Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 10, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-40721 | |
Entity Registrant Name | FINWISE BANCORP | |
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 $0.001 per share | |
Trading Symbol | FINW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 12,719,773 | |
Entity Central Index Key | 0001856365 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Cash and cash equivalents | ||
Cash and due from banks | $ 369 | $ 386 |
Interest-bearing deposits | 118,674 | 100,181 |
Total cash and cash equivalents | 119,043 | 100,567 |
Investment securities held-to-maturity, at cost | 14,403 | 14,292 |
Investment in Federal Home Loan Bank (FHLB) stock, at cost | 476 | 449 |
Strategic Program loans held-for-sale, at lower of cost or fair value | 42,362 | 23,589 |
Loans receivable, net | 277,663 | 224,217 |
Premises and equipment, net | 13,154 | 9,478 |
Accrued interest receivable | 2,316 | 1,818 |
Deferred taxes, net | 0 | 1,167 |
SBA servicing asset, net | 5,233 | 5,210 |
Investment in Business Funding Group (BFG), at fair value | 4,500 | 4,800 |
Operating lease right-of-use (“ROU”) assets | 4,668 | 5,041 |
Income taxes receivable, net | 2,355 | 0 |
Other assets | 9,452 | 10,152 |
Total assets | 495,625 | 400,780 |
Deposits | ||
Noninterest-bearing | 93,347 | 78,817 |
Interest-bearing | 239,183 | 164,181 |
Total deposits | 332,530 | 242,998 |
Accrued interest payable | 466 | 54 |
Income taxes payable, net | 0 | 1,077 |
Deferred taxes, net | 140 | 0 |
PPP Liquidity Facility | 252 | 314 |
Operating lease liabilities | 6,792 | 7,020 |
Other liabilities | 7,997 | 8,858 |
Total liabilities | 348,177 | 260,321 |
Commitments and contingencies (Note 7) | ||
Shareholders’ equity | ||
Preferred stock, $0.001 par value, 4,000,000 authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022 | 0 | 0 |
Common stock, $0.001 par value, 40,000,000 shares authorized; 12,723,703 and 12,831,345 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively | 13 | 13 |
Additional paid-in-capital | 52,625 | 54,614 |
Retained earnings | 94,810 | 85,832 |
Total shareholders’ equity | 147,448 | 140,459 |
Total liabilities and shareholders’ equity | $ 495,625 | $ 400,780 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par or stated value per share (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 or stated value per share (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) | 12,723,703 | 12,831,345 |
Common stock, shares, outstanding (in shares) | 12,723,703 | 12,831,345 |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest income | ||||
Interest and fees on loans | $ 14,355 | $ 12,864 | $ 26,697 | $ 26,020 |
Interest on securities | 77 | 44 | 149 | 83 |
Other interest income | 1,437 | 105 | 2,424 | 133 |
Total interest income | 15,869 | 13,013 | 29,270 | 26,236 |
Interest expense | ||||
Interest on deposits | 2,194 | 244 | 3,489 | 505 |
Interest on PPP Liquidity Facility | 0 | 0 | 0 | 1 |
Total interest expense | 2,194 | 244 | 3,489 | 506 |
Net interest income | 13,675 | 12,769 | 25,781 | 25,730 |
Provision for credit losses | 2,688 | 2,913 | 5,359 | 5,860 |
Net interest income after provision for loan losses | 10,987 | 9,856 | 20,422 | 19,870 |
Non-interest income | ||||
Strategic Program fees | 4,054 | 6,221 | 7,739 | 12,844 |
Gain on sale of loans, net | 700 | 2,412 | 887 | 7,464 |
SBA loan servicing fees | 226 | 342 | 817 | 729 |
Change in fair value on investment in BFG | 120 | (575) | 35 | (973) |
Other miscellaneous income | 188 | 31 | 337 | 49 |
Total non-interest income | 5,288 | 8,431 | 9,815 | 20,113 |
Non-interest expense | ||||
Salaries and employee benefits | 6,681 | 6,594 | 11,938 | 13,547 |
Professional services | 1,305 | 1,511 | 2,779 | 2,145 |
Occupancy and equipment expenses | 718 | 469 | 1,430 | 821 |
(Recovery) impairment of SBA servicing asset | (339) | 1,135 | (592) | 1,076 |
Other operating expenses | 1,634 | 1,310 | 3,181 | 2,478 |
Total non-interest expense | 9,999 | 11,019 | 18,736 | 20,067 |
Income before income tax expense | 6,276 | 7,268 | 11,501 | 19,916 |
Provision for income taxes | 1,638 | 1,786 | 3,002 | 5,000 |
Net income | $ 4,638 | $ 5,482 | $ 8,499 | $ 14,916 |
Earnings per share, basic (in dollars per share) | $ 0.36 | $ 0.43 | $ 0.66 | $ 1.17 |
Earnings per share, diluted (in dollars per share) | $ 0.35 | $ 0.41 | $ 0.64 | $ 1.10 |
Weighted average shares outstanding, basic (in shares) | 12,603,463 | 12,716,010 | 12,655,605 | 12,698,714 |
Weighted average shares outstanding, diluted (in shares) | 12,989,530 | 13,417,390 | 13,080,620 | 13,444,347 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Total | Impact of ASU 2016-13 adoption | Common Stock | Additional Paid-In Capital | Retained Earnings | Retained Earnings Impact of ASU 2016-13 adoption |
Beginning balance (in shares) at Dec. 31, 2021 | 12,772,010 | |||||
Beginning balance at Dec. 31, 2021 | $ 115,442 | $ 13 | $ 54,836 | $ 60,593 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense (in shares) | 96,011 | |||||
Stock-based compensation expense | 139 | 139 | ||||
Stock options exercised (in shares) | 16,800 | |||||
Stock options exercised | 40 | 40 | ||||
Net Income | 14,916 | 14,916 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 12,884,821 | |||||
Ending balance at Jun. 30, 2022 | 130,537 | $ 13 | 55,015 | 75,509 | ||
Beginning balance (in shares) at Dec. 31, 2021 | 12,772,010 | |||||
Beginning balance at Dec. 31, 2021 | $ 115,442 | $ 13 | 54,836 | 60,593 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Accounting Standards Update [Extensible Enumeration] | Accounting Standards Update 2016-13 [Member] | |||||
Ending balance (in shares) at Dec. 31, 2022 | 12,831,345 | |||||
Ending balance at Dec. 31, 2022 | $ 140,459 | $ (212) | $ 13 | 54,614 | 85,832 | $ (212) |
Beginning balance (in shares) at Mar. 31, 2022 | 12,788,810 | |||||
Beginning balance at Mar. 31, 2022 | 124,955 | $ 13 | 54,915 | 70,027 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense (in shares) | 96,011 | |||||
Stock-based compensation expense | 100 | 100 | ||||
Net Income | 5,482 | 5,482 | ||||
Ending balance (in shares) at Jun. 30, 2022 | 12,884,821 | |||||
Ending balance at Jun. 30, 2022 | 130,537 | $ 13 | 55,015 | 75,509 | ||
Beginning balance (in shares) at Dec. 31, 2022 | 12,831,345 | |||||
Beginning balance at Dec. 31, 2022 | 140,459 | $ (212) | $ 13 | 54,614 | 85,832 | $ (212) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense (in shares) | 168,821 | |||||
Stock-based compensation expense | $ 1,050 | 1,050 | ||||
Stock options exercised (in shares) | 16,800 | 16,800 | ||||
Stock options exercised | $ 40 | 40 | ||||
Common stock repurchased (in shares) | (293,263) | |||||
Common stock repurchased | (2,388) | (3,079) | 691 | |||
Net Income | 8,499 | 0 | 8,499 | |||
Ending balance (in shares) at Jun. 30, 2023 | 12,723,703 | |||||
Ending balance at Jun. 30, 2023 | 147,448 | $ 13 | 52,625 | 94,810 | ||
Beginning balance (in shares) at Mar. 31, 2023 | 12,824,572 | |||||
Beginning balance at Mar. 31, 2023 | 144,353 | $ 13 | 54,827 | 89,513 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation expense (in shares) | 168,821 | |||||
Stock-based compensation expense | 629 | 629 | ||||
Common stock repurchased (in shares) | (269,690) | |||||
Common stock repurchased | (2,173) | (2,831) | 659 | |||
Net Income | 4,638 | 0 | 4,638 | |||
Ending balance (in shares) at Jun. 30, 2023 | 12,723,703 | |||||
Ending balance at Jun. 30, 2023 | $ 147,448 | $ 13 | $ 52,625 | $ 94,810 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||||||
Net Income | $ 4,638 | $ 5,482 | $ 8,499 | $ 14,916 | ||
Adjustments to reconcile net income to net cash from operating activities | ||||||
Depreciation and amortization | 1,648 | 754 | ||||
Provision for credit losses | 2,688 | 2,913 | 5,359 | 5,860 | ||
Noncash operating lease cost | 373 | 445 | ||||
Net amortization in securities discounts and premiums | 1 | 18 | ||||
Capitalized servicing assets | (150) | (2,243) | ||||
Gain on sale of loans, net | $ (2,100) | (887) | (7,464) | |||
Originations of Strategic Program loans held-for-sale | (1,942,395) | (4,436,343) | ||||
Proceeds on Strategic Program loans held-for-sale | 1,923,622 | 4,465,492 | ||||
Change in fair value of BFG | (120) | 575 | (35) | 973 | ||
(Recovery) impairment of SBA servicing asset | (339) | 1,135 | (592) | 1,076 | ||
Stock-based compensation expense | 1,050 | 139 | ||||
Deferred income tax benefit | 1,307 | (195) | ||||
Net changes in: | ||||||
Accrued interest receivable | (498) | 126 | ||||
Accrued interest payable | 412 | (14) | ||||
Other assets | (1,647) | (725) | ||||
Operating lease liabilities | (228) | 13 | ||||
Other liabilities | (1,938) | (5,337) | ||||
Net cash provided by (used in) operating activities | (6,099) | 37,491 | ||||
Cash flows from investing activities: | ||||||
Net (increase) decrease in loans receivable | (45,742) | 10,036 | ||||
Purchase of lease pools | (12,386) | 0 | ||||
Investment in equity investment | (9) | 0 | ||||
Distributions from BFG | 335 | 327 | ||||
Purchase of bank premises and equipment, net | (4,605) | (2,784) | ||||
Proceeds from maturities and paydowns of securities held-to-maturity | 879 | 917 | ||||
Purchases of securities held to maturity | (992) | (1,975) | ||||
Purchase of FHLB stock | (27) | (71) | ||||
Net cash (used in) provided by investing activities | (62,547) | 6,450 | ||||
Cash flows from financing activities: | ||||||
Net increase (decrease) in deposits | 89,532 | (32,533) | ||||
Common stock repurchased | (2,388) | 0 | ||||
Proceeds from exercise of stock options | 40 | 40 | ||||
Repayment of PPP Liquidity Facility | (62) | (674) | ||||
Net cash used in financing activities | 87,122 | (33,167) | ||||
Net change in cash and cash equivalents | 18,476 | 10,774 | ||||
Cash and cash equivalents, beginning of the period | 100,567 | 85,754 | $ 85,754 | |||
Cash and cash equivalents, end of the period | 119,043 | $ 100,567 | 96,528 | 119,043 | 96,528 | $ 100,567 |
Cash paid during the period | ||||||
Income taxes | 5,050 | 7,257 | ||||
Interest | 3,077 | 520 | ||||
Supplemental disclosures of noncash operating activities: | ||||||
Right-of-use assets obtained in exchange for operating lease liabilities (ASC 842 adoption effective January 1, 2022) | $ 0 | $ 0 | $ 0 | $ 7,380 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of business and organization – FinWise Bancorp is a Utah Corporation headquartered in Murray, Utah and operates all business activities through its wholly-owned subsidiaries FinWise Bank, f/k/a Utah Community Bank and FinWise Investment, LLC. 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, FinWise Investment, LLC, and FinWise Bank collectively and on a consolidated basis. References to the “Bank” refer to FinWise Bank on a standalone basis. 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 – The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with rules and regulations of the Securities and Exchange Commission ("SEC") and include the activity of the Company and its wholly owned subsidiaries, FinWise Investments, LLC and the Bank. The statements do not include all of the information and footnotes required by GAAP for complete financial statements. All significant inter-company transactions have been eliminated in consolidation. In the opinion of management, all the adjustments (consisting of normal and recurring adjustments) necessary for the fair presentation of the consolidated financial condition and the consolidated results of operations for the periods presented have been included. The results of operations and other data presented for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for subsequent periods or the full year results. 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, 2022 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure in this Quarterly Report on Form 10-Q through the date these consolidated financial statements were issued. Out-of-period adjustments – During the first quarter of 2022, we recognized a $(0.8) million ($(0.6) million net of tax) reduction of interest and fees on loans and loans receivable, net as an out-of-period adjustment. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three and six months ended June 30, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods. During the third quarter of 2022, the Company identified an error in the calculation of the Company’s tax provision which understated income tax expense for previously reported financial statements. The error was related to an incorrect application of Section 162(m) of the Internal Revenue Code, which limits tax deductions relating to executive compensation of certain executives of publicly held companies. The Company recorded an out-of-period adjustment during the third quarter of 2022 to correct the previously understated income tax expense. The adjustment resulted in a decrease to after-tax income of $(0.9) million for the year ended December 31, 2022. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three months ended September 30, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods. During the fourth quarter of 2022, the Company established a new loan trailing fee asset which is included in “Other assets” on the Consolidated Balance Sheets of approximately $2.3 million and recognized $2.1 million in gain on sale of loans ($1.5 million net of tax) as an out-of-period adjustment of which $1.2 million ($0.9 million net of tax) would have been recorded in the first three quarters of 2022 with the remaining $0.9 million ($0.6 million net of tax) associated with years prior to 2022. Before this correction, the loan trailing fees had been recognized in revenue during the month payment was owed by the Strategic Program rather than as a gain to be recognized upon sale of the loan receivables. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three and six months ended December 31, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods. Cash and Cash Equivalents – For purposes of reporting cash flows, the Company defines cash and cash equivalents as cash, cash due from banks, interest-bearing deposits in other banks, other interest-bearing deposits, and federal funds sold. Loans Receivable – Loans receivable are reported at their outstanding principal adjusted for any charge-offs, the allowance for credit losses, and deferred fees and costs. Loan origination fees, net of certain direct origination costs, if any, are deferred and recognized on an adjustment of the related loan yield using an effective-yield method over the contractual life of the loan. Interest income on loans is recognized on an accrual basis commencing in the month of origination using the interest method. Delinquency fees are recognized in income when chargeable and when collectability is reasonably assured. The Company requires most loans to be substantially collateralized by real estate, equipment, vehicles, accounts receivable, inventories or other tangible or intangible assets. Real estate collateral is in the form of first and second mortgages on various types of property. The Company also originates unsecured loans to consumers and businesses. The Company may change its intent from holding loans for investment and reclassify them as held-for-sale. Loans Held For Sale - Loans held-for-sale are carried at the lower of aggregate cost and fair value. Gains and losses are recorded in non-interest income based on the difference between sales proceeds and carrying value. Nonaccrual Loans – The Company's policy is to place loans on a nonaccrual status when: 1) payment is in default for 90 days or more unless the loan is well secured and in the process of collection; or 2) full repayment of principal and interest is not foreseen. When a loan is placed on nonaccrual status, all accrued and uncollected interest on that loan is reversed. Past-due interest received on nonaccrual loans is not recognized in interest income but is applied as a reduction of the outstanding principal of the loan. A loan is relieved of its nonaccrual status when all principal and interest payments are brought current, the loan is well secured, and an analysis of the borrower's financial condition provides reasonable assurance that the borrower can repay the loan as scheduled. Stock Repurchase Program – On August 18, 2022, the Company announced that its Board of Directors (the “Board”) has authorized, effective August 16, 2022, a common stock repurchase program to purchase up to 644,241 shares of the Company’s common stock in the aggregate. The repurchase program expires on August 31, 2024, but may be limited or terminated at any time without prior notice. The repurchase program authorizes the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or privately negotiated transactions. The authorization permits management to repurchase shares of the Company’s common stock from time to time at management’s discretion. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The actual means and timing of any shares purchased under the program will depend on a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. The repurchase program does not obligate the Company to purchase any particular number of shares. Since commencement of the repurchase program, the Company has repurchased 413,263 shares for approximately $3.5 million as of June 30, 2023 and retired them at cost. Revenue from Contracts with Customers – The Company applies the provisions of ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Services that the Company reports as part of non-interest income are subject to ASC 606 and include fees from its deposit customers for transaction-based activities, account maintenance charges and overdraft services. Transaction-based fees, such as ACH and wire transfer fees, overdraft, return and stop payment charges, are recognized at the time such transactions are executed and the services have been fulfilled by the Company. The fees are typically withdrawn from the customer’s deposit account balance. The Company also receives fees from third-parties in its Strategic Programs for setting up systems and procedures to efficiently originate loans in a convenient, compliant and safe manner. Because the third-party simultaneously receives and benefits from the services, revenue is recognized evenly over the term of the loan program. Program Fees received in connection with the Company’s Strategic Programs are recorded at the time services are provided. Segment Reporting – Operating segments are components of a business where separate financial information is available and evaluated regularly by the chief operating decision makers ("CODMs") in deciding how to allocate resources and in assessing performance. ASC Topic 280, Segment Reporting , requires information to be reported about a company's operating segments using a "management approach", meaning it is based on the way management organizes segments internally to make operating decisions and assess performance. Based on this guidance, the Company has one reportable operating segment, the Bank. Recently adopted accounting pronouncements Allowance for Credit Losses : On January 1, 2023, the Company adopted ASU 2016-13, Topic 326 which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances. The allowance for credit losses (“ACL”) on loans held for investment is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments. ACL in accordance with CECL methodology With respect to the Bank's core portfolio which consists of SBA 7(a), local lending, retail point of sale, and equipment finance and leasing, the Bank pools similar loans that are collectively evaluated and determines an appropriate level of general allowance by portfolio segment using a non-discounted cash flow model taking into account probability of default, loss in the event of default, and prepayment speed estimates based on industry specific collected data. The model captures losses over the historical charge-off and prepayment cycle and applies those losses at a loan level over the remaining maturity of the loan. The model then calculates a historical loss rate using the average losses over the reporting period, which is then applied to each segment utilizing a standard reversion rate. With respect to the Bank's active retained Strategic Program loan portfolio, the Bank is using a methodology that compares the actual loan performance of a vintage to the worst performing loans within that vintage, known as the high-water mark. The Bank records the expected credit losses based on the high-water mark loss rate. With respect to the Bank's inactive retained Strategic Program loan portfolio, performance data at the summary level provided by the Strategic Programs is banded by credit profile and original loan term and compared to actual loan performance on a quarterly basis. The expected loss rate is supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, including but not limited to national unemployment rate forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the ACL are qualitative factors based on the risks present for each portfolio segment. These qualitative factors include the following that are derived from the Interagency Policy Statement on Allowance for Credit Losses: changes in lending policies and procedures; changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio; changes in the nature and volume of the loan portfolio and in the terms of loans; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due loans, nonaccrual loans, and classified or graded loans; changes in the quality of the Bank's loan review system; changes in the value of underlying collateral for loans that are not collateral-dependent; changes in the level of concentration of credit; changes in the effect of competition, legal, and regulatory requirements on the level of estimated credit losses; and, if applicable, changes in the composition and volume of the loan portfolio due to mergers, acquisitions, and other significant transactions not considered elsewhere. The Bank also considers as an additional qualitative factor any lingering "ripple" effects of the Covid-19 pandemic, including lasting changes to consumer behavior, lending, and society at large. