Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Feb. 05, 2015 | Jun. 30, 2014 |
Document and Entity Information | |||
Entity Registrant Name | HERITAGE COMMERCE CORP | ||
Entity Central Index Key | 1053352 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $126 | ||
Entity Common Stock, Shares Outstanding | 26,504,785 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Cash and due from banks | $23,256 | $20,158 |
Interest-bearing deposits in other financial institutions | 99,147 | 92,447 |
Total cash and cash equivalents | 122,403 | 112,605 |
Securities available-for-sale, at fair value | 206,335 | 280,100 |
Securities held-to-maturity, at amortized cost (Fair value of $94,953 at December 31, 2014 and $86,032 at December 31, 2013) | 95,362 | 95,921 |
Loans held-for-sale - SBA, at lower of cost or fair value, including deferred costs | 1,172 | 3,148 |
Loans, net of deferred fees | 1,088,643 | 914,913 |
Allowance for loan losses | -18,379 | -19,164 |
Loans, net | 1,070,264 | 895,749 |
Federal Home Loan Bank and Federal Reserve Bank stock, at cost | 10,598 | 10,435 |
Company owned life insurance | 51,257 | 50,012 |
Premises and equipment, net | 7,451 | 7,240 |
Goodwill | 13,044 | |
Other intangible assets | 3,276 | 1,527 |
Accrued interest receivable and other assets | 35,941 | 34,895 |
Total assets | 1,617,103 | 1,491,632 |
Deposits: | ||
Demand, noninterest-bearing | 517,662 | 431,085 |
Demand, interest-bearing | 225,821 | 195,451 |
Savings and money market | 384,644 | 347,052 |
Time deposits-under $100 | 20,005 | 21,646 |
Time deposits-$100 and over | 200,890 | 195,005 |
Time deposits-brokered | 28,116 | 55,524 |
CDARS - money market and time deposits | 11,248 | 40,458 |
Total deposits | 1,388,386 | 1,286,221 |
Accrued interest payable and other liabilities | 44,359 | 32,015 |
Total liabilities | 1,432,745 | 1,318,236 |
Commitments and contingencies (Notes 6 and 15) | ||
Shareholders' equity: | ||
Common stock, no par value; 60,000,000 shares authorized; 26,503,505 shares issued and outstanding at December 31, 2014 and 26,350,938 shares issued and outstanding at December 31, 2013 | 133,676 | 132,561 |
Retained earnings | 33,014 | 25,345 |
Accumulated other comprehensive loss | -1,851 | -4,029 |
Total shareholders' equity | 184,358 | 173,396 |
Total liabilities and shareholders' equity | 1,617,103 | 1,491,632 |
Series C convertible perpetual preferred stock | ||
Shareholders' equity: | ||
Preferred stock, no par value; 10,000,000 shares authorized Series C convertible perpetual preferred stock, 21,004 shares issued and outstanding at December 31, 2014 and December 31, 2013 (liquidation preference of $21,004 at December 31, 2014 and December 31, 2013) | $19,519 | $19,519 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Securities held-to-maturity, fair value (in dollars) | $94,953 | $86,032 |
Preferred stock, par value (in dollars per share) | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | ||
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 26,503,505 | 26,350,938 |
Common stock, shares outstanding | 26,503,505 | 26,350,938 |
Series C convertible perpetual preferred stock | ||
Preferred stock, shares issued | 21,004 | 21,004 |
Preferred stock outstanding (in shares) | 21,004 | 21,004 |
Preferred stock, liquidation preference (in dollars) | $21,004 | $21,004 |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Interest income: | |||
Loans, including fees | $49,207 | $41,570 | $40,800 |
Securities, taxable | 7,810 | 9,472 | 11,519 |
Securities, non-taxable | 2,025 | 1,530 | 112 |
Interest-bearing deposits in other financial institutions | 214 | 214 | 134 |
Total interest income | 59,256 | 52,786 | 52,565 |
Interest expense: | |||
Deposits | 2,032 | 2,369 | 2,800 |
Subordinated debt | 229 | 1,383 | |
Short-term borrowings | 121 | 2 | 4 |
Total interest expense | 2,153 | 2,600 | 4,187 |
Net interest income before provision for loan losses | 57,103 | 50,186 | 48,378 |
Provision (credit) for loan losses | -338 | -816 | 2,784 |
Net interest income after provision for loan losses | 57,441 | 51,002 | 45,594 |
Noninterest income: | |||
Service charges and fees on deposit accounts | 2,519 | 2,457 | 2,333 |
Increase in cash surrender value of life insurance | 1,600 | 1,654 | 1,720 |
Servicing income | 1,296 | 1,446 | 1,743 |
Gain on sales of SBA loans | 971 | 449 | 702 |
Gain on sales of securities | 97 | 38 | 1,560 |
Other | 1,263 | 1,170 | 807 |
Total noninterest income | 7,746 | 7,214 | 8,865 |
Noninterest expense: | |||
Salaries and employee benefits | 26,250 | 23,450 | 21,722 |
Occupancy and equipment | 4,059 | 4,043 | 3,997 |
Professional fees | 1,891 | 2,588 | 2,876 |
Insurance expense | 1,126 | 1,032 | 911 |
Software subscriptions | 999 | 1,289 | 1,149 |
Data processing | 969 | 1,078 | 983 |
Acquisition and integration related costs | 895 | ||
FDIC deposit insurance premiums | 892 | 894 | 918 |
Correspondent bank charges | 760 | 684 | 611 |
Foreclosed assets, net | 53 | -251 | -45 |
Premium on redemption of subordinated debt | 601 | ||
Other | 6,328 | 5,663 | 5,338 |
Total noninterest expense | 44,222 | 40,470 | 39,061 |
Income before income taxes | 20,965 | 17,746 | 15,398 |
Income tax expense | 7,538 | 6,206 | 5,489 |
Net income | 13,427 | 11,540 | 9,909 |
Dividends and discount accretion on preferred stock | -1,008 | -336 | -1,206 |
Net income available to common shareholders | $12,419 | $11,204 | $8,703 |
Earnings per common share: | |||
Basic (in dollars per share) | $0.42 | $0.36 | $0.27 |
Diluted (in dollars per share) | $0.42 | $0.36 | $0.27 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $13,427 | $11,540 | $9,909 |
Other comprehensive income (loss): | |||
Change in net unrealized holding gains (losses) on available-for-sale securities and I/O strips | 7,164 | -14,302 | 4,451 |
Deferred income taxes | -3,012 | 6,007 | -1,869 |
Change in net unamortized unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity | -54 | -54 | 857 |
Deferred income taxes | 23 | 23 | -360 |
Reclassification adjustment for gains realized in income | -97 | -38 | -1,560 |
Deferred income taxes | 41 | 16 | 655 |
Change in unrealized gains (losses) on securities and I/O strips, net of deferred income taxes | 4,065 | -8,348 | 2,174 |
Change in net pension and other benefit plan liability adjustment | -3,253 | 2,825 | -772 |
Deferred income taxes | 1,366 | -1,187 | 324 |
Change in pension and other benefit plan liability, net of deferred income taxes | -1,887 | 1,638 | -448 |
Other comprehensive income (loss) | 2,178 | -6,710 | 1,726 |
Total comprehensive income | $15,605 | $4,830 | $11,635 |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Preferred Stock | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income / (Loss) | Total |
In Thousands, except Share data, unless otherwise specified | |||||
Balance at Dec. 31, 2011 | $59,365 | $131,172 | $7,172 | $955 | $197,831 |
Balance (in shares) at Dec. 31, 2011 | 61,004 | 26,295,001 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 9,909 | 9,909 | |||
Other comprehensive income (loss) | 1,726 | 1,726 | |||
Repurchase of Series A preferred stock | -40,000 | -40,000 | |||
Repurchase of Series A preferred stock (in shares) | -40,000 | ||||
Series A preferred stock capitalized offering costs | 154 | -154 | |||
Issuance (forfeitures) of restricted stock awards, net (in shares) | 21,500 | ||||
Amortization of restricted stock awards, net of forfeitures and taxes | 148 | 148 | |||
Cash dividends accrued on Series A preferred stock | -373 | -373 | |||
Accretion of discount on Series A preferred stock | 833 | -833 | |||
Stock option expense, net of forfeitures and taxes | 461 | 461 | |||
Stock options exercised | 39 | 39 | |||
Stock options exercised (in shares) | 5,646 | ||||
Balance at Dec. 31, 2012 | 19,519 | 131,820 | 15,721 | 2,681 | 169,741 |
Balance (in shares) at Dec. 31, 2012 | 21,004 | 26,322,147 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 11,540 | 11,540 | |||
Other comprehensive income (loss) | -6,710 | -6,710 | |||
Issuance (forfeitures) of restricted stock awards, net (in shares) | 10,000 | ||||
Repurchase of warrant | -140 | -140 | |||
Amortization of restricted stock awards, net of forfeitures and taxes | 200 | 200 | |||
Cash dividend declared $0.18 and $0.06 per share in 2014 and 2013 respectively | -1,916 | -1,916 | |||
Stock option expense, net of forfeitures and taxes | 593 | 593 | |||
Stock options exercised | 88 | 88 | |||
Stock options exercised (in shares) | 18,791 | ||||
Balance at Dec. 31, 2013 | 19,519 | 132,561 | 25,345 | -4,029 | 173,396 |
Balance (in shares) at Dec. 31, 2013 | 21,004 | 26,350,938 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 13,427 | 13,427 | |||
Other comprehensive income (loss) | 2,178 | 2,178 | |||
Issuance (forfeitures) of restricted stock awards, net (in shares) | 90,000 | ||||
Amortization of restricted stock awards, net of forfeitures and taxes | -9 | -9 | |||
Cash dividend declared $0.18 and $0.06 per share in 2014 and 2013 respectively | -5,758 | -5,758 | |||
Stock option expense, net of forfeitures and taxes | 862 | 862 | |||
Stock options exercised | 262 | 262 | |||
Stock options exercised (in shares) | 62,567 | ||||
Balance at Dec. 31, 2014 | $19,519 | $133,676 | $33,014 | ($1,851) | $184,358 |
Balance (in shares) at Dec. 31, 2014 | 21,004 | 26,503,505 |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||
Cash dividend declared per share (in dollars per share) | $0.18 | $0.06 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $13,427 | $11,540 | $9,909 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of discounts and premiums on securities | 1,163 | 2,231 | 2,588 |
Gain on sales of securities available-for-sale | -97 | -38 | -1,560 |
Gain on sales of SBA loans | -971 | -449 | -702 |
Proceeds from sale of SBA loans originated for sale | 15,858 | 6,174 | 10,040 |
Net change in SBA loans originated for sale | -12,911 | -9,234 | -11,994 |
Provision (credit) for loan losses | -338 | -816 | 2,784 |
Increase in cash surrender value of life insurance | -1,600 | -1,654 | -1,720 |
Gain on proceeds from company owned life insurance | -51 | ||
Depreciation and amortization | 725 | 729 | 750 |
Amortization of intangible assets | 510 | 473 | 491 |
Gains on sale of foreclosed assets, net | -243 | -530 | |
Stock option expense, net | 862 | 593 | 461 |
Amortization of restricted stock awards, net | -9 | 200 | 148 |
Effect of changes in: | |||
Accrued interest receivable and other assets | -2,428 | 4,694 | 4,717 |
Accrued interest payable and other liabilities | 5,244 | 2,063 | 659 |
Net cash provided by operating activities | 19,384 | 16,263 | 16,041 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of securities available-for-sale | -53,292 | -17,844 | -154,414 |
Purchase of securities held-to-maturity | -4,595 | -51,044 | -33,317 |
Maturities/paydowns/calls of securities available-for-sale | 24,917 | 62,531 | 108,026 |
Maturities/paydowns/calls of securities held-to-maturity | 3,899 | 3,851 | 1,553 |
Proceeds from sale of securities available-for-sale | 108,603 | 26,944 | 40,587 |
Proceeds from sale of other loans transferred to held-for-sale | 220 | ||
Net change in loans | -131,648 | -97,910 | -54,042 |
Changes in Federal Home Loan Bank stock and other investments | -163 | 293 | -803 |
Purchase of company owned life insurance | -250 | ||
Purchase of premises and equipment | -817 | -500 | -239 |
Proceeds from sale of foreclosed assets | 850 | 2,148 | |
Proceeds from company owned life insurance | 406 | ||
Cash paid in bank acquisition, net of cash received | -21,918 | ||
Net cash (used in) provided by investing activities | -74,608 | -72,829 | -90,531 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net change in deposits | 102,165 | -193,147 | 429,940 |
Repurchase of warrant | -140 | ||
Exercise of stock options | 262 | 88 | 39 |
Repayment of preferred stock | -40,000 | ||
Repayments of short-term borrowings | -31,647 | ||
Redemption of subordinated debt | -9,279 | -14,423 | |
Payment of cash dividends - Series A preferred stock | -373 | ||
Payment of cash dividends | -5,758 | -1,916 | |
Net cash provided by (used in) financing activities | 65,022 | -204,394 | 375,183 |
Net (decrease) increase in cash and cash equivalents | 9,798 | -260,960 | 300,693 |
Cash and cash equivalents, beginning of period | 112,605 | 373,565 | 72,872 |
Cash and cash equivalents, end of period | 122,403 | 112,605 | 373,565 |
Supplemental disclosures of cash flow information: | |||
Interest paid | 2,166 | 2,685 | 4,694 |
Income taxes paid | 4,280 | 2,021 | 2,730 |
Supplemental schedule of non-cash investing activity: | |||
Due to broker for securities purchased, settling after year-end | 961 | 3,493 | |
Transfer of loans held-for-sale to loan portfolio | 3,770 | 87 | |
Transfer securities from available-for-sale to held-to-maturity | 15,498 | ||
Loans transferred to foreclosed assets | 229 | 33 | 2,056 |
Summary of assets acquired and liabilities assumed through acquisition: | |||
Net loans | 42,300 | ||
Goodwill and other intangible assets | 15,303 | ||
Premises and equipment | 119 | ||
Other assets, net | 738 | ||
Other liabilities | -4,895 | ||
Borrowings | ($31,647) |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |
Dec. 31, 2014 | ||
Summary of Significant Accounting Policies | ||
Summary of Significant Accounting Policies | ||
(1) Summary of Significant Accounting Policies | ||
Description of Business and Basis of Presentation | ||
Heritage Commerce Corp ("HCC") operates as a registered bank holding company for its wholly-owned subsidiary Heritage Bank of Commerce ("HBC" or the "Bank"), collectively referred to as the "Company". HBC was incorporated on November 23, 1993 and commenced operations on June 8, 1994. HBC is a California state chartered bank which offers a full range of commercial and personal banking services to residents and the business/professional community in Santa Clara, Alameda, and Contra Costa counties, California. As discussed in Note 7, the Company acquired BVF/CSNK Acquisition Corp., a Delaware corporation ("Bay View Funding" or "BVF") on November 1, 2014, and BVF became a wholly owned subsidiary of HBC. Based in Santa Clara, California, BVF is the parent company of CSNK Working Capital Finance Corp. dba Bay View Funding, which provides business-essential working capital factoring financing to various industries throughout the United States. | ||
The consolidated financial statements are prepared in accordance with accounting policies generally accepted in the United States of America and general practices in the banking industry. The financial statements include the accounts of the Company. All inter-company accounts and transactions have been eliminated in consolidation. | ||
The Company also established the following wholly-owned Delaware business trusts that were formed to issue trust preferred and related common securities: Heritage Capital Trust I and Heritage Statutory Trust I, formed in 2000, Heritage Statutory Trust II, formed in 2001, and Heritage Statutory Trust III, formed in 2002 ("Trusts"). During the third quarter of 2012 the Company dissolved the Heritage Statutory Trust I and the Heritage Capital Trust I. During the third quarter of 2013, the Company dissolved the Heritage Statutory Trust II and the Heritage Statutory Trust III. | ||
The Trusts issued their preferred securities to investors, and used the proceeds to purchase subordinated debt issued by the Company. The subordinated debt payable to the Trusts was recorded as debt of the Company. The Company had fully and unconditionally guaranteed the trust preferred securities along with all obligations of the Trusts under the trust agreements. Interest income from the subordinated debt was the source of revenues for these Trusts. In accordance with generally accepted accounting principles, the Trusts were not consolidated in the Company's financial statements. | ||
Use of Estimates | ||
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Cash and Cash Equivalents | ||
Cash and cash equivalents include cash on hand, amounts due from banks, amounts held at the Federal Reserve Bank, and Federal funds sold. The Company is required to maintain reserves against certain of the deposit accounts with the Federal Reserve Bank. Federal funds are generally sold and purchased for one-day periods. | ||
Cash Flows | ||
Net cash flows are reported for customer loan and deposit transactions, notes payable, repurchase agreements and other short-term borrowings. | ||
Securities | ||
The Company classifies its securities as either available-for-sale or held-to-maturity at the time of purchase. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of taxes. | ||
