ 19,909 | |
Adjustment [Member] | |||||
Out-of-Period Adjustment [Abstract] | |||||
Interest and fee on loans and loans receivable, net | $ (800) | ||||
Interest and fees, net of tax, on loans and loans receivable, net | $ (600) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Recently adopted accounting pronouncements (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Recently Adopted Accounting Pronouncements [Abstract] | ||
Assets | $ 365,987 | $ 380,214 |
Liabilities | 235,450 | $ 264,772 |
ASU 2018-11 [Member] | Cumulative Effect, Period of Adoption, Adjustment [Member] | ||
Recently Adopted Accounting Pronouncements [Abstract] | ||
Assets | 7,400 | |
Liabilities | $ 7,400 |
Investments, Held-to-Maturity S
Investments, Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Securities held-to-maturity [Abstract] | ||
Amortized cost | $ 12,463 | $ 11,423 |
Estimated fair value | 11,070 | 11,332 |
Mortgage-Backed Securities [Member] | ||
Securities held-to-maturity [Abstract] | ||
Amortized cost | 12,463 | 11,423 |
Unrealized gain | 0 | 23 |
Unrealized loss | (1,393) | (114) |
Estimated fair value | $ 11,070 | $ 11,332 |
Investments, Unrealized Loss Po
Investments, Unrealized Loss Position (Details) $ in Thousands | Jun. 30, 2022 USD ($) Securities | Dec. 31, 2021 USD ($) Securities |
Securities in Unrealized Loss Position [Abstract] | ||
Number of securities in unrealized loss position | Securities | 15 | 9 |
Mortgage-Backed Securities [Member] | ||
Securities in Unrealized Loss Position [Abstract] | ||
Less Than 12 Months, Fair Value | $ 11,070 | $ 8,961 |
Less Than 12 Months, Unrealized Losses | (1,393) | (114) |
12 Months or More, Fair Value | 0 | 0 |
12 Months or More, Unrealized Losses | 0 | 0 |
Total, Fair Value | 11,070 | 8,961 |
Total, Unrealized Losses | $ (1,393) | $ (114) |
Investments, Amortized Cost and
Investments, Amortized Cost and Estimated Market Value of Debt Securities (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Securities Held-to-Maturity, Amortized Cost [Abstract] | |||
Due in one year or less | $ 0 | $ 0 | |
Due after one year through five years | 0 | 0 | |
Due after five years through ten years | 2,328 | 1,541 | |
Due after ten years | 10,135 | 9,882 | |
Amortized cost | 12,463 | 11,423 | |
Securities Held-to-Maturity, Estimated Fair Value [Abstract] | |||
Due in one year or less | 0 | 0 | |
Due after one year through five years | 0 | 0 | |
Due after five years through ten years | 2,177 | 1,548 | |
Due after ten years | 8,893 | 9,784 | |
Estimated fair value | 11,070 | $ 11,332 | |
Sale of investment securities | 0 | $ 0 | |
Realized gains or losses | $ 0 | $ 0 |
Investments, FHLB Stock (Detail
Investments, FHLB Stock (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Investments [Abstract] | ||
FHLB stock to be held as percentage of membership asset value | 1% | |
FHLB stock to be held as percentage of FHLB advances outstanding | 2.70% | |
Investment in Federal Home Loan Bank (FHLB) stock, at cost | $ 449 | $ 378 |
Loans and Allowance for Loan _3
Loans and Allowance for Loan Losses, Loans Summarized to Major Risk Category (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Loans to Major Risk Category [Abstract] | ||||||
Total loans | $ 232,139 | $ 265,788 | ||||
Loans held-for-sale | (31,599) | (60,748) | ||||
Total loans held for investment | 200,540 | 205,040 | $ 174,277 | |||
Deferred loan costs (fees), net | (268) | 2,917 | ||||
Allowance for loan losses | (10,602) | $ (9,987) | (9,855) | (7,239) | $ (6,184) | $ (6,199) |
Net loans | 189,670 | 198,102 | ||||
Commercial, Non-Real Estate [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 7,847 | 3,428 | ||||
Total loans held for investment | 7,847 | 3,627 | ||||
Allowance for loan losses | (274) | (107) | (132) | (250) | (191) | (232) |
Residential Real Estate [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 30,965 | 27,108 | ||||
Total loans held for investment | 30,965 | 22,410 | ||||
Allowance for loan losses | (415) | (411) | (352) | (855) | (855) | (855) |
Strategic Program Loans [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 59,066 | 85,850 | ||||
Loans held-for-sale | (31,599) | (60,748) | ||||
Total loans held for investment | 27,467 | 12,459 | ||||
Allowance for loan losses | (6,442) | (6,322) | (6,549) | (5,078) | (4,135) | (4,111) |
Commercial Real Estate [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 4,722 | 2,436 | ||||
Total loans held for investment | 4,722 | 2,316 | ||||
Allowance for loan losses | (22) | (21) | (21) | (19) | (19) | (19) |
Consumer [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 5,062 | 4,574 | ||||
Total loans held for investment | 5,062 | 4,624 | ||||
Allowance for loan losses | (65) | (62) | (62) | (60) | (60) | (62) |
SBA [Member] | ||||||
Loans to Major Risk Category [Abstract] | ||||||
Total loans | 124,477 | 142,392 | ||||
Total loans held for investment | 124,477 | 128,841 | ||||
Allowance for loan losses | $ (3,384) | $ (3,064) | $ (2,739) | $ (977) | $ (924) | $ (920) |