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. When management identifies loans that do not share common risk characteristics (i.e., are not similar to other loans within a pool) they are evaluated on an individual basis. These loans are not included in the collective evaluation. For loans identified as having a likelihood of foreclosure or that the borrower is experiencing financial difficulty, a collateral dependent approach is used. These are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient method to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things: segmenting the loan portfolio; determining the amount of loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the reasonable and supportable forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts, which are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered appropriate, there can be no assurance that it will be sufficient to absorb future losses. In determining an appropriate amount for the allowance, the Bank segments and aggregates the loan portfolio based on common characteristics. The following segments have been identified: Commercial Real Estate . These loans are generally secured by owner-occupied nonfarm, nonresidential properties, or by other nonfarm, nonresidential properties. Owner-occupied commercial real estate loans are typically repaid first by the cash flows generated by the underlying business. Factors that may influence a business' cash flows include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Non-owner occupied commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions. Commercial and Industrial . These loans are generally secured by business assets such as furniture, fixtures, equipment. accounts receivable, inventory, business vehicles, and other business personal property. Commercial and industrial loans are typically repaid first by the cash flows generated by the borrower's business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and resulting positive cash flows. Factors that may influence a business' profitability include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Lease Financing Receivables . Equipment financing and leasing typically involve the use of equipment as collateral for the loan. If the borrower defaults on the loan, the Bank may need to repossess and sell the equipment to recover the outstanding debt. However, the value of the equipment may depreciate over time, or disappear, making it difficult for the Bank to recover the full amount of the loan. In equipment leasing, the residual value of the equipment is an important consideration. The residual value is the estimated value of the equipment at the end of the lease term. If the actual value of the equipment is lower than the residual value, the lessor may not be able to recover the full amount of the lease payments. Construction and Land Development . Risks common to construction loans are cost overruns, changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates. Risks common to residential lot loans are those similar to other types of real estate construction loans, as many customers finance the purchase of improved lots in anticipation of constructing a 1 to 4 family residence. Accordingly, common risks are changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values and higher interest rates. Consumer . These are loans to individuals for household, family, and other personal expenditures. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. Residential Real Estate . These loans are generally secured by 1 to 4 family residential properties. The primary risk characteristics associated with residential mortgage loans typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, residential mortgage loans that have adjustable rates could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank. Residential Real Estate Multifamily . Risks common to multifamily loans are poor management, high vacancy rates and regulatory changes. The value of multi-family properties can be impacted by changes in the local real estate market. If property values decline, the Bank may not be able to recover the full amount of the loan if the property needs to be foreclosed. Strategic Program Loans . Unsecured consumer loans and secured or unsecured business loans issued by the Company through these programs generally follow and are limited to specific predetermined underwriting criteria. Strategic Program loans cover a wide range of borrower credit profiles, loan terms and interest rates. Strategic Program loans generally have higher interest rates and shorter terms similar to consumer loans and tend to have higher credit risk due to the type of collateral securing the loan or in most cases the absence of collateral. In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and modifications. The Company adopted ASU 2022-02 on January 1, 2023. Effective January 1, 2023 loan modifications to borrowers experiencing financial difficulty are required to be disclosed by type of modification and by type of loan. Prior accounting guidance classified loans which were modified as troubled debt restructurings only if the modification reflected a concession from the lender in the form of a below market interest rate or other concession in addition to borrower financial difficulty. Under the new guidance, loans with modifications will be reported whether a concession is made or not. In the first half of 2023, there were no loan modifications which were subject to the new reporting. Enactment of the Inflation Reduction Act of 2022 On August 16, 2022, the U.S. government enacted the Inflation Reduction Act (IRA) which, among other changes, created a new corporate alternative minimum tax (AMT) based on adjusted financial statement income and imposes a 1% excise tax on corporate stock repurchases. The effective date of these provisions is January 1, 2023. The Company is aware of the effects that the enactment of the IRA will have on its consolidated financial statements. If expected stock repurchases are likely to be more than the exemption threshold, we will account for them in our tax provision. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | Investments Investment securities held-to-maturity, at cost The Company's held-to-maturity ("HTM") investment portfolio consists of Agency mortgage-backed securities and Agency collateralized mortgage obligations. The Company reports HTM securities on the Company's Consolidated Balance Sheets at carrying value which is amortized cost. The amortized cost, unrealized gains and losses, and estimated fair values of the Company’s held-to-maturity securities at June 30, 2023 and December 31, 2022, are summarized as follows: June 30, 2023 ($ in thousands) Amortized Unrealized Unrealized Estimated Mortgage-backed securities $ 7,511 $ — $ (867) $ 6,644 Collateralized mortgage obligations 6,892 — (806) 6,086 Total securities held-to-maturity $ 14,403 $ — $ (1,673) $ 12,730 December 31, 2022 ($ in thousands) Amortized Unrealized Unrealized Estimated Mortgage-backed securities $ 8,087 $ 5 $ (825) $ 7,267 Collateralized mortgage obligations 6,205 — (744) 5,461 Total securities held-to-maturity $ 14,292 $ 5 $ (1,569) $ 12,728 Credit Quality Indicators & Allowance for Credit Losses - HTM On January 1, 2023, the Company adopted ASU 2016-13, which replaced the legacy GAAP other-than-temporary impairment ("OTTI") model with a credit loss model. ASU 2016-13 requires an allowance on lifetime expected credit losses on HTM debt securities but retains the concept from the OTTI model that credit losses are recognized once securities become impaired. For HTM securities, the Company evaluates the credit risk of its securities on at least a quarterly basis. The Company estimates expected credit losses on HTM debt securities on a collective basis by major security type. Accrued interest receivable on HTM debt securities is excluded from the estimate of credit losses. At June 30, 2023 and at adoption of CECL on January 1, 2023, there was no ACL related to HTM securities due to the composition of the portfolio which is generally considered not to have credit risk given the government guarantee associated with these agencies. The Company had nineteen securities, consisting of nine collateralized mortgage obligations and ten mortgage-backed securities, in an unrealized loss position at June 30, 2023 and seventeen securities, consisting of eight collateralized mortgage obligations and nine mortgage-backed securities, in an unrealized loss position at December 31, 2022, as summarized in the following tables: June 30, 2023 Less than 12 months 12 Months or More Total ($ in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Mortgage-backed securities $ 794 $ (16) $ 5,850 $ (851) $ 6,644 $ (867) Collateralized mortgage obligations 2,631 (68) 3,455 (738) 6,086 (806) Total securities held-to-maturity $ 3,425 $ (84) $ 9,305 $ (1,589) $ 12,730 $ (1,673) December 31, 2022 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Mortgage-backed securities $ 2,374 $ (190) $ 3,962 $ (635) $ 6,336 $ (825) Collateralized mortgage obligations 2,752 (96) 2,709 (648) 5,461 (744) Total securities held-to-maturity $ 5,126 $ (286) $ 6,671 $ (1,283) $ 11,797 $ (1,569) The amortized cost and estimated market value of debt securities at June 30, 2023 and December 31, 2022, 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, 2023 December 31, 2022 ($ in thousands) Amortized Estimated Amortized Estimated Securities held-to-maturity Due in one year or less $ — $ — $ — $ — Due after one year through five years — — — — Due after five years through ten years 3,070 2,868 3,388 3,202 Due after ten years 11,333 9,862 10,904 9,526 Total Securities held-to-maturity $ 14,403 $ 12,730 $ 14,292 $ 12,728 At June 30, 2023, held-to-maturity securities in the amount of $12.6 million 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 three and six months ended June 30, 2023 or 2022. 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 2.70% of outstanding FHLB advances. At June 30, 2023 and December 31, 2022, the Bank owned $0.5 million and $0.4 million, respectively, of FHLB stock, which is carried at cost. The Company evaluated the carrying value of its FHLB stock investment at June 30, 2023 and determined that it was not impaired. This evaluation considered the long-term nature of the investment, the current financial and liquidity position of the FHLB, repurchase activity of excess stock by the FHLB at its carrying value, the return on the investment from recurring and special dividends, and the Company’s intent and ability to hold this investment for a period of time sufficient to recover our recorded investment. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 6 Months Ended |
Jun. 30, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans and Allowance for Credit Losses | Loans and Allowance for Credit Losses Loans outstanding by general ledger classification as of June 30, 2023 and December 31, 2022, consisted of the following: June 30, December 31, 2023 2022 ($ in thousands) SBA $ 189,028 $ 145,172 Commercial, non-real estate 24,851 11,484 Residential real estate 30,378 37,815 Strategic Program loans 63,094 47,848 Commercial real estate 18,677 12,063 Consumer 6,993 5,808 Total loans $ 333,021 $ 260,190 Loans held-for-sale (42,362) (23,589) Total loans held for investment $ 290,659 $ 236,601 Deferred loan fees, net (675) (399) Allowance for credit losses 1 (12,321) (11,985) Net loans $ 277,663 $ 224,217 (1) The Company adopted ASU 2016-13 as of January 1, 2023. The 2022 amounts presented are calculated under the prior accounting standard. Strategic Program Loans – In 2016, the Company began originating loans with various third-party loan origination platforms that use technology and other innovative systems to streamline the origination of unsecured consumer and secured or unsecured business loans to a wide array of borrowers within certain approved credit profiles. Loans issued by the Company through these programs generally follow and are limited to specific predetermined underwriting criteria. The Company earns monthly minimum program fees from these third parties. Based on the volume of loans originated by the Company related to each Strategic Program, an additional fee equal to a percentage of the loans generated under the Strategic Program may be collected. The program fee is included within non-interest income on the Consolidated Statements of Income. 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 reserve account deposit balance does not fall below an agreed upon dollar or percentage threshold related to the total loans currently outstanding as held for sale 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, 2023 and December 31, 2022, was $29.8 million and $16.6 million, respectively. Strategic Program loans retained and held-for-sale as of June 30, 2023 and December 31, 2022, are summarized as follows: June 30, December 31, 2023 2022 ($ in thousands) Retained Strategic Program loans $ 20,732 $ 24,259 Strategic Program loans held-for-sale 42,362 23,589 Total Strategic Program loans $ 63,094 $ 47,848 Allowance for Credit Losses In determining an appropriate amount for the allowance, the Bank segmented and aggregated the loan portfolio based on the Federal Deposit Insurance Corporation ("FDIC") Consolidated Reports of Condition and Income ("Call Report") codes. The following pool segments identified as of June 30, 2023 are based on the CECL methodology: ($ in thousands) Construction and land development $ 24,949 Residential real estate 29,357 Residential real estate multifamily 572 Commercial real estate 170,253 Commercial and industrial 16,507 Consumer 6,180 Lease financing receivables 22,109 Retained Strategic Program loans 20,732 Total loans $ 290,659 The portfolio classes identified as of December 31, 2022 are based on the incurred loss methodology and are segmented by general ledger classification as detailed below. ($ in thousands) SBA $ 145,172 Commercial, non-real estate 11,484 Residential real estate 37,815 Retained Strategic Program loans 24,259 Commercial real estate 12,063 Consumer 5,808 Total loans $ 236,601 Activity in the ACL by common characteristic loan pools based on the CECL methodology was as follows: Three Months Ended June 30, 2023 ($ in thousands) Beginning Balance Provision (Reversal) of Credit Losses Charge-Offs Recoveries Ending Balance Construction and land development $ 285 $ (6) $ — $ — $ 279 Residential real estate 799 (51) (121) 81 708 Residential real estate multifamily 5 1 — — 6 Commercial real estate 3,034 133 — — 3,167 Commercial and industrial 277 75 (66) 1 287 Consumer 82 27 (19) — 90 Lease financing receivables 325 203 — — 528 Retained Strategic Program loans 7,227 2,293 (2,516) 252 7,256 Total allowance for loan losses $ 12,034 $ 2,675 $ (2,722) $ 334 $ 12,321 Unfunded lending commitments 29 13 — — 42 Total allowance for credit losses $ 12,063 $ 2,688 $ (2,722) $ 334 $ 12,363 Six Months Ended June 30, 2023 ($ in thousands) Beginning Balance Impact of ASU 2016-13 adoption Provision (Reversal) of Credit Losses Charge-Offs Recoveries Ending Balance Construction and land development $ 424 $ (67) $ (78) $ — $ — $ 279 Residential real estate 876 (58) (73) (121) 84 708 Residential real estate multifamily 3 1 2 — — 6 Commercial real estate 3,238 (574) 625 (122) — 3,167 Commercial and industrial 339 (85) 114 (84) 3 287 Consumer 65 14 30 (19) — 90 Lease financing receivables 339 (105) 294 — — 528 Retained Strategic Program loans 6,701 1,131 4,429 (5,541) 536 7,256 Total allowance for loan losses $ 11,985 $ 257 $ 5,343 $ (5,887) $ 623 $ 12,321 Unfunded lending commitments — 26 16 — — 42 Total allowance for credit losses $ 11,985 $ 283 $ 5,359 $ (5,887) $ 623 $ 12,363 Activity in the allowance for loan losses by general ledger classification based on the incurred loss methodology was as follows: Three Months Ended June 30, 2022 ($ in thousands) Beginning Balance Provision (Reversal) of Loan Losses Charge-Offs Recoveries Ending Balance SBA $ 3,064 $ 374 $ (102) $ 48 $ 3,384 Commercial, non-real estate 107 166 — 1 274 Residential real estate 411 4 — — 415 Retained Strategic Program loans 6,322 2,365 (2,560) 315 6,442 Commercial real estate 21 1 — — 22 Consumer 62 3 — — 65 Total allowance for loan losses $ 9,987 $ 2,913 $ (2,662) $ 364 $ 10,602 Six Months Ended June 30, 2022 ($ in thousands) Beginning Balance Provision (Reversal) of Loan Losses Charge-Offs Recoveries Ending Balance SBA $ 2,739 $ 730 $ (133) $ 48 $ 3,384 Commercial, non-real estate 132 140 — 2 274 Residential real estate 352 63 — — 415 Retained Strategic Program loans 6,549 4,923 (5,438) 408 6,442 Commercial real estate 21 1 — — 22 Consumer 62 3 — — 65 Total allowance for loan losses $ 9,855 $ 5,860 $ (5,571) $ 458 $ 10,602 The following table presents the loan balances by portfolio class, based on impairment method, and the corresponding balances in the allowance as of December 31, 2022 . For the year ended December 31, 2022 , the allowance was calculated based on the incurred loss methodology. Allowance for Loan Losses Portfolio Loan Balances ($ in thousands) Individually Collectively Total Individually Collectively Total SBA $ — $ 4,294 $ 4,294 $ 450 $ 144,722 $ 145,172 Commercial, non-real estate — 401 401 — 11,484 11,484 Residential real estate — 497 497 — 37,815 37,815 Retained Strategic Program loans — 6,701 6,701 — 24,259 24,259 Commercial real estate — 27 27 — 12,063 12,063 Consumer — 65 65 — 5,808 5,808 Total loans $ — $ 11,985 $ 11,985 $ 450 $ 236,151 $ 236,601 The following table presents, under previously applicable GAAP, loans individually evaluated for impairment as of December 31, 2022 : Recorded Unpaid Related Average Interest ($ in thousands) With no related allowance recorded SBA $ 450 $ 450 $ — $ 711 $ 36 Commercial, non-real estate — — — — — Residential real estate — — — — — Retained Strategic Program loans — — — — — Commercial real estate — — — — — Consumer — — — — — Total $ 450 $ 450 $ — $ 711 $ 36 Nonaccrual and past due loans are summarized below as of June 30, 2023 and December 31, 2022: June 30, 2023 ($ in thousands) Current 30-59 60-89 90+ Days Total Non- Total Construction and land development $ 24,733 $ 216 $ — $ — $ 216 $ — $ 24,949 Residential real estate 29,239 — — — — 118 29,357 Residential real estate multifamily 572 — — — — — 572 Commercial real estate 169,513 — — — — 740 170,253 Commercial and industrial 16,458 28 21 — 49 — 16,507 Consumer 6,120 53 7 — 60 — 6,180 Lease financing receivables 22,109 — — — — — 22,109 Retained Strategic Program loans 19,022 935 638 137 1,710 — 20,732 Total $ 287,766 $ 1,232 $ 666 $ 137 $ 2,035 $ 858 $ 290,659 December 31, 2022 ($ in thousands) Current 30-59 60-89 90+ Days Total Non- Total SBA $ 144,803 $ 369 $ — $ — $ 369 $ — $ 145,172 Commercial, non-real estate 11,484 — — — — — 11,484 Residential real estate 37,387 428 — — 428 — 37,815 Retained Strategic Program loans 22,080 1,184 802 193 2,179 — 24,259 Commercial real estate 12,063 — — — — — 12,063 Consumer 5,776 32 — — 32 — 5,808 Total $ 233,593 $ 2,013 $ 802 $ 193 $ 3,008 $ — $ 236,601 The amount of interest income for the six months ended June 30, 2023 and 2022, that was not recorded on nonaccrual loans was de minimis . The allowance for credit losses represents management’s estimate of lifetime credit losses inherent in loans as of the balance sheet date. The allowance for credit losses is estimated by management using relevant available information, from both internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Bank measures expected credit losses for loans on a pooled basis when similar risk characteristics exist. Generally, collectively assessed loans are grouped by Call Report code and then risk grade grouping. 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 – A Pass asset is higher quality and does not fit any of the other categories described below. The likelihood of loss is believed to be remote. Watch – A Watch asset may be a larger loan or one that places a heavier reliance on collateral due to the relative financial strength of the borrower. The assets may be maintenance intensive requiring closer monitoring. The obligor is believed to have an adequate primary source of repayment. Special Mention – A Special Mention asset has potential weaknesses that may be temporary or, if left uncorrected, may result in a loss. While concerns exist, the Company believes that it is currently protected against a default and loss is considered unlikely and not imminent. Substandard – A Substandard asset is believed to be inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified have identified weaknesses and are characterized by the possibility that the Company may sustain some loss if deficiencies are not corrected. Not Rated – For certain Strategic Program and consumer loans, the Company does not evaluate and risk rate the loans in the same manner as other loans in the Company’s portfolio. The Not Rated loans are typically homogenous, smaller dollar balances approved using abridged underwriting methods that allow the Company to streamline the loan approval process and increase efficiency . Credit quality for Strategic Program loans is highly correlated with delinquency levels. The following table presents the ending balances of the Company's loan and lease portfolio including non-performing loans by class of receivable and originating year and considering certain credit quality indicators as of the date indicated along with gross chargeoffs for the six months ended June 30, 2023 : June 30, 2023 2023 2022 2021 Prior Revolving Loans Total ($ in thousands) Construction and land development Pass $ 4,595 $ 15,789 $ 4,358 $ 207 $ — $ 24,949 Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Total 4,595 15,789 4,358 207 — 24,949 Current period gross writeoff — — — — — — Residential real estate Pass 1,328 8,765 1,603 3,577 1,818 17,091 Watch 333 7,169 1,918 2,716 — 12,136 Special Mention — — — 12 — 12 Substandard — 118 — — — 118 Total 1,661 16,052 3,521 6,305 1,818 29,357 Current period gross writeoff — (121) — — — (121) Residential real estate multifamily Pass 200 266 80 — — 546 Watch — — — 26 — 26 Special Mention — — — — — — Substandard — — — — — — Total 200 266 80 26 — 572 Current period gross writeoff — — — — — — Commercial real estate Pass 41,966 34,298 859 14,220 — 91,343 Watch 16,087 34,310 15,069 12,260 — 77,726 Special Mention — — — 444 — 444 Substandard — 356 — 384 — 740 Total 58,053 68,964 15,928 27,308 — 170,253 Current period gross writeoff — — — (122) — (122) Commercial and industrial Pass 5,266 2,869 866 1,854 — 10,855 Watch 1,340 2,649 957 595 — 5,541 Special Mention — — — 18 — 18 Substandard — — — 93 — 93 Total 6,606 5,518 1,823 2,560 — 16,507 Current period gross writeoff — — (13) (71) — (84) Consumer Pass 2,001 2,463 873 780 1 6,118 Watch 38 — — 1 — 39 Special Mention — — — — — — Substandard — — — — — — Not Rated 23 — — — — 23 Total 2,062 2,463 873 781 1 6,180 Current period gross writeoff — (5) (12) (2) — (19) Lease financing receivables Pass 14,178 7,616 — 315 — 22,109 Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Total 14,178 7,616 — 315 — 22,109 Current-period gross writeoffs — — — — — — Retained Strategic Program loans Pass — — — — — — Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Not Rated 11,136 7,450 2,145 1 — 20,732 Total 11,136 7,450 2,145 1 — 20,732 Current-period gross writeoffs (438) (4,474) (627) (2) — (5,541) Total portfolio loans receivable, gross 98,491 124,118 28,728 37,503 1,819 290,659 Total current-period gross writeoffs (438) (4,600) (652) (197) — (5,887) The following table presents the ending balances of the Company's loan and lease portfolio including non-performing loans by class of receivable and considering certain credit quality indicators as of the date indicated: December 31, 2022 ($ in thousands) Pass Special Classified/ Total SBA $ 144,149 $ 573 $ 450 $ 145,172 Commercial, non-real estate 11,484 — — 11,484 Residential real estate 37,815 — — 37,815 Commercial real estate 12,063 — — 12,063 Consumer 5,808 — — 5,808 Not Risk Graded Retained Strategic Program loans 24,259 Total $ 211,319 $ 573 $ 450 $ 236,601 Effective January 1, 2023 loan modifications to borrowers experiencing financial difficulty are required to be disclosed by type of modification and by type of loan. Prior accounting guidance classified loans which were modified as troubled debt restructurings ("TDRs") only if the modification reflected a concession from the lender in the form of a below market interest rate or other concession in addition to borrower financial difficulty. Under the new guidance (ASU 2022-02), loans with modifications made after January 1, 2023, will be reported under the new loan modification guidance whether a concession is made or not. As of January 1, 2023, the Company has ceased to recognize or measure new TDRs but those existing at December 31, 2022 will remain until settled. In the six months ended June 30, 2023 there were no material loan modifications reportable under the new guidance. Loans modified and recorded as TDR’s at December 31, 2022, c onsist of the following: ($ in thousands) Number Pre- Post- December 31, 2022 SBA 1 $ 94 $ 94 Total at December 31, 2022 1 $ 94 $ 94 At December 31, 2022, there were no commitments to lend additional funds to debtors whose loan terms have been modified in a TDR. There was one principal charge-off recorded related to TDRs during the six months ended June 30, 2022 for $0.01 million. There was no principal charge-off recorded related to TDRs during the three months ended June 30, 2022. During the three and six months ended June 30, 2022, there were no loan modifications to TDRs. Separately, one restructured loan incurred a default within 12 months of the restructure date during the six months ended June 30, 2022. This same loan was paid in full with interest on June 2, 2022. Collateral-Dependent Financial Loans A collateral-dependent financial loan relies substantially on the operation or sale of the collateral for repayment. In evaluating the overall risk associated with a loan, the Company considers (1) character, overall financial condition and resources, and payment record of the borrower; (2) the prospects for support from any financially responsible guarantors; and (3) the nature and degree of protection provided by the cash flow and value of any underlying collateral. The loan may become collateral-dependent when foreclosure is probable or the borrower is experiencing financial difficulty and its sources of repayment become inadequate over time. At such time, the Company develops an expectation that repayment will be provided substantially through the operation or sale of the collateral. The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of the dates indicated: ($ in thousands) Collateral Type As of June 30, 2023 Real Estate Personal Property Total Commercial real estate $ 1,809 $ — $ 1,809 Residential real estate 118 — 118 Total $ 1,927 $ — $ 1,927 ($ in thousands) Collateral Type As of December 31, 2022 Real Estate Personal Property Total Commercial real estate $ 356 $ — $ 356 |