A decline in the fair value of any available-for-sale or held-to-maturity security below amortized cost that is deemed other than temporary results in a charge to earnings and the corresponding establishment of a new cost basis for the security. In estimating other-than-temporary losses, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the fair value decline was affected by macroeconomic conditions, and (4) whether the Company has the intention to sell the security or more likely than not will be required to sell the security before any anticipated recovery in fair value. | ||
Interest income includes amortization of purchase premiums or discounts. Premiums and discounts are amortized, or accreted, over the life of the related security as an adjustment to income using a method that approximates the interest method. Realized gains and losses are recorded on the trade date and determined using the specific identification method for the cost of securities sold. | ||
Loan Sales and Servicing | ||
The Company holds for sale the conditionally guaranteed portion of certain loans guaranteed by the Small Business Administration or the U.S. Department of Agriculture (collectively referred to as "SBA loans"). These loans are carried at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. | ||
Gains or losses on SBA loans held-for-sale are recognized upon completion of the sale, based on the difference between the selling price and the carrying value of the related loan sold. | ||
SBA loans are sold with servicing retained. Servicing assets recognized separately upon the sale of SBA loans consist of servicing rights and, for loans sold prior to 2009, interest-only strip receivables ("I/O strips"). The Company accounts for the sale and servicing of SBA loans based on the financial and servicing assets it controls and liabilities it has incurred, reversing recognition of financial assets when control has been surrendered, and reversing recognition of liabilities when extinguished. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans. Servicing rights are amortized in proportion to and over the period of net servicing income and are assessed for impairment on an ongoing basis. Impairment is determined by stratifying the servicing rights based on interest rates and terms. Any servicing assets in excess of the contractually specified servicing fees are reclassified at fair value as an I/O strip receivable and treated like an available for sale security. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance. The servicing rights, net of any required valuation allowance, and I/O strip receivable are included in other assets on the consolidated balance sheets. | ||
Servicing income, net of amortization of servicing rights, is recognized as noninterest income. The initial fair value of I/O strip receivables is amortized against interest income on loans. | ||
Loans | ||
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan origination fees and costs and an allowance for loan losses. The majority of the Company's loans have variable interest rates. Interest on loans is accrued on the unpaid principal balance and is credited to income using the effective yield interest method. | ||
A loan portfolio segment is defined as the level at which the Company uses a systematic methodology to determine the allowance for loan losses. A loan portfolio class is defined as a group of loans having similar risk characteristics and methods for monitoring and assessing risk. | ||
For all loan classes, when a loan is classified as nonaccrual, the accrual of interest is discontinued, any accrued and unpaid interest is reversed, and the amortization of deferred loan fees and costs is discontinued. For all loan classes, loans are classified as nonaccrual when the payment of principal or interest is 90 days past due, unless the loan is well secured and in the process of collection. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. In certain circumstances, loans that are under 90 days past due may also be classified as nonaccrual. Any interest or principal payments received on nonaccrual loans are applied toward reduction of principal. Nonaccrual loans generally are not returned to performing status until the obligation is brought current, the loan has performed in accordance with the contract terms for a reasonable period of time, and the ultimate collectability of the contractual principal and interest is no longer in doubt. | ||
Non-refundable loan fees and direct origination costs are deferred and recognized over the expected lives of the related loans using the effective yield interest method. | ||
Allowance for Loan Losses | ||
The allowance for loan losses is an estimate of probable incurred losses in the loan portfolio. Loans are charged-off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management's methodology for estimating the allowance balance consists of several key elements, which include specific allowances on individual impaired loans and the formula driven allowances on pools of loans with similar risk characteristics. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management's judgment, should be charged off. | ||
Specific allowances are established for impaired loans. Management considers a loan to be impaired when it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the loan agreement, including scheduled interest payments. Loans for which the terms have been modified with a concession granted, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. When a loan is considered to be impaired, the amount of impairment is measured based on the fair value of the collateral, less costs to sell, if the loan is collateral dependent, or on the present value of expected future cash flows or values that are observable in the secondary market if the loan is not collateral dependent. The amount of any impairment will be charged off against the allowance for loan losses if the amount is a confirmed loss or, alternatively, a specific allocation within the allowance will be established. Loans that are considered impaired are specifically excluded from the formula portion of the allowance for loan losses analysis. | ||
The formula driven allowance on pools of loans covers all loans that are not impaired and is based on historical losses of each loan segment adjusted for current factors. In calculating the historical component of our allowance, we aggregate our loans into one of three loan segments: Commercial, Real Estate and Consumer. Each segment of loans in the portfolio possess varying degrees of risk, based on, among other things, the type of loan being made, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company's loan portfolio, which are factors management regularly considers when evaluating the adequacy of the allowance: | ||
• | Commercial loans consist primarily of commercial and industrial loans (business lines of credit), and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which may impact a borrower's ability to continue to make scheduled payments. The factored receivables at BVF are included in the Company's commercial loan portfolio; however, they are evaluated for risk primarily based on the agings of the receivables. Faster turning receivables imply less risk and therefore warrant a lower associated allowance. Should the overall aging for the portfolio increase, this structure will by formula increase the allowance to reflect the increasing risk. Should the portfolio turn more quickly, it would reduce the associated allowance to reflect the reducing risk. | |
• | Real estate loans consist primarily of loans secured by commercial and residential real estate. Also included in this segment are land and construction loans and home equity lines of credit secured by real estate. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lay primarily within these loan types. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company's recorded investment in the loan. | |
• | Consumer loans consist primarily of a large number of small loans and lines of credit. The majority of installment loans are made for consumer and business purchases. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. | |
As a result of the matters mentioned above, changes in the financial condition of individual borrowers, economic conditions, historical loss experience and the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan losses and the associated provision for loan losses. | ||
The estimated loss factors for pools of loans that are not impaired are based on determining the probability of default and loss given default for loans within each segment of the portfolio, adjusted for significant factors that, in management's judgment, affect collectibility as of the evaluation date. The Company's historical delinquency experience and loss experience are utilized to determine the probability of default and loss given default for segments of the portfolio where the Company has experienced losses in the past. For segments of the portfolio where the Company has no significant prior loss experience, the Company uses quantifiable observable industry data to determine the probability of default and loss given default. Risk factors impacting loans in each of the portfolio segments include broad deterioration of property values, reduced consumer and business spending as a result of continued high unemployment and reduced credit availability and lack of confidence in a sustainable recovery. The historical loss experience is adjusted for management's estimate of the impact of other factors based on the risks present for each portfolio segment. These other factors include consideration of the following: the overall level of concentrations and trends of classified loans; loan concentrations within a portfolio segment or division of a portfolio segment; identification of certain loan types with higher risk than other loans; existing internal risk factors; and management's evaluation of the impact of local and national economic conditions on each of our loan types. | ||
Loan Commitments and Related Financial Instruments | ||
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. | ||
Federal Home Loan Bank and Federal Reserve Bank Stock | ||
As a member of the Federal Home Loan Bank ("FHLB") system, the Bank is required to own common stock in the FHLB based on the Bank's level of borrowings and outstanding FHLB advances. FHLB stock is carried at cost and classified as a restricted security. Both cash and stock dividends are reported as income. | ||
As a member of the Federal Reserve Bank ("FRB") of San Francisco, the Bank is required to own stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends received are reported as income. | ||
Company Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan | ||
The Company has purchased life insurance policies on certain directors and officers. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The purchased insurance is subject to split-dollar insurance agreements with the insured participants, which continues after the participant's employment and retirement. | ||
Accounting guidance requires that a liability be recorded primarily over the participant's service period when a split-dollar life insurance agreement continues after a participant's employment or retirement. The required accrued liability is based on either the post-employment benefit cost for the continuing life insurance or the future death benefit depending on the contractual terms of the underlying agreement. | ||
Premises and Equipment | ||
Land is carried at cost. Premises and equipment are stated at cost. Depreciation and amortization are computed on the straight-line basis over the lesser of the respective lease terms or estimated useful lives. The Company owns one building which is being depreciated over 40 years. Furniture, equipment, and leasehold improvements are depreciated over estimated useful lives generally ranging from five to fifteen years. The Company evaluates the recoverability of long-lived assets on an ongoing basis. | ||
Business Combinations | ||
The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. | ||
Goodwill and Other Intangible Assets | ||
Goodwill resulted from the acquisition of Bay View Funding on November 1, 2014, and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. | ||
Other intangible assets consist of core deposit and customer relationship intangible assets arising from the Diablo Valley Bank acquisition in June 2007, and a below market value lease intangible asset, customer relationship and brokered relationship intangible assets, and a non-compete agreement intangible asset arising from the Bay View Funding acquisition in November 2014. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposits intangible asset from the acquisition of Diablo Valley Bank is being amortized on an accelerated method over ten years. The customer relationship intangible from the acquisition of Diablo Valley Bank was being amortized on an accelerated method over seven years, and was fully amortized at December 31, 2014. The below market value lease intangible asset, customer relationship and brokered relationship intangible assets, and non-compete agreement intangible asset from the acquisition of Bay View Funding are being amortized on the straight-line method over three, ten, and three years, respectively. | ||
Foreclosed Assets | ||
Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through operations. Operating costs after acquisition are expensed. Gains and losses on disposition are included in noninterest expense. | ||
The carrying value of foreclosed assets was $696,000 and $575,000 at December 31, 2014 and 2013, respectively, and is included in other assets on the consolidated balance sheets. | ||
Retirement Plans | ||
Expenses for the Company's non-qualified, unfunded defined benefits plan consists of service and interest cost and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service. | ||
Loss Contingencies | ||
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company's accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated. The Company's accounting policy for uncertain recoveries is to recognize the anticipated recovery when realization is deemed probable. | ||
Income Taxes | ||
The Company files consolidated Federal and combined state income tax returns. Income tax expense is the total of the current year income tax payable or refunded, the change in deferred tax assets and liabilities, and low income housing investment losses, net of tax benefits received. Some items of income and expense are recognized in different years for tax purposes when applying generally accepted accounting principles, leading to timing differences between the Company's actual tax liability and the amount accrued for this liability based on book income. These temporary differences comprise the "deferred" portion of the Company's tax expense or benefit, which is accumulated on the Company's books as a deferred tax asset or deferred tax liability until such time as they reverse. | ||
Realization of the Company's deferred tax assets is primarily dependent upon the Company generating sufficient taxable income to obtain benefit from the reversal of net deductible temporary differences and utilization of tax credit carryforwards for Federal and California state income tax purposes. The amount of deferred tax assets considered realizable is subject to adjustment in future periods based on estimates of future taxable income. Under generally accepted accounting principles, a valuation allowance is required to be recognized if it is "more likely than not" that a deferred tax asset will not be realized. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning management's evaluation of both positive and negative evidence, including forecasts of future income, cumulative losses, applicable tax planning strategies, and assessments of current and future economic and business conditions. | ||
The Company had net deferred tax assets of $18,527,000 and $23,326,000 at December 31, 2014, and December 31, 2013, respectively. After consideration of the matters in the preceding paragraph, the Company determined that it is more likely than not that the net deferred tax asset at December 31, 2014 and 2013 will be fully realized in future years. | ||
A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. | ||
Stock-Based Compensation | ||
Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company's common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost recognized reflects estimated forfeitures, adjusted as necessary for actual forfeitures. | ||
Comprehensive Income (Loss) | ||
Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss) because they have been recorded directly in equity under the provisions of certain accounting guidance. The Company's sources of other comprehensive income (loss) are unrealized gains and losses on securities available-for-sale, and I/O strips, which are treated like available-for-sale securities, and the liabilities related to the Company's defined benefit pension plan and the split-dollar life insurance benefit plan. Reclassification adjustments result from gains or losses on securities that were realized and included in net income (loss) of the current period that also had been included in other comprehensive income as unrealized holding gains and losses. | ||
Segment Reporting | ||
HBC is an independent community business bank with eleven branch offices that offer similar products to customers. Bay View Funding, a subsidiary of Heritage Bank of Commerce, provides factoring financing, which are included in HBC's commercial loan portfolio. No customer accounts for more than 10 percent of revenues for HBC or the Company. While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company wide basis. Management evaluates the Company's performance as a whole and does not allocate resources based on the performance of different lending or transaction activities. Accordingly, the Company and its subsidiary bank all operate as one business segment. | ||
Reclassifications | ||
Certain items in the consolidated financial statements for the years ended December 31, 2013 and 2012 were reclassified to conform to the 2014 presentation. These reclassifications did not affect previously reported net income. | ||
Adoption of New Accounting Standards | ||
In January 2014, the Financial Accounting Standards Board ("FASB") amended existing guidance clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. The Company has evaluated the adoption of the new guidance and has determined it will not have a material impact on the consolidated financial statements. | ||
In January 2014, the FASB issued guidance for accounting for investments in qualified affordable housing projects, which represents a consensus of the Emerging Issues Task Force and sets forth new accounting for qualifying investments in flow through limited liability entities that invest in affordable housing projects. The new guidance allows a limited liability investor that meets certain conditions to amortize the cost of its investment in proportion to the tax credits and other tax benefits it receives. The new accounting method, referred to as the proportional amortization method, allows amortization of the tax credit investment to be reflected along with the primary benefits, the tax credits and other tax benefits, on a net basis in the income statement within the income tax expense (benefit) line. For public business entities, the guidance is effective for interim and annual periods beginning after December 15, 2014. For all other entities, the guidance is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. If elected, the proportional amortization method is required to be applied retrospectively. Early adoption is permitted in the annual period for which financial statements have not been issued. | ||
The Company adopted the proportional amortization method of accounting for its low income housing investments in the third quarter of 2014. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense for all periods reflected on the consolidated income statements. See Note 11 — Income Taxes for more information on the adoption of the proportional method of accounting for low income housing investments. | ||
In May 2014, the FASB issued an update to the guidance for accounting for revenue from contracts with customers. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides steps to follow to achieve the core principle. An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are evaluating the impact of adopting the new guidance on the consolidated financial statements. | ||
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Income (''AOCI'') | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income ("AOCI") | ||||||||||||||
Accumulated Other Comprehensive Income ("AOCI") | ||||||||||||||
(2) Accumulated Other Comprehensive Income ("AOCI") | ||||||||||||||
The following table reflects the changes in AOCI by component for the periods indicated: | ||||||||||||||
For the Years Ended December 31, 2014, 2013, and 2012 | ||||||||||||||
Unrealized | Unamortized | Defined | Total(1) | |||||||||||
Gains (Losses) on | Unrealized | Benefit | ||||||||||||
Available- | Gain on | Pension | ||||||||||||
for-Sale | Available- | Plan | ||||||||||||
Securities | for-Sale | Items(1) | ||||||||||||
and I/O | Securities | |||||||||||||
Strips(1) | Reclassified | |||||||||||||
to Held-to- | ||||||||||||||
Maturity(1) | ||||||||||||||
(Dollars in thousands) | ||||||||||||||
Beginning balance January 1, 2014, net of taxes | $ | (430 | ) | $ | 466 | $ | (4,065 | ) | $ | (4,029 | ) | |||
Other comprehensive income (loss) before reclassification, net of taxes | 4,152 | — | (1,910 | ) | 2,242 | |||||||||
Amounts reclassified from other comprehensive income (loss), net of taxes | (56 | ) | (31 | ) | 23 | (64 | ) | |||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income (loss), net of taxes | 4,096 | (31 | ) | (1,887 | ) | 2,178 | ||||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2014, net of taxes | $ | 3,666 | $ | 435 | $ | (5,952 | ) | $ | (1,851 | ) | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Beginning balance January 1, 2013, net of taxes | 7,887 | 497 | (5,703 | 2,681 | ||||||||||
$ | $ | $ | ) | $ | ||||||||||
Other comprehensive income (loss) before reclassification, net of taxes | (8,295 | ) | — | 1,518 | (6,777 | ) | ||||||||
Amounts reclassified from other comprehensive income (loss), net of taxes | (22 | ) | (31 | ) | 120 | 67 | ||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income (loss), net of taxes | (8,317 | ) | (31 | ) | 1,638 | (6,710 | ) | |||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2013, net of taxes | $ | (430 | ) | $ | 466 | $ | (4,065 | ) | $ | (4,029 | ) | |||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Beginning balance January 1, 2012, net of taxes | 6,210 | (5,255 | 955 | |||||||||||
$ | $ | — | $ | ) | $ | |||||||||
Other comprehensive income (loss) before reclassification, net of taxes | 2,582 | — | (568 | ) | 2,014 | |||||||||
| | | | | | | | | | | | | | |
Amounts reclassified from other comprehensive income (loss), net of taxes | (905 | ) | 497 | 120 | (288 | ) | ||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income, net of taxes | 1,677 | 497 | (448 | ) | 1,726 | |||||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2012, net of taxes | $ | 7,887 | $ | 497 | $ | (5,703 | ) | $ | 2,681 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | Amounts in parenthesis indicate debits. | |||||||||||||
Amounts Reclassified from | ||||||||||||||
AOCI(1) | ||||||||||||||
For the Year Ended | ||||||||||||||
December 31, | Affected Line Item Where | |||||||||||||
Details About AOCI Components | 2014 | 2013 | 2012 | Net Income is Presented | ||||||||||
(Dollars in thousands) | ||||||||||||||
Unrealized gains on available-for-sale securities and I/O strips | $ | 97 | $ | 38 | $ | 1,560 | Realized gains on sale of securities | |||||||
(41 | ) | (16 | ) | (655 | ) | Income tax expense | ||||||||
| | | | | | | | | | | | |||
56 | 22 | 905 | Net of tax | |||||||||||
| | | | | | | | | | | | |||
Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity | 54 | 54 | (857 | ) | Interest income on taxable securities | |||||||||
(23 | ) | (23 | ) | 360 | Income tax (expense) benefit | |||||||||
| | | | | | | | | | | | |||
31 | 31 | (497 | ) | Net of tax | ||||||||||
| | | | | | | | | | | | |||
Amortization of defined benefit pension plan items(2) | ||||||||||||||
Prior service cost | — | — | (27 | ) | ||||||||||
Prior transition obligation | 102 | 84 | 73 | |||||||||||
Actuarial losses | (142 | ) | (291 | ) | (253 | ) | ||||||||
| | | | | | | | | | | | |||
(40 | ) | (207 | ) | (207 | ) | Income before income tax | ||||||||
17 | 87 | 87 | Income tax benefit | |||||||||||
| | | | | | | | | | | | |||
(23 | ) | (120 | ) | (120 | ) | Net of tax | ||||||||
| | | | | | | | | | | | |||
Total reclassification for the year | $ | 64 | $ | (67 | ) | $ | 288 | |||||||
| | | | | | | | | | | | |||
| | | | | | | | | | | | |||
-1 | Amounts in parenthesis indicate debits. | |||||||||||||
-2 | This AOCI component is included in the computation of net periodic benefit cost (see Note 13 — Benefit Plans). | |||||||||||||
Securities
Securities | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Securities | ||||||||||||||||||||
Securities | ||||||||||||||||||||
(3) Securities | ||||||||||||||||||||
The amortized cost and estimated fair value of securities at year-end were as follows: | ||||||||||||||||||||
2014 | Amortized | Gross | Gross | Estimated | ||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||
Gains | (Losses) | Value | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 150,570 | $ | 3,867 | $ | (265 | ) | $ | 154,172 | |||||||||||
Corporate bonds | 35,927 | 959 | (23 | ) | 36,863 | |||||||||||||||
Trust preferred securities | 15,000 | 300 | — | 15,300 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 201,497 | $ | 5,126 | $ | (288 | ) | $ | 206,335 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 15,480 | $ | 44 | $ | (118 | ) | $ | 15,406 | |||||||||||
Municipals — tax exempt | 79,882 | 1,011 | (1,346 | ) | 79,547 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 95,362 | $ | 1,055 | $ | (1,464 | ) | $ | 94,953 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
2013 | Amortized | Gross | Gross | Estimated | ||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||
Gains | (Losses) | Value | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 208,644 | $ | 2,465 | $ | (3,465 | ) | $ | 207,644 | |||||||||||
Corporate bonds | 53,002 | 527 | (1,483 | ) | 52,046 | |||||||||||||||
Trust preferred securities | 20,849 | — | (439 | ) | 20,410 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 282,495 | $ | 2,992 | $ | (5,387 | ) | $ | 280,100 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 15,932 | $ | — | $ | (470 | ) | $ | 15,462 | |||||||||||
Municipals — tax exempt | 79,989 | 54 | (9,473 | ) | 70,570 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 95,921 | $ | 54 | $ | (9,943 | ) | $ | 86,032 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Securities with unrealized losses at year end, aggregated by investment category and length of time that individual securities have been in an unrealized loss position, are as follows: | ||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||
2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | (Losses) | Value | (Losses) | Value | (Losses) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 12,491 | $ | (27 | ) | $ | 35,614 | $ | (238 | ) | $ | 48,105 | $ | (265 | ) | |||||
Corporate bonds | — | — | 5,148 | (23 | ) | 5,148 | (23 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 12,491 | $ | (27 | ) | $ | 40,762 | $ | (261 | ) | $ | 53,253 | $ | (288 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 4,869 | $ | (29 | ) | $ | 4,974 | $ | (89 | ) | $ | 9,843 | $ | (118 | ) | |||||
Municipals — Tax Exempt | 1,884 | (16 | ) | 42,867 | (1,330 | ) | 44,751 | (1,346 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 6,753 | $ | (45 | ) | $ | 47,841 | $ | (1,419 | ) | $ | 54,594 | $ | (1,464 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||
2013 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | (Losses) | Value | (Losses) | Value | (Losses) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 87,798 | $ | (2,869 | ) | $ | 8,920 | $ | (596 | ) | $ | 96,718 | $ | (3,465 | ) | |||||
Corporate bonds | 38,092 | (1,322 | ) | 1,860 | (161 | ) | 39,952 | (1,483 | ) | |||||||||||
Trust preferred securities | 20,410 | (439 | ) | — | — | 20,410 | (439 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 146,300 | $ | (4,630 | ) | $ | 10,780 | $ | (757 | ) | $ | 157,080 | $ | (5,387 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 5,978 | $ | (101 | ) | $ | 9,134 | $ | (369 | ) | $ | 15,112 | $ | (470 | ) | |||||
Municipals — Tax Exempt | 38,177 | (4,421 | ) | 25,520 | (5,052 | ) | 63,697 | (9,473 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 44,155 | $ | (4,522 | ) | $ | 34,654 | $ | (5,421 | ) | $ | 78,809 | $ | (9,943 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
There were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders' equity. At December 31, 2014, the Company held 361 securities (130 available-for-sale and 231 held-to-maturity), of which 151 had fair values below amortized cost. At December 31, 2014, there were $35,614,000 of agency mortgage-backed securities available-for-sale, $5,148,000 of corporate bonds available-for-sale, $4,974,000 of agency mortgage-backed securities held-to-maturity and $42,867,000 of municipals bonds held-to-maturity carried with an unrealized loss for over 12 months. The total unrealized loss for securities over 12 months was $1,680,000 at December 31, 2014. The unrealized losses were due to higher interest rates. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. The Company does not consider these securities to be other-than-temporarily impaired at December 31, 2014. | ||||||||||||||||||||
At December 31, 2013, the Company held 392 securities (163 available-for-sale and 229 held-to-maturity), of which 275 had fair values below amortized cost. At December 31, 2013, there were $8,920,000 of agency mortgage-backed securities available-for-sale, $1,860,000 of corporate bonds available-for-sale, $9,134,000 of agency mortgage-backed securities held-to-maturity, and $25,520,000 of municipal bonds held-to-maturity carried with an unrealized loss for over 12 months. The total unrealized loss for securities over 12 months was $6,178,000 at December 31, 2013. The unrealized losses were due to higher interest rates. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. The Company does not consider these securities to be other than temporarily impaired at December 31, 2013. | ||||||||||||||||||||
The proceeds from sales of securities and the resulting gains and losses are listed below: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Proceeds | $ | 108,603 | $ | 26,944 | $ | 40,587 | ||||||||||||||
Gross gains | 1,008 | 310 | 1,560 | |||||||||||||||||
Gross losses | (911 | ) | (272 | ) | — | |||||||||||||||
The amortized cost and fair value of debt securities as of December 31, 2014, by contractual maturity, are shown below. The expected maturities will differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. | ||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Due after one through five years | $ | 6,335 | $ | 6,713 | ||||||||||||||||
Due after five through ten years | 29,592 | 30,150 | ||||||||||||||||||
Due after ten years | 15,000 | 15,300 | ||||||||||||||||||
Agency mortgage-backed securities | 150,570 | 154,172 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | $ | 201,497 | $ | 206,335 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Held-to-maturity | ||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Due after five through ten years | 5,883 | 6,050 | ||||||||||||||||||
Due after ten years | 73,999 | 73,497 | ||||||||||||||||||
Agency mortgage-backed securities | 15,480 | 15,406 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | $ | 95,362 | $ | 94,953 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Securities with amortized cost of $147,497,000 and $147,455,000 as of December 31, 2014 and 2013 were pledged to secure public deposits and for other purposes as required or permitted by law or contract. | ||||||||||||||||||||
Loans_and_Loan_Servicing
Loans and Loan Servicing | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Loans and Loan Servicing | ||||||||||||||||||||
Loans and Loan Servicing | ||||||||||||||||||||
(4) Loans and Loan Servicing | ||||||||||||||||||||
Loans at year-end were as follows: | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Loans held-for-investment: | ||||||||||||||||||||
Commercial | $ | 462,403 | $ | 393,074 | ||||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 478,335 | 423,288 | ||||||||||||||||||
Land and construction | 67,980 | 31,443 | ||||||||||||||||||
Home equity | 61,644 | 51,815 | ||||||||||||||||||
Consumer | 18,867 | 15,677 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Loans | 1,089,229 | 915,297 | ||||||||||||||||||
Deferred loan fees, net | (586 | ) | (384 | ) | ||||||||||||||||
| | | | | | | | |||||||||||||
Loans, net of deferred fees | 1,088,643 | 914,913 | ||||||||||||||||||
Allowance for loan losses | (18,379 | ) | (19,164 | ) | ||||||||||||||||
| | | | | | | | |||||||||||||
Loans, net | $ | 1,070,264 | $ | 895,749 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Changes in the allowance for loan losses were as follows: | ||||||||||||||||||||
For the Year Ended December 31, 2014 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