Loans and Allowance for Loan _4
Loans and Allowance for Loan Losses, Strategic Program Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Strategic Program Loans retained and Held-for-sale [Abstract] | ||
Loans held-for-sale | $ 31,599 | $ 60,748 |
Strategic Program Loans [Member] | ||
Strategic Program Loans retained and Held-for-sale [Abstract] | ||
Cash held in reserve by strategic programs | 24,400 | 39,600 |
Retained loans | 27,467 | 25,102 |
Loans held-for-sale | 31,599 | 60,748 |
Total loans | $ 59,066 | $ 85,850 |
Loans and Allowance for Loan _5
Loans and Allowance for Loan Losses, Changes in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | $ 9,987 | $ 6,184 | $ 9,855 | $ 6,199 | |
Charge-offs | (2,662) | (611) | (5,571) | (1,319) | |
Recoveries | 364 | 130 | 458 | 190 | |
Provision for loan losses | 2,913 | 1,536 | 5,860 | 2,169 | |
Ending balance | 10,602 | 7,239 | 10,602 | 7,239 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 10,602 | 7,239 | 10,602 | 7,239 | |
Total loans | 200,540 | 174,277 | 200,540 | 174,277 | $ 205,040 |
Ending balance individually evaluated for impairment | 728 | 887 | 728 | 887 | |
Ending balance collectively evaluated for impairment | 199,812 | 173,390 | 199,812 | 173,390 | |
Commercial, Non-Real Estate [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 107 | 191 | 132 | 232 | |
Charge-offs | 0 | (22) | 0 | (63) | |
Recoveries | 1 | 81 | 2 | 81 | |
Provision for loan losses | 166 | 0 | 140 | 0 | |
Ending balance | 274 | 250 | 274 | 250 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 274 | 250 | 274 | 250 | |
Total loans | 7,847 | 3,627 | 7,847 | 3,627 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 7,847 | 3,627 | 7,847 | 3,627 | |
Residential Real Estate [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 411 | 855 | 352 | 855 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for loan losses | 4 | 0 | 63 | 0 | |
Ending balance | 415 | 855 | 415 | 855 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 415 | 855 | 415 | 855 | |
Total loans | 30,965 | 22,410 | 30,965 | 22,410 | |
Ending balance individually evaluated for impairment | 0 | 0 | |||
Ending balance collectively evaluated for impairment | 30,965 | 22,410 | 30,965 | 22,410 | |
Strategic Program Loans [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 6,322 | 4,135 | 6,549 | 4,111 | |
Charge-offs | (2,560) | (541) | (5,438) | (1,199) | |
Recoveries | 315 | 48 | 408 | 97 | |
Provision for loan losses | 2,365 | 1,436 | 4,923 | 2,069 | |
Ending balance | 6,442 | 5,078 | 6,442 | 5,078 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 6,442 | 5,078 | 6,442 | 5,078 | |
Total loans | 27,467 | 12,459 | 27,467 | 12,459 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 27,467 | 12,459 | 27,467 | 12,459 | |
Commercial Real Estate [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 21 | 19 | 21 | 19 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for loan losses | 1 | 0 | 1 | 0 | |
Ending balance | 22 | 19 | 22 | 19 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 22 | 19 | 22 | 19 | |
Total loans | 4,722 | 2,316 | 4,722 | 2,316 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 4,722 | 2,316 | 4,722 | 2,316 | |
Consumer [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 62 | 60 | 62 | 62 | |
Charge-offs | 0 | (1) | 0 | (3) | |
Recoveries | 0 | 1 | 0 | 1 | |
Provision for loan losses | 3 | 0 | 3 | 0 | |
Ending balance | 65 | 60 | 65 | 60 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 65 | 60 | 65 | 60 | |
Total loans | 5,062 | 4,624 | 5,062 | 4,624 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 5,062 | 4,624 | 5,062 | 4,624 | |
SBA [Member] | |||||
Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 3,064 | 924 | 2,739 | 920 | |
Charge-offs | (102) | (47) | (133) | (54) | |
Recoveries | 48 | 0 | 48 | 11 | |
Provision for loan losses | 374 | 100 | 730 | 100 | |
Ending balance | 3,384 | 977 | 3,384 | 977 | |
Ending balance individually evaluated for impairment | 0 | 0 | 0 | 0 | |
Ending balance collectively evaluated for impairment | 3,384 | 977 | 3,384 | 977 | |
Total loans | 124,477 | 128,841 | 124,477 | 128,841 | |
Ending balance individually evaluated for impairment | 728 | 887 | 728 | 887 | |
Ending balance collectively evaluated for impairment | $ 123,749 | $ 127,954 | $ 123,749 | $ 127,954 |
Loans and Allowance for Loan _6
Loans and Allowance for Loan Losses, Impaired Loans (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2022 | Dec. 31, 2021 | |
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | $ 728 | $ 972 |
Unpaid Principal Balance | 728 | 972 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 850 | 1,134 |
Interest Income Recognized | 43 | 47 |
Commercial, Non-Real Estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
Residential Real Estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 189 |
Interest Income Recognized | 0 | 0 |
Strategic Program Loans [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