Lease Liabilities
Lease Liabilities | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Lease Liabilities | Lease Liabilities The Company includes commercial operating leases with an original cost of $7.1 million and $2.8 million within premises and equipment, net as of June 30, 2023 and December 31, 2022, respectively. Net book value of the operating leases as of June 30, 2023 and December 31, 2022 was $6.7 million and $2.7 million. Rental income from operating leases for the three months ended June 30, 2023 was $0.2 million and for the three months ended June 30, 2022 was a de minimis amount. Rental income from operating leases for the six months ended June 30, 2023 was $0.3 million and for the six months ended June 30, 2022 was a de minimis amount. Depreciation expense for the related premises and equipment was $0.5 million and $0.1 million for the three months ended June 30, 2023 and 2022, respectively. Depreciation expense for the related premises and equipment was $0.9 million and $0.2 million for the six months ended June 30, 2023 and 2022, respectively. The Company leases its facilities under noncancelable operating leases. Rent expense for the three months ended June 30, 2023 and 2022 was $0.2 million and $0.3 million, respectively. Rent expense for the six months ended June 30, 2023 and 2022 was $0.5 million and $0.6 million, respectively. Future minimum annual undiscounted rental payments for these operating leases are as follows ($ in thousands): Six Months Ended December 31, 2023 $ 558 Year Ended December 31, 2024 1,104 Year Ended December 31, 2025 1,086 Year Ended December 31, 2026 1,118 Year Ended December 31, 2027 1,152 Thereafter 2,203 Total 7,221 Less present value discount (429) Operating lease liabilities $ 6,792 The Company entered into one lease during the six months ended June 30, 2022 to provide additional space while the Murray office construction was 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. Six Months Ended June 30, 2023 June 30, 2022 Weighted-average remaining lease term – operating leases (in years) 6.3 7.2 Weighted-average discount rate – operating leases 1.9 % 1.9 % Supplemental cash flow information related to leases were as follows (in thousands): For the Three Months Ended For the Six Months Ended 2023 2022 2023 2022 ($ in thousands) Operating cash flows from operating leases $ 21 $ 28 $ 292 $ 56 Right-of-use assets obtained in exchange for operating lease liabilities — — — 7,380 The components of lease expense were as follows (in thousands): For the Three Months Ended For the Six Months Ended 2023 2022 2023 2022 (in thousands) Operating leases Operating lease cost $ 219 $ 278 $ 438 $ 514 Variable lease cost 9 4 18 8 Operating lease expense 228 282 456 522 Short-term lease rent expense — 28 — 28 Net rent expense $ 228 $ 310 $ 456 $ 550 |
SBA Servicing Asset
SBA Servicing Asset | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
SBA Servicing Asset | 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 $302.0 million and $318.6 million at June 30, 2023 and December 31, 2022, respectively. The following table summarizes SBA servicing asset activity for the periods indicated: For the Three Months Ended For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Beginning balance $ 5,284 $ 5,225 $ 5,210 $ 3,938 Additions to servicing asset 150 835 150 2,243 Recovery of SBA servicing asset 339 (1,135) 592 (1,076) Amortization of servicing asset (540) (339) (719) (519) Ending balance $ 5,233 $ 4,586 $ 5,233 $ 4,586 The fair market value of the SBA servicing asset as of June 30, 2023 and December 31, 2022, was $5.2 million and $5.2 million, respectively. Recovery or impairment 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 15.68%, weighted average term of 4.24 years, and a weighted average discount rate of 14.33% at June 30, 2023. The Company assumed a weighted average prepayment rate of 14.24%, weighted average term of 4.45 years, and a weighted average discount rate of 18.79% at December 31, 2022. |
Capital Requirements
Capital Requirements | 6 Months Ended |
Jun. 30, 2023 | |
Capital Requirements [Abstract] | |
Capital Requirements | 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, 2023 and December 31, 2022, that the Bank meets all capital adequacy requirements to which it is subject. As of June 30, 2023 and December 31, 2022, 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 ($ in thousands) Amount Ratio Amount Ratio June 30, 2023 Leverage ratio (CBLR election) $ 103,813 22.4 % $ 41,718 9.0 % December 31, 2022 Leverage ratio (CBLR election) $ 91,674 25.1 % $ 32,898 9.0 % 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, 2023 and December 31, 2022. 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, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Federal Home Loan Bank Secured Line of Credit As of June 30, 2023 and December 31, 2022, the Bank’s available line of credit with the FHLB to borrow in overnight funds was $2.5 million and $2.6 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, 2023 and December 31, 2022, no amounts were outstanding under the line of credit. Loans totaling $3.8 million and $4.0 million were pledged to secure the FHLB line of credit as of June 30, 2023 and December 31, 2022, respectively. Subsequent to June 30, 2023, the Bank pledged additional loans to the FHLB of $46.9 million resulting in an increase to the available line of credit of $30.9 million. No funds had been advanced utilizing the line increase during the period beginning July 1, 2023 through the date of this report. Lines of Credit At June 30, 2023 and December 31, 2022, the Bank had the ability to access $10.4 million and $10.6 million from the Federal Reserve Bank’s Discount Window on a collateralized basis. At June 30, 2023, the Bank had the ability to access $0.8 million from the Federal Reserve Bank’s Bank Term Funding Program on a collateralized basis. Through Zions Bank, the Bank had an available unsecured line available of $1.0 million at December 31, 2022. 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, 2023 and December 31, 2022. The Bank had no outstanding balances on such unsecured or secured lines of credit as of June 30, 2023 and December 31, 2022. In April 2023, Zions Bank notified the Bank that due to the banking industry disruptions, Zions Bank was limiting its Fed Funds line advances to secured arrangements and would continue to do so for the foreseeable future, thereby eliminating the unsecured line the Bank had previously maintained with Zions Bank. In August 2023, the Bank was notified that Zions Bank was reinstating the unsecured Fed Funds line advance and increasing the Bank's borrowing capacity to $5.0 million. 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 Paycheck Protection Program ("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 $0.3 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at June 30, 2023. The Bank pledged $0.3 million of PPP loans as eligible collateral under the PPPLF borrowing arrangement at December 31, 2022. The average outstanding borrowings were $0.3 million during the six months ended June 30, 2023 and $0.8 million during the six months ended June 30, 2022. Commitments to Extend Credit In the ordinary course of business, the Bank has entered into commitments to extend credit to customers which have not yet been exercised. These financial instruments include commitments to extend credit in the form of loans. Those instruments involve to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the balance sheets. At June 30, 2023 and December 31, 2022, financial instruments with off-balance-sheet risk were as follows: June 30, December 31, ($ in thousands) 2023 2022 Revolving, open-end lines of credit $ 1,966 $ 1,683 Commercial real estate 22,667 17,886 Other unused commitments 221 253 $ 24,854 $ 19,822 Allowance for Credit Losses on Unfunded Commitments The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancelable by the Company. The allowance for credit losses on unfunded commitments is included in other liabilities on the consolidated balance sheets and is adjusted through a charge to provision for credit loss expense on the consolidated statements of income. The allowance for credit losses on unfunded commitments estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The allowance for credit losses on unfunded commitments was $41.5 thousand as of June 30, 2023. |
Investment in Business Funding
Investment in Business Funding Group, LLC | 6 Months Ended |
Jun. 30, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investment in Business Funding Group, LLC | 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 $0.1 million for the six months ended June 30, 2023 and 2022, 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. Subsequent to June 30, 2023, the Company entered into a Membership Purchase Agreement (the "Purchase Agreement") with BFG and four members of BFG ("Sellers") dated as of July 25, 2023. Pursuant to the Purchase Agreement, the Company will acquire an additional 10% voting ownership interest in BFG (the "Transaction"). As a part of the Transaction, the Company’s existing 5.1% non-voting ownership interest in BFG will be converted to a voting ownership interest and, when combined with the Company’s existing 4.9% voting ownership interest and the 10% voting ownership interest in BFG to be acquired in the Transaction, the Company will have a 20% voting ownership interest in BFG. At the closing of the Transaction (the "Closing"), the Company will issue in the aggregate 372,132 shares of Common Stock of the Company, par value $0.001 per share, in a private placement to the Sellers in exchange for their 10% aggregate ownership interest in BFG, provided that the average of the last sales prices of the Company's Common Stock on the Nasdaq National Market for the 10 consecutive trading days preceding the Closing date (the "Average FinWise Share Price") is less than $12.63 per share and greater than $6.00 per share. The Purchase Agreement contains representations and warranties, covenants and indemnification provisions which the Company believes are customary for a transaction of this nature. If on the Closing date, the Average FinWise Share Price is more than $12.63 per share, the Company may terminate the Purchase Agreement. If on the Closing date, the Average FinWise Share Price is less than $6.00 per share, BFG may terminate the Purchase Agreement. Closing is subject to certain conditions, including the receipt of any required regulatory approval. Either of the Company or the Sellers may terminate the Purchase Agreement if any condition to the other parties’ obligations has not been satisfied by September 30, 2023. 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, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | 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. 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, 2023, 335,353 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, 2023, 1,550 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. 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 options granted during the six months ended June 30, 2023. No options were granted during the first three months of 2022. For the Six Months Ended 2023 Risk-free interest rate 3.6% - 4.0% Expected term in years 5.5 – 7.5 Expected volatility 43.9% – 44.9% Expected dividend yield — The following summarizes stock option activity for the three months and six months ended June 30, 2023: Stock Weighted Weighted Aggregate Outstanding at December 31, 2022 881,625 $ 5.27 7.5 $ 3,871,667 Options granted 124,906 8.64 9.6 — Options exercised (16,800) 2.37 0.0 111,656 Options forfeited (8,264) 9.25 0.0 11,765 Outstanding at June 30 2023 981,467 $ 5.72 7.4 $ 3,546,581 Options vested and exercisable at June 30 2023 689,418 $ 4.78 6.9 $ 3,000,920 Stock Weighted Weighted Aggregate Outstanding at March 31 2023 863,429 $ 5.32 7.3 $ 3,407,917 Options granted 123,806 8.63 9.6 — Options forfeited (5,768) 8.94 0 7,884 Outstanding at June 30 2023 981,467 $ 5.72 7.4 $ 3,546,581 Options vested and exercisable at June 30 2023 689,418 $ 4.78 6.9 $ 3,000,920 The weighted average grant-date fair value of options per share granted during the six months ended June 30, 2023 was $4.12. The aggregate intrinsic value of options exercised during the six months ended June 30, 2023 was a de minimis amount. During the six months ended June 30, 2023, the Company received de minimis proceeds from the exercise of stock options and recognized a de minimis tax benefit from the exercise of stock options. Upon exercise of the stock options, the Company will issue new authorized shares. 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 $0.2 million. During the six months ended June 30, 2022, the Company received de minimis proceeds from the exercise of stock options and recognized a de minimis tax benefit from the exercise of stock options. Stock-based compensation expense The following tables present pre-tax and after-tax stock-based compensation expense recognized: For the Three Months Ended For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Pre-tax Stock options $ 142 $ 54 $ 237 $ 93 Restricted shares 487 46 813 46 Total $ 629 $ 100 $ 1,050 $ 139 After-tax Stock options $ 126 $ 53 $ 218 $ 91 Restricted shares 532 46 777 46 Total $ 658 $ 99 $ 995 $ 137 As of June 30, 2023, the Company had unrecognized stock-based compensation expense related to stock options and restricted stock of approximately $0.7 million and $1.7 million, respectively, which is expected to be recognized over the remaining weighted average recognition period of 1.8 years and 1.6 years. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 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 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data. Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation also includes observable inputs from nonbinding single dealer quotes not corroborated by observable market data. In developing Level 3 measurements, management incorporates whatever market data might be available and uses discounted cash flow models where appropriate. These calculations include projections of future cash flows, including appropriate default and loss assumptions, and market-based discount rates. 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 : The carrying amount of these items is a reasonable estimate of their fair value. Investment securities held-to-maturity : The estimated fair values of investment securities are priced using current active market quotes, if available, which are considered Level 1 measurements. For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value. These measurements are considered Level 2. Investment in Federal Home Loan Bank stock : The fair value is based upon the redemption value of the stock, which equates to the carrying value. Strategic Program loans held-for-sale : The carrying amount of these items is a reasonable estimate of their fair value. Loans held for investment : The fair value is estimated by discounting the future cash flows and estimated prepayments using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term. Some loan types’ fair value approximated carrying value because of their floating rate or expected maturity characteristics. SBA servicing asset : The fair value of servicing assets is based on, in part, third -party valuations that project estimated future cash inflows that include servicing fees and outflows that include market rates for costs of servicing. The present value of the future cash flows are calculated utilizing market-based discount rates. The market-based discount rates represent risk spreads based on secondary market transactions utilizing calculated prepayment curves. Due to the fact that observable loan transactions are used to determine the risk spreads, the Company considers the measurement to be Level 2. Investment in BFG : The Company purchased its ownership interest in BFG on December 31, 2019. The Company’s valuation technique utilized the average of the discounted cash flow method and the Guideline Public Company method. A 20% lack of marketability discount was applied to the valuation as well as a 4.50% discount to non-voting shares to arrive at fair value as of June 30, 2023 and December 31, 2022. 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 $4.5 million and $4.8 million as of June 30, 2023 and December 31, 2022, respectively. The following table summarizes investment in BFG activity for the periods indicated: For the Six Months Ended ($ in thousands) 2023 2022 Beginning balance $ 4,800 $ 5,900 Distributions from BFG (335) (327) Change in fair value of BFG 35 (973) Ending balance $ 4,500 $ 4,600 Deposits : The carrying amount of deposits with no stated maturity, such as savings and checking accounts, is a reasonable estimate of their fair value. The market value of certificates of deposit is based upon the discounted value of contractual cash flows. The discount rate is determined using the rates currently offered on comparable instruments. Accrued interest receivable and payable : The fair value of accrued interest receivable and payable approximates their carrying amount. 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. The table below presents the carrying amount and fair value of the Company's financial instruments: June 30, 2023 December 31, 2022 ($ in thousands) Level Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 1 $ 119,043 $ 119,043 $ 100,567 $ 100,567 Investment securities held-to-maturity 2 14,403 12,730 14,292 12,728 Investment in FHLB stock 2 476 476 449 449 Loans held for investment 3 277,663 294,533 224,217 237,225 Loans held-for-sale 2 42,362 42,357 23,589 23,586 Accrued interest receivable 2 2,316 2,316 1,818 1,818 SBA servicing asset 2 5,233 5,233 5,210 5,210 Investment in BFG 3 4,500 4,500 4,800 4,800 Financial liabilities: Total deposits 2 332,530 306,396 242,998 221,287 Accrued interest payable 2 466 466 54 54 PPP Liquidity Facility 2 252 252 314 314 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, 2023 Nonrecurring assets Individually evaluated loans $ 952 $ — $ — $ 952 December 31, 2022 Nonrecurring assets Individually evaluated loans $ 450 $ — $ — $ 450 Individually evaluated loans – The loan amount above represents loans individually evaluated as of year-end that have been adjusted to fair value. When collateral dependent loans are individually evaluated, they are measured using the current fair value of the collateral securing these loans, less selling costs. The fair value of real estate collateral is determined using collateral valuations or a discounted cash flow analysis using inputs such as discount rates, sale prices of similar assets, and term of expected disposition. Some appraised values are adjusted based on management’s review and analysis, which may include historical knowledge, changes in market conditions, estimated selling and other anticipated costs, and/or expertise and knowledge. The loss represents charge-offs on loans for adjustments made based on the fair value of the collateral. 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, 2023 and as of December 31, 2022, along with the valuation techniques used, are shown in the following table: ($ in thousands) Fair Value Valuation Unobservable Range June 30, 2023 Individually evaluated loans $ 952 Market Adjustment to 0.34 % December 31, 2022 Individually evaluated loans $ 450 Market Adjustment to 0.20 % The range and weighted average of the significant unobservable inputs used to fair value the investment in BFG Level 3 recurring asset as of June 30, 2023 and as of December 31, 2022 are shown in the following table: ($ in thousands) June 30, 2023 December 31, 2022 Discounted Cash Flows Revenue growth rate 10.7 % 10.8 % Expense growth rate 14.1 % 11.5 % Discount rate 25.0 % 30.0 % Guideline Public Company Multiples of enterprise value 3.5x to 5.0x 3.0x to 5.0x |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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 decreased $1.3 million to a deferred tax liability during the six months ended June 30, 2023 as a result of changes to temporary timing differences associated with accelerated tax depreciation. 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, 2023. For the six months ended June 30, 2023 and 2022, income tax expense was $3.0 million and $5.0 million, respectively, resulting in an effective income tax rate of 26.1% and 25.1%, respectively. The effective tax rate differs from the statutory rate of 24.9% during the six months ended June 30, 2023 due primarily to nondeductible wages, state taxes and the tax effect of stock-based compensation. The effective tax rate differs from the statutory rate of 24.9% during the six months ended June 30, 2022 due primarily to the tax effect of stock-based compensation. The Company had no unrecognized tax benefits at June 30, 2023. |
Related Parties
Related Parties | 6 Months Ended |