Charge-offs | (815 | ) | (87 | ) | (25 | ) | (927 | ) | ||||||||||||
Recoveries | 418 | 62 | — | 480 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net charge-offs | (397 | ) | (25 | ) | (25 | ) | (447 | ) | ||||||||||||
Provision (credit) for loan losses | (949 | ) | 547 | 64 | (338 | ) | ||||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 11,187 | $ | 7,070 | $ | 122 | $ | 18,379 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 12,866 | $ | 6,034 | $ | 127 | $ | 19,027 | ||||||||||||
Charge-offs | (1,676 | ) | (276 | ) | — | (1,952 | ) | |||||||||||||
Recoveries | 2,621 | 283 | 1 | 2,905 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net recoveries | 945 | 7 | 1 | 953 | ||||||||||||||||
Provision (credit) for loan losses | (1,278 | ) | 507 | (45 | ) | (816 | ) | |||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
For the Year Ended December 31, 2012 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 13,215 | $ | 7,338 | $ | 147 | $ | 20,700 | ||||||||||||
Charge-offs | (3,935 | ) | (1,528 | ) | — | (5,463 | ) | |||||||||||||
Recoveries | 776 | 230 | — | 1,006 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net charge-offs | (3,159 | ) | (1,298 | ) | — | (4,457 | ) | |||||||||||||
Provision (credit) for loan losses | 2,810 | (6 | ) | (20 | ) | 2,784 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 12,866 | $ | 6,034 | $ | 127 | $ | 19,027 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on the impairment method as follows at year-end: | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 404 | $ | — | $ | — | $ | 404 | ||||||||||||
Collectively evaluated for impairment | 10,783 | 7,070 | 122 | 17,975 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total allowance balance | $ | 11,187 | $ | 7,070 | $ | 122 | $ | 18,379 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 2,701 | $ | 3,315 | $ | 6 | $ | 6,022 | ||||||||||||
Collectively evaluated for impairment | 459,702 | 604,644 | 18,861 | 1,083,207 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total loan balance | $ | 462,403 | $ | 607,959 | $ | 18,867 | $ | 1,089,229 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
December 31, 2013 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 1,694 | $ | 741 | $ | 21 | $ | 2,456 | ||||||||||||
Collectively evaluated for impairment | 10,839 | 5,807 | 62 | 16,708 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total allowance balance | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 4,906 | $ | 6,790 | $ | 122 | $ | 11,818 | ||||||||||||
Collectively evaluated for impairment | 388,168 | 499,756 | 15,555 | 903,479 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total loan balance | $ | 393,074 | $ | 506,546 | $ | 15,677 | $ | 915,297 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
The following table presents loans held-for-investment individually evaluated for impairment by class of loans as of December 31, 2014 and December 31, 2013. The recorded investment included in the following table represents loan principal net of any partial charge-offs recognized on the loans. The unpaid principal balance represents the recorded balance prior to any partial charge-offs. | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Unpaid | Recorded | Allowance | Unpaid | Recorded | Allowance | |||||||||||||||
Principal | Investment | for Loan | Principal | Investment | for Loan | |||||||||||||||
Balance | Losses | Balance | Losses | |||||||||||||||||
Allocated | Allocated | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial | $ | 2,282 | $ | 1,872 | $ | — | $ | 1,999 | $ | 1,915 | $ | — | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 2,510 | 1,651 | — | 2,831 | 2,831 | — | ||||||||||||||
Land and construction | 1,808 | 1,319 | — | 1,761 | 1,761 | — | ||||||||||||||
Home Equity | 345 | 345 | — | 377 | 377 | — | ||||||||||||||
Consumer | 6 | 6 | — | — | — | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total with no related allowance recorded | 6,951 | 5,193 | — | 6,968 | 6,884 | — | ||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 829 | 829 | 404 | 3,225 | 2,991 | 1,694 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | — | — | — | 1,531 | 1,531 | 451 | ||||||||||||||
Land and construction | — | — | — | — | — | — | ||||||||||||||
Home Equity | — | — | — | 290 | 290 | 290 | ||||||||||||||
Consumer | — | — | — | 122 | 122 | 21 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | 829 | 829 | 404 | 5,168 | 4,934 | 2,456 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 7,780 | $ | 6,022 | $ | 404 | $ | 12,136 | $ | 11,818 | $ | 2,456 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The following table presents interest recognized and cash-basis interest earned on impaired loans for the periods indicated: | ||||||||||||||||||||
For the Year Ended December 31, 2014 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
Commercial | Commercial and | Land and | Home | Consumer | Total | |||||||||||||||
Residential | Construction | Equity | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Average of impaired loans during the period | $ | 4,069 | $ | 2,758 | $ | 1,628 | $ | 529 | $ | 56 | $ | 9,040 | ||||||||
Interest income during impairment | $ | 56 | $ | — | $ | — | $ | — | $ | — | $ | 56 | ||||||||
Cash-basis interest earned | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
Commercial | Commercial and | Land and | Home | Consumer | Total | |||||||||||||||
Residential | Construction | Equity | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Average of impaired loans during the period | $ | 6,855 | $ | 4,921 | $ | 2,028 | $ | 2,064 | $ | 135 | $ | 16,003 | ||||||||
Interest income during impairment | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Cash-basis interest earned | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Nonperforming loans include both smaller dollar balance homogenous loans that are collectively evaluated for impairment and individually classified loans. Nonperforming loans were as follows at year-end: | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Nonaccrual loans — held-for-investment | $ | 5,855 | $ | 11,326 | ||||||||||||||||
Restructured and loans over 90 days past due and still accruing | — | 492 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total nonperforming loans | $ | 5,855 | $ | 11,818 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Other restructured loans | $ | 167 | $ | — | ||||||||||||||||
Impaired loans, excluding loans held-for-sale | $ | 6,022 | $ | 11,818 | ||||||||||||||||
The following table presents the nonperforming loans by class at year-end: | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Nonaccrual | Restructured and | Total | Nonaccrual | Restructured and | Total | |||||||||||||||
Loans over 90 | Loans over 90 Days | |||||||||||||||||||
Days Past Due and | Past Due and | |||||||||||||||||||
Still Accruing | Still Accruing | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 2,534 | $ | — | $ | 2,534 | $ | 4,414 | $ | 492 | $ | 4,906 | ||||||||
Real estate: | — | |||||||||||||||||||
Commercial and residential | 1,651 | — | 1,651 | 4,363 | — | 4,363 | ||||||||||||||
Land and construction | 1,320 | — | 1,320 | 1,761 | — | 1,761 | ||||||||||||||
Home equity | 344 | — | 344 | 666 | — | 666 | ||||||||||||||
Consumer | 6 | — | 6 | 122 | — | 122 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 5,855 | $ | — | $ | 5,855 | $ | 11,326 | $ | 492 | $ | 11,818 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The following table presents the aging of past due loans as of December 31, 2014 by class of loans: | ||||||||||||||||||||
30 - 59 | 60 - 89 | 90 Days or | Total | Loans Not | Total | |||||||||||||||
Days | Days | Greater | Past Due | Past Due | ||||||||||||||||
Past Due | Past Due | Past Due | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 3,002 | $ | 195 | $ | 1,978 | $ | 5,175 | $ | 457,228 | $ | 462,403 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | — | — | 1,065 | 1,065 | 477,270 | 478,335 | ||||||||||||||
Land and construction | — | — | — | — | 67,980 | 67,980 | ||||||||||||||
Home equity | — | — | — | — | 61,644 | 61,644 | ||||||||||||||
Consumer | — | — | — | — | 18,867 | 18,867 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,002 | $ | 195 | $ | 3,043 | $ | 6,240 | $ | 1,082,989 | $ | 1,089,229 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The following table presents the aging of past due loans as of December 31, 2013 by class of loans: | ||||||||||||||||||||
30 - 59 | 60 - 89 | 90 Days or | Total | Loans Not | Total | |||||||||||||||
Days | Days | Greater | Past Due | Past Due | ||||||||||||||||
Past Due | Past Due | Past Due | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 3,314 | $ | 428 | $ | 2,865 | $ | 6,607 | $ | 386,467 | $ | 393,074 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 1,559 | — | 1,065 | 2,624 | 420,664 | 423,288 | ||||||||||||||
Land and construction | — | — | — | — | 31,443 | 31,443 | ||||||||||||||
Home equity | 28 | — | 290 | 318 | 51,497 | 51,815 | ||||||||||||||
Consumer | — | — | 89 | 89 | 15,588 | 15,677 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 4,901 | $ | 428 | $ | 4,309 | $ | 9,638 | $ | 905,659 | $ | 915,297 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Past due loans 30 days or greater totaled $6,240,000 and $9,638,000 at December 31, 2014 and December 31, 2013, respectively, of which $3,130,000 and $5,900,000 were on nonaccrual. At December 31, 2014, there were also $2,725,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. At December 31, 2013, there were also $5,426,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. Management's classification of a loan as "nonaccrual" is an indication that there is reasonable doubt as to the full recovery of principal or interest on the loan. At that point, the Company stops accruing interest income, and reverses any uncollected interest that had been accrued as income. The Company begins recognizing interest income only as cash interest payments are received and it has been determined the collection of all outstanding principal is not in doubt. The loans may or may not be collateralized, and collection efforts are pursued. | ||||||||||||||||||||
Credit Quality Indicators | ||||||||||||||||||||
Concentrations of credit risk arise when a number of clients are engaged in similar business activities, or activities in the same geographic region, or have similar features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company's loan portfolio is concentrated in commercial (primarily manufacturing, wholesale, and service) and real estate lending, with the balance in consumer loans. While no specific industry concentration is considered significant, the Company's lending operations are located in the Company's market areas that are dependent on the technology and real estate industries and their supporting companies. Thus, the Company's borrowers could be adversely impacted by a continued downturn in these sectors of the economy which could reduce the demand for loans and adversely impact the borrowers' ability to repay their loans. | ||||||||||||||||||||
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information; historical payment experience; credit documentation; public information; and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loans terms. Classified loans are those loans that are assigned a substandard, substandard-nonaccrual, or doubtful risk rating using the following definitions: | ||||||||||||||||||||
Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. | ||||||||||||||||||||
Substandard-Nonaccrual. Loans classified as substandard-nonaccrual are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any, and it is probable that the Company will not receive payment of the full contractual principal and interest. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. In addition, the Company no longer accrues interest on the loan because of the underlying weaknesses. | ||||||||||||||||||||
Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. | ||||||||||||||||||||
Loss. Loans classified as loss are considered uncollectable or of so little value that their continuance as assets is not warranted. This classification does not necessarily mean that a loan has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. Loans classified as loss are immediately charged off against the allowance for loan losses. Therefore, there is no balance to report at December 31, 2014 or 2013. | ||||||||||||||||||||
The following table provides a summary of the loan portfolio by loan type and credit quality classification for the periods indicated: | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Nonclassified | Classified | Total | Nonclassified | Classified | Total | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 455,767 | $ | 6,636 | $ | 462,403 | $ | 380,806 | $ | 12,268 | $ | 393,074 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 472,061 | 6,274 | 478,335 | 416,992 | 6,296 | 423,288 | ||||||||||||||
Land and construction | 66,660 | 1,320 | 67,980 | 29,682 | 1,761 | 31,443 | ||||||||||||||
Home equity | 60,736 | 908 | 61,644 | 48,818 | 2,997 | 51,815 | ||||||||||||||
Consumer | 18,518 | 349 | 18,867 | 15,336 | 341 | 15,677 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,073,742 | $ | 15,487 | $ | 1,089,229 | $ | 891,634 | $ | 23,663 | $ | 915,297 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company's underwriting policy. | ||||||||||||||||||||
For the year ended December 31, 2014, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included a reduction of the stated interest rate of the loan, or an extension of maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. | ||||||||||||||||||||
The book balance of troubled debt restructurings at December 31, 2014 was $1,083,000, which included $916,000 of nonaccrual loans and $167,000 of accruing loans. The book balance of troubled debt restructurings at December 31, 2013 was $3,722,000, which included $3,230,000 of nonaccrual loans and $492,000 of accruing loans. Approximately $113,000 and $1,186,000 in specific reserves were established with respect to these loans as of December 31, 2014 and December 31, 2013. As of December 31, 2014 and December 31, 2013, the Company had no additional amounts committed on any loan classified as a troubled debt restructuring. | ||||||||||||||||||||
There were no loans by class modified as troubled debt restructurings during the twelve month period ended December 31, 2014. | ||||||||||||||||||||
The following table presents loans by class modified as troubled debt restructurings during the twelve month period ended December 31, 2013: | ||||||||||||||||||||
During the Year Ended | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Troubled Debt Restructurings: | Number | Pre-modification | Post-modification | |||||||||||||||||
of | Outstanding | Outstanding | ||||||||||||||||||
Contracts | Recorded | Recorded | ||||||||||||||||||
Investment | Investment | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | 1 | $ | 211 | $ | 211 | |||||||||||||||
Real Estate-Commercial and residential | 1 | 1,531 | 1,531 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total | 2 | $ | 1,742 | $ | 1,742 | |||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
The troubled debt restructurings described above increased the allowance for loan losses by $491,000 through the allocation of specific reserves, and resulted in no charge-offs for the years ended December 31, 2013. | ||||||||||||||||||||
A loan is considered to be in payment default when it is 30 days contractually past due under the modified terms. There were no defaults on troubled debt restructurings within twelve months following the modification during the years ended December 31, 2014 and 2013. | ||||||||||||||||||||
At December 31, 2014 and 2013, the Company serviced SBA loans sold to the secondary market of approximately $130,611,000 and $135,513,000. | ||||||||||||||||||||
Servicing assets represent the servicing spread generated from the sold guaranteed portions of SBA loans. The weighted average servicing rate for all loans serviced was 1.20% and 1.34% at December 31, 2014 and 2013, respectively. | ||||||||||||||||||||
Servicing rights are included in "accrued interest receivable and other assets" on the consolidated balance sheets. Activity for loan servicing rights follows: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 525 | $ | 709 | $ | 792 | ||||||||||||||
Additions | 319 | 106 | 184 | |||||||||||||||||
Amortization | (279 | ) | (290 | ) | (267 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Balance, end of year | $ | 565 | $ | 525 | $ | 709 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