Commercial Real Estate [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
Consumer [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 0 | 0 |
Unpaid Principal Balance | 0 | 0 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 0 | 0 |
Interest Income Recognized | 0 | 0 |
SBA [Member] | ||
Impaired Financing Receivable, Recorded Investment [Abstract] | ||
Recorded Investment | 728 | 972 |
Unpaid Principal Balance | 728 | 972 |
Related Allowance | 0 | 0 |
Average Recorded Investment | 850 | 945 |
Interest Income Recognized | $ 43 | $ 47 |
Loans and Allowance for Loan _7
Loans and Allowance for Loan Losses, Nonaccrual and Past Due Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | $ 633 | $ 657 |
Total loans | 232,139 | 265,788 |
Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 229,570 | 263,079 |
30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 991 | 1,308 |
60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 770 | 690 |
90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 175 | 54 |
Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 1,936 | 2,052 |
Commercial, Non-Real Estate [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 0 | 0 |
Total loans | 7,847 | 3,428 |
Commercial, Non-Real Estate [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 7,847 | 3,428 |
Commercial, Non-Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial, Non-Real Estate [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial, Non-Real Estate [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial, Non-Real Estate [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 0 | 0 |
Total loans | 30,965 | 27,108 |
Residential Real Estate [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 30,965 | 27,108 |
Residential Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Strategic Program Loans [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 0 | 0 |
Total loans | 59,066 | 85,850 |
Strategic Program Loans [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 57,133 | 84,065 |
Strategic Program Loans [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 991 | 1,041 |
Strategic Program Loans [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 770 | 690 |
Strategic Program Loans [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 172 | 54 |
Strategic Program Loans [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 1,933 | 1,785 |
Commercial Real Estate [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 0 | 0 |
Total loans | 4,722 | 2,436 |
Commercial Real Estate [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 4,722 | 2,436 |
Commercial Real Estate [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial Real Estate [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial Real Estate [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Commercial Real Estate [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Consumer [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 0 | 0 |
Total loans | 5,062 | 4,574 |
Consumer [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 5,059 | 4,554 |
Consumer [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 20 |
Consumer [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
Consumer [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 3 | 0 |
Consumer [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 3 | 20 |
SBA [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Non-accrual | 633 | 657 |
Total loans | 124,477 | 142,392 |
SBA [Member] | Current [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 123,844 | 141,488 |
SBA [Member] | 30-59 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 247 |
SBA [Member] | 60-89 Days Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
SBA [Member] | 90+ Days Past Due & Still Accruing [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | 0 | 0 |
SBA [Member] | Past Due [Member] | ||
Non-accrual and Past Due Loans [Abstract] | ||
Total loans | $ 0 | $ 247 |
Loans and Allowance for Loan _8
Loans and Allowance for Loan Losses, Outstanding Loan Balances Categorized by Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | $ 232,139 | $ 265,788 |
Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 170,934 | 177,485 |
Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 1,411 | 1,481 |
Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 728 | 972 |
Commercial, Non-Real Estate [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 7,847 | 3,428 |
Commercial, Non-Real Estate [Member] | Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 7,847 | 3,382 |
Commercial, Non-Real Estate [Member] | Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 46 |
Commercial, Non-Real Estate [Member] | Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 30,965 | 27,108 |
Residential Real Estate [Member] | Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 30,965 | 27,108 |