Jun. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Parties | 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 de minimis loans outstanding to related parties as of June 30, 2023 and December 31, 2022. Total deposits from certain executive officers and directors and the companies with which they are associated were $1.3 million and $1.2 million as of June 30, 2023 and December 31, 2022, respectively. On October 21, 2022, Mr. Alan Weichselbaum, who was elected as a director of the Company on October 6, 2022, repaid in full the $0.1 million aggregate principal amount plus interest owed under a secured promissory note, dated as of June 1, 2022 (the “2022 Note”), between the Company and Mr. Weichselbaum in accordance with the terms of the 2022 Note. As such, the obligations of the parties under the 2022 Note and a related security agreement were discharged and the 2022 Note and the security agreement were terminated. BFG is a small business loan broker, primarily under the SBA’s 7(a) loan program. As noted in Note 9 Investments above, the Company has a 10% ownership in the outstanding membership units of BFG. The Company underwrites loans sourced by BFG in its normal course of business. If approved and funded, the Company pays BFG a commission fee based on the amount funded. There is no guarantee or commitment made by the Company to BFG to approve or fund loans referred by BFG. The Company is able to use its sole discretion in deciding to approve and fund loans referred by BFG. |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share The following table is a reconciliation of the components used to derive basic and diluted EPS for the three and six months ended June 30, 2023 and 2022 ($ in thousands, except share and per share amounts): For the Three Months Ended For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Numerator: Net income $ 4,638 $ 5,482 $ 8,499 $ 14,916 Amount allocated to participating common shareholders (1) (88) (41) (122) (112) Net income allocate to common shareholders $ 4,550 $ 5,441 $ 8,377 $ 14,804 Denominator: Weighted average shares outstanding, basic 12,603,463 12,716,010 12,655,605 12,698,714 Weighted average effect of dilutive securities: Stock options 327,786 558,855 359,632 589,091 Warrants 58,281 142,525 65,383 156,542 Weighted average shares outstanding, diluted 12,989,530 13,417,390 13,080,620 13,444,347 Earnings per share, basic $ 0.36 $ 0.43 $ 0.66 $ 1.17 Earnings per share, diluted $ 0.35 $ 0.41 $ 0.64 $ 1.10 (1) Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees. There were 621,835 and 336,192 anti-dilutive options for the six months ended June 30, 2023 and 2022, respectively, reported in the table above. There were 204,617 shares and 113,458 anti-dilutive warrants for the six months ended June 30, 2023 and 2022, respectively, reported in the table above. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent 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 14, 2023, which is the date the consolidated financial statements are available to be issued. On July 25, 2023, the Company entered into a definitive agreement with BFG and four members of BFG to acquire an additional 10% of its membership interests in exchange for 372,132 shares of the Company’s stock, subject to regulatory approval and other customary closing conditions. For further details, refer to Note 8 – Investment in Business Funding Group, LLC. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of business and organization | Nature of business and organization – FinWise Bancorp is a Utah Corporation headquartered in Murray, Utah and operates all business activities through its wholly-owned subsidiaries FinWise Bank, f/k/a Utah Community Bank and FinWise Investment, LLC. 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, FinWise Investment, LLC, and FinWise Bank collectively and on a consolidated basis. References to the “Bank” refer to FinWise Bank on a standalone basis. 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 – The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with rules and regulations of the Securities and Exchange Commission ("SEC") and include the activity of the Company and its wholly owned subsidiaries, FinWise Investments, LLC and the Bank. The statements do not include all of the information and footnotes required by GAAP for complete financial statements. All significant inter-company transactions have been eliminated in consolidation. In the opinion of management, all the adjustments (consisting of normal and recurring adjustments) necessary for the fair presentation of the consolidated financial condition and the consolidated results of operations for the periods presented have been included. The results of operations and other data presented for the three and six months ended June 30, 2023 are not necessarily indicative of the results of operations that may be expected for subsequent periods or the full year results. 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, 2022 Annual Report on Form 10-K. Certain prior period amounts have been reclassified to conform to current period presentation. The Company has evaluated subsequent events for potential recognition and/or disclosure in this Quarterly Report on Form 10-Q through the date these consolidated financial statements were issued. |
Out-of-period adjustment | Out-of-period adjustments – During the first quarter of 2022, we recognized a $(0.8) million ($(0.6) million net of tax) reduction of interest and fees on loans and loans receivable, net as an out-of-period adjustment. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three and six months ended June 30, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods. During the third quarter of 2022, the Company identified an error in the calculation of the Company’s tax provision which understated income tax expense for previously reported financial statements. The error was related to an incorrect application of Section 162(m) of the Internal Revenue Code, which limits tax deductions relating to executive compensation of certain executives of publicly held companies. The Company recorded an out-of-period adjustment during the third quarter of 2022 to correct the previously understated income tax expense. The adjustment resulted in a decrease to after-tax income of $(0.9) million for the year ended December 31, 2022. The impact associated with this correction was not considered material to the interim unaudited consolidated financial statements for the three months ended September 30, 2022, year ended December 31, 2022, or the financial statements of any previously filed interim or annual periods. During the fourth quarter of 2022, the Company established a new loan trailing fee asset which is included in “Other assets” on the Consolidated Balance Sheets of approximately $2.3 million and recognized $2.1 million in gain on sale of loans ($1.5 million net of tax) as an out-of-period adjustment of which $1.2 million ($0.9 million net of tax) would have been recorded in the first three quarters of 2022 with the remaining $0.9 million ($0.6 million net of tax) associated with years prior to 2022. Before this correction, the loan trailing fees had been recognized in revenue during the month payment |
Cash and Cash Equivalents | Cash and Cash Equivalents – For purposes of reporting cash flows, the Company defines cash and cash equivalents as cash, cash due from banks, interest-bearing deposits in other banks, other interest-bearing deposits, and federal funds sold. |
Loans Receivable | Loans Receivable – Loans receivable are reported at their outstanding principal adjusted for any charge-offs, the allowance for credit losses, and deferred fees and costs. Loan origination fees, net of certain direct origination costs, if any, are deferred and recognized on an adjustment of the related loan yield using an effective-yield method over the contractual life of the loan. Interest income on loans is recognized on an accrual basis commencing in the month of origination using the interest method. Delinquency fees are recognized in income when chargeable and when collectability is reasonably assured. The Company requires most loans to be substantially collateralized by real estate, equipment, vehicles, accounts receivable, inventories or other tangible or intangible assets. Real estate collateral is in the form of first and second mortgages on various types of property. The Company also originates unsecured loans to consumers and businesses. |
Loans Held for Sale | Loans Held For Sale - Loans held-for-sale are carried at the lower of aggregate cost and fair value. Gains and losses are recorded in non-interest income based on the difference between sales proceeds and carrying value. |
Nonaccrual Loans | Nonaccrual Loans – The Company's policy is to place loans on a nonaccrual status when: 1) payment is in default for 90 days or more unless the loan is well secured and in the process of collection; or 2) full repayment of principal and interest is not foreseen. When a loan is placed on nonaccrual status, all accrued and uncollected interest on that loan is reversed. Past-due interest received on nonaccrual loans is not recognized in interest income but is applied as a reduction of the outstanding principal of the loan. A loan is relieved of its nonaccrual status when all principal and interest payments are brought current, the loan is well secured, and an analysis of the borrower's financial condition provides reasonable assurance that the borrower can repay the loan as scheduled. |
Stock Repurchase Program | Stock Repurchase Program – On August 18, 2022, the Company announced that its Board of Directors (the “Board”) has authorized, effective August 16, 2022, a common stock repurchase program to purchase up to 644,241 shares of the Company’s common stock in the aggregate. The repurchase program expires on August 31, 2024, but may be limited or terminated at any time without prior notice. The repurchase program authorizes the repurchase by the Company of its common stock in open market transactions, including pursuant to a trading plan in accordance with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or privately negotiated transactions. The authorization permits management to repurchase shares of the Company’s common stock from time to time at management’s discretion. Repurchases may also be made pursuant to a trading plan under Rule 10b5-1 under the Exchange Act, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so because of self-imposed trading blackout periods or other regulatory restrictions. The actual means and timing of any shares purchased under the program will depend on a variety of factors, including the market price of the Company’s common stock, general market and economic conditions, and applicable legal and regulatory requirements. The repurchase program does not obligate the Company to purchase any particular number of shares. Since commencement of the repurchase program, the Company has repurchased 413,263 shares for approximately $3.5 million as of June 30, 2023 and retired them at cost. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers – The Company applies the provisions of ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Services that the Company reports as part of non-interest income are subject to ASC 606 and include fees from its deposit customers for transaction-based activities, account maintenance charges and overdraft services. Transaction-based fees, such as ACH and wire transfer fees, overdraft, return and stop payment charges, are recognized at the time such transactions are executed and the services have been fulfilled by the Company. The fees are typically withdrawn from the customer’s deposit account balance. The Company also receives fees from third-parties in its Strategic Programs for setting up systems and procedures to efficiently originate loans in a convenient, compliant and safe manner. Because the third-party simultaneously receives and benefits from the services, |
Segment Reporting | Segment Reporting – Operating segments are components of a business where separate financial information is available and evaluated regularly by the chief operating decision makers ("CODMs") in deciding how to allocate resources and in assessing performance. ASC Topic 280, Segment Reporting |
Recently adopted accounting pronouncements | Recently adopted accounting pronouncements Allowance for Credit Losses : On January 1, 2023, the Company adopted ASU 2016-13, Topic 326 which replaced the incurred loss methodology with CECL for financial instruments measured at amortized cost and other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable economic forecasts of future events and circumstances. The allowance for credit losses (“ACL”) on loans held for investment is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments. ACL in accordance with CECL methodology With respect to the Bank's core portfolio which consists of SBA 7(a), local lending, retail point of sale, and equipment finance and leasing, the Bank pools similar loans that are collectively evaluated and determines an appropriate level of general allowance by portfolio segment using a non-discounted cash flow model taking into account probability of default, loss in the event of default, and prepayment speed estimates based on industry specific collected data. The model captures losses over the historical charge-off and prepayment cycle and applies those losses at a loan level over the remaining maturity of the loan. The model then calculates a historical loss rate using the average losses over the reporting period, which is then applied to each segment utilizing a standard reversion rate. With respect to the Bank's active retained Strategic Program loan portfolio, the Bank is using a methodology that compares the actual loan performance of a vintage to the worst performing loans within that vintage, known as the high-water mark. The Bank records the expected credit losses based on the high-water mark loss rate. With respect to the Bank's inactive retained Strategic Program loan portfolio, performance data at the summary level provided by the Strategic Programs is banded by credit profile and original loan term and compared to actual loan performance on a quarterly basis. The expected loss rate is supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, including but not limited to national unemployment rate forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the ACL are qualitative factors based on the risks present for each portfolio segment. These qualitative factors include the following that are derived from the Interagency Policy Statement on Allowance for Credit Losses: changes in lending policies and procedures; changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio; changes in the nature and volume of the loan portfolio and in the terms of loans; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due loans, nonaccrual loans, and classified or graded loans; changes in the quality of the Bank's loan review system; changes in the value of underlying collateral for loans that are not collateral-dependent; changes in the level of concentration of credit; changes in the effect of competition, legal, and regulatory requirements on the level of estimated credit losses; and, if applicable, changes in the composition and volume of the loan portfolio due to mergers, acquisitions, and other significant transactions not considered elsewhere. The Bank also considers as an additional qualitative factor any lingering "ripple" effects of the Covid-19 pandemic, including lasting changes to consumer behavior, lending, and society at large. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. When management identifies loans that do not share common risk characteristics (i.e., are not similar to other loans within a pool) they are evaluated on an individual basis. These loans are not included in the collective evaluation. For loans identified as having a likelihood of foreclosure or that the borrower is experiencing financial difficulty, a collateral dependent approach is used. These are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient method to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things: segmenting the loan portfolio; determining the amount of loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the reasonable and supportable forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts, which are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered appropriate, there can be no assurance that it will be sufficient to absorb future losses. In determining an appropriate amount for the allowance, the Bank segments and aggregates the loan portfolio based on common characteristics. The following segments have been identified: Commercial Real Estate . These loans are generally secured by owner-occupied nonfarm, nonresidential properties, or by other nonfarm, nonresidential properties. Owner-occupied commercial real estate loans are typically repaid first by the cash flows generated by the underlying business. Factors that may influence a business' cash flows include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Non-owner occupied commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions. Commercial and Industrial . These loans are generally secured by business assets such as furniture, fixtures, equipment. accounts receivable, inventory, business vehicles, and other business personal property. Commercial and industrial loans are typically repaid first by the cash flows generated by the borrower's business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and resulting positive cash flows. Factors that may influence a business' profitability include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Lease Financing Receivables . Equipment financing and leasing typically involve the use of equipment as collateral for the loan. If the borrower defaults on the loan, the Bank may need to repossess and sell the equipment to recover the outstanding debt. However, the value of the equipment may depreciate over time, or disappear, making it difficult for the Bank to recover the full amount of the loan. In equipment leasing, the residual value of the equipment is an important consideration. The residual value is the estimated value of the equipment at the end of the lease term. If the actual value of the equipment is lower than the residual value, the lessor may not be able to recover the full amount of the lease payments. Construction and Land Development . Risks common to construction loans are cost overruns, changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates. Risks common to residential lot loans are those similar to other types of real estate construction loans, as many customers finance the purchase of improved lots in anticipation of constructing a 1 to 4 family residence. Accordingly, common risks are changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values and higher interest rates. Consumer . These are loans to individuals for household, family, and other personal expenditures. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. Residential Real Estate . These loans are generally secured by 1 to 4 family residential properties. The primary risk characteristics associated with residential mortgage loans typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, residential mortgage loans that have adjustable rates could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank. Residential Real Estate Multifamily . Risks common to multifamily loans are poor management, high vacancy rates and regulatory changes. The value of multi-family properties can be impacted by changes in the local real estate market. If property values decline, the Bank may not be able to recover the full amount of the loan if the property needs to be foreclosed. Strategic Program Loans . Unsecured consumer loans and secured or unsecured business loans issued by the Company through these programs generally follow and are limited to specific predetermined underwriting criteria. Strategic Program loans cover a wide range of borrower credit profiles, loan terms and interest rates. Strategic Program loans generally have higher interest rates and shorter terms similar to consumer loans and tend to have higher credit risk due to the type of collateral securing the loan or in most cases the absence of collateral. In March 2022, the FASB issued ASU 2022-02, Financial Instruments-Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures . ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of the credit losses standard (ASU 2016-13) that introduced the CECL model. The amendments eliminate the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhance the disclosure requirements for loan refinancings and modifications. The Company adopted ASU 2022-02 on January 1, 2023. Effective January 1, 2023 loan modifications to borrowers experiencing financial difficulty are required to be disclosed by type of modification and by type of loan. Prior accounting guidance classified loans which were modified as troubled debt restructurings only if the modification reflected a concession from the lender in the form of a below market interest rate or other concession in addition to borrower financial difficulty. Under the new guidance, loans with modifications will be reported whether a concession is made or not. In the first half of 2023, there were no loan modifications which were subject to the new reporting. |