There was no valuation allowance for servicing rights at December 31, 2014 and 2013, because the estimated fair value of the servicing rights was greater than the carrying value. The estimated fair value of loan servicing rights was $2,426,000 and $2,556,000 at December 31, 2014 and 2013, respectively. The fair value of servicing rights at December 31, 2014, was estimated using a weighted average constant prepayment rate ("CPR") assumption of 7.32%, and a weighted average discount rate assumption of 12.11%. The fair value of servicing rights at December 31, 2013 was estimated using a weighted average constant prepayment rate ("CPR") assumption of 6.83%, and a weighted average discount rate assumption of 13.55%. | ||||||||||||||||||||
The weighted average discount rate and CPR assumptions used to estimate the fair value of the I/O strip receivables are the same as for the servicing rights. Management reviews the key economic assumptions used to estimate the fair value of I/O strip receivables on a quarterly basis. The fair value of the I/O strip can be adversely impacted by a significant increase in either the prepayment speed of the portfolio or the discount rate. | ||||||||||||||||||||
I/O strip receivables are included in "accrued interest receivable and other assets" on the consolidated balance sheets. Activity for I/O strip receivables follows: | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 1,647 | $ | 1,786 | $ | 2,094 | ||||||||||||||
Unrealized loss | (166 | ) | (139 | ) | (308 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Balance, end of year | $ | 1,481 | $ | 1,647 | $ | 1,786 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Premises_and_Equipment
Premises and Equipment | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Premises and Equipment | ||||||||
Premises and Equipment | ||||||||
(5) Premises and Equipment | ||||||||
Premises and equipment at year-end were as follows: | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Building | $ | 3,256 | $ | 3,256 | ||||
Land | 2,900 | 2,900 | ||||||
Furniture and equipment | 8,082 | 7,203 | ||||||
Leasehold improvements | 4,658 | 4,225 | ||||||
| | | | | | | | |
18,896 | 17,584 | |||||||
Accumulated depreciation and amortization | (11,445 | ) | (10,344 | ) | ||||
| | | | | | | | |
Premises and equipment, net | $ | 7,451 | $ | 7,240 | ||||
| | | | | | | | |
| | | | | | | | |
Depreciation and amortization expense was $725,000, $729,000, and $750,000 in 2014, 2013, and 2012, respectively. | ||||||||
Leases
Leases | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases | |||||
Leases | |||||
(6) Leases | |||||
Operating Leases | |||||
The Company owns one of its offices and leases the others under non-cancelable operating leases with terms, including renewal options, ranging from five to fifteen years. Future minimum payments under the agreements are as follows: | |||||
Year ending December 31, | (Dollars in thousands) | ||||
2015 | $ | 2,759 | |||
2016 | 2,733 | ||||
2017 | 2,549 | ||||
2018 | 2,034 | ||||
2019 | 1,856 | ||||
Thereafter | 1,127 | ||||
| | | | | |
Total | $ | 13,058 | |||
| | | | | |
| | | | | |
Rent expense under operating leases was $2,692,000, $2,719,000, and $2,735,000 in 2014, 2013, and 2012, respectively. | |||||
Acquisition_of_Bay_View_Fundin
Acquisition of Bay View Funding | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisition of Bay View Funding | ||||||||
Acquisition of Bay View Funding | ||||||||
(7) Acquisition of Bay View Funding | ||||||||
On October 8, 2014, HBC entered into a Stock Purchase Agreement ("Purchase Agreement") with BVF/CSNK Acquisition Corp., a Delaware corporation ("Bay View Funding" or "BVF") pursuant to which HBC agreed to acquire all of the outstanding common stock from the stockholders of BVF for an aggregate purchase price of $22,520,000 ("Acquisition"). The Acquisition closed on November 1, 2014, and BVF became a wholly owned subsidiary of HBC. At the Closing the Bank paid in cash $20,268,000 of the total purchase price to the BVF stockholders, and $2,252,000, or 10% of the purchase price, was deposited into an 18 month escrow account. Based in Santa Clara, California, BVF through its wholly-owned subsidiary CSNK Working Capital Finance Corp., a California corporation ("CSNK"), dba Bay View Funding provides business essential working capital factoring financing to various industries throughout the United States. Combining BVF's staff and national reach with Heritage Bank of Commerce's banking products and services further diversifies the Bank's commercial products and services. The BVF platform is scalable and is aligned with recent key product initiatives designed to deliver a full spectrum of commercial lending products to our markets. BVF's results of operations have been included in the Company's results beginning November 1, 2014, providing net interest income of $1,958,000, noninterest income of $84,000, and $558,000 of the Company's net income for the year ended December 31, 2014. The one-time pre-tax acquisition costs incurred by the Company for the BVF acquisition totaled $895,000 for the year ended December 31, 2014. | ||||||||
The consolidated financial statements for the year ended December 31, 2014 include purchase accounting adjustments to record the assets and liabilities of BVF at their estimated fair values. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition: | ||||||||
(Dollars in thousands) | ||||||||
Cash and cash equivalents | $ | 602 | ||||||
Net loans | 42,300 | |||||||
Goodwill | 13,044 | |||||||
Other intangible assets | 2,259 | |||||||
Premises and equipment | 119 | |||||||
Other assets, net | 738 | |||||||
| | | | | ||||
Total assets acquired | 59,062 | |||||||
Borrowings | (31,647 | |||||||
) | ||||||||
Other liabilities | (4,895 | ) | ||||||
| | | | | ||||
Total liabilities assumed | (36,542 | ) | ||||||
| | | | | ||||
Total consideration paid | $ | 22,520 | ||||||
| | | | | ||||
| | | | | ||||
The fair value of net assets acquired includes fair value adjustments to certain factored receivables that were not considered impaired as of the acquisition date. The fair value of factored receivables is based on estimated rates of return expected by market participants discounted over the expected duration of the portfolio which is less than 60 days. In addition to underwriting of its clients, BVF also performs significant underwriting of the account debtors and limits the overall level of receivables it purchases related to any given account debtor. Faster turnover of receivables implies less risk and, therefore, warrants a lower associated fair value mark. The average life of the factored receivables is 31 days. The gross contractual amounts receivable totaled $42,413,000 as of November 1, 2014. As of that date, contractual cash flows not expected to be collected on these receivables totaled $113,000, which has been recorded as the credit risk component of the purchase discount, and which represents 0.3% of the gross factored receivables outstanding. | ||||||||
Goodwill of $13,044,000 arising from the acquisition of BVF is primarily attributable to synergies and cost savings of combining the operations of the companies. The goodwill will not be deductible for tax purposes. The fair values of assets acquired and liabilities assumed are subject to adjustment during the first twelve months after the acquisition date if additional information becomes available to indicate a more accurate or appropriate value for an asset or liability. | ||||||||
The Acquisition purchase agreement contains customary representations and warranties by BVF and the BVF stockholders, covenants by BVF regarding the operation of its business between the date of signing of the purchase agreement and the closing date of the Acquisition, and indemnification provisions whereby the BVF stockholders agreed to indemnify BVF, CSNK, HBC and their affiliated parties for breaches of representations and warranties, breaches of covenants and certain other matters. Of the total purchase price, $2,252,000, or 10%, was deposited into an escrow account with an independent escrow agent to support the indemnification obligations, if any, of indemnification claims against the BVF stockholders. Any amounts remaining in the escrow account will be released to the BVF stockholders after 18 months following the closing date of the Acquisition, net of any indemnification payments made from the escrow or amounts reserved for pending claims pursuant to any indemnification claims under the purchase agreement. As of the date of this report, it is not possible to estimate if any claims will be made and, if made the amounts involved, against the escrow account. Therefore, the Company has assumed that the full escrow amount will be paid to the stockholders of BVF for purposes of determining the fair value of $2,252,000 at November 1, 2014. | ||||||||
The following table presents pro forma financial information as if the acquisition had occurred on January 1, 2013, which includes the pre-acquisition period for BVF. The historical unaudited pro forma financial information has been adjusted to reflect supportable items that are directly attributable to the acquisition and expected to have a continuing impact on consolidated results of operations, as such, one-time acquisition costs are not included. The unaudited pro forma financial information is provided for informational purposes only. The unaudited pro forma financial information is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the acquisition been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined consolidated financial statements and related adjustments required management to make certain assumptions and estimates. . | ||||||||
UNAUDITED | 2014 | 2013 | ||||||
(Dollars in thousands, except per share amounts) | ||||||||
Net interest income | $ | 66,105 | $ | 59,998 | ||||
Noninterest income | 8,293 | 8,080 | ||||||
| | | | | | | | |
Total revenue | $ | 74,398 | $ | 68,078 | ||||
| | | | | | | | |
| | | | | | | | |
Net income | $ | 15,141 | $ | 13,397 | ||||
Net income per share — basic | 0.47 | 0.42 | ||||||
$ | $ | |||||||
Net income per share — diluted | $ | 0.47 | $ | 0.42 | ||||
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Goodwill and Other Intangible Assets | |||||
Goodwill and Other Intangible Assets | |||||
(8) Goodwill and Other Intangible Assets | |||||
Goodwill | |||||
The Company recognized $13,044,000 of goodwill upon its acquisition of Bay View Funding on November 1, 2014. Goodwill remained at $13,044,000 as of December 31, 2014. | |||||
Other Intangible Assets | |||||
Core deposit and customer relationship intangible assets acquired in the 2007 acquisition of Diablo Valley Bank were $5,049,000 and $276,000, respectively. These assets are amortized over their estimated useful lives. Customer relationship intangible asset is fully amortized at December 31, 2014. Accumulated amortization of these intangible assets was $4,257,000 and $3,798,000 at December 31, 2014 and 2013, respectively. | |||||
Other intangible assets acquired in the acquisition of Bay View Funding in November 2014 included: a below market value lease intangible asset of $109,000 (amortized over 3 years), customer relationship and brokered relationship intangible assets of $1,900,000, (amortized over the 10 year estimated useful lives), and a non-compete agreement intangible asset of $250,000 (amortized over 3 years). Accumulated amortization of these intangible assets was $51,000 at December 31, 2014. | |||||
Estimated amortization expense for each of the next five years follows: | |||||
(Dollars in thousands) | |||||
2015 | $ | 755 | |||
2016 | 736 | ||||
2017 | 486 | ||||
2018 | 190 | ||||
2019 | 190 | ||||
The estimated amortization expense related to the Diablo Valley Bank acquisition for each of the years 2015 through 2019 is $446,000, $427,000, $195,000, $0, and $0, respectively. The estimated amortization expense related to the Bay View Funding acquisition for each of the years 2015 through 2019 is $309,000, $309,000, $291,000, $190,000, and $190,000, respectively. | |||||
Impairment testing of the intangible assets is performed at the individual asset level. Impairment exists if the carrying amount of the asset is not recoverable and exceeds its fair value at the date of the impairment test. For intangible assets, estimates of expected future cash flows (cash inflows less cash outflows) that are directly associated with an intangible asset are used to determine the fair value of that asset. Management makes certain estimates and assumptions in determining the expected future cash flows from core deposit and customer relationship intangibles including account attrition, expected lives, discount rates, interest rates, servicing costs and other factors. Significant changes in these estimates and assumptions could adversely impact the valuation of these intangible assets. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is then amortized over the remaining useful life of the asset. Based on its assessment, management concluded that there was no impairment of intangible assets at December 31, 2014 and December 31, 2013. | |||||
Deposits
Deposits | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Deposits | |||||
Deposits | |||||
(9) Deposits | |||||
Time deposits of $250,000 and over, including time deposits within the Certificate of Deposit Account Registry Service ("CDARS") and brokered deposits of $250,000 and over, were $193,228,000 and $213,769,000 at December 31, 2014 and 2013, respectively. The following table presents the scheduled maturities of all time deposits and brokered deposits for the next five years: | |||||
(Dollars in thousands) | |||||
2015 | $ | 230,675 | |||
2016 | 23,791 | ||||
2017 | 728 | ||||
2018 | 29 | ||||
2019 | 1,000 | ||||
| | | | | |
Total | $ | 256,223 | |||
| | | | | |
| | | | | |
At December 31, 2014, total CDARS deposits of $11,248,000 include money market deposits of $4,036,000, which have no scheduled maturity date, and therefore, are excluded from the table above. | |||||
At December 31, 2014, the Company had securities pledged with a fair value of $109,764,000 for $98,019,000 in certificates of deposits (including accrued interest) with the State of California. At December 31, 2013, the Company had securities pledged with a fair value of $107,965,000 for $98,022,000 in certificates of deposits (including accrued interest) with the State of California. | |||||
The CDARS program allows customers with deposits in excess of FDIC-insured limits to obtain full coverage on time deposits through a network of banks within the CDARS program. Deposits gathered through these programs are considered brokered deposits under current regulatory reporting guidelines. CDARS deposits were comprised of $4,036,000 of money market accounts and $7,212,000 of time deposits at December 31, 2014. CDARS deposits were comprised of $34,789,000 of money market accounts and $5,669,000 of time deposits at December 31, 2013. The CDARS money market deposits at December 31, 2013, included $27,463,000 in deposits from a law firm for legal settlements. All of the $27,463,000 in deposits from the law firm were withdrawn in the first quarter of 2014. | |||||
Deposits from executive officers, directors, and their affiliates were $2,593,000 and $3,122,000 at December 31, 2014 and 2013, respectively. | |||||
Borrowing_Arrangements
Borrowing Arrangements | 12 Months Ended |
Dec. 31, 2014 | |
Borrowing Arrangements | |
Borrowing Arrangements | |
(10) Borrowing Arrangements | |
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |
The Company maintains a collateralized line of credit with the FHLB of San Francisco. Under this line, the Company can borrow from the FHLB on a short-term (typically overnight) or long-term (over one year) basis. As of December 31, 2014, and December 31, 2013, the Company had no overnight borrowings from the FHLB. The Company had $246,635,000 of loans and no securities pledged to the FHLB as collateral on a line of credit of $139,990,000 at December 31, 2014. The Company had $253,472,000 of loans and no securities pledged to the FHLB as collateral on a line of credit of $125,330,000 at December 31, 2013. | |
The Company can also borrow from the FRB's discount window. The Company had approximately $387,972,000 of loans pledged to the FRB as collateral on an available line of credit of approximately $260,439,000 at December 31, 2014, none of which was outstanding. The Company had approximately $323,209,000 of loans pledged to the FRB as collateral on an available line of credit of approximately $241,515,000 at December 31, 2013, none of which was outstanding. | |
At December 31, 2014, the Company has Federal funds purchase arrangements and lines of credit available of $55,000,000. There were no Federal funds purchased at December 31, 2014 and 2013. | |