Residential Real Estate [Member] | Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Residential Real Estate [Member] | Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Commercial Real Estate [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 4,722 | 2,436 |
Commercial Real Estate [Member] | Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 4,722 | 2,436 |
Commercial Real Estate [Member] | Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Commercial Real Estate [Member] | Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Consumer [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 5,062 | 4,574 |
Consumer [Member] | Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 5,062 | 4,574 |
Consumer [Member] | Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Consumer [Member] | Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 0 | 0 |
Strategic Program Loans [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 59,066 | 85,850 |
SBA [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 124,477 | 142,392 |
SBA [Member] | Pass Grade 1-4 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 122,338 | 139,985 |
SBA [Member] | Special Mention Grade 5 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | 1,411 | 1,435 |
SBA [Member] | Classified/Doubtful/Loss Grade 6-8 [Member] | ||
Loans and Leases Receivable, Net of Deferred Income [Abstract] | ||
Total loans | $ 728 | $ 972 |
Loans and Allowance for Loan _9
Loans and Allowance for Loan Losses, TDR's (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 USD ($) Loan | Jun. 30, 2021 USD ($) Loan | Jun. 30, 2022 USD ($) Contract Loan | Jun. 30, 2021 USD ($) Loan | Dec. 31, 2021 USD ($) Contract | |
Loans Modified and Recorded as TDR [Abstract] | |||||
Number of contracts | Contract | 1 | 2 | |||
Pre-modification outstanding recorded investment | $ 95 | $ 106 | |||
Post-modification outstanding recorded investment | 95 | 106 | |||
Modified Troubled Debt Restructuring [Abstract] | |||||
Commitments to lend additional funds to debtors | $ 0 | $ 0 | $ 0 | ||
Number of principal charge-offs related to TDRs | Loan | 1 | ||||
Charge-offs related to TDRs | $ 0 | $ 0 | $ 10 | $ 0 | |
Number of new loans modification | Loan | 0 | 0 | 0 | 0 | |
Number of restructured loans | Loan | 1 | 1 | |||
SBA [Member] | |||||
Loans Modified and Recorded as TDR [Abstract] | |||||
Number of contracts | Contract | 1 | 2 | |||
Pre-modification outstanding recorded investment | $ 95 | $ 106 | |||
Post-modification outstanding recorded investment | $ 95 | $ 106 | |||
Non-Accrual of Troubled Debt Restructuring [Abstract] | |||||
Number of contracts | Contract | 1 | ||||
Pre-modification outstanding recorded investment | $ 25 | ||||
Post-modification outstanding recorded investment | $ 25 |
Premises and Equipment (Details
Premises and Equipment (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 USD ($) Lease | Jun. 30, 2022 USD ($) Lease | Jun. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Premises and Equipment [Abstract] | ||||
Total premises and equipment | $ 7,416 | $ 7,416 | $ 4,632 | |
Less accumulated depreciation | (1,582) | (1,582) | (1,347) | |
Premises and equipment, net | 5,834 | 5,834 | 3,285 | |
Depreciation expense | 200 | $ 100 | ||
Future Minimum Annual Rental Payments for Operating Leases [Abstract] | ||||
Six Months Ended December 31, 2022 | 441 | 441 | ||
Year Ended December 31, 2023 | 850 | 850 | ||
Year Ended December 31, 2024 | 1,104 | 1,104 | ||
Year Ended December 31, 2025 | 1,086 | 1,086 | ||
Year Ended December 31, 2026 | 1,118 | 1,118 | ||
Thereafter | 3,355 | 3,355 | ||
Total | 7,954 | 7,954 | ||
Less present value discount | (561) | (561) | ||
Operating lease liabilities | $ 7,393 | $ 7,393 | 0 | |
Number of leases entered into during period | Lease | 1 | 1 | ||
Information Regarding Lease Assets and Liabilities [Abstract] | ||||
Weighted-average remaining lease term - operating leases (in years) | 7 years 2 months 12 days | 7 years 2 months 12 days | ||
Weighted-average discount rate - operating leases | 1.90% | 1.90% | ||
Supplemental Cash Flow Information Related to Leases [Abstract] | ||||
Operating cash flows from operating leases | $ 28 | $ 56 | ||
Right-of-use assets obtained in exchange for operating lease liabilities | 0 | 7,380 | 0 | |
Components of Lease Expense [Abstract] | ||||
Operating leases, operating lease cost | 278 | 514 | ||
Operating leases, variable lease cost | 4 | 8 | ||
Operating lease expense | 282 | 522 | ||
Short-term lease rent expense | 28 | 28 | ||
Net rent expense | 310 | 550 | $ 300 | |
Leasehold Improvements [Member] | ||||
Premises and Equipment [Abstract] | ||||
Total premises and equipment | 80 | 80 | 80 | |
Furniture, Fixtures and Equipment [Member] | ||||
Premises and Equipment [Abstract] | ||||
Total premises and equipment | 3,315 | 3,315 | 2,219 | |
Construction in Progress [Member] | ||||
Premises and Equipment [Abstract] | ||||
Total premises and equipment | $ 4,021 | $ 4,021 | $ 2,333 |
Deposits (Details)
Deposits (Details) - USD ($) | Jun. 30, 2022 | Dec. 31, 2021 |
Major classes of deposits [Abstract] | ||