Allowance for Credit Losses | The allowance for credit losses (“ACL”) on loans held for investment is the combination of the allowance for loan losses and the reserve for unfunded loan commitments. The allowance for loan losses is reported as a reduction of the amortized cost basis of loans, while the reserve for unfunded loan commitments is included within "other liabilities" on the Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates. The amortized cost basis of loans does not include accrued interest receivable, which is included in "accrued interest receivable" on the Consolidated Balance Sheets. The "Provision for credit losses" on the Consolidated Statements of Income is a combination of the provision for credit losses and the provision for unfunded loan commitments. ACL in accordance with CECL methodology With respect to the Bank's core portfolio which consists of SBA 7(a), local lending, retail point of sale, and equipment finance and leasing, the Bank pools similar loans that are collectively evaluated and determines an appropriate level of general allowance by portfolio segment using a non-discounted cash flow model taking into account probability of default, loss in the event of default, and prepayment speed estimates based on industry specific collected data. The model captures losses over the historical charge-off and prepayment cycle and applies those losses at a loan level over the remaining maturity of the loan. The model then calculates a historical loss rate using the average losses over the reporting period, which is then applied to each segment utilizing a standard reversion rate. With respect to the Bank's active retained Strategic Program loan portfolio, the Bank is using a methodology that compares the actual loan performance of a vintage to the worst performing loans within that vintage, known as the high-water mark. The Bank records the expected credit losses based on the high-water mark loss rate. With respect to the Bank's inactive retained Strategic Program loan portfolio, performance data at the summary level provided by the Strategic Programs is banded by credit profile and original loan term and compared to actual loan performance on a quarterly basis. The expected loss rate is supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, including but not limited to national unemployment rate forecasts. Expected credit losses are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. Also included in the ACL are qualitative factors based on the risks present for each portfolio segment. These qualitative factors include the following that are derived from the Interagency Policy Statement on Allowance for Credit Losses: changes in lending policies and procedures; changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of the loan portfolio; changes in the nature and volume of the loan portfolio and in the terms of loans; changes in the experience, ability, and depth of lending management and staff; changes in the volume and severity of past due loans, nonaccrual loans, and classified or graded loans; changes in the quality of the Bank's loan review system; changes in the value of underlying collateral for loans that are not collateral-dependent; changes in the level of concentration of credit; changes in the effect of competition, legal, and regulatory requirements on the level of estimated credit losses; and, if applicable, changes in the composition and volume of the loan portfolio due to mergers, acquisitions, and other significant transactions not considered elsewhere. The Bank also considers as an additional qualitative factor any lingering "ripple" effects of the Covid-19 pandemic, including lasting changes to consumer behavior, lending, and society at large. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. When management identifies loans that do not share common risk characteristics (i.e., are not similar to other loans within a pool) they are evaluated on an individual basis. These loans are not included in the collective evaluation. For loans identified as having a likelihood of foreclosure or that the borrower is experiencing financial difficulty, a collateral dependent approach is used. These are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral. Under CECL, for collateral dependent loans, the Company has adopted the practical expedient method to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required. The CECL methodology requires a significant amount of management judgment in determining the appropriate allowance for credit losses. Several of the steps in the methodology involve judgment and are subjective in nature including, among other things: segmenting the loan portfolio; determining the amount of loss history to consider; selecting predictive econometric regression models that use appropriate macroeconomic variables; determining the methodology to forecast prepayments; selecting the most appropriate economic forecast scenario; determining the length of the reasonable and supportable forecast and reversion periods; estimating expected utilization rates on unfunded loan commitments; and assessing relevant and appropriate qualitative factors. In addition, the CECL methodology is dependent on economic forecasts, which are inherently imprecise and will change from period to period. Although the allowance for credit losses is considered appropriate, there can be no assurance that it will be sufficient to absorb future losses. In determining an appropriate amount for the allowance, the Bank segments and aggregates the loan portfolio based on common characteristics. The following segments have been identified: Commercial Real Estate . These loans are generally secured by owner-occupied nonfarm, nonresidential properties, or by other nonfarm, nonresidential properties. Owner-occupied commercial real estate loans are typically repaid first by the cash flows generated by the underlying business. Factors that may influence a business' cash flows include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Non-owner occupied commercial real estate loans are generally considered to have a higher degree of credit risk as they may be dependent on the ongoing success and operating viability of a fewer number of tenants who are occupying the property and who may have a greater degree of exposure to economic conditions. Commercial and Industrial . These loans are generally secured by business assets such as furniture, fixtures, equipment. accounts receivable, inventory, business vehicles, and other business personal property. Commercial and industrial loans are typically repaid first by the cash flows generated by the borrower's business operations. The primary risk characteristics are specific to the underlying business and its ability to generate sustainable profitability and resulting positive cash flows. Factors that may influence a business' profitability include, but are not limited to, demand for its products or services, quality and depth of management, degree of competition, regulatory changes, and general economic conditions. Lease Financing Receivables . Equipment financing and leasing typically involve the use of equipment as collateral for the loan. If the borrower defaults on the loan, the Bank may need to repossess and sell the equipment to recover the outstanding debt. However, the value of the equipment may depreciate over time, or disappear, making it difficult for the Bank to recover the full amount of the loan. In equipment leasing, the residual value of the equipment is an important consideration. The residual value is the estimated value of the equipment at the end of the lease term. If the actual value of the equipment is lower than the residual value, the lessor may not be able to recover the full amount of the lease payments. Construction and Land Development . Risks common to construction loans are cost overruns, changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values, and higher interest rates. Risks common to residential lot loans are those similar to other types of real estate construction loans, as many customers finance the purchase of improved lots in anticipation of constructing a 1 to 4 family residence. Accordingly, common risks are changes in market demand for property, supply chain interruption affecting construction materials, inadequate long-term financing arrangements and declines in real estate values. Changes in market demand for property could lead to longer marketing times resulting in higher carrying costs, declining values and higher interest rates. Consumer . These are loans to individuals for household, family, and other personal expenditures. Consumer loans generally have higher interest rates and shorter terms than residential loans but tend to have higher credit risk due to the type of collateral securing the loan or in some cases the absence of collateral. Residential Real Estate . These loans are generally secured by 1 to 4 family residential properties. The primary risk characteristics associated with residential mortgage loans typically involve: major living or lifestyle changes to the borrower, including unemployment or other loss of income; unexpected significant expenses, such as for major medical issues or catastrophic events; and divorce or death. In addition, residential mortgage loans that have adjustable rates could expose the borrower to higher debt service requirements in a rising interest rate environment. Further, real estate values could drop significantly and cause the value of the property to fall below the loan amount, creating additional potential loss exposure for the Bank. Residential Real Estate Multifamily . Risks common to multifamily loans are poor management, high vacancy rates and regulatory changes. The value of multi-family properties can be impacted by changes in the local real estate market. If property values decline, the Bank may not be able to recover the full amount of the loan if the property needs to be foreclosed. |
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 – Quoted prices in active markets for identical instruments. An active market is a market in which transactions occur with sufficient frequency and volume to provide pricing information on an ongoing basis. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. Level 2 – Observable inputs other than Level 1 including quoted prices in active markets for similar instruments, quoted prices in less active markets for identical or similar instruments, or other observable inputs that can be corroborated by observable market data. Level 3 – Unobservable inputs supported by little or no market activity for financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation also includes observable inputs from nonbinding single dealer quotes not corroborated by observable market data. In developing Level 3 measurements, management incorporates whatever market data might be available and uses discounted cash flow models where appropriate. These calculations include projections of future cash flows, including appropriate default and loss assumptions, and market-based discount rates. 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 : The carrying amount of these items is a reasonable estimate of their fair value. Investment securities held-to-maturity : The estimated fair values of investment securities are priced using current active market quotes, if available, which are considered Level 1 measurements. For most of the portfolio, matrix pricing based on the securities’ relationship to other benchmark quoted prices is used to establish the fair value. These measurements are considered Level 2. Investment in Federal Home Loan Bank stock : The fair value is based upon the redemption value of the stock, which equates to the carrying value. Strategic Program loans held-for-sale : The carrying amount of these items is a reasonable estimate of their fair value. Loans held for investment : The fair value is estimated by discounting the future cash flows and estimated prepayments using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining term. Some loan types’ fair value approximated carrying value because of their floating rate or expected maturity characteristics. SBA servicing asset : The fair value of servicing assets is based on, in part, third -party valuations that project estimated future cash inflows that include servicing fees and outflows that include market rates for costs of servicing. The present value of the future cash flows are calculated utilizing market-based discount rates. The market-based discount rates represent risk spreads based on secondary market transactions utilizing calculated prepayment curves. Due to the fact that observable loan transactions are used to determine the risk spreads, the Company considers the measurement to be Level 2. Deposits : The carrying amount of deposits with no stated maturity, such as savings and checking accounts, is a reasonable estimate of their fair value. The market value of certificates of deposit is based upon the discounted value of contractual cash flows. The discount rate is determined using the rates currently offered on comparable instruments. Accrued interest receivable and payable : The fair value of accrued interest receivable and payable approximates their carrying amount. Individually evaluated loans – The loan amount above represents loans individually evaluated as of year-end that have been adjusted to fair value. When collateral dependent loans are individually evaluated, they are measured using the current fair value of the collateral securing these loans, less selling costs. The fair value of real estate collateral is determined using collateral valuations or a discounted cash flow analysis using inputs such as discount rates, sale prices of similar assets, and term of expected disposition. Some appraised values are adjusted based on management’s review and analysis, which may include historical knowledge, changes in market conditions, estimated selling and other anticipated costs, and/or expertise and knowledge. The loss represents charge-offs on loans for adjustments made based on the fair value of the collateral. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Investments, Debt and Equity Securities [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, 2023 and December 31, 2022, are summarized as follows: June 30, 2023 ($ in thousands) Amortized Unrealized Unrealized Estimated Mortgage-backed securities $ 7,511 $ — $ (867) $ 6,644 Collateralized mortgage obligations 6,892 — (806) 6,086 Total securities held-to-maturity $ 14,403 $ — $ (1,673) $ 12,730 December 31, 2022 ($ in thousands) Amortized Unrealized Unrealized Estimated Mortgage-backed securities $ 8,087 $ 5 $ (825) $ 7,267 Collateralized mortgage obligations 6,205 — (744) 5,461 Total securities held-to-maturity $ 14,292 $ 5 $ (1,569) $ 12,728 |
Fair Value and Unrealized Losses of Securities in Unrealized Loss Position | The Company had nineteen securities, consisting of nine collateralized mortgage obligations and ten mortgage-backed securities, in an unrealized loss position at June 30, 2023 and seventeen securities, consisting of eight collateralized mortgage obligations and nine mortgage-backed securities, in an unrealized loss position at December 31, 2022, as summarized in the following tables: June 30, 2023 Less than 12 months 12 Months or More Total ($ in thousands) Fair Unrealized Fair Unrealized Fair Unrealized Mortgage-backed securities $ 794 $ (16) $ 5,850 $ (851) $ 6,644 $ (867) Collateralized mortgage obligations 2,631 (68) 3,455 (738) 6,086 (806) Total securities held-to-maturity $ 3,425 $ (84) $ 9,305 $ (1,589) $ 12,730 $ (1,673) December 31, 2022 Less than 12 months 12 Months or More Total ($ in thousands) Fair Value Unrealized Fair Value Unrealized Fair Value Unrealized Mortgage-backed securities $ 2,374 $ (190) $ 3,962 $ (635) $ 6,336 $ (825) Collateralized mortgage obligations 2,752 (96) 2,709 (648) 5,461 (744) Total securities held-to-maturity $ 5,126 $ (286) $ 6,671 $ (1,283) $ 11,797 $ (1,569) |
Amortized Cost and Estimated Market Value of Debt Securities | The amortized cost and estimated market value of debt securities at June 30, 2023 and December 31, 2022, 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, 2023 December 31, 2022 ($ in thousands) Amortized Estimated Amortized Estimated Securities held-to-maturity Due in one year or less $ — $ — $ — $ — Due after one year through five years — — — — Due after five years through ten years 3,070 2,868 3,388 3,202 Due after ten years 11,333 9,862 10,904 9,526 Total Securities held-to-maturity $ 14,403 $ 12,730 $ 14,292 $ 12,728 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans Outstanding by General Ledger Classification | Loans outstanding by general ledger classification as of June 30, 2023 and December 31, 2022, consisted of the following: June 30, December 31, 2023 2022 ($ in thousands) SBA $ 189,028 $ 145,172 Commercial, non-real estate 24,851 11,484 Residential real estate 30,378 37,815 Strategic Program loans 63,094 47,848 Commercial real estate 18,677 12,063 Consumer 6,993 5,808 Total loans $ 333,021 $ 260,190 Loans held-for-sale (42,362) (23,589) Total loans held for investment $ 290,659 $ 236,601 Deferred loan fees, net (675) (399) Allowance for credit losses 1 (12,321) (11,985) Net loans $ 277,663 $ 224,217 (1) The Company adopted ASU 2016-13 as of January 1, 2023. The 2022 amounts presented are calculated under the prior accounting standard. In determining an appropriate amount for the allowance, the Bank segmented and aggregated the loan portfolio based on the Federal Deposit Insurance Corporation ("FDIC") Consolidated Reports of Condition and Income ("Call Report") codes. The following pool segments identified as of June 30, 2023 are based on the CECL methodology: ($ in thousands) Construction and land development $ 24,949 Residential real estate 29,357 Residential real estate multifamily 572 Commercial real estate 170,253 Commercial and industrial 16,507 Consumer 6,180 Lease financing receivables 22,109 Retained Strategic Program loans 20,732 Total loans $ 290,659 The portfolio classes identified as of December 31, 2022 are based on the incurred loss methodology and are segmented by general ledger classification as detailed below. ($ in thousands) SBA $ 145,172 Commercial, non-real estate 11,484 Residential real estate 37,815 Retained Strategic Program loans 24,259 Commercial real estate 12,063 Consumer 5,808 Total loans $ 236,601 The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of the dates indicated: ($ in thousands) Collateral Type As of June 30, 2023 Real Estate Personal Property Total Commercial real estate $ 1,809 $ — $ 1,809 Residential real estate 118 — 118 Total $ 1,927 $ — $ 1,927 ($ in thousands) Collateral Type As of December 31, 2022 Real Estate Personal Property Total Commercial real estate $ 356 $ — $ 356 |
Strategic Program Loans Retained and Held-for-sale | Strategic Program loans retained and held-for-sale as of June 30, 2023 and December 31, 2022, are summarized as follows: June 30, December 31, 2023 2022 ($ in thousands) Retained Strategic Program loans $ 20,732 $ 24,259 Strategic Program loans held-for-sale 42,362 23,589 Total Strategic Program loans $ 63,094 $ 47,848 |
Changes in Allowance for Loan Losses | Activity in the ACL by common characteristic loan pools based on the CECL methodology was as follows: Three Months Ended June 30, 2023 ($ in thousands) Beginning Balance Provision (Reversal) of Credit Losses Charge-Offs Recoveries Ending Balance Construction and land development $ 285 $ (6) $ — $ — $ 279 Residential real estate 799 (51) (121) 81 708 Residential real estate multifamily 5 1 — — 6 Commercial real estate 3,034 133 — — 3,167 Commercial and industrial 277 75 (66) 1 287 Consumer 82 27 (19) — 90 Lease financing receivables 325 203 — — 528 Retained Strategic Program loans 7,227 2,293 (2,516) 252 7,256 Total allowance for loan losses $ 12,034 $ 2,675 $ (2,722) $ 334 $ 12,321 Unfunded lending commitments 29 13 — — 42 Total allowance for credit losses $ 12,063 $ 2,688 $ (2,722) $ 334 $ 12,363 Six Months Ended June 30, 2023 ($ in thousands) Beginning Balance Impact of ASU 2016-13 adoption Provision (Reversal) of Credit Losses Charge-Offs Recoveries Ending Balance Construction and land development $ 424 $ (67) $ (78) $ — $ — $ 279 Residential real estate 876 (58) (73) (121) 84 708 Residential real estate multifamily 3 1 2 — — 6 Commercial real estate 3,238 (574) 625 (122) — 3,167 Commercial and industrial 339 (85) 114 (84) 3 287 Consumer 65 14 30 (19) — 90 Lease financing receivables 339 (105) 294 — — 528 Retained Strategic Program loans 6,701 1,131 4,429 (5,541) 536 7,256 Total allowance for loan losses $ 11,985 $ 257 $ 5,343 $ (5,887) $ 623 $ 12,321 Unfunded lending commitments — 26 16 — — 42 Total allowance for credit losses $ 11,985 $ 283 $ 5,359 $ (5,887) $ 623 $ 12,363 Activity in the allowance for loan losses by general ledger classification based on the incurred loss methodology was as follows: Three Months Ended June 30, 2022 ($ in thousands) Beginning Balance Provision (Reversal) of Loan Losses Charge-Offs Recoveries Ending Balance SBA $ 3,064 $ 374 $ (102) $ 48 $ 3,384 Commercial, non-real estate 107 166 — 1 274 Residential real estate 411 4 — — 415 Retained Strategic Program loans 6,322 2,365 (2,560) 315 6,442 Commercial real estate 21 1 — — 22 Consumer 62 3 — — 65 Total allowance for loan losses $ 9,987 $ 2,913 $ (2,662) $ 364 $ 10,602 Six Months Ended June 30, 2022 ($ in thousands) Beginning Balance Provision (Reversal) of Loan Losses Charge-Offs Recoveries Ending Balance SBA $ 2,739 $ 730 $ (133) $ 48 $ 3,384 Commercial, non-real estate 132 140 — 2 274 Residential real estate 352 63 — — 415 Retained Strategic Program loans 6,549 4,923 (5,438) 408 6,442 Commercial real estate 21 1 — — 22 Consumer 62 3 — — 65 Total allowance for loan losses $ 9,855 $ 5,860 $ (5,571) $ 458 $ 10,602 The following table presents the loan balances by portfolio class, based on impairment method, and the corresponding balances in the allowance as of December 31, 2022 . For the year ended December 31, 2022 , the allowance was calculated based on the incurred loss methodology. Allowance for Loan Losses Portfolio Loan Balances ($ in thousands) Individually Collectively Total Individually Collectively Total SBA $ — $ 4,294 $ 4,294 $ 450 $ 144,722 $ 145,172 Commercial, non-real estate — 401 401 — 11,484 11,484 Residential real estate — 497 497 — 37,815 37,815 Retained Strategic Program loans — 6,701 6,701 — 24,259 24,259 Commercial real estate — 27 27 — 12,063 12,063 Consumer — 65 65 — 5,808 5,808 Total loans $ — $ 11,985 $ 11,985 $ 450 $ 236,151 $ 236,601 |
Summary of Impaired Loans | The following table presents, under previously applicable GAAP, loans individually evaluated for impairment as of December 31, 2022 : Recorded Unpaid Related Average Interest ($ in thousands) With no related allowance recorded SBA $ 450 $ 450 $ — $ 711 $ 36 Commercial, non-real estate — — — — — Residential real estate — — — — — Retained Strategic Program loans — — — — — Commercial real estate — — — — — Consumer — — — — — Total $ 450 $ 450 $ — $ 711 $ 36 |
Summary of Nonaccrual and Past Due Loans | Nonaccrual and past due loans are summarized below as of June 30, 2023 and December 31, 2022: June 30, 2023 ($ in thousands) Current 30-59 60-89 90+ Days Total Non- Total Construction and land development $ 24,733 $ 216 $ — $ — $ 216 $ — $ 24,949 Residential real estate 29,239 — — — — 118 29,357 Residential real estate multifamily 572 — — — — — 572 Commercial real estate 169,513 — — — — 740 170,253 Commercial and industrial 16,458 28 21 — 49 — 16,507 Consumer 6,120 53 7 — 60 — 6,180 Lease financing receivables 22,109 — — — — — 22,109 Retained Strategic Program loans 19,022 935 638 137 1,710 — 20,732 Total $ 287,766 $ 1,232 $ 666 $ 137 $ 2,035 $ 858 $ 290,659 December 31, 2022 ($ in thousands) Current 30-59 60-89 90+ Days Total Non- Total SBA $ 144,803 $ 369 $ — $ — $ 369 $ — $ 145,172 Commercial, non-real estate 11,484 — — — — — 11,484 Residential real estate 37,387 428 — — 428 — 37,815 Retained Strategic Program loans 22,080 1,184 802 193 2,179 — 24,259 Commercial real estate 12,063 — — — — — 12,063 Consumer 5,776 32 — — 32 — 5,808 Total $ 233,593 $ 2,013 $ 802 $ 193 $ 3,008 $ — $ 236,601 |
Outstanding Loan Balances Categorized by Credit Quality Indicators | The following table presents the ending balances of the Company's loan and lease portfolio including non-performing loans by class of receivable and originating year and considering certain credit quality indicators as of the date indicated along with gross chargeoffs for the six months ended June 30, 2023 : June 30, 2023 2023 2022 2021 Prior Revolving Loans Total ($ in thousands) Construction and land development Pass $ 4,595 $ 15,789 $ 4,358 $ 207 $ — $ 24,949 Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Total 4,595 15,789 4,358 207 — 24,949 Current period gross writeoff — — — — — — Residential real estate Pass 1,328 8,765 1,603 3,577 1,818 17,091 Watch 333 7,169 1,918 2,716 — 12,136 Special Mention — — — 12 — 12 Substandard — 118 — — — 118 Total 1,661 16,052 3,521 6,305 1,818 29,357 Current period gross writeoff — (121) — — — (121) Residential real estate multifamily Pass 200 266 80 — — 546 Watch — — — 26 — 26 Special Mention — — — — — — Substandard — — — — — — Total 200 266 80 26 — 572 Current period gross writeoff — — — — — — Commercial real estate Pass 41,966 34,298 859 14,220 — 91,343 Watch 16,087 34,310 15,069 12,260 — 77,726 Special Mention — — — 444 — 444 Substandard — 356 — 384 — 740 Total 58,053 68,964 15,928 27,308 — 170,253 Current period gross writeoff — — — (122) — (122) Commercial and industrial Pass 5,266 2,869 866 1,854 — 10,855 Watch 1,340 2,649 957 595 — 5,541 Special Mention — — — 18 — 18 Substandard — — — 93 — 93 Total 6,606 5,518 1,823 2,560 — 16,507 Current period gross writeoff — — (13) (71) — (84) Consumer Pass 2,001 2,463 873 780 1 6,118 Watch 38 — — 1 — 39 Special Mention — — — — — — Substandard — — — — — — Not Rated 23 — — — — 23 Total 2,062 2,463 873 781 1 6,180 Current period gross writeoff — (5) (12) (2) — (19) Lease financing receivables Pass 14,178 7,616 — 315 — 22,109 Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Total 14,178 7,616 — 315 — 22,109 Current-period gross writeoffs — — — — — — Retained Strategic Program loans Pass — — — — — — Watch — — — — — — Special Mention — — — — — — Substandard — — — — — — Not Rated 11,136 7,450 2,145 1 — 20,732 Total 11,136 7,450 2,145 1 — 20,732 Current-period gross writeoffs (438) (4,474) (627) (2) — (5,541) Total portfolio loans receivable, gross 98,491 124,118 28,728 37,503 1,819 290,659 Total current-period gross writeoffs (438) (4,600) (652) (197) — (5,887) The following table presents the ending balances of the Company's loan and lease portfolio including non-performing loans by class of receivable and considering certain credit quality indicators as of the date indicated: December 31, 2022 ($ in thousands) Pass Special Classified/ Total SBA $ 144,149 $ 573 $ 450 $ 145,172 Commercial, non-real estate 11,484 — — 11,484 Residential real estate 37,815 — — 37,815 Commercial real estate 12,063 — — 12,063 Consumer 5,808 — — 5,808 Not Risk Graded Retained Strategic Program loans 24,259 Total $ 211,319 $ 573 $ 450 $ 236,601 |