At November 1, 2014 Bay View Funding had $1,000,000 outstanding on a subordinated revolving line credit from a related party with a maturity date of June 30, 2015. On November 5, 2014, BVF paid off the related party line of credit of $1,000,000. | |
Bay View Funding had a $32,500,000 revolving bank line of credit. Repayment of the line of credit was secured by all the assets of BVF and was set to mature on April 3, 2015. On December 17, 2014, the remaining unpaid principal balance of $14,002,000 was paid, along with a $325,000 prepayment premium, to close out the $32,500,000 revolving bank line of credit. | |
Subordinated Debt | |
The Company supported its growth through the issuance of trust preferred securities from special purpose trusts and accompanying sales of subordinated debt to these trusts. The subordinated debt issued to the trusts was senior to the outstanding shares of common stock and Series C Preferred Stock. As a result, payments were required on the subordinated debt before any dividends could be paid on the common stock and Series C Preferred Stock. Under the terms of the subordinated debt, the Company could defer interest payments for up to five years. Interest payments on the subordinated notes payable to the Company's subsidiary grantor Trusts were deductible for tax purposes. | |
During the third quarter of 2012, the Company redeemed its 10.875% fixed-rate subordinated debentures in the amount of $7,000,000 issued to Heritage Capital Trust I and the Company's 10.600% fixed-rate subordinated debentures in the amount of $7,000,000 issued to Heritage Statutory Trust I. The related trust securities issued by Capital Trust I and Statutory Trust I were also redeemed in connection with the subordinated debt redemption and the trusts were dissolved. | |
During the third quarter of 2013, the Company redeemed its Company's variable rate subordinated debentures in the amount of $5,000,000 issued to Heritage Statutory Trust II and the Company's variable rate subordinated debentures in the amount of $4,000,000 issued to Heritage Statutory Trust III. The related trust securities issued by Statutory Trust II and Statutory Trust III were also redeemed in connection with the subordinated debt redemption and the trusts were dissolved. | |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Taxes | |||||||||||||||||
Income Taxes | |||||||||||||||||
11) Income Taxes | |||||||||||||||||
Income tax (benefit) consisted of the following for the year ended December 31, as follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Currently payable tax: | |||||||||||||||||
Federal | $ | 4,392 | $ | 5,015 | $ | 4,139 | |||||||||||
State | 818 | 63 | 51 | ||||||||||||||
| | | | | | | | | | | |||||||
Total currently payable | 5,210 | 5,078 | 4,190 | ||||||||||||||
Deferred tax (benefit): | |||||||||||||||||
Federal | 1,114 | (130 | ) | 292 | |||||||||||||
State | 1,214 | 1,258 | 1,007 | ||||||||||||||
| | | | | | | | | | | |||||||
Total deferred tax | 2,328 | 1,128 | 1,299 | ||||||||||||||
| | | | | | | | | | | |||||||
Income tax | $ | 7,538 | $ | 6,206 | $ | 5,489 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
The effective tax rate differs from the Federal statutory rate for the years ended December 31, as follows: | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Statutory Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||||||||||
State income taxes, net of federal tax benefit | 6.5 | % | 5.3 | % | 4.7 | % | |||||||||||
Low income housing credits, net of investment losses | 0.8 | % | 0.6 | % | -0.6 | % | |||||||||||
Increase in cash surrender value of life insurance | -2.7 | % | -3.5 | % | -4.2 | % | |||||||||||
Non-taxable interest income | -3.2 | % | -2.9 | % | -0.3 | % | |||||||||||
Split-dollar term insurance | 0.1 | % | 0.2 | % | 0.0 | % | |||||||||||
Other, net | -0.5 | % | 0.3 | % | 1.0 | % | |||||||||||
| | | | | | | | | | | |||||||
Effective tax rate | 36.0 | % | 35.0 | % | 35.6 | % | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Deferred tax assets and liabilities that result from the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at December 31, are as follows: | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Defined postretirement benefit obligation | $ | 10,327 | $ | 8,707 | |||||||||||||
Allowance for loan losses | 7,728 | 8,058 | |||||||||||||||
Tax credit carryforwards | 2,441 | 3,958 | |||||||||||||||
Stock compensation | 1,693 | 1,697 | |||||||||||||||
California net operating loss carryforwards | — | 1,138 | |||||||||||||||
Accrued expenses | 1,446 | 1,029 | |||||||||||||||
Securities available-for-sale | — | 668 | |||||||||||||||
Loans | 2 | — | |||||||||||||||
Fixed assets | 702 | 613 | |||||||||||||||
Nonaccrual interest | 25 | 134 | |||||||||||||||
Split-dollar life insurance benefit plan | 112 | 108 | |||||||||||||||
State income taxes | 213 | — | |||||||||||||||
Other | 359 | 451 | |||||||||||||||
| | | | | | | | ||||||||||
Total deferred tax assets | 25,048 | 26,561 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Securities available-for-sale | (2,351 | ) | — | ||||||||||||||
FHLB stock | (245 | ) | (263 | ) | |||||||||||||
Prepaid expenses | (464 | ) | (481 | ) | |||||||||||||
Intangible assets | (1,334 | ) | (642 | ) | |||||||||||||
I/O strips | (621 | ) | (691 | ) | |||||||||||||
Loan fees | (1,131 | ) | (1,025 | ) | |||||||||||||
Other | (375 | ) | (133 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total deferred tax liabilities | (6,521 | ) | (3,235 | ) | |||||||||||||
| | | | | | | | ||||||||||
Net deferred tax assets | $ | 18,527 | $ | 23,326 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Tax credit carryforwards as of December 31, 2014 consist of the following: | |||||||||||||||||
2014 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Low income housing credits | $ | 1,388 | (begin to expire in 2030) | ||||||||||||||
Alternative Minimum Tax credits | 870 | (no expiration date) | |||||||||||||||
State tax credits, net of federal tax effects | 181 | (no expiration date) | |||||||||||||||
New Hire Retention Credit | 2 | (expires in 2031) | |||||||||||||||
| | | | | | ||||||||||||
Total tax credit carryforwards | $ | 2,441 | |||||||||||||||
| | | | | | ||||||||||||
| | | | | | ||||||||||||
If the Company were to generate a Federal net operating loss, it would have the ability to carryback its net operating loss to recover some federal income taxes paid in prior years. Under current California law, if the Company were to generate a state net operating loss, it would have the ability to carryback 75% of the net operating loss to recover some state income taxes paid in prior years. | |||||||||||||||||
Under generally accepted accounting principles, a valuation allowance is required if it is "more likely than not" that a deferred tax asset will not be realized. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning management's evaluation of both positive and negative evidence, including forecasts of future income, cumulative losses, applicable tax planning strategies, and assessments of current and future economic and business conditions. In accordance with Accounting Standards Codification (ASC) 740-10 Accounting for Uncertainty in Income Taxes, the Company estimated the need for a reserve for income taxes of $250,000 for uncertain state income tax positions of BVF. | |||||||||||||||||
At December 31, 2014, and December 31, 2013, the Company had net deferred tax assets of $18,527,000 and $23,326,000, respectively. At December 31, 2014, the Company determined that a valuation allowance for deferred tax assets was not necessary. | |||||||||||||||||
The Company and its subsidiaries are subject to U.S. Federal income tax as well as income tax of the State of California. The Company is no longer subject to examination by Federal and state taxing authorities for years before 2011 and 2010, respectively. | |||||||||||||||||
The Company adopted the proportional amortization method of accounting for its low income housing investments in the third quarter of 2014. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense for all periods reflected on the consolidated income statements. The following tables reflect noninterest expense, income tax expense, and the effective tax rate as originally reported and with the low income housing investment losses reclassified under the proportional amortization method of accounting for the periods indicated: | |||||||||||||||||
For the Quarter Ended | |||||||||||||||||
For the | |||||||||||||||||
Year Ended | |||||||||||||||||
12/31/14 | 12/31/14 | 9/30/14 | 6/30/14 | 3/31/14 | |||||||||||||
(Dollars in thousands) | |||||||||||||||||
Noninterest expense as originally reported | $ | 44,222 | $ | 12,415 | $ | 10,139 | $ | 10,934 | $ | 10,734 | |||||||
Low income housing investment losses reclassified to income tax expense | — | — | 353 | (165 | ) | (188 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Noninterest expense under the proportional method | $ | 44,222 | $ | 12,415 | $ | 10,492 | $ | 10,769 | $ | 10,546 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income tax expense as originally reported | $ | 7,538 | $ | 1,993 | $ | 2,322 | $ | 1,672 | $ | 1,551 | |||||||
Low income housing investment losses reclassified from noninterest expense | — | — | (353 | ) | 165 | 188 | |||||||||||
| | | | | | | | | | | | | | | | | |
Income tax expense under the proportional method | $ | 7,538 | $ | 1,993 | $ | 1,969 | $ | 1,837 | $ | 1,739 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Effective tax rate as originally reported | 36 | % | 35.6 | % | 40.4 | % | 33.5 | % | 33.5 | % | |||||||
Effective under the proportional method | 36 | % | 35.6 | % | 36.5 | % | 35.6 | % | 36.1 | % | |||||||
For the | For the | ||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Noninterest expense as originally reported | $ | 41,722 | $ | 40,256 | |||||||||||||
Low income housing investment losses reclassified to income tax expense | (1,252 | ) | (1,195 | ) | |||||||||||||
| | | | | | | | ||||||||||
Noninterest expense under the proportional method | $ | 40,470 | $ | 39,061 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Income tax expense as originally reported | $ | 4,954 | $ | 4,294 | |||||||||||||
Low income housing investment losses reclassified from noninterest expense | 1,252 | 1,195 | |||||||||||||||
| | | | | | | | ||||||||||
Income tax expense under the proportional method | $ | 6,206 | $ | 5,489 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Effective tax rate as originally reported | 30 | % | 30.2 | % | |||||||||||||
Effective under the proportional method | 35 | % | 35.6 | % | |||||||||||||
The following table reflects the carry amounts of the low income housing investments included in accrued interest receivable and other assets, and the future commitments as of December 31, 2014 and 2013: | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Low income housing investments | $ | 5,268 | $ | 1,227 | |||||||||||||
Future commitments | $ | 1,827 | $ | 59 | |||||||||||||
The Company expects $1,193,000 of the future commitments to be paid in 2015, $550,000 in 2016, and $84,000 in 2017 through 2023. | |||||||||||||||||
For tax purposes, the Company had low income housing tax credits of $581,000 and $731,000 for the years ended December 31, 2014 and December 2013, respectively, and low income housing investment losses of $338,000 and $263,000, respectively. The Company recognized low income housing investment expense as a component of income tax expense of $174,000 for the year ended December 31, 2014. | |||||||||||||||||
Equity_Plan
Equity Plan | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Equity Plan | ||||||||||||||
Equity Plan | ||||||||||||||
(12) Equity Plan | ||||||||||||||
The Company maintained an Amended and Restated 2004 Equity Plan (the "2004 Plan") for directors, officers, and key employees. The 2004 Plan was terminated on May 23, 2013. On May 23, 2013, the Company's shareholders approved the 2013 Equity Incentive Plan (the "2013 Plan"). The equity plans provide for the grant of incentive and nonqualified stock options and restricted stock. The equity plans provide that the option price for both incentive and nonqualified stock options will be determined by the Board of Directors at no less than the fair value at the date of grant. Options granted vest on a schedule determined by the Board of Directors at the time of grant. Generally options vest over four years. All options expire no later than ten years from the date of grant. Restricted stock is subject to time vesting. In 2014, the Company granted 385,050 shares of nonqualified stock options and 90,000 shares of restricted stock subject to time vesting requirements. There were 1,273,816 shares available for the issuance of equity awards under the 2013 Plan as of December 31, 2014. | ||||||||||||||
Stock option activity under the equity plans is as follows: | ||||||||||||||
Total Stock Options | Number | Weighted | Weighted | Aggregate | ||||||||||
of Shares | Average | Average | Intrinsic | |||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Life (Years) | ||||||||||||||
Outstanding at January 1, 2014 | 1,506,504 | $ | 11.8 | |||||||||||
Granted | 385,050 | $ | 8.15 | |||||||||||
Exercised | (62,567 | ) | $ | 4.19 | ||||||||||
Forfeited or expired | (102,881 | ) | $ | 12.41 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 1,726,106 | $ | 11.23 | 5.9 | $ | 2,478,300 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested or expected to vest | 1,639,801 | 5.9 | $ | 2,354,385 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Exercisable at December 31, 2014 | 1,176,652 | 4.5 | $ | 1,703,800 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Information related to the equity plans for each of the last three years: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Intrinsic value of options exercised | $ | 258,467 | $ | 51,000 | $ | 10,000 | ||||||||
Cash received from option exercise | $ | 262,035 | $ | 88,000 | $ | 25,000 | ||||||||
Tax benefit realized from option exercises | $ | 102,710 | $ | 17,245 | $ | 3,000 | ||||||||
Weighted average fair value of options granted | $ | 3.90 | $ | 3.84 | $ | 3.67 | ||||||||
As of December 31, 2014, there was $2,092,000 of total unrecognized compensation cost related to nonvested stock options granted under the equity plans. That cost is expected to be recognized over a weighted-average period of approximately 2.71 years. | ||||||||||||||
The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted in the following table, including the weighted average assumptions for the option grants in each year. | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected life in months(1) | 84 | 96 | 84 | |||||||||||
Volatility(1) | 57 | % | 54 | % | 57 | % | ||||||||
Weighted average risk-free interest rate(2) | 2.09 | % | 1.49 | % | 1.31 | % | ||||||||
Expected dividends(3) | 2.06 | % | 0.12 | % | 0.00 | % | ||||||||
-1 | The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding based on historical experience. Volatility is based on the historical volatility of the stock price over the same period of the expected life of the option. | |||||||||||||
-2 | Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the option granted. | |||||||||||||
-3 | Each grant's dividend yield is calculated by annualizing the most recent quarterly cash dividend and dividing that amount by the market price of the Company's common stock as of the grant date. | |||||||||||||
The Company estimates the impact of forfeitures based on historical experience. Should the Company's current estimate change, additional expense could be recognized or reversed in future periods. The Company issues authorized shares of common stock to satisfy stock option exercises. | ||||||||||||||
Restricted stock activity under the equity plans is as follows: | ||||||||||||||
Total Restricted Stock Award | Number | Weighted | ||||||||||||
of Shares | Average Grant | |||||||||||||
Date Fair | ||||||||||||||
Value | ||||||||||||||
Nonvested shares at January 1, 2014 | 58,000 | $ | 6.28 | |||||||||||
Granted | 90,000 | $ | 8.44 | |||||||||||
Vested | (48,000 | ) | $ | 6.23 | ||||||||||
| | | | | | | | |||||||
Nonvested shares at December 31, 2014 | 100,000 | $ | 8.25 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
As of December 31, 2014, there was $714,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the 2004 Plan and 2013 Plan. The cost is expected to be recognized over a weighted-average period of approximately 3.75 years. | ||||||||||||||
Benefit_Plans
Benefit Plans | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Benefit Plans | ||||||||
Benefit Plans | ||||||||
(13) Benefit Plans | ||||||||
401(k) Savings Plan | ||||||||