Demand | $ 94,850,000 | $ 115,947,000 |
Savings | 7,462,000 | 6,685,000 |
Money markets | 48,273,000 | 31,076,000 |
Time certificates of deposit | 68,774,000 | 98,184,000 |
Total deposits | 219,359,000 | 251,892,000 |
Maturities of time deposits [Abstract] | ||
Year Ended December 31, 2022 | 12,666,000 | |
Year Ended December 31, 2023 | 21,269,000 | |
Year Ended December 31, 2024 | 16,374,000 | |
Year Ended December 31, 2025 | 9,243,000 | |
Year Ended December 31, 2026 | 8,338,000 | |
Thereafter | 884,000 | |
Total | 68,774,000 | 98,184,000 |
FDIC insurance limit on deposit accounts | 250,000 | 250,000 |
Time deposits equal or greater than FDIC insurance limits | $ 3,500,000 | $ 3,700,000 |
SBA Servicing Asset (Details)
SBA Servicing Asset (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
SBA Servicing Asset [Abstract] | |||
SBA loans serviced for others | $ 273,900 | $ 210,200 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | |||
Beginning balance | 3,938 | $ 2,415 | 2,415 |
Additions to servicing asset | 2,243 | 1,760 | |
Impairment of SBA servicing asset | (1,076) | 0 | |
Amortization of servicing asset | (519) | (450) | |
Ending balance | 4,586 | $ 3,725 | 3,938 |
Fair market value of SBA servicing asset | $ 4,600 | $ 3,900 | |
Weighted average prepayment rate | 14.12% | 14.37% | |
Weighted average term | 4 years 3 months 18 days | 4 years 7 days | |
Weighted average discount rate | 15.78% | 11.38% |
Capital Requirements, Actual Ca
Capital Requirements, Actual Capital Amounts and Ratios (Details) $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Leverage Ratio (CBLR Election), Amount [Abstract] | |||
Actual Amount | $ 82,381 | $ 65,503 | |
Well-Capitalized Requirement Amount | [1] | $ 34,625 | $ 31,442 |
Leverage Ratio (CBLR Election), Ratio [Abstract] | |||
Actual Ratio | 0.214 | 0.177 | |
Well Capitalized Requirement Ratio | 0.090 | 0.085 | |
Minimum bank reserve balance | $ 0 | $ 0 | |
[1]On March 27, 2020 the CARES Act became law. Section 4012 of the CARES Act directs the agencies to issue an interim final rule reducing the CBLR ratio requirement from 9% to 8% for the last two quarters of the year 2020, 8.5% for the calendar year 2021, and 9% thereafter. |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities, Federal Home Loan Bank Secured Line of Credit (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | Apr. 20, 2020 | |
Paycheck Protection Program Liquidity Facility [Member] | ||||
Federal Home Loan Bank Secured Line of Credit [Abstract] | ||||
Line of credit to borrow in overnight funds | $ 400 | $ 1,000 | ||
Borrowings Fixed-rate of interest | 0.35% | |||
Average outstanding borrowings | 800 | $ 67,800 | ||
Line of Credit [Member] | ||||
Federal Home Loan Bank Secured Line of Credit [Abstract] | ||||
Outstanding line of credit | 0 | 0 | ||
Federal Reserve Bank borrowings on collateral | 10,000 | 10,900 | ||
Zion Bank [Member] | Line of Credit [Member] | ||||
Federal Home Loan Bank Secured Line of Credit [Abstract] | ||||
Unsecured line | 1,000 | 1,000 | ||
Bank of the West [Member] | Line of Credit [Member] | ||||
Federal Home Loan Bank Secured Line of Credit [Abstract] | ||||
Line of credit to borrow in overnight funds | 1,050 | 1,050 | ||
Federal Home Loan Bank Secured Line of Credit [Member] | ||||
Federal Home Loan Bank Secured Line of Credit [Abstract] | ||||
Line of credit to borrow in overnight funds | 3,200 | 4,100 | ||
Outstanding line of credit | 0 | 0 | ||
Loans pledged to secure line of credit | $ 5,000 | $ 5,400 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities, Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Financial Instruments with Off-Balance Sheet Risk [Abstract] | ||
Financial instruments with off-balance-sheet risk | $ 25,764 | $ 17,038 |
Commercial Real Estate [Member] | ||
Financial Instruments with Off-Balance Sheet Risk [Abstract] | ||
Financial instruments with off-balance-sheet risk | 23,830 | 15,402 |
Revolving, Open-End Lines of Credit [Member] | ||
Financial Instruments with Off-Balance Sheet Risk [Abstract] | ||
Financial instruments with off-balance-sheet risk | 1,290 | 1,259 |
Other Unused Commitments [Member] | ||
Financial Instruments with Off-Balance Sheet Risk [Abstract] | ||
Financial instruments with off-balance-sheet risk | $ 644 | $ 377 |
Investment in Business Fundin_2
Investment in Business Funding Group, LLC (Details) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2022 USD ($) $ / shares | Jun. 30, 2021 USD ($) | Dec. 31, 2019 USD ($) $ / shares shares | Dec. 31, 2021 $ / shares | Mar. 31, 2020 $ / shares shares | |
Investment in Business Funding Group, LLC [Abstract] | |||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Investment Business Funding Group, LLC [Member] | |||||
Investment in Business Funding Group, LLC [Abstract] | |||||
Membership interest | 10% | 10% | |||
Aggregate value of shares exchanged (in shares) | shares | 950,784 | ||||
Common stock, par value (in dollars per share) | $ 0.001 | ||||