Loans Modified and Recorded as TDR's | Loans modified and recorded as TDR’s at December 31, 2022, c onsist of the following: ($ in thousands) Number Pre- Post- December 31, 2022 SBA 1 $ 94 $ 94 Total at December 31, 2022 1 $ 94 $ 94 |
Lease Liabilities (Tables)
Lease Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Leases [Abstract] | |
Future Minimum Annual Undiscounted Rental Payments for Operating Leases | Future minimum annual undiscounted rental payments for these operating leases are as follows ($ in thousands): Six Months Ended December 31, 2023 $ 558 Year Ended December 31, 2024 1,104 Year Ended December 31, 2025 1,086 Year Ended December 31, 2026 1,118 Year Ended December 31, 2027 1,152 Thereafter 2,203 Total 7,221 Less present value discount (429) Operating lease liabilities $ 6,792 |
Information Regarding Lease Assets and Liabilities | The tables below present information regarding the Company’s lease assets and liabilities. Six Months Ended June 30, 2023 June 30, 2022 Weighted-average remaining lease term – operating leases (in years) 6.3 7.2 Weighted-average discount rate – operating leases 1.9 % 1.9 % |
Supplemental Cash Flow Information and Components of Lease Expense | Supplemental cash flow information related to leases were as follows (in thousands): For the Three Months Ended For the Six Months Ended 2023 2022 2023 2022 ($ in thousands) Operating cash flows from operating leases $ 21 $ 28 $ 292 $ 56 Right-of-use assets obtained in exchange for operating lease liabilities — — — 7,380 The components of lease expense were as follows (in thousands): For the Three Months Ended For the Six Months Ended 2023 2022 2023 2022 (in thousands) Operating leases Operating lease cost $ 219 $ 278 $ 438 $ 514 Variable lease cost 9 4 18 8 Operating lease expense 228 282 456 522 Short-term lease rent expense — 28 — 28 Net rent expense $ 228 $ 310 $ 456 $ 550 |
SBA Servicing Asset (Tables)
SBA Servicing Asset (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Transfers and Servicing [Abstract] | |
SBA Servicing Asset Activity | The following table summarizes SBA servicing asset activity for the periods indicated: For the Three Months Ended For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Beginning balance $ 5,284 $ 5,225 $ 5,210 $ 3,938 Additions to servicing asset 150 835 150 2,243 Recovery of SBA servicing asset 339 (1,135) 592 (1,076) Amortization of servicing asset (540) (339) (719) (519) Ending balance $ 5,233 $ 4,586 $ 5,233 $ 4,586 |
Capital Requirements (Tables)
Capital Requirements (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Capital Requirements [Abstract] | |
Capital Amounts and Ratios | The Bank’s actual capital amounts and ratios are presented in the following table: Actual Well-Capitalized ($ in thousands) Amount Ratio Amount Ratio June 30, 2023 Leverage ratio (CBLR election) $ 103,813 22.4 % $ 41,718 9.0 % December 31, 2022 Leverage ratio (CBLR election) $ 91,674 25.1 % $ 32,898 9.0 % |
Commitments and Contingent Li_2
Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Financial Instruments with Off-Balance Sheet Risk | At June 30, 2023 and December 31, 2022, financial instruments with off-balance-sheet risk were as follows: June 30, December 31, ($ in thousands) 2023 2022 Revolving, open-end lines of credit $ 1,966 $ 1,683 Commercial real estate 22,667 17,886 Other unused commitments 221 253 $ 24,854 $ 19,822 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Assumptions Used | The table below summarizes the assumptions used for the options granted during the six months ended June 30, 2023. No options were granted during the first three months of 2022. For the Six Months Ended 2023 Risk-free interest rate 3.6% - 4.0% Expected term in years 5.5 – 7.5 Expected volatility 43.9% – 44.9% Expected dividend yield — |
Stock Option Activity | The following summarizes stock option activity for the three months and six months ended June 30, 2023: Stock Weighted Weighted Aggregate Outstanding at December 31, 2022 881,625 $ 5.27 7.5 $ 3,871,667 Options granted 124,906 8.64 9.6 — Options exercised (16,800) 2.37 0.0 111,656 Options forfeited (8,264) 9.25 0.0 11,765 Outstanding at June 30 2023 981,467 $ 5.72 7.4 $ 3,546,581 Options vested and exercisable at June 30 2023 689,418 $ 4.78 6.9 $ 3,000,920 Stock Weighted Weighted Aggregate Outstanding at March 31 2023 863,429 $ 5.32 7.3 $ 3,407,917 Options granted 123,806 8.63 9.6 — Options forfeited (5,768) 8.94 0 7,884 Outstanding at June 30 2023 981,467 $ 5.72 7.4 $ 3,546,581 Options vested and exercisable at June 30 2023 689,418 $ 4.78 6.9 $ 3,000,920 |
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 For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Pre-tax Stock options $ 142 $ 54 $ 237 $ 93 Restricted shares 487 46 813 46 Total $ 629 $ 100 $ 1,050 $ 139 After-tax Stock options $ 126 $ 53 $ 218 $ 91 Restricted shares 532 46 777 46 Total $ 658 $ 99 $ 995 $ 137 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Investment in BFG Activity | The following table summarizes investment in BFG activity for the periods indicated: For the Six Months Ended ($ in thousands) 2023 2022 Beginning balance $ 4,800 $ 5,900 Distributions from BFG (335) (327) Change in fair value of BFG 35 (973) Ending balance $ 4,500 $ 4,600 |
Estimated Fair Value and Carrying Value of Financial Instrument | The table below presents the carrying amount and fair value of the Company's financial instruments: June 30, 2023 December 31, 2022 ($ in thousands) Level Carrying Estimated Carrying Estimated Financial assets: Cash and cash equivalents 1 $ 119,043 $ 119,043 $ 100,567 $ 100,567 Investment securities held-to-maturity 2 14,403 12,730 14,292 12,728 Investment in FHLB stock 2 476 476 449 449 Loans held for investment 3 277,663 294,533 224,217 237,225 Loans held-for-sale 2 42,362 42,357 23,589 23,586 Accrued interest receivable 2 2,316 2,316 1,818 1,818 SBA servicing asset 2 5,233 5,233 5,210 5,210 Investment in BFG 3 4,500 4,500 4,800 4,800 Financial liabilities: Total deposits 2 332,530 306,396 242,998 221,287 Accrued interest payable 2 466 466 54 54 PPP Liquidity Facility 2 252 252 314 314 |
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, 2023 Nonrecurring assets Individually evaluated loans $ 952 $ — $ — $ 952 December 31, 2022 Nonrecurring assets Individually evaluated loans $ 450 $ — $ — $ 450 |
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, 2023 and as of December 31, 2022, along with the valuation techniques used, are shown in the following table: ($ in thousands) Fair Value Valuation Unobservable Range June 30, 2023 Individually evaluated loans $ 952 Market Adjustment to 0.34 % December 31, 2022 Individually evaluated loans $ 450 Market Adjustment to 0.20 % |
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 in BFG Level 3 recurring asset as of June 30, 2023 and as of December 31, 2022 are shown in the following table: ($ in thousands) June 30, 2023 December 31, 2022 Discounted Cash Flows Revenue growth rate 10.7 % 10.8 % Expense growth rate 14.1 % 11.5 % Discount rate 25.0 % 30.0 % Guideline Public Company Multiples of enterprise value 3.5x to 5.0x 3.0x to 5.0x |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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, 2023 and 2022 ($ in thousands, except share and per share amounts): For the Three Months Ended For the Six Months Ended ($ in thousands) 2023 2022 2023 2022 Numerator: Net income $ 4,638 $ 5,482 $ 8,499 $ 14,916 Amount allocated to participating common shareholders (1) (88) (41) (122) (112) Net income allocate to common shareholders $ 4,550 $ 5,441 $ 8,377 $ 14,804 Denominator: Weighted average shares outstanding, basic 12,603,463 12,716,010 12,655,605 12,698,714 Weighted average effect of dilutive securities: Stock options 327,786 558,855 359,632 589,091 Warrants 58,281 142,525 65,383 156,542 Weighted average shares outstanding, diluted 12,989,530 13,417,390 13,080,620 13,444,347 Earnings per share, basic $ 0.36 $ 0.43 $ 0.66 $ 1.17 Earnings per share, diluted $ 0.35 $ 0.41 $ 0.64 $ 1.10 (1) Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 11 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Jun. 30, 2023 USD ($) segment | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 16, 2022 shares | |
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Interest and fees on loans | $ 14,355 | $ 12,864 | $ 26,697 | $ 26,020 | |||||||
Adjustment to net income | 4,638 | 5,482 | 8,499 | 14,916 | |||||||
Gain on sale of loans | $ 2,100 | 887 | 7,464 | ||||||||
Gain on sale of loans, net | 700 | 1,500 | $ 2,412 | $ 887 | $ 7,464 | ||||||
Past due period after which loans are placed on nonaccrual status | 90 days | ||||||||||
Common stock repurchase program, shares authorized to be purchased (in shares) | shares | 644,241 | ||||||||||
Stock repurchases (in shares) | shares | 413,263 | ||||||||||
Common stock repurchased, value | $ 2,173 | $ 2,388 | $ 3,500 | ||||||||
Number of reportable segments | segment | 1 | ||||||||||
Other Assets | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
New loan trailing fee asset | $ 2,300 | $ 2,300 | |||||||||
Out-of-Period Adjustment | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Interest and fees on loans | $ (800) | ||||||||||
Interest and fees on loans, net of tax | $ (600) | ||||||||||
Adjustment to net income | $ (900) | ||||||||||
Gain on sale of loans | $ 1,200 | $ 900 | |||||||||
Gain on sale of loans, net | $ 900 | $ 600 | |||||||||
FinWise Bank | |||||||||||
Subsidiary, Sale of Stock [Line Items] | |||||||||||
Percentage of business acquired | 100% | 100% | 100% |
Investments - Held-to-Maturity
Investments - Held-to-Maturity Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Held-to-Maturity Securities [Line Items] | ||
Amortized Cost | $ 14,403 | $ 14,292 |
Unrealized Gain | 0 | 5 |
Unrealized Loss | (1,673) | (1,569) |
Estimated Fair Value | 12,730 | 12,728 |
Mortgage-backed securities | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Amortized Cost | 7,511 | 8,087 |
Unrealized Gain | 0 | 5 |
Unrealized Loss | (867) | (825) |
Estimated Fair Value | 6,644 | 7,267 |
Collateralized mortgage obligations | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Amortized Cost | 6,892 | 6,205 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | (806) | (744) |
Estimated Fair Value | $ 6,086 | $ 5,461 |
Investments - Narrative (Detail
Investments - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 USD ($) security | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) security | Jun. 30, 2022 USD ($) | Jan. 01, 2023 USD ($) | Dec. 31, 2022 USD ($) security | |
Schedule of Held-to-Maturity Securities [Line Items] | ||||||
Allowance for credit losses related to HTM securities | $ 0 | $ 0 | $ 0 | |||
Number of securities in unrealized loss position | security | 19 | 19 | 17 | |||
Investment securities held-to-maturity, at cost | $ 14,403,000 | $ 14,403,000 | $ 14,292,000 | |||
Sales or transfers of investment securities | 0 | $ 0 | 0 | $ 0 | ||
Realized gains or losses on investment securities | $ 0 | $ 0 | $ 0 | $ 0 | ||
Collateralized mortgage obligations | ||||||
Schedule of Held-to-Maturity Securities [Line Items] | ||||||
Number of securities in unrealized loss position | security | 9 | 9 | 8 | |||
Investment securities held-to-maturity, at cost | $ 6,892,000 | $ 6,892,000 | $ 6,205,000 | |||
Mortgage-backed securities | ||||||
Schedule of Held-to-Maturity Securities [Line Items] | ||||||
Number of securities in unrealized loss position | security | 10 | 10 | 9 | |||
Investment securities held-to-maturity, at cost | $ 7,511,000 | $ 7,511,000 | $ 8,087,000 | |||
Asset Pledged as Collateral | Federal Reserve Bank Advances | ||||||
Schedule of Held-to-Maturity Securities [Line Items] | ||||||
Investment securities held-to-maturity, at cost | $ 12,600,000 | $ 12,600,000 |
Investments - Unrealized Loss P
Investments - Unrealized Loss Position (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Schedule of Held-to-Maturity Securities [Line Items] | ||
Less than 12 months, Fair Value | $ 3,425 | $ 5,126 |
Less than 12 months, Unrealized Losses | (84) | (286) |
12 Months or More, Fair Value | 9,305 | 6,671 |
12 Months or More, Unrealized Losses | (1,589) | (1,283) |
Total, Fair Value | 12,730 | 11,797 |
Total, Unrealized Losses | (1,673) | (1,569) |
Mortgage-backed securities | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Less than 12 months, Fair Value | 794 | 2,374 |
Less than 12 months, Unrealized Losses | (16) | (190) |
12 Months or More, Fair Value | 5,850 | 3,962 |
12 Months or More, Unrealized Losses | (851) | (635) |
Total, Fair Value | 6,644 | 6,336 |
Total, Unrealized Losses | (867) | (825) |
Collateralized mortgage obligations | ||
Schedule of Held-to-Maturity Securities [Line Items] | ||
Less than 12 months, Fair Value | 2,631 | 2,752 |
Less than 12 months, Unrealized Losses | (68) | (96) |
12 Months or More, Fair Value | 3,455 | 2,709 |
12 Months or More, Unrealized Losses | (738) | (648) |
Total, Fair Value | 6,086 | 5,461 |
Total, Unrealized Losses | $ (806) | $ (744) |
Investments - Amortized Cost an
Investments - Amortized Cost and Estimated Market Value of Debt Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Due in one year or less | $ 0 | $ 0 |
Due after one year through five years | 0 | 0 |
Due after five years through ten years | 3,070 | 3,388 |
Due after ten years | 11,333 | 10,904 |
Amortized Cost | 14,403 | 14,292 |
Estimated Fair Value | ||
Due in one year or less | 0 | 0 |
Due after one year through five years | 0 | 0 |
Due after five years through ten years | 2,868 | 3,202 |
Due after ten years | 9,862 | 9,526 |
Estimated fair value | $ 12,730 | $ 12,728 |
Investments - FHLB Stock (Detai
Investments - FHLB Stock (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Investments, Debt and Equity Securities [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 | $ 476 | $ 449 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses - Loans Summarized to Major Risk Category (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | $ 290,659 | $ 236,601 | ||||
Allowance for credit losses | (12,321) | $ (12,034) | (11,985) | $ (10,602) | $ (9,987) | $ (9,855) |
Net loans | 277,663 | 224,217 | ||||
Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 333,021 | 260,190 | ||||
Loans held-for-sale | (42,362) | (23,589) | ||||
Retained Strategic Program loans | 290,659 | 236,601 | ||||
Deferred loan fees, net | (675) | (399) | ||||
Allowance for credit losses | (12,321) | (11,985) | ||||
Net loans | 277,663 | 224,217 | ||||
SBA | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | 145,172 | |||||
Allowance for credit losses | (3,384) | (3,064) | (2,739) | |||
SBA | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 189,028 | 145,172 | ||||
Retained Strategic Program loans | 145,172 | |||||
Allowance for credit losses | (4,294) | |||||
Commercial, non-real estate | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | 11,484 | |||||
Allowance for credit losses | (274) | (107) | (132) | |||
Commercial, non-real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 24,851 | 11,484 | ||||
Retained Strategic Program loans | 11,484 | |||||
Allowance for credit losses | (401) | |||||
Residential real estate | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | 29,357 | 37,815 | ||||
Allowance for credit losses | (708) | (799) | (876) | (415) | (411) | (352) |
Residential real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 30,378 | 37,815 | ||||
Retained Strategic Program loans | 37,815 | |||||
Allowance for credit losses | (497) | |||||
Strategic Program loans | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 63,094 | 47,848 | ||||
Loans held-for-sale | (42,362) | (23,589) | ||||
Retained Strategic Program loans | 20,732 | 24,259 | ||||
Allowance for credit losses | (7,256) | (7,227) | (6,701) | (6,442) | (6,322) | (6,549) |
Strategic Program loans | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 63,094 | 47,848 | ||||
Retained Strategic Program loans | 24,259 | |||||
Allowance for credit losses | (6,701) | |||||
Commercial real estate | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | 170,253 | 12,063 | ||||
Allowance for credit losses | (3,167) | (3,034) | (3,238) | (22) | (21) | (21) |
Commercial real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | 18,677 | 12,063 | ||||
Retained Strategic Program loans | 12,063 | |||||
Allowance for credit losses | (27) | |||||
Consumer | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Retained Strategic Program loans | 6,180 | 5,808 | ||||
Allowance for credit losses | (90) | $ (82) | (65) | $ (65) | $ (62) | $ (62) |
Consumer | Financing Receivable, Incurred Loss Methodology | ||||||
Loans and Leases Receivable Disclosure [Line Items] | ||||||
Total Strategic Program loans | $ 6,993 | 5,808 | ||||
Retained Strategic Program loans | 5,808 | |||||
Allowance for credit losses | $ (65) |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Narrative (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2022 loan | Jun. 30, 2022 USD ($) loan | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Commitments to lend | $ | $ 0 | |||
Number of principal charge-offs related to TDRs | loan | 0 | 1 | ||
Charge-offs related to TDRs | $ | $ 10,000 | |||
Number of new loans modification | loan | 0 | 0 | ||
Number of restructured loans | loan | 1 | |||
Strategic Program loans | ||||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||||
Cash held in reserve by strategic programs | $ | $ 29,800,000 | $ 16,600,000 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Strategic Program Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Retained Strategic Program loans | $ 290,659 | $ 236,601 |
Retained Strategic Program loans | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Retained Strategic Program loans | 20,732 | 24,259 |
Strategic Program loans held-for-sale | 42,362 | 23,589 |
Total Strategic Program loans | $ 63,094 | $ 47,848 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Allowance for Credit Loss by Loan Segment (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | $ 290,659 | $ 236,601 |
Construction and land development | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 24,949 | |
Residential real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 29,357 | 37,815 |
Residential real estate multifamily | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 572 | |
Commercial real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 170,253 | 12,063 |
Commercial and industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 16,507 | |
Consumer | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 6,180 | 5,808 |
Lease financing receivables | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | 22,109 | |
Retained Strategic Program loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total loans | $ 20,732 | $ 24,259 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Portfolio Classes by Incurred Loss Methodology (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | $ 290,659 | $ 236,601 |
Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 290,659 | 236,601 |
SBA | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 145,172 | |
SBA | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 145,172 | |
Commercial, non-real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 11,484 | |
Commercial, non-real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 11,484 | |
Residential real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 29,357 | 37,815 |
Residential real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 37,815 | |
Retained Strategic Program loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 20,732 | 24,259 |
Retained Strategic Program loans | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 24,259 | |
Commercial real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 170,253 | 12,063 |
Commercial real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | 12,063 | |
Consumer | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | $ 6,180 | 5,808 |
Consumer | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Retained Strategic Program loans | $ 5,808 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Changes in Allowance for Loan Losses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Total allowance for loan losses | ||||
Beginning Balance | $ 12,034,000 | $ 9,987,000 | $ 11,985,000 | $ 9,855,000 |
Provision (Reversal) of Credit Losses | 2,675,000 | 2,913,000 | 5,343,000 | 5,860,000 |
Charge-Offs | (2,722,000) | (2,662,000) | (5,887,000) | (5,571,000) |
Recoveries | 334,000 | 364,000 | 623,000 | 458,000 |
Ending Balance | 12,321,000 | 10,602,000 | 12,321,000 | 10,602,000 |
Unfunded lending commitments | ||||
Beginning Balance | 29,000 | 0 | ||
Provision (Reversal) of Credit Losses | 13,000 | 16,000 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Ending Balance | 41,500 | 41,500 | ||
Total allowance for credit losses | ||||
Beginning Balance | 12,063,000 | 11,985,000 | ||
Provision (Reversal) of Credit Losses | 2,688,000 | 5,359,000 | ||
Charge-Offs | (2,722,000) | (5,887,000) | ||
Recoveries | 334,000 | 623,000 | ||
Ending Balance | 12,363,000 | 12,363,000 | ||
Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | 257,000 | |||
Unfunded lending commitments | ||||
Beginning Balance | 26,000 | |||
Total allowance for credit losses | ||||
Beginning Balance | 283,000 | |||
Construction and land development | ||||
Total allowance for loan losses | ||||
Beginning Balance | 285,000 | 424,000 | ||
Provision (Reversal) of Credit Losses | (6,000) | (78,000) | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Ending Balance | 279,000 | 279,000 | ||
Construction and land development | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | (67,000) | |||
Residential real estate | ||||
Total allowance for loan losses | ||||
Beginning Balance | 799,000 | 411,000 | 876,000 | 352,000 |
Provision (Reversal) of Credit Losses | (51,000) | 4,000 | (73,000) | 63,000 |
Charge-Offs | (121,000) | 0 | (121,000) | 0 |
Recoveries | 81,000 | 0 | 84,000 | 0 |
Ending Balance | 708,000 | 415,000 | 708,000 | 415,000 |
Residential real estate | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | (58,000) | |||
Residential real estate multifamily | ||||
Total allowance for loan losses | ||||
Beginning Balance | 5,000 | 3,000 | ||
Provision (Reversal) of Credit Losses | 1,000 | 2,000 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Ending Balance | 6,000 | 6,000 | ||
Residential real estate multifamily | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | 1,000 | |||
Commercial real estate | ||||
Total allowance for loan losses | ||||
Beginning Balance | 3,034,000 | 21,000 | 3,238,000 | 21,000 |
Provision (Reversal) of Credit Losses | 133,000 | 1,000 | 625,000 | 1,000 |
Charge-Offs | 0 | 0 | (122,000) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Ending Balance | 3,167,000 | 22,000 | 3,167,000 | 22,000 |
Commercial real estate | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | (574,000) | |||