The Company offers a 401(k) savings plan that allows employees to contribute up to a maximum percentage of their compensation, as established by the Internal Revenue Code. The Company made a discretionary matching contribution of up to $1,000 for each employee's contributions in 2014, 2013 and 2012. Contribution expense was $206,000, $196,000, and $187,000 in 2014, 2013 and 2012, respectively. | ||||||||
Employee Stock Ownership Plan | ||||||||
The Company sponsors a non-contributory employee stock ownership plan. To participate in this plan, an employee must have worked at least 1,000 hours during the year and must be employed by the Company at year-end. Employer contributions to the ESOP are discretionary. The Company has suspended contributions to the ESOP since 2010. At December 31, 2014, the ESOP owned 125,713 shares of the Company's common stock. | ||||||||
Deferred Compensation Plan | ||||||||
The Company has a nonqualified deferred compensation plan for its directors ("Deferral Agreements"). Under the Deferral Agreements, a participating director may defer up to 100% of his or her board fees into a deferred account. The director may elect a distribution schedule of up to ten years. Amounts deferred earn interest. The Company's deferred compensation obligation of $50,000 and $173,000 as of December 31, 2014 and 2013 is included in "Accrued interest payable and other liabilities." | ||||||||
The Company has purchased life insurance policies on the lives of two of its former directors who have Deferral Agreements. It is expected that the earnings on these policies will offset the cost of the program. In addition, the Company will receive death benefit payments upon the death of the former director. The proceeds will permit the Company to "complete" the deferral program as the former director originally intended if he dies prior to the completion of the deferral program. The disbursement of deferred fees is accelerated at death and commences one month after the former director dies. | ||||||||
In the event of the former director's disability prior to attainment of his benefit eligibility date, the former director may request that the Board permit him to receive an immediate disability benefit equal to the annualized value of the director's deferral account. | ||||||||
Nonqualified Defined Benefit Pension Plan | ||||||||
The Company has a supplemental retirement plan covering some current and some former key executives and directors ("SERP"). The SERP is an unfunded, nonqualified defined benefit plan. The combined number of active and retired/terminated participants in the SERP was 53 at December 31, 2014. The defined benefit represents a stated amount for key executives and directors that generally vests over nine years and is reduced for early retirement. The projected benefit obligation is included in "Accrued interest payable and other liabilities" on the consolidated balance sheets. The SERP has no assets and the entire projected benefit obligation is unfunded. The measurement date of the SERP is December 31. | ||||||||
The following table sets forth the SERP's status at December 31: | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | $ | 20,712 | $ | 21,305 | ||||
Service cost | 714 | 1,214 | ||||||
Actuarial loss (gain) | 3,059 | (1,746 | ) | |||||
Interest cost | 911 | 783 | ||||||
Benefits paid | (826 | ) | (844 | ) | ||||
| | | | | | | | |
Projected benefit obligation at end of year | $ | 24,570 | $ | 20,712 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts recognized in accumulated other comprehensive loss: Net actuarial loss | $ | 6,730 | $ | 3,813 | ||||
Weighted-average assumptions used to determine the benefit obligation at year-end: | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.65 | % | 4.50 | % | ||||
Rate of compensation increase | N/A | N/A | ||||||
Estimated benefit payments over the next ten years, which reflect anticipated future events, service and other assumptions, are as follows: | ||||||||
Year | Estimated | |||||||
Benefit | ||||||||
Payments | ||||||||
(Dollars in thousands) | ||||||||
2015 | $ | 866 | ||||||
2016 | 1,248 | |||||||
2017 | 1,422 | |||||||
2018 | 1,525 | |||||||
2019 | 1,549 | |||||||
2020 to 2024 | 8,814 | |||||||
The components of pension cost for the SERP follow: | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Components of net periodic benefit cost: | ||||||||
Service cost | $ | 714 | $ | 1,214 | ||||
Interest cost | 911 | 783 | ||||||
Amortization of net actuarial loss | 142 | 291 | ||||||
| | | | | | | | |
Net periodic benefit cost | $ | 1,767 | $ | 2,288 | ||||
| | | | | | | | |
| | | | | | | | |
The estimated net actuarial loss and prior service cost for the SERP that will be amortized from Accumulated Other Comprehensive Loss into net periodic benefit cost over the next fiscal year are $386,000 and $142,000 as of December 31, 2014 and 2013, respectively. | ||||||||
Net periodic benefit cost was determined using the following assumption: | ||||||||
2014 | 2013 | |||||||
Discount rate | 4.50 | % | 3.75 | % | ||||
Rate of compensation increase | N/A | N/A | ||||||
Split-Dollar Life Insurance Benefit Plan | ||||||||
The Company maintains life insurance policies for some current and some former directors and officers that are subject to split-dollar life insurance agreements, which continues after the participant's employment and retirement. All participants are fully vested in their split-dollar life insurance benefits. The accrued benefit liability for the split-dollar insurance agreements represents either the present value of the future death benefits payable to the participants' beneficiaries or the present value of the estimated cost to maintain life insurance, depending on the contractual terms of the participant's underlying agreement. | ||||||||
The split-dollar life insurance projected benefit obligation is included in "Accrued interest payable and other liabilities" on the consolidated balance sheets. The measurement date of the split-dollar life insurance benefit plan is December 31. | ||||||||
The following sets forth the funded status of the split dollar life insurance benefits. | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | $ | 4,353 | $ | 4,717 | ||||
Interest cost | 196 | 177 | ||||||
Actuarial loss (gain) | 92 | (541 | ) | |||||
| | | | | | | | |
Projected benefit obligation at end of year | $ | 4,641 | $ | 4,353 | ||||
| | | | | | | | |
| | | | | | | | |
Amounts recognized in accumulated other comprehensive income (loss) at December 31 consist of: | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Net actuarial loss | $ | 540 | $ | 256 | ||||
Prior transition obligation | 1,507 | 1,597 | ||||||
| | | | | | | | |
Accumulated other comprehensive loss | $ | 2,047 | $ | 1,853 | ||||
| | | | | | | | |
| | | | | | | | |
Weighted-average assumption used to determine the benefit obligation at year-end follow: | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.65 | % | 4.50 | % | ||||
Components of net periodic benefit cost during the year are: | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Amortization of prior transition obligation | $ | (102 | ) | $ | (84 | ) | ||
Interest cost | 196 | 177 | ||||||
| | | | | | | | |
Net periodic benefit cost | $ | 94 | $ | 93 | ||||
| | | | | | | | |
| | | | | | | | |
The estimated net actuarial loss and prior transition obligation for the split-dollar life insurance benefit plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $90,000 as of December 31, 2014 and 2013. | ||||||||
Weighted-average assumption used to determine the net periodic benefit cost: | ||||||||
2014 | 2013 | |||||||
Discount rate | 4.50 | % | 3.75 | % | ||||
Fair_Value
Fair Value | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value | |||||||||||||||||
Fair Value | |||||||||||||||||
(14) Fair Value | |||||||||||||||||
Accounting guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: | |||||||||||||||||
Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. | |||||||||||||||||
Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (for example, interest rates and yield curves observable at commonly quoted intervals, prepayment speeds, credit risks, and default rates). | |||||||||||||||||
Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability. | |||||||||||||||||
Financial Assets and Liabilities Measured on a Recurring Basis | |||||||||||||||||
The fair values of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). The Company uses matrix pricing (Level 2 inputs) to establish the fair value of its securities available-for-sale. | |||||||||||||||||
The fair value of interest-only ("I/O") strip receivable assets is based on a valuation model used by a third party. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 2 inputs). | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
Balance | Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets for | Other | Unobservable | |||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets at December 31, 2014: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Agency mortgage-backed securities | $ | 154,172 | — | $ | 154,172 | — | |||||||||||
Corporate bonds | $ | 36,863 | — | $ | 36,863 | — | |||||||||||
Trust preferred securities | $ | 15,300 | — | $ | 15,300 | — | |||||||||||
I/O strip receivables | $ | 1,481 | — | $ | 1,481 | — | |||||||||||
Assets at December 31, 2013: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Agency mortgage-backed securities | $ | 207,644 | — | $ | 207,644 | — | |||||||||||
Corporate bonds | $ | 52,046 | — | $ | 52,046 | — | |||||||||||
Trust preferred securities | $ | 20,410 | — | $ | 20,410 | — | |||||||||||
I/O strip receivables | $ | 1,647 | — | $ | 1,647 | — | |||||||||||
There were no transfers between Level 1 and Level 2 during the year for assets measured at fair value on a recurring basis. | |||||||||||||||||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | |||||||||||||||||
The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. The appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. | |||||||||||||||||
Foreclosed assets are valued at the time the loan is foreclosed upon and the asset is transferred to foreclosed assets. The fair value is based primarily on third party appraisals, less costs to sell. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
Balance | Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets for | Other | Unobservable | |||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets at December 31, 2014: | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 859 | — | — | $ | 859 | |||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 587 | — | — | 587 | |||||||||||||
Land and construction | 1,176 | — | — | 1,176 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | 2,622 | — | — | $ | 2,622 | ||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Foreclosed assets: | |||||||||||||||||
Commercial | $ | 31 | — | — | $ | 31 | |||||||||||
| | | | | | | | | | | | | | ||||
$ | 31 | $ | 31 | ||||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Assets at December 31, 2013: | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 1,780 | — | — | $ | 1,780 | |||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 2,846 | — | — | 2,846 | |||||||||||||
Land and construction | 1,290 | — | — | 1,290 | |||||||||||||
Consumer | 100 | — | — | 100 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | 6,016 | — | — | $ | 6,016 | ||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Foreclosed assets: | |||||||||||||||||
Land and construction | $ | 575 | — | — | $ | 575 | |||||||||||
| | | | | | | | | | | | | | ||||
$ | 575 | $ | 575 | ||||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
The following table shows the detail of the impaired loans held-for-investment and the impaired loans held-for-investment carried at fair value for the periods indicated: | |||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans held-for-investment: | |||||||||||||||||
Book value of impaired loans held-for-investment carried at fair value | $ | 3,026 | $ | 8,472 | |||||||||||||
Book value of impaired loans held-for-investment carried at cost | 2,996 | 3,346 | |||||||||||||||
| | | | | | | | ||||||||||
Total impaired loans held-for-investment | $ | 6,022 | $ | 11,818 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Impaired loans held-for-investment carried at fair value: | |||||||||||||||||
Book value of impaired loans held-for-investment carried at fair value | $ | 3,026 | $ | 8,472 | |||||||||||||
Specific valuation allowance | (404 | ) | (2,456 | ) | |||||||||||||
| | | | | | | | ||||||||||
Impaired loans held-for-investment carried at fair value, net | $ | 2,622 | $ | 6,016 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Impaired loans held-for-investment of $6,022,000 at December 31, 2014, after partial charge-offs of $107,000 in 2014, were analyzed for additional impairment primarily using the fair value of collateral. In addition, these loans had a specific valuation allowance of $404,000 at December 31, 2014. Impaired loans held-for-investment totaling $3,026,000 at December 31, 2014 were carried at fair value as a result of the aforementioned partial charge-offs and specific valuation allowances at year-end. The remaining $2,996,000 of impaired loans were carried at cost at December 31, 2014, as the fair value of the collateral exceeded the cost basis of each respective loan. Partial charge-offs and changes in specific valuation allowances during 2014 on impaired loans held-for-investment carried at fair value at December 31, 2014 resulted in a credit to the provision for loan losses of $100,000. | |||||||||||||||||
At December 31, 2014, foreclosed assets had a carrying amount of $696,000, with no valuation allowance at December 31, 2014. | |||||||||||||||||
Impaired loans held for investment of $11,818,000 at December 31, 2013, after partial charge offs of $318,000 in 2013, were analyzed for additional impairment primarily using the fair value of collateral. In addition, these loans had a specific valuation allowance of $2,456,000 at December 31, 2013. Impaired loans held for investment totaling $8,472,000 at December 31, 2013 were carried at fair value as a result of the aforementioned partial charge offs and specific valuation allowances at year end. The remaining $3,346,000 of impaired loans were carried at cost at December 31, 2013, as the fair value of the collateral exceeded the cost basis of each respective loan. Partial charge offs and changes in specific valuation allowances during 2013 on impaired loans held for investment carried at fair value at December 31, 2013 resulted in an additional provision for loan losses of $508,000. | |||||||||||||||||
At December 31, 2013, foreclosed assets had a carrying amount of $575,000, with no valuation allowance at December 31, 2013. | |||||||||||||||||
The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis, except for consumer loans, at December 31, 2014 and 2013: | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Fair Value | Valuation | Unobservable | Range | ||||||||||||||
Techniques | Inputs | (Weighted Average) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 859 | Market Approach | Discount adjustment for differences between comparable sales | 0% to 3% (3%) | ||||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 587 | Market Approach | Discount adjustment for differences between comparable sales | 0% to 3% (3%) | |||||||||||||
Land and construction | 1,176 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 2% (2%) | |||||||||||||
Foreclosed assets: | |||||||||||||||||
Commercial | 31 | Market Approach | Discount adjustment for differences between comparable sales | Less than 1% | |||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value | Valuation | Unobservable | Range | ||||||||||||||
Techniques | Inputs | (Weighted Average) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 1,780 | Market Approach | Discount adjustment for differences between comparable sales | 2% to 3% (2%) | ||||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 2,846 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 15% (2%) | |||||||||||||
Land and construction | 1,290 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 2% (2%) | |||||||||||||
Foreclosed assets: | |||||||||||||||||
Land and construction | 575 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 16% (7%) | |||||||||||||
The Company obtains third party appraisals on its impaired loans held-for-investment and foreclosed assets to determine fair value. Generally, the third party appraisals apply the "market approach," which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities, or a group of assets and liabilities, such as a business. Adjustments are then made based on the type of property, age of appraisal, current status of property and other related factors to estimate the current value of collateral. | |||||||||||||||||