Fair value of shares exchanged | $ | $ 3.5 | ||||
Membership interests held by other existing members | 90% | ||||
Distributions received | $ | $ 0.3 | $ 0.4 | |||
Warrants issued (in shares) | shares | 270,000 | ||||
Warrants exercise price (in dollars per share) | $ 6.67 | ||||
Fair value of warrants issued per share (in dollars per share) | $ 0.19 | ||||
Investment Business Funding Group, LLC [Member] | Minimum [Member] | |||||
Investment in Business Funding Group, LLC [Abstract] | |||||
Earnings multiplier | 10 | ||||
Investment Business Funding Group, LLC [Member] | Maximum [Member] | |||||
Investment in Business Funding Group, LLC [Abstract] | |||||
Earnings multiplier | 15 | ||||
Investment Business Funding Group, LLC [Member] | Class A Voting Units [Member] | |||||
Investment in Business Funding Group, LLC [Abstract] | |||||
Membership interest | 4.96% | ||||
Investment Business Funding Group, LLC [Member] | Class B Non-Voting Units [Member] | |||||
Investment in Business Funding Group, LLC [Abstract] | |||||
Membership interest | 5.04% |
Stock-Based Compensation, Summa
Stock-Based Compensation, Summary (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||||||
Jun. 09, 2022 | Nov. 18, 2021 | Apr. 06, 2020 | Dec. 24, 2019 | Jun. 30, 2022 | Dec. 31, 2019 | Dec. 31, 2018 | Apr. 19, 2022 | |
2019 Plan [Member] | Employee [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
Number of shares authorized for issuance (in shares) | 1,280,000 | 500,000 | ||||||
Future awards life | 10 years | |||||||
Number of shares available for grant (in shares) | 645,178 | |||||||
2016 Plan [Member] | Employee [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
Number of shares authorized for issuance (in shares) | 299,628 | |||||||
Future awards life | 10 years | |||||||
Number of shares available for grant (in shares) | 54 | |||||||
Shares granted (in shares) | 0 | |||||||
2019 Plan and 2016 Plan [Member] | Employee [Member] | Minimum [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
Vesting period | 1 year | |||||||
2019 Plan and 2016 Plan [Member] | Employee [Member] | Maximum [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
Future awards life | 10 years | |||||||
Vesting period | 5 years | |||||||
Restricted Stock [Member] | ||||||||
Other Stock-Based Compensation [Abstract] | ||||||||
Stock repurchases (in shares) | 73,770 | 351,852 | ||||||
Restricted Stock [Member] | Employee [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
Vesting period | 3 years | |||||||
Other Stock-Based Compensation [Abstract] | ||||||||
Number of restricted shares granted (in shares) | 96,011 | 1,072,746 | ||||||
Aggregate fair value | $ 1.3 | |||||||
Awards vested (in shares) | 424,458 | 73,770 | 351,852 |
Stock-Based Compensation, Assum
Stock-Based Compensation, Assumptions Used in Option-pricing Model for Stock Options (Details) - Stock Option [Member] | 6 Months Ended | |
Jun. 30, 2022 | Jun. 30, 2021 | |
Summary of Assumptions Used [Abstract] | ||
Risk-free interest rate | 3.10% | |
Expected dividend yield | 0% | 0% |
Minimum [Member] | ||
Summary of Assumptions Used [Abstract] | ||
Risk-free interest rate | 0.40% | |
Expected term in years | 5 years 6 months | 5 years |
Expected volatility | 45.80% | 45.70% |
Maximum [Member] | ||
Summary of Assumptions Used [Abstract] | ||
Risk-free interest rate | 0.70% | |
Expected term in years | 6 years 6 months | 7 years 6 months |
Expected volatility | 46.70% | 47.60% |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Option Activity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2021 | Dec. 31, 2021 | |
Aggregate Intrinsic Value [Abstract] | |||||
Proceeds from exercise of stock options | $ 40,000 | $ 166,000 | |||
Stock Option [Member] | |||||
Stock Options [Roll Forward] | |||||
Outstanding, beginning of year (in shares) | 839,028 | 862,488 | 862,488 | ||
Option granted (in shares) | 89,415 | 89,415 | |||
Options exercised (in shares) | (16,800) | ||||
Options forfeited (in shares) | (3,160) | (9,820) | |||
Outstanding, end of period (in shares) | 925,283 | 839,028 | 925,283 | 862,488 | |
Options vested and exercisable, end of period (in shares) | 607,608 | 607,608 | |||
Weighted Average Exercise Price [Abstract] | |||||
Outstanding, beginning of year (in dollars per share) | $ 4.46 | $ 4.41 | $ 4.41 | ||
Options granted (in dollars per share) | 13.04 | 13.04 | |||
Options exercised (in dollars per share) | 2.37 | ||||
Options forfeited (in dollars per share) | 4.40 | 3.64 | |||
Outstanding, end of period (in dollars per share) | 5.29 | $ 4.46 | 5.29 | $ 4.41 | |
Options vested and exercisable, end of period (in dollars per share) | $ 4.56 | $ 4.56 | |||
Weighted Average Remaining Contractual Life [Abstract] | |||||
Outstanding | 8 years | 8 years | 8 years | 8 years 2 months 12 days | |
Options granted | 9 years 10 months 24 days | 9 years 10 months 24 days | |||
Options vested and exercisable | 7 years 9 months 18 days | 7 years 9 months 18 days | |||