Commercial and industrial | ||||
Total allowance for loan losses | ||||
Beginning Balance | 277,000 | 339,000 | ||
Provision (Reversal) of Credit Losses | 75,000 | 114,000 | ||
Charge-Offs | (66,000) | (84,000) | ||
Recoveries | 1,000 | 3,000 | ||
Ending Balance | 287,000 | 287,000 | ||
Commercial and industrial | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | (85,000) | |||
Consumer | ||||
Total allowance for loan losses | ||||
Beginning Balance | 82,000 | 62,000 | 65,000 | 62,000 |
Provision (Reversal) of Credit Losses | 27,000 | 3,000 | 30,000 | 3,000 |
Charge-Offs | (19,000) | 0 | (19,000) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Ending Balance | 90,000 | 65,000 | 90,000 | 65,000 |
Consumer | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | 14,000 | |||
Lease financing receivables | ||||
Total allowance for loan losses | ||||
Beginning Balance | 325,000 | 339,000 | ||
Provision (Reversal) of Credit Losses | 203,000 | 294,000 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 0 | 0 | ||
Ending Balance | 528,000 | 528,000 | ||
Lease financing receivables | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | (105,000) | |||
Retained Strategic Program loans | ||||
Total allowance for loan losses | ||||
Beginning Balance | 7,227,000 | 6,322,000 | 6,701,000 | 6,549,000 |
Provision (Reversal) of Credit Losses | 2,293,000 | 2,365,000 | 4,429,000 | 4,923,000 |
Charge-Offs | (2,516,000) | (2,560,000) | (5,541,000) | (5,438,000) |
Recoveries | 252,000 | 315,000 | 536,000 | 408,000 |
Ending Balance | $ 7,256,000 | 6,442,000 | 7,256,000 | 6,442,000 |
Retained Strategic Program loans | Impact of ASU 2016-13 adoption | ||||
Total allowance for loan losses | ||||
Beginning Balance | $ 1,131,000 | |||
SBA | ||||
Total allowance for loan losses | ||||
Beginning Balance | 3,064,000 | 2,739,000 | ||
Provision (Reversal) of Credit Losses | 374,000 | 730,000 | ||
Charge-Offs | (102,000) | (133,000) | ||
Recoveries | 48,000 | 48,000 | ||
Ending Balance | 3,384,000 | 3,384,000 | ||
Commercial, non-real estate | ||||
Total allowance for loan losses | ||||
Beginning Balance | 107,000 | 132,000 | ||
Provision (Reversal) of Credit Losses | 166,000 | 140,000 | ||
Charge-Offs | 0 | 0 | ||
Recoveries | 1,000 | 2,000 | ||
Ending Balance | $ 274,000 | $ 274,000 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Allowance for Loan Losses on Impaired Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Allowance for Loan Losses | ||||||
Total | $ 12,321 | $ 12,034 | $ 11,985 | $ 10,602 | $ 9,987 | $ 9,855 |
Portfolio Loan Balances | ||||||
Total loans held for investment | 290,659 | 236,601 | ||||
Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 11,985 | |||||
Total | 12,321 | 11,985 | ||||
Portfolio Loan Balances | ||||||
Individually | 450 | |||||
Collectively | 236,151 | |||||
Total loans held for investment | 290,659 | 236,601 | ||||
SBA | ||||||
Allowance for Loan Losses | ||||||
Total | 3,384 | 3,064 | 2,739 | |||
Portfolio Loan Balances | ||||||
Total loans held for investment | 145,172 | |||||
SBA | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 4,294 | |||||
Total | 4,294 | |||||
Portfolio Loan Balances | ||||||
Individually | 450 | |||||
Collectively | 144,722 | |||||
Total loans held for investment | 145,172 | |||||
Commercial, non-real estate | ||||||
Allowance for Loan Losses | ||||||
Total | 274 | 107 | 132 | |||
Portfolio Loan Balances | ||||||
Total loans held for investment | 11,484 | |||||
Commercial, non-real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 401 | |||||
Total | 401 | |||||
Portfolio Loan Balances | ||||||
Individually | 0 | |||||
Collectively | 11,484 | |||||
Total loans held for investment | 11,484 | |||||
Residential real estate | ||||||
Allowance for Loan Losses | ||||||
Total | 708 | 799 | 876 | 415 | 411 | 352 |
Portfolio Loan Balances | ||||||
Total loans held for investment | 29,357 | 37,815 | ||||
Residential real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 497 | |||||
Total | 497 | |||||
Portfolio Loan Balances | ||||||
Individually | 0 | |||||
Collectively | 37,815 | |||||
Total loans held for investment | 37,815 | |||||
Retained Strategic Program loans | ||||||
Allowance for Loan Losses | ||||||
Total | 7,256 | 7,227 | 6,701 | 6,442 | 6,322 | 6,549 |
Portfolio Loan Balances | ||||||
Total loans held for investment | 20,732 | 24,259 | ||||
Retained Strategic Program loans | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 6,701 | |||||
Total | 6,701 | |||||
Portfolio Loan Balances | ||||||
Individually | 0 | |||||
Collectively | 24,259 | |||||
Total loans held for investment | 24,259 | |||||
Commercial real estate | ||||||
Allowance for Loan Losses | ||||||
Total | 3,167 | 3,034 | 3,238 | 22 | 21 | 21 |
Portfolio Loan Balances | ||||||
Total loans held for investment | 170,253 | 12,063 | ||||
Commercial real estate | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 27 | |||||
Total | 27 | |||||
Portfolio Loan Balances | ||||||
Individually | 0 | |||||
Collectively | 12,063 | |||||
Total loans held for investment | 12,063 | |||||
Consumer | ||||||
Allowance for Loan Losses | ||||||
Total | 90 | $ 82 | 65 | $ 65 | $ 62 | $ 62 |
Portfolio Loan Balances | ||||||
Total loans held for investment | $ 6,180 | 5,808 | ||||
Consumer | Financing Receivable, Incurred Loss Methodology | ||||||
Allowance for Loan Losses | ||||||
Individually | 0 | |||||
Collectively | 65 | |||||
Total | 65 | |||||
Portfolio Loan Balances | ||||||
Individually | 0 | |||||
Collectively | 5,808 | |||||
Total loans held for investment | $ 5,808 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Impaired Loans (Details) - Financing Receivable, Incurred Loss Methodology $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
With no related allowance recorded | |
Recorded Investment | $ 450 |
Unpaid Principal Balance | 450 |
Related Allowance | 0 |
Average Recorded Investment | 711 |
Interest Income Recognized | 36 |
SBA | |
With no related allowance recorded | |
Recorded Investment | 450 |
Unpaid Principal Balance | 450 |
Related Allowance | 0 |
Average Recorded Investment | 711 |
Interest Income Recognized | 36 |
Commercial, non-real estate | |
With no related allowance recorded | |
Recorded Investment | 0 |
Unpaid Principal Balance | 0 |
Related Allowance | 0 |
Average Recorded Investment | 0 |
Interest Income Recognized | 0 |
Residential real estate | |
With no related allowance recorded | |
Recorded Investment | 0 |
Unpaid Principal Balance | 0 |
Related Allowance | 0 |
Average Recorded Investment | 0 |
Interest Income Recognized | 0 |
Retained Strategic Program loans | |
With no related allowance recorded | |
Recorded Investment | 0 |
Unpaid Principal Balance | 0 |
Related Allowance | 0 |
Average Recorded Investment | 0 |
Interest Income Recognized | 0 |
Commercial real estate | |
With no related allowance recorded | |
Recorded Investment | 0 |
Unpaid Principal Balance | 0 |
Related Allowance | 0 |
Average Recorded Investment | 0 |
Interest Income Recognized | 0 |
Consumer | |
With no related allowance recorded | |
Recorded Investment | 0 |
Unpaid Principal Balance | 0 |
Related Allowance | 0 |
Average Recorded Investment | 0 |
Interest Income Recognized | $ 0 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses - Nonaccrual and Past Due Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | $ 290,659 | $ 236,601 |
Non- Accrual | 858 | |
Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 290,659 | 236,601 |
Non- Accrual | 0 | |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 287,766 | |
Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 233,593 | |
Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 2,035 | |
Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 3,008 | |
30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 1,232 | |
30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 2,013 | |
60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 666 | |
60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 802 | |
90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 137 | |
90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 193 | |
Construction and land development | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 24,949 | |
Non- Accrual | 0 | |
Construction and land development | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 24,733 | |
Construction and land development | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 216 | |
Construction and land development | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 216 | |
Construction and land development | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Construction and land development | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 29,357 | 37,815 |
Non- Accrual | 118 | |
Residential real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 37,815 | |
Non- Accrual | 0 | |
Residential real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 29,239 | |
Residential real estate | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 37,387 | |
Residential real estate | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 428 | |
Residential real estate | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 428 | |
Residential real estate | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 572 | |
Non- Accrual | 0 | |
Residential real estate multifamily | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 572 | |
Residential real estate multifamily | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate multifamily | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate multifamily | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Residential real estate multifamily | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 170,253 | 12,063 |
Non- Accrual | 740 | |
Commercial real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 12,063 | |
Non- Accrual | 0 | |
Commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 169,513 | |
Commercial real estate | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 12,063 | |
Commercial real estate | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial real estate | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 16,507 | |
Non- Accrual | 0 | |
Commercial and industrial | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 16,458 | |
Commercial and industrial | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 49 | |
Commercial and industrial | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 28 | |
Commercial and industrial | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 21 | |
Commercial and industrial | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 6,180 | 5,808 |
Non- Accrual | 0 | |
Consumer | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 5,808 | |
Non- Accrual | 0 | |
Consumer | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 6,120 | |
Consumer | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 5,776 | |
Consumer | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 60 | |
Consumer | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 32 | |
Consumer | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 53 | |
Consumer | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 32 | |
Consumer | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 7 | |
Consumer | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Consumer | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Consumer | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Lease financing receivables | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 22,109 | |
Non- Accrual | 0 | |
Lease financing receivables | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 22,109 | |
Lease financing receivables | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Lease financing receivables | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Lease financing receivables | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Lease financing receivables | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Retained Strategic Program loans | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 20,732 | 24,259 |
Non- Accrual | 0 | |
Retained Strategic Program loans | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 24,259 | |
Non- Accrual | 0 | |
Retained Strategic Program loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 19,022 | |
Retained Strategic Program loans | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 22,080 | |
Retained Strategic Program loans | Total Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 1,710 | |
Retained Strategic Program loans | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 2,179 | |
Retained Strategic Program loans | 30-59 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 935 | |
Retained Strategic Program loans | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 1,184 | |
Retained Strategic Program loans | 60-89 Days Due Due | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 638 | |
Retained Strategic Program loans | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 802 | |
Retained Strategic Program loans | 90+ Days Past Due & Still Accruing | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | $ 137 | |
Retained Strategic Program loans | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 193 | |
SBA | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 145,172 | |
SBA | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 145,172 | |
Non- Accrual | 0 | |
SBA | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 144,803 | |
SBA | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 369 | |
SBA | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 369 | |
SBA | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
SBA | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial, non-real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 11,484 | |
Commercial, non-real estate | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 11,484 | |
Non- Accrual | 0 | |
Commercial, non-real estate | Current | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 11,484 | |
Commercial, non-real estate | Total Past Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial, non-real estate | 30-59 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial, non-real estate | 60-89 Days Due Due | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | 0 | |
Commercial, non-real estate | 90+ Days Past Due & Still Accruing | Financing Receivable, Incurred Loss Methodology | ||
Financing Receivable, Past Due [Line Items] | ||
Retained Strategic Program loans | $ 0 |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses - Loans by Origination Year (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | $ 98,491 | $ 98,491 | |||
2022 | 124,118 | 124,118 | |||
2021 | 28,728 | 28,728 | |||
Prior | 37,503 | 37,503 | |||
Revolving Loans | 1,819 | 1,819 | |||
Total loans held for investment | 290,659 | 290,659 | $ 236,601 | ||
2023, Writeoff | (438) | ||||
2022, Writeoff | (4,600) | ||||
2021, Writeoff | (652) | ||||
Prior, Writeoff | (197) | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | (2,722) | $ (2,662) | (5,887) | $ (5,571) | |
Construction and land development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 4,595 | 4,595 | |||
2022 | 15,789 | 15,789 | |||
2021 | 4,358 | 4,358 | |||
Prior | 207 | 207 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 24,949 | 24,949 | |||
2023, Writeoff | 0 | ||||
2022, Writeoff | 0 | ||||
2021, Writeoff | 0 | ||||
Prior, Writeoff | 0 | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | 0 | 0 | |||
Residential real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 1,661 | 1,661 | |||
2022 | 16,052 | 16,052 | |||
2021 | 3,521 | 3,521 | |||
Prior | 6,305 | 6,305 | |||
Revolving Loans | 1,818 | 1,818 | |||
Total loans held for investment | 29,357 | 29,357 | 37,815 | ||
2023, Writeoff | 0 | ||||
2022, Writeoff | (121) | ||||
2021, Writeoff | 0 | ||||
Prior, Writeoff | 0 | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | (121) | 0 | (121) | 0 | |
Residential real estate multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 200 | 200 | |||
2022 | 266 | 266 | |||
2021 | 80 | 80 | |||
Prior | 26 | 26 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 572 | 572 | |||
2023, Writeoff | 0 | ||||
2022, Writeoff | 0 | ||||
2021, Writeoff | 0 | ||||
Prior, Writeoff | 0 | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | 0 | 0 | |||
Commercial real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 58,053 | 58,053 | |||
2022 | 68,964 | 68,964 | |||
2021 | 15,928 | 15,928 | |||
Prior | 27,308 | 27,308 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 170,253 | 170,253 | 12,063 | ||
2023, Writeoff | 0 | ||||
2022, Writeoff | 0 | ||||
2021, Writeoff | 0 | ||||
Prior, Writeoff | (122) | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | 0 | 0 | (122) | 0 | |
Commercial and industrial | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 6,606 | 6,606 | |||
2022 | 5,518 | 5,518 | |||
2021 | 1,823 | 1,823 | |||
Prior | 2,560 | 2,560 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 16,507 | 16,507 | |||
2023, Writeoff | 0 | ||||
2022, Writeoff | 0 | ||||
2021, Writeoff | (13) | ||||
Prior, Writeoff | (71) | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | (66) | (84) | |||
Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 2,062 | 2,062 | |||
2022 | 2,463 | 2,463 | |||
2021 | 873 | 873 | |||
Prior | 781 | 781 | |||
Revolving Loans | 1 | 1 | |||
Total loans held for investment | 6,180 | 6,180 | 5,808 | ||
2023, Writeoff | 0 | ||||
2022, Writeoff | (5) | ||||
2021, Writeoff | (12) | ||||
Prior, Writeoff | (2) | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | (19) | 0 | (19) | 0 | |
Lease financing receivables | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 14,178 | 14,178 | |||
2022 | 7,616 | 7,616 | |||
2021 | 0 | 0 | |||
Prior | 315 | 315 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 22,109 | 22,109 | |||
2023, Writeoff | 0 | ||||
2022, Writeoff | 0 | ||||
2021, Writeoff | 0 | ||||
Prior, Writeoff | 0 | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | 0 | 0 | |||
Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 11,136 | 11,136 | |||
2022 | 7,450 | 7,450 | |||
2021 | 2,145 | 2,145 | |||
Prior | 1 | 1 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 20,732 | 20,732 | 24,259 | ||
2023, Writeoff | (438) | ||||
2022, Writeoff | (4,474) | ||||
2021, Writeoff | (627) | ||||
Prior, Writeoff | (2) | ||||
Revolving Loans, Writeoff | 0 | ||||
Writeoff | (2,516) | $ (2,560) | (5,541) | $ (5,438) | |
Pass | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Total loans held for investment | 211,319 | ||||
Pass | Construction and land development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 4,595 | 4,595 | |||
2022 | 15,789 | 15,789 | |||
2021 | 4,358 | 4,358 | |||
Prior | 207 | 207 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 24,949 | 24,949 | |||
Pass | Residential real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 1,328 | 1,328 | |||
2022 | 8,765 | 8,765 | |||
2021 | 1,603 | 1,603 | |||
Prior | 3,577 | 3,577 | |||
Revolving Loans | 1,818 | 1,818 | |||
Total loans held for investment | 17,091 | 17,091 | 37,815 | ||
Pass | Residential real estate multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 200 | 200 | |||
2022 | 266 | 266 | |||
2021 | 80 | 80 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 546 | 546 | |||
Pass | Commercial real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 41,966 | 41,966 | |||
2022 | 34,298 | 34,298 | |||
2021 | 859 | 859 | |||
Prior | 14,220 | 14,220 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 91,343 | 91,343 | 12,063 | ||
Pass | Commercial and industrial | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 5,266 | 5,266 | |||
2022 | 2,869 | 2,869 | |||
2021 | 866 | 866 | |||
Prior | 1,854 | 1,854 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 10,855 | 10,855 | |||
Pass | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 2,001 | 2,001 | |||
2022 | 2,463 | 2,463 | |||
2021 | 873 | 873 | |||
Prior | 780 | 780 | |||
Revolving Loans | 1 | 1 | |||
Total loans held for investment | 6,118 | 6,118 | 5,808 | ||
Pass | Lease financing receivables | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 14,178 | 14,178 | |||
2022 | 7,616 | 7,616 | |||
2021 | 0 | 0 | |||
Prior | 315 | 315 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 22,109 | 22,109 | |||
Pass | Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Watch | Construction and land development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Watch | Residential real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 333 | 333 | |||
2022 | 7,169 | 7,169 | |||
2021 | 1,918 | 1,918 | |||
Prior | 2,716 | 2,716 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 12,136 | 12,136 | |||
Watch | Residential real estate multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 26 | 26 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 26 | 26 | |||
Watch | Commercial real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 16,087 | 16,087 | |||
2022 | 34,310 | 34,310 | |||
2021 | 15,069 | 15,069 | |||
Prior | 12,260 | 12,260 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 77,726 | 77,726 | |||
Watch | Commercial and industrial | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 1,340 | 1,340 | |||
2022 | 2,649 | 2,649 | |||
2021 | 957 | 957 | |||
Prior | 595 | 595 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 5,541 | 5,541 | |||
Watch | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 38 | 38 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 1 | 1 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 39 | 39 | |||
Watch | Lease financing receivables | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Watch | Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Special Mention | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
Total loans held for investment | 573 | ||||
Special Mention | Construction and land development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Special Mention | Residential real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 12 | 12 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 12 | 12 | 0 | ||
Special Mention | Residential real estate multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Special Mention | Commercial real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 444 | 444 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 444 | 444 | 0 | ||
Special Mention | Commercial and industrial | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 18 | 18 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 18 | 18 | |||
Special Mention | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | $ 0 | ||
Special Mention | Lease financing receivables | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Special Mention | Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Substandard | Construction and land development | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Substandard | Residential real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 118 | 118 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 118 | 118 | |||
Substandard | Residential real estate multifamily | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Substandard | Commercial real estate | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 356 | 356 | |||
2021 | 0 | 0 | |||
Prior | 384 | 384 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 740 | 740 | |||
Substandard | Commercial and industrial | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 93 | 93 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 93 | 93 | |||