The carrying amounts and estimated fair values of the Company's financial instruments, at year-end were as follows: | |||||||||||||||||
December 31, 2014 Estimated Fair Value | |||||||||||||||||
Carrying | Quoted Prices in | Significant | Significant | Total | |||||||||||||
Amounts | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs (Level 2) | (Level 3) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 122,403 | $ | 122,403 | $ | — | $ | — | $ | 122,403 | |||||||
Securities available-for-sale | 206,335 | — | 206,335 | — | 206,335 | ||||||||||||
Securities held-to-maturity | 95,362 | — | 94,953 | — | 94,953 | ||||||||||||
Loans (including loans held-for-sale), net | 1,071,436 | — | 1,172 | 1,071,854 | 1,073,026 | ||||||||||||
FHLB and FRB stock | 10,598 | — | — | — | N/A | ||||||||||||
Accrued interest receivable | 5,044 | — | 1,435 | 3,609 | 5,044 | ||||||||||||
Loan servicing rights and I/O strips receivables | 2,046 | — | 3,906 | — | 3,906 | ||||||||||||
Liabilities: | |||||||||||||||||
Time deposits | $ | 256,223 | $ | — | $ | 256,589 | $ | — | $ | 256,589 | |||||||
Other deposits | 1,132,163 | — | 1,132,163 | — | 1,132,163 | ||||||||||||
Accrued interest payable | 201 | — | 201 | — | 201 | ||||||||||||
December 31, 2013 Estimated Fair Value | |||||||||||||||||
Carrying | Quoted Prices in | Significant | Significant | Total | |||||||||||||
Amounts | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 112,605 | $ | 112,605 | $ | — | $ | — | $ | 112,605 | |||||||
Securities available-for-sale | 280,100 | — | 280,100 | — | 280,100 | ||||||||||||
Securities held-to-maturity | 95,921 | — | 86,032 | — | 86,032 | ||||||||||||
Loans (including loans held-for-sale), net | 898,897 | — | 3,148 | 890,368 | 893,516 | ||||||||||||
FHLB and FRB stock | 10,435 | — | — | — | N/A | ||||||||||||
Accrued interest receivable | 4,085 | — | 1,729 | 2,356 | 4,085 | ||||||||||||
Loan servicing rights and I/O strips receivables | 2,172 | — | 4,203 | — | 4,203 | ||||||||||||
Liabilities: | |||||||||||||||||
Time deposits | $ | 277,844 | $ | — | $ | 278,239 | $ | — | $ | 278,239 | |||||||
Other deposits | 1,008,377 | — | 1,008,377 | — | 1,008,377 | ||||||||||||
Accrued interest payable | 192 | — | 192 | — | 192 | ||||||||||||
The methods and assumptions, not previously discussed, used to estimate the fair value are described as follows: | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The carrying amounts of cash on hand, noninterest and interest bearing due from bank accounts approximate fair values and are classified as Level 1. | |||||||||||||||||
Loans | |||||||||||||||||
The fair value of loans held-for-sale is estimated based upon binding contracts and quotes from third party investors resulting in a Level 2 classification. | |||||||||||||||||
Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. | |||||||||||||||||
FHLB and FRB Stock | |||||||||||||||||
It was not practical to determine the fair value of FHLB and FRB stock due to the restrictions placed on transferability. | |||||||||||||||||
Accrued Interest Receivable/Payable | |||||||||||||||||
The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification. | |||||||||||||||||
Deposits | |||||||||||||||||
The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The carrying amounts of variable rate, fixed-term money market accounts approximate their fair values at the reporting date resulting in a Level 2 classification. The carrying amounts of variable rate, certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. | |||||||||||||||||
Subordinated Debt | |||||||||||||||||
The fair values of the subordinated debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification. | |||||||||||||||||
Off-Balance Sheet Items | |||||||||||||||||
Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of commitments is not material. | |||||||||||||||||
Limitations | |||||||||||||||||
Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates. | |||||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
(15) Commitments and Contingencies | ||||||||||||||
Financial Instruments with Off-Balance Sheet Risk | ||||||||||||||
HBC is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its clients. These financial instruments include commitments to extend credit and standby letters of credit. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the balance sheets. | ||||||||||||||
HBC's exposure to credit loss in the event of non-performance of the other party to the financial instrument for commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments. HBC uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. Credit risk is the possibility that a loss may occur because a party to a transaction failed to perform according to the terms of the contract. HBC controls the credit risk of these transactions through credit approvals, limits, and monitoring procedures. Management does not anticipate any significant losses as a result of these transactions. | ||||||||||||||
Commitments to extend credit were as follows: | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Fixed | Variable | Fixed | Variable | |||||||||||
Rate | Rate | Rate | Rate | |||||||||||
(Dollars in thousands) | ||||||||||||||
Unused lines of credit and commitments to make loans | $ | 8,164 | $ | 415,146 | $ | 6,136 | $ | 359,955 | ||||||
Standby letters of credit | 3,235 | 12,783 | — | 11,099 | ||||||||||
| | | | | | | | | | | | | | |
$ | 11,399 | $ | 427,929 | $ | 6,136 | $ | 371,054 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Commitments generally expire within one year. | ||||||||||||||
Standby letters of credit are written with conditional commitments issued by HBC to guarantee the performance of a client to a third party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to clients. | ||||||||||||||
The Company is required to maintain interest-bearing reserves. Reserve requirements are based on a percentage of certain deposits. As of December 31, 2014, the Company maintained reserves of $11,379,000 in the form of vault cash and balances at the Federal Reserve Bank of San Francisco, which satisfied the regulatory requirements. | ||||||||||||||
Loss Contingencies | ||||||||||||||
The Company's policy is to accrue for legal costs associated with both asserted and unasserted claims when it is probable that such costs will be incurred and such costs can be reasonably estimated. A number of parties have filed complaints in the Superior Court of California for the County of Santa Clara asserting certain claims against the Company arising from the transfer of funds for personal use by an authorized signatory of a customer. The litigation is in the discovery stage and it is not possible to determine the amount of the loss, if any, arising from the claim in excess of the legal expenses expected to be incurred in defense of the litigation. The Company intends to vigorously defend the litigation. | ||||||||||||||
Shareholders_Equity_and_Earnin
Shareholders' Equity and Earnings Per Share | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Shareholders' Equity and Earnings Per Share | |||||||||||
Shareholders' Equity and Earnings Per Share | |||||||||||
(16) Shareholders' Equity and Earnings Per Share | |||||||||||
Series A Preferred Stock—On November 21, 2008, the Company issued 40,000 shares of Series A Fixed Rate Cumulative Perpetual Preferred Stock ("Series A Preferred Stock") to the U.S. Treasury under the terms of the U.S. Treasury Capital Purchase Program for $40,000,000 with a liquidation preference of $1,000 per share. On March 7, 2012, in accordance with approvals received from the U.S. Treasury and the Federal Reserve Board, the Company repurchased all of the Series A Preferred Stock and paid all of the related accrued and unpaid dividends. | |||||||||||
Warrants—On November 21, 2008, in conjunction with the issuance of the Series A Preferred Stock, the Company issued a warrant to the U.S Treasury with an initial exercise price of $12.96 per share of common stock, with an allocated fair value of $1,979,000. The warrant was exercisable at any time on or before November 21, 2018. The warrant was transferable at any time. On June 12, 2013, the Company completed the repurchase of the common stock warrant for $140,000. | |||||||||||
Series C Preferred Stock—On June 21, 2010, the Company issued to various institutional investors 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock"). The Series C Preferred Stock is mandatorily convertible into 5,601,000 shares of common stock at a conversion price of $3.75 per share upon a subsequent transfer of the Series C Preferred Stock to third parties not affiliated with the holder in a widely dispersed offering. The Series C Preferred Stock is non-voting except in the case of certain transactions that would affect the rights of the holders of the Series C Preferred Stock or applicable law. The holders of Series C Preferred Stock receive dividends on an as converted basis when dividends are also declared for holders of common stock. The Series C Preferred Stock is not redeemable by the Company or by the holders and has a liquidation preference of $1,000 per share. The Series C Preferred Stock ranks senior to the Company's common stock. | |||||||||||
Dividends—On January 26, 2015, the Company announced that its Board of Directors declared a $0.08 per share quarterly cash dividend to holders of common stock and Series C preferred stock (on an as converted basis). The dividend will be paid on February 25, 2015, to shareholders of record on February 10, 2015. | |||||||||||
Earnings Per Share—Basic earnings per common share is computed by dividing net income, less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. The Series C Preferred Stock participates in the earnings of the Company and, therefore, the shares issued on the conversion of the Series C Preferred Stock are considered outstanding under the two-class method of computing basic earnings per common share during periods of earnings. Diluted earnings per share reflect potential dilution from outstanding stock options and common stock warrants, using the treasury stock method. The common stock warrant was antidilutive at December 31, 2013, and 2012. The Company repurchased the warrant for $140,000 in the second quarter of 2013. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows: | |||||||||||
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
Net income available to common shareholders | $ | 12,419 | $ | 11,204 | $ | 8,703 | |||||
Less: undistributed earnings allocated to Series C Preferred Stock | 1,342 | 1,687 | 1,527 | ||||||||
| | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 11,077 | $ | 9,517 | $ | 7,176 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted average common shares outstanding for basic earnings per common share | 26,390,615 | 26,338,161 | 26,303,245 | ||||||||
Dilutive effect of stock options oustanding, using the the treasury stock method | 135,666 | 48,291 | 26,091 | ||||||||
| | | | | | | | | | | |
Shares used in computing diluted earnings per common share | 26,526,282 | 26,386,452 | 26,329,336 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic earnings per share | $ | 0.42 | $ | 0.36 | $ | 0.27 | |||||
Diluted earnings per share | $ | 0.42 | $ | 0.36 | $ | 0.27 | |||||
Capital_Requirements
Capital Requirements | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Capital Requirements | ||||||||||||||||||||
Capital Requirements | ||||||||||||||||||||
(17) Capital Requirements | ||||||||||||||||||||
The Company and its subsidiary bank are subject to various regulatory capital requirements administered by the banking agencies. 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 Company's financial statements and operations. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and HBC must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. | ||||||||||||||||||||
Quantitative measures established by regulation to help ensure capital adequacy require the Company and HBC to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Management believes that, as of December 31, 2014 and 2013, the Company and HBC met all capital adequacy guidelines to which they were subject. | ||||||||||||||||||||
As of December 31, 2014 HBC was categorized as "well-capitalized" under the regulatory framework for prompt corrective action. There are no conditions or events since December 31, 2014 that management believes have changed the categorization of the Company or HBC as well-capitalized. | ||||||||||||||||||||
The Company's consolidated capital amounts and ratios are presented in the following table, together with capital adequacy requirements. | ||||||||||||||||||||
Actual | To Be | Required For | ||||||||||||||||||
Well-Capitalized | Capital | |||||||||||||||||||
Under Regulatory | Adequacy | |||||||||||||||||||
Requirements | Purposes | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Total Capital | $ | 186,068 | 13.9 | % | $ | 134,109 | 10.0 | % | $ | 107,287 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 169,278 | 12.6 | % | $ | 80,465 | 6.0 | % | $ | 53,644 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 169,278 | 10.6 | % | N/A | N/A | $ | 63,949 | 4.0 | % | ||||||||||
(to average assets) | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Total Capital | $ | 179,916 | 15.3 | % | $ | 117,581 | 10.0 | % | $ | 94,065 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 165,162 | 14.0 | % | $ | 70,549 | 6.0 | % | $ | 47,032 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 165,162 | 11.2 | % | N/A | N/A | $ | 59,083 | 4.0 | % | ||||||||||
(to average assets) | ||||||||||||||||||||
HBC's actual capital and required amounts and ratios are presented in the following table. | ||||||||||||||||||||
Actual | To Be | Required For | ||||||||||||||||||
Well-Capitalized | Capital | |||||||||||||||||||
Under Prompt | Adequacy | |||||||||||||||||||
Corrective Action | Purposes | |||||||||||||||||||
Provisions | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Total Capital | $ | 175,765 | 13.1 | % | $ | 134,095 | 10.0 | % | $ | 107,276 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 158,976 | 11.9 | % | $ | 80,457 | 6.0 | % | $ | 53,638 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 158,976 | 9.9 | % | $ | 79,959 | 5.0 | % | $ | 63,967 | 4.0 | % | ||||||||
(to average assets) | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Total Capital | $ | 163,827 | 13.9 | % | $ | 117,872 | 10.0 | % | $ | 94,297 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 149,037 | 12.6 | % | $ | 70,723 | 6.0 | % | $ | 47,148 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 149,037 | 10.1 | % | $ | 73,858 | 5.0 | % | $ | 59,086 | 4.0 | % | ||||||||
(to average assets) | ||||||||||||||||||||
The Company's total risk based capital ratio, Tier 1 risk based capital ratio, and leverage ratio at December 31, 2014 decreased to 13.9%, 12.6%, and 10.6%, compared to 15.3%, 14.0%, and 11.2% at December 31, 2013, respectively. HBC's total risk based capital ratio, Tier 1 risk based capital ratio, and leverage ratio at December 31, 2014 decreased to 13.1%, 11.9%, and 9.9%, compared to 13.9%, 12.6%, and 10.1% at December 31, 2013, respectively. The decrease was primarily due to the addition of goodwill and other intangible assets from the BVF acquisition. At December 31, 2014, the Company's and HBC's capital ratios exceed the highest regulatory capital requirement of "well capitalized" under prompt corrective action provisions. | ||||||||||||||||||||
HCC is dependent upon dividends from HBC. Under California General Corporation Law, the holders of common stock are entitled to receive dividends when and as declared by the Board of Directors, out of funds legally available. The California Financial Code provides that a state-licensed bank may not make a cash distribution to its shareholders in excess of the lesser of the following: (i) the bank's retained earnings; or (ii) the bank's net income for its last three fiscal years, less the amount of any distributions made by the bank to its shareholders during such period. However, a bank, with the prior approval of the Commissioner of the California Department of Business Oversight may make a distribution to its shareholders of an amount not to exceed the greater of (i) a bank's retained earnings; (ii) its net income for its last fiscal year; or (iii) its net income for the current fiscal year. Also with the prior approval of the Commissioner of the California Department of Business Oversight and the shareholders of the bank, the bank may make a distribution to its shareholders, as a reduction in capital of the bank. In the event that the Commissioner determines that the shareholders' equity of a bank is inadequate or that the making of a distribution by a bank would be unsafe or unsound, the Commissioner