Aggregate Intrinsic Value [Abstract] | |||||
Outstanding, beginning of year | $ 10,645,951 | $ 8,088,660 | $ 8,088,660 | ||
Options granted | 0 | 0 | |||
Options exercised | 248,312 | $ 300,000 | |||
Options forfeited | 16,158 | 108,515 | |||
Outstanding, end of period | 4,091,633 | $ 10,645,951 | 4,091,633 | $ 8,088,660 | |
Options vested and exercisable | $ 2,898,340 | $ 2,898,340 | |||
Weighted average grant-date fair value of options granted (in dollars per share) | $ 6.26 | $ 1.48 | |||
Proceeds from exercise of stock options | $ 200,000 |
Stock-Based Compensation, Sto_2
Stock-Based Compensation, Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Stock-Based Compensation Expense [Abstract] | ||||
Pre-tax stock-based compensation expense | $ 100 | $ 274 | $ 139 | $ 1,255 |
After-tax stock-based compensation expense | 99 | 185 | $ 137 | 1,344 |
Remaining weighted average recognition period | 2 years | |||
Stock Option [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Pre-tax stock-based compensation expense | 54 | 75 | $ 93 | 822 |
After-tax stock-based compensation expense | 53 | 32 | 91 | 713 |
Unrecognized stock-based compensation expense | 700 | 700 | ||
Restricted Stock [Member] | ||||
Stock-Based Compensation Expense [Abstract] | ||||
Pre-tax stock-based compensation expense | 46 | 199 | 46 | 433 |
After-tax stock-based compensation expense | 46 | $ 153 | 46 | $ 631 |
Unrecognized stock-based compensation expense | $ 1,200 | $ 1,200 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments, Investment in BFG Activity (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2021 USD ($) | Dec. 31, 2019 | |
Investment in BFG Activity [Abstract] | |||||
Beginning balance | $ 5,900 | $ 3,770 | |||
Distributions from BFG | (327) | (431) | |||
Change in fair value of BFG | $ (575) | $ 1,501 | (973) | 1,861 | |
Beginning balance | $ 4,600 | $ 5,200 | $ 4,600 | $ 5,200 | |
Lack of Marketability Discount [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||
Investment, measurement input | 0.20 | ||||
Discount to Non-Voting Shares [Member] | |||||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | |||||
Investment, measurement input | 0.0450 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments, Estimated Fair Value and Carrying Value of Financial Instrument (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Financial assets [Abstract] | ||||
Investment securities held-to-maturity | $ 11,070 | $ 11,332 | ||
SBA servicing asset | 4,600 | 3,900 | ||
Investment in BFG | 4,600 | 5,900 | $ 5,200 | $ 3,770 |
Level 1 [Member] | Carrying Amount [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 96,528 | 85,754 | ||
Level 1 [Member] | Estimated Fair Value [Member] | ||||
Financial assets [Abstract] | ||||
Cash and cash equivalents | 96,528 | 85,754 | ||
Level 2 [Member] | Carrying Amount [Member] | ||||
Financial assets [Abstract] | ||||
Investment securities held-to-maturity | 12,463 | 11,423 | ||
Investment in FHLB stock | 449 | 378 | ||
Loans held-for-sale | 31,599 | 60,748 | ||
Accrued interest receivable | 1,422 | 1,548 | ||
SBA servicing asset | 4,586 | 3,938 | ||
Financial liabilities [Abstract] | ||||
Total deposits | 219,359 | 251,892 | ||
Accrued interest payable | 34 | 48 | ||
PPP Liquidity Facility | 376 | 1,050 | ||
Level 2 [Member] | Estimated Fair Value [Member] | ||||
Financial assets [Abstract] | ||||
Investment securities held-to-maturity | 11,070 | 11,332 | ||
Investment in FHLB stock | 449 | 378 | ||
Loans held-for-sale | 31,594 | 60,743 | ||
Accrued interest receivable | 1,422 | 1,548 | ||
SBA servicing asset | 4,586 | 3,938 | ||
Financial liabilities [Abstract] | ||||
Total deposits | 204,221 | 249,488 | ||
Accrued interest payable | 34 | 48 | ||
PPP Liquidity Facility | 376 | 1,050 | ||
Level 3 [Member] | Carrying Amount [Member] | ||||
Financial assets [Abstract] | ||||
Loans held for investment | 189,670 | 198,102 | ||
Investment in BFG | 4,600 | 5,900 | ||
Level 3 [Member] | Estimated Fair Value [Member] | ||||
Financial assets [Abstract] | ||||
Loans held for investment | 196,654 | 197,412 | ||
Investment in BFG | $ 4,600 | $ 5,900 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments, Assets Measured on Non-recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2022 | Dec. 31, 2021 |
Level 3 [Member] | ||
Nonrecurring assets [Abstract] | ||
Impaired loans | $ 728 | $ 972 |
Nonrecurring Basis [Member] | ||
Nonrecurring assets [Abstract] | ||
Impaired loans | 728 | 972 |
Nonrecurring Basis [Member] | Level 1 [Member] | ||
Nonrecurring assets [Abstract] | ||
Impaired loans | 0 | 0 |
Nonrecurring Basis [Member] | Level 2 [Member] | ||
Nonrecurring assets [Abstract] | ||
Impaired loans | 0 | 0 |
Nonrecurring Basis [Member] | Level 3 [Member] | ||
Nonrecurring assets [Abstract] | ||
Impaired loans | $ 728 | $ 972 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments, Quantitative Information for Level 3 Fair Value Measurements (Details) - Level 3 [Member] $ in Thousands | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Impaired loans | $ 728 | $ 972 |
