2020 Annual Report

The following table presents the dollar and percentage composition of the loan portfolio by category, at the dates indicated:

December 31, 2020

December 31, 2019

December 31, 2018

December 31, 2017

December 31, 2016

(dollars in thousands)

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Amount

Percent

Commercial . . . . . . . . . . Paycheck Protection Program . . . . . . . . . . .

$ 304,220 13.1 % $ 276,035 14.5 % $ 260,833 15.7 % $ 217,753 16.2 % $ 132,592 13.2 %

138,454

6.0

—

—

—

—

—

—

—

—

Construction and Land Development . . . . . . . 170,217

7.3 196,776 10.3 210,041 12.6 130,586

9.7 106,070 10.6

Real Estate Mortgage: 1 - 4 Family Mortgage . 294,479 12.7 260,611 13.6 226,773 13.6 195,707 14.5 178,815 17.9 Multifamily . . . . . . . . . 626,465 26.9 515,014 26.9 407,934 24.5 317,872 23.6 205,250 20.5 CRE Owner Occupied . 75,604 3.2 66,584 3.5 64,458 3.9 65,909 4.9 62,347 6.2 CRE Nonowner Occupied . . . . . . . . . 709,300 30.5 592,545 31.0 490,632 29.5 415,034 30.8 311,835 31.2 Total Real Estate Mortgage Loans . . . . . 1,705,848 73.3 1,434,754 75.0 1,189,797 71.5 994,522 73.8 758,247 75.8 Consumer and Other. . . . 7,689 0.3 4,473 0.2 4,260 0.2 4,252 0.3 3,830 0.4 Total Loans, Gross . . . . 2,326,428 100.0 % 1,912,038 100.0 % 1,664,931 100.0 % 1,347,113 100.0 % 1,000,739 100.0 % Allowance for Loan Losses . . . . . . . . . . . . (34,841) (22,526) (20,031) (16,502) (12,333) Net Deferred Loan Fees . (9,151) (5,512) (4,515) (4,104) (3,266) Total Loans, Net . . . . . . . . $ 2,282,436 $ 1,884,000 $ 1,640,385 $ 1,326,507 $ 985,140 The Company’s primary focus has been on real estate mortgage lending, which constituted 73.3% of the portfolio as of December 31, 2020. The composition of the portfolio has remained relatively consistent with prior periods and the Company does not expect any significant changes in the foreseeable future in the composition of the loan portfolio or in the emphasis on real estate lending. As of December 31, 2020, investor CRE loans totaled $1.51 billion, consisting of $709.3 million of loans secured by nonowner occupied CRE, $626.5 million of loans secured by multifamily residential properties and $170.2 million of construction and land development loans. Investor CRE loans represented 68.8% of the total gross loan portfolio, excluding PPP loans, and 455.8% of the Bank’s total risk-based capital at December 31, 2020, compared to 516.6% at December 31, 2019.

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