Substandard | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Substandard | Lease financing receivables | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Substandard | Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 0 | 0 | |||
Not Rated | Consumer | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 23 | 23 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | 23 | 23 | |||
Not Rated | Retained Strategic Program loans | |||||
Financing Receivable, Credit Quality Indicator [Line Items] | |||||
2023 | 11,136 | 11,136 | |||
2022 | 7,450 | 7,450 | |||
2021 | 2,145 | 2,145 | |||
Prior | 1 | 1 | |||
Revolving Loans | 0 | 0 | |||
Total loans held for investment | $ 20,732 | $ 20,732 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses - Outstanding Loan Balances Categorized by Credit Quality Indicators (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 290,659 | $ 236,601 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 211,319 | |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 573 | |
Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 450 | |
SBA | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 145,172 | |
SBA | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 144,149 | |
SBA | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 573 | |
SBA | Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 450 | |
Commercial, non-real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 11,484 | |
Commercial, non-real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 11,484 | |
Commercial, non-real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Commercial, non-real estate | Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Residential real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 29,357 | 37,815 |
Residential real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 17,091 | 37,815 |
Residential real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 12 | 0 |
Residential real estate | Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 170,253 | 12,063 |
Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 91,343 | 12,063 |
Commercial real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 444 | 0 |
Commercial real estate | Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 6,180 | 5,808 |
Consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 6,118 | 5,808 |
Consumer | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | 0 |
Consumer | Classified/Doubtful/Loss | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Retained Strategic Program loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 20,732 | $ 24,259 |
Retained Strategic Program loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | 0 | |
Retained Strategic Program loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total loans | $ 0 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses - TDR's (Details) - SBA $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) contract | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Number of Contracts | contract | 1 |
Pre- Modification Outstanding Recorded Investment | $ 94 |
Post- Modification Outstanding Recorded Investment | $ 94 |
Loans and Allowance for Cred_15
Loans and Allowance for Credit Losses - Collateral-Dependent Financial Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | $ 290,659 | $ 236,601 |
Total | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 1,927 | |
Real Estate | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 1,927 | |
Personal Property | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 0 | |
Commercial real estate | Total | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 1,809 | 356 |
Commercial real estate | Real Estate | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 1,809 | 356 |
Commercial real estate | Personal Property | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 0 | $ 0 |
Residential real estate | Total | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 118 | |
Residential real estate | Real Estate | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | 118 | |
Residential real estate | Personal Property | ||
Other than Temporary Impairment, Credit Losses Recognized in Earnings [Line Items] | ||
Total loans | $ 0 |
Lease Liabilities - Narrative (
Lease Liabilities - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) Lease | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | |||||
Net book value | $ 13,154 | $ 13,154 | $ 9,478 | ||
Rental income | 200 | 300 | |||
Depreciation | 500 | $ 100 | 900 | $ 200 | |
Net rent expense | 228 | $ 310 | 456 | $ 550 | |
Number of leases entered into during period | Lease | 1 | ||||
Commercial Operating Leases | |||||
Lessee, Lease, Description [Line Items] | |||||
Commercial operating leases | 7,100 | 7,100 | 2,800 | ||
Net book value | $ 6,700 | $ 6,700 | $ 2,700 |
Lease Liabilities - Minimum Fut
Lease Liabilities - Minimum Future Rental Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Six Months Ended December 31, 2023 | $ 558 | |
Year Ended December 31, 2024 | 1,104 | |
Year Ended December 31, 2025 | 1,086 | |
Year Ended December 31, 2026 | 1,118 | |
Year Ended December 31, 2027 | 1,152 | |
Thereafter | 2,203 | |
Total | 7,221 | |
Less present value discount | (429) | |
Operating lease liabilities | $ 6,792 | $ 7,020 |
Lease Liabilities - Lease Asset
Lease Liabilities - Lease Assets and Liabilities (Details) | Jun. 30, 2023 | Jun. 30, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term – operating leases (in years) | 6 years 3 months 18 days | 7 years 2 months 12 days |
Weighted-average discount rate – operating leases | 1.90% | 1.90% |
Lease Liabilities - Supplementa
Lease Liabilities - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Leases [Abstract] | ||||
Operating cash flows from operating leases | $ 21 | $ 28 | $ 292 | $ 56 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 0 | $ 0 | $ 0 | $ 7,380 |
Lease Liabilities - Lease Expen
Lease Liabilities - Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating leases | ||||
Operating lease cost | $ 219 | $ 278 | $ 438 | $ 514 |
Variable lease cost | 9 | 4 | 18 | 8 |
Operating lease expense | 228 | 282 | 456 | 522 |
Short-term lease rent expense | 0 | 28 | 0 | 28 |
Net rent expense | $ 228 | $ 310 | $ 456 | $ 550 |
SBA Servicing Asset - Narrative
SBA Servicing Asset - Narrative (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Transfers and Servicing [Abstract] | ||
SBA loans serviced for others | $ 302 | $ 318.6 |
SBA servicing asset | $ 5.2 | $ 5.2 |
Weighted average prepayment rate | 15.68% | 14.24% |
Weighted average term | 4 years 2 months 26 days | 4 years 5 months 12 days |
Weighted average discount rate | 14.33% | 18.79% |
SBA Servicing Asset - Summary o
SBA Servicing Asset - Summary of SBA Servicing Asset Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Asset at Amortized Cost, Balance [Roll Forward] | ||||
Beginning balance | $ 5,284 | $ 5,225 | $ 5,210 | $ 3,938 |
Additions to servicing asset | 150 | 835 | 150 | 2,243 |
Recovery of SBA servicing asset | 339 | (1,135) | 592 | (1,076) |
Amortization of servicing asset | (540) | (339) | (719) | (519) |
Ending balance | $ 5,233 | $ 4,586 | $ 5,233 | $ 4,586 |
Capital Requirements - Actual C
Capital Requirements - Actual Capital Amounts and Ratios (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Amount | ||
Actual | $ 103,813 | $ 91,674 |
Well-Capitalized Requirement | $ 41,718 | $ 32,898 |
Ratio | ||
Actual | 0.224 | 0.251 |
Well-Capitalized Requirement | 0.090 | 0.090 |
Capital Requirements - Narrativ
Capital Requirements - Narrative (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Capital Requirements [Abstract] | ||
Minimum bank reserve balance | $ 0 | $ 0 |
Commitments and Contingent Li_3
Commitments and Contingent Liabilities - Narrative (Details) - USD ($) | 1 Months Ended | 6 Months Ended | ||||
Aug. 14, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Dec. 31, 2022 | Apr. 20, 2020 | |
Line of Credit Facility [Line Items] | ||||||
PPP Liquidity Facility | $ 252,000 | $ 314,000 | ||||
Allowance for credit losses on unfunded commitments | 41,500 | $ 29,000 | 0 | |||
Paycheck Protection Program Liquidity Facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 300,000 | 300,000 | ||||
Fixed rate | 0.35% | |||||
Average outstanding borrowings | 300,000 | $ 800,000 | ||||
Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
PPP Liquidity Facility | 0 | 0 | ||||
Federal Reserve Bank borrowings on collateral | 10,400,000 | 10,600,000 | ||||
Term Funding Program | ||||||
Line of Credit Facility [Line Items] | ||||||
Federal Reserve Bank borrowings on collateral | 800,000 | |||||
Zion Bank | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Unsecured line available | 1,000,000 | |||||
Zion Bank | Line of Credit | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Unsecured line available | $ 5,000,000 | |||||
Bank of the West | Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 1,050,000 | 1,050,000 | ||||
Federal Home Loan Bank Secured Line of Credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | 2,500,000 | 2,600,000 | ||||
PPP Liquidity Facility | 0 | 0 | ||||
Loans | $ 3,800,000 | $ 4,000,000 | ||||
Federal Home Loan Bank Secured Line of Credit | Subsequent Event | ||||||
Line of Credit Facility [Line Items] | ||||||
Additional loans pledged | 46,900,000 | |||||
Increase in maximum borrowing capacity | $ 30,900,000 |
Commitments and Contingent Li_4
Commitments and Contingent Liabilities - Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk | $ 24,854 | $ 19,822 |
Commercial real estate | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk | 22,667 | 17,886 |
Revolving, open-end lines of credit | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk | 1,966 | 1,683 |
Other unused commitments | ||
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items] | ||
Financial instruments with off-balance-sheet risk | $ 221 | $ 253 |
Investment in Business Fundin_2
Investment in Business Funding Group, LLC (Details) $ / shares in Units, $ in Millions | 2 Months Ended | 6 Months Ended | |||||
Dec. 31, 2019 USD ($) $ / shares shares | Sep. 30, 2023 $ / shares shares | Jun. 30, 2023 USD ($) $ / shares | Jun. 30, 2022 USD ($) | Jul. 25, 2023 d $ / shares | Dec. 31, 2022 $ / shares | Mar. 31, 2020 $ / shares shares | |
Schedule of Equity Method Investments [Line Items] | |||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | $ 0.001 | |||||
Business Funding Group, LLC | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Membership interest | 10% | 10% | |||||
Aggregate value of shares exchanged (in shares) | shares | 950,784 | ||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | ||||||
Fair value of Company's shares | $ | $ 3.5 | ||||||
Membership interests held by other existing members | 90% | ||||||
Distributions received | $ | $ 0.3 | $ 0.1 | |||||
Number of warrants (in shares) | shares | 270,000 | ||||||
Warrant exercise price (in dollars per share) | $ 6.67 | ||||||
Fair value of warrants issued per share (in dollars per share) | $ 0.19 | ||||||
Business Funding Group, LLC | Forecast | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Membership interest | 20% | ||||||
Aggregate value of shares exchanged (in shares) | shares | 372,132 | ||||||
Common stock, par or stated value per share (in dollars per share) | $ 0.001 | ||||||
Additional ownership percentage | 0.10 | ||||||
Consecutive trading days | d | 10 | ||||||
Business Funding Group, LLC | Minimum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Earnings multiplier | 10 | ||||||
Business Funding Group, LLC | Minimum | Forecast | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Average share price threshold (in dollars per share) | $ 6 | ||||||
Business Funding Group, LLC | Maximum | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Earnings multiplier | 15 | ||||||
Business Funding Group, LLC | Maximum | Forecast | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Average share price threshold (in dollars per share) | $ 12.63 | ||||||
Business Funding Group, LLC | Class A Voting Units | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Membership interest | 4.96% | 4.90% | |||||
Business Funding Group, LLC | Class B Non-Voting Units | |||||||
Schedule of Equity Method Investments [Line Items] | |||||||
Membership interest | 5.04% | 5.10% |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) - USD ($) | 6 Months Ended | 8 Months Ended | |||
Jun. 20, 2019 | Apr. 20, 2017 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2017 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Weighted average grant date fair value (in dollars per share) | $ 4.12 | $ 6.26 | |||
Options exercised (in shares) | $ 111,656 | $ 200,000 | |||
2019 Plan | Share-Based Payment Arrangement, Employee | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Number of shares available for grant (in shares) | 335,353 | ||||
2016 Plan | Share-Based Payment Arrangement, Employee | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Number of shares available for grant (in shares) | 1,550 | ||||
Number of shares authorized (in shares) | 299,628 | ||||
Shares granted (in shares) | 0 | ||||
2019 Plan and 2016 Plan | Share-Based Payment Arrangement, Employee | Minimum | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
2019 Plan and 2016 Plan | Share-Based Payment Arrangement, Employee | Maximum | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Award vesting period | 5 years | ||||
Stock options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 700,000 | ||||
Weighted average recognition period | 1 year 9 months 18 days | ||||
Restricted Stock | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Unrecognized stock-based compensation expense | $ 1,700,000 | ||||
Weighted average recognition period | 1 year 7 months 6 days |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used in Option-Pricing Model for Stock Options (Details) - Stock options | 6 Months Ended |
Jun. 30, 2023 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Expected dividend yield | 0% |
Minimum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Risk-free interest rate | 3.60% |
Expected term in years | 5 years 6 months |
Expected volatility | 43.90% |
Maximum | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Risk-free interest rate | 4% |
Expected term in years | 7 years 6 months |
Expected volatility | 44.90% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock Option Activity (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Stock Options | |||||
Outstanding, beginning of year (in shares) | 863,429 | 881,625 | 881,625 | ||
Options granted (in shares) | 123,806 | 124,906 | |||
Options exercised (in shares) | (16,800) | ||||
Options forfeited (in shares) | (5,768) | (8,264) | |||
Outstanding, end of period (in shares) | 981,467 | 863,429 | 981,467 | 881,625 | |
Options vested and exercisable, end of period (in shares) | 689,418 | 689,418 | |||
Weighted Average Exercise Price | |||||
Outstanding, beginning of year (in dollars per share) | $ 5.32 | $ 5.27 | $ 5.27 | ||
Options granted (in dollars per share) | 8.63 | 8.64 | |||
Options exercised (in dollars per share) | 2.37 | ||||
Options forfeited (in dollars per share) | 8.94 | 9.25 | |||
Outstanding, end of period (in dollars per share) | 5.72 | $ 5.32 | 5.72 | $ 5.27 | |
Options vested and exercisable, end of period (in dollars per share) | $ 4.78 | $ 4.78 | |||
Weighted Average Contractual Life (in years) | |||||
Outstanding | 7 years 3 months 18 days | 7 years 4 months 24 days | 7 years 6 months | ||
Options granted | 9 years 7 months 6 days | 9 years 7 months 6 days | |||
Options vested and exercisable | 6 years 10 months 24 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding, beginning of year | $ 3,407,917 | $ 3,871,667 | $ 3,871,667 | ||
Options granted | 0 | 0 | |||
Options exercised | 111,656 | $ 200,000 | |||
Options forfeited | 7,884 | 11,765 | |||
Outstanding, end of period | 3,546,581 | $ 3,407,917 | 3,546,581 | $ 3,871,667 | |
Options vested and exercisable | $ 3,000,920 | $ 3,000,920 |
Stock-Based Compensation - St_2
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation expense | $ 629 | $ 100 | $ 1,050 | $ 139 |
After-tax stock-based compensation expense | 658 | 99 | 995 | 137 |
Stock options | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation expense | 142 | 54 | 237 | 93 |
After-tax stock-based compensation expense | 126 | 53 | 218 | 91 |
Restricted shares | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
Pre-tax stock-based compensation expense | 487 | 46 | 813 | 46 |
After-tax stock-based compensation expense | $ 532 | $ 46 | $ 777 | $ 46 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Narrative (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Investment in BFG | $ 4,500 | $ 4,800 | $ 4,600 | $ 5,900 | |
Measurement Input, Discount for Lack of Marketability | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Investment, measurement input | 0.20 | ||||
Discount rate | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Investment, measurement input | 0.0450 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Investment in BFG Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Beginning balance | $ 4,800 | $ 5,900 | ||
Distributions from BFG | (335) | (327) | ||
Change in fair value of BFG | $ 120 | $ (575) | 35 | (973) |
Ending balance | $ 4,500 | $ 4,600 | $ 4,500 | $ 4,600 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Estimated Fair Value and Carrying Value of Financial Instrument (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Financial assets: | ||||
Investment securities held-to-maturity | $ 12,730 | $ 12,728 | ||
SBA servicing asset | 5,200 | 5,200 | ||
Investment in BFG | 4,500 | 4,800 | $ 4,600 | $ 5,900 |
Level 1 | Carrying Amount | ||||
Financial assets: | ||||
Cash and cash equivalents | 119,043 | 100,567 | ||
Level 1 | Estimated Fair Value | ||||
Financial assets: | ||||
Cash and cash equivalents | 119,043 | 100,567 | ||
Level 2 | Carrying Amount | ||||
Financial assets: | ||||
Investment securities held-to-maturity | 14,403 | 14,292 | ||
Investment in FHLB stock | 476 | 449 | ||
Loans held-for-sale | 42,362 | 23,589 | ||
Accrued interest receivable | 2,316 | 1,818 | ||
SBA servicing asset | 5,233 | 5,210 | ||
Financial liabilities: | ||||
Total deposits | 332,530 | 242,998 | ||
Accrued interest payable | 466 | 54 | ||
PPP Liquidity Facility | 252 | 314 | ||
Level 2 | Estimated Fair Value | ||||
Financial assets: | ||||
Investment securities held-to-maturity | 12,730 | 12,728 | ||
Investment in FHLB stock | 476 | 449 | ||
Loans held-for-sale | 42,357 | 23,586 | ||
Accrued interest receivable | 2,316 | 1,818 | ||
SBA servicing asset | 5,233 | 5,210 | ||
Financial liabilities: | ||||
Total deposits | 306,396 | 221,287 | ||
Accrued interest payable | 466 | 54 | ||
PPP Liquidity Facility | 252 | 314 | ||
Level 3 | Carrying Amount | ||||
Financial assets: | ||||
Loans held for investment | 277,663 | 224,217 | ||
Investment in BFG | 4,500 | 4,800 | ||
Level 3 | Estimated Fair Value | ||||
Financial assets: | ||||
Loans held for investment | 294,533 | 237,225 | ||
Investment in BFG | $ 4,500 | $ 4,800 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Assets Measured on Non-recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Level 3 | ||
Nonrecurring assets | ||
Individually evaluated loans | $ 952 | $ 450 |
Fair Value | ||
Nonrecurring assets | ||
Individually evaluated loans | 952 | 450 |
Fair Value | Level 1 | ||
Nonrecurring assets | ||
Individually evaluated loans | 0 | 0 |
Fair Value | Level 2 | ||
Nonrecurring assets | ||
Individually evaluated loans | 0 | 0 |
Fair Value | Level 3 | ||
Nonrecurring assets | ||
Individually evaluated loans | $ 952 | $ 450 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Quantitative Information for Level 3 Fair Value Measurements (Details) - Level 3 $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Individually evaluated loans | $ 952 | $ 450 |
Market comparable | Adjustment to appraisal value | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Individually evaluated loans, measurement input | 0.0034 | 0.0020 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Investment in BFG Level 3 Recurring Asset (Details) | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2019 |
Discount rate | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 0.0450 | ||
Discounted Cash Flows | Level 3 | Revenue growth rate | Fair Value, Recurring | Weighted Average | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 0.107 | 0.108 | |
Discounted Cash Flows | Level 3 | Expense growth rate | Fair Value, Recurring | Weighted Average | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 0.141 | 0.115 | |
Discounted Cash Flows | Level 3 | Discount rate | Fair Value, Recurring | Weighted Average | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 0.250 | 0.300 | |
Guideline Public Company | Level 3 | Multiples of enterprise value | Fair Value, Recurring | Minimum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 3.5 | 3 | |
Guideline Public Company | Level 3 | Multiples of enterprise value | Fair Value, Recurring | Maximum | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Investment, measurement input | 5 | 5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Income Tax Disclosure [Abstract] | ||||
Decrease in deferred tax assets | $ 1,307,000 | $ (195,000) | ||
Income tax expense | $ 1,638,000 | $ 1,786,000 | $ 3,002,000 | $ 5,000,000 |
Effective income tax rate | 26.10% | 25.10% | ||
Statutory income tax rate | 24.90% | 24.90% | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Millions | Oct. 21, 2022 | Jun. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||
Deposits | $ 1.3 | $ 1.2 | ||
BFG | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Membership interest | 10% | 10% | ||
Mr. Alan Weichselbaum | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Proceeds from collection of promissory note to related party | $ 0.1 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |||
Numerator: | ||||||
Net Income | $ 4,638 | $ 5,482 | $ 8,499 | $ 14,916 | ||
Amount allocated to participating common shareholders | (88) | (41) | (122) | [1] | (112) | [1] |
Net income allocate to common shareholders | 4,550 | 5,441 | 8,377 | 14,804 | ||
Net income allocate to common shareholders | $ 4,550 | $ 5,441 | $ 8,377 | $ 14,804 | ||
Denominator: | ||||||
Weighted average shares outstanding, basic (in shares) | 12,603,463 | 12,716,010 | 12,655,605 | 12,698,714 | ||
Weighted average effect of dilutive securities: | ||||||
Stock options (in shares) | 327,786 | 558,855 | 359,632 | 589,091 | ||
Warrants (in shares) | 58,281 | 142,525 | 65,383 | 156,542 | ||
Weighted average shares outstanding, diluted (in shares) | 12,989,530 | 13,417,390 | 13,080,620 | 13,444,347 | ||
Earnings per share, basic (in dollars per share) | $ 0.36 | $ 0.43 | $ 0.66 | $ 1.17 | ||
Earnings per share, diluted (in dollars per share) | $ 0.35 | $ 0.41 | $ 0.64 | $ 1.10 | ||
[1]Represents earnings attributable to holders of unvested restricted stock issued outside of the Plan to the Company’s employees. |
Earnings per Share - Narrative
Earnings per Share - Narrative (Details) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 621,835 | 336,192 |
Warrant | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computation of earnings per share, amount | 204,617 | 113,458 |
Subsequent Events (Details)
Subsequent Events (Details) - Business Funding Group, LLC | 2 Months Ended | |
Dec. 31, 2019 shares | Sep. 30, 2023 shares | |
Subsequent Event [Line Items] | ||
Aggregate value of shares exchanged (in shares) | 950,784 | |
Forecast | ||
Subsequent Event [Line Items] | ||
Additional ownership percentage | 0.10 | |
Aggregate value of shares exchanged (in shares) | 372,132 |