Market Comparable [Member] | Adjustment to Appraisal Value [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Abstract] | ||
Impaired loans, measurement input | 0.0038 | 0.0050 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments, Investment in BFG Level 3 Recurring Asset (Details) | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2019 |
Discount Rate [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 0.0450 | ||
Discounted Cash Flow [Member] | Level 3 [Member] | Revenue Growth Rate [Member] | Recurring [Member] | Weighted Average [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 0.146 | 0.166 | |
Discounted Cash Flow [Member] | Level 3 [Member] | Expense Growth Rate [Member] | Recurring [Member] | Weighted Average [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 0.143 | 0.163 | |
Discounted Cash Flow [Member] | Level 3 [Member] | Discount Rate [Member] | Recurring [Member] | Weighted Average [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 0.300 | 0.250 | |
Guideline Public Company [Member] | Level 3 [Member] | Multiples of Enterprise Value [Member] | Recurring [Member] | Minimum [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 3 | 4 | |
Guideline Public Company [Member] | Level 3 [Member] | Multiples of Enterprise Value [Member] | Recurring [Member] | Maximum [Member] | |||
Fair Value Investment in BFG [Abstract] | |||
Investment, measurement input | 5 | 6 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Income Tax Expense [Abstract] | ||||
Increase in deferred tax assets | $ 195 | $ 556 | ||
Income tax expense | $ 1,786 | $ 2,609 | $ 5,000 | $ 4,535 |
Effective income tax rate | 25.10% | 25.80% | ||
Statutory rate | 24.90% | 24.90% | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2019 |
Related Parties [Abstract] | |||
Loans outstanding to related parties | $ 0 | $ 0 | |
Deposits | $ 0.8 | $ 0.5 | |
BFG [Member] | |||
Equity Method Investments [Abstract] | |||
Membership interest | 10% | 10% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | ||
Numerator [Abstract] | |||||
Net income | $ 5,482 | $ 7,739 | $ 14,916 | $ 13,030 | |
Amount allocated to participating common shareholders | [1] | (41) | (473) | (112) | (838) |
Net income allocate to common shareholders | $ 5,441 | $ 7,266 | $ 14,804 | $ 12,192 | |
Denominator [Abstract] | |||||
Weighted average shares outstanding, basic (in shares) | 12,716,010 | 8,183,774 | 12,698,714 | 8,137,736 | |
Weighted average effect of dilutive securities [Abstract] | |||||
Stock options (in shares) | 558,855 | 408,841 | 589,091 | 245,280 | |
Warrants (in shares) | 142,525 | 58,341 | 156,542 | 29,171 | |
Weighted average shares outstanding, diluted (in shares) | 13,417,390 | 8,650,956 | 13,444,347 | 8,412,187 | |
Earnings per share, basic (in dollars per share) | $ 0.43 | $ 0.89 | $ 1.17 | $ 1.50 | |
Earnings per share, diluted (in dollars per share) | $ 0.41 | $ 0.84 | $ 1.10 | $ 1.45 | |
Options [Member] | |||||
Weighted average effect of dilutive securities [Abstract] | |||||
Anti-dilutive securities excluded from earnings per share (in shares) | 336,192 | 684,648 | |||
Warrants [Member] | |||||
Weighted average effect of dilutive securities [Abstract] | |||||
Anti-dilutive securities excluded from earnings per share (in shares) | 113,458 | 240,829 | |||
[1]Represents earnings attributable to holders of unvested restricted stock issued outside of the 2016 Plan and 2019 Plan to the Company’s employees for the three or six months ended June 30, 2021. |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 | Jun. 30, 2021 | Jun. 30, 2022 | Jun. 30, 2021 | |
Interest income, not-in-scope [Abstract] | ||||
Interest and fees on loans | $ 12,864 | $ 11,119 | $ 26,020 | $ 19,909 |
Interest on securities | 44 | 6 | 83 | 12 |
Other interest income | 105 | 10 | 133 | 20 |
Total interest income | 13,013 | 11,135 | 26,236 | 19,941 |
Non-interest income [Abstract] | ||||
Total non-interest income | 8,431 | 8,161 | 20,113 | 14,240 |
Service Charges on Deposit Accounts [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, in-scope | 7 | 7 | 15 | 13 |
Strategic Program Set Up Fees [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, in-scope | 48 | 19 | 97 | 19 |
Strategic Program Fees [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | 5,878 | 3,847 | 12,044 | 6,720 |
Gain on Sale of Loans [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | 2,412 | 2,397 | 7,464 | 5,000 |
SBA Loan Servicing Fees [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | 342 | 311 | 729 | 463 |
Change in Fair Value on Investment in BFG [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | (575) | 1,501 | (973) | 1,861 |
Other Miscellaneous Income [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | 24 | 3 | 34 | 8 |
Strategic Program Service Charges [Member] | ||||
Non-interest income [Abstract] | ||||
Non-interest income, not in-scope | $ 295 | $ 76 | $ 703 | $ 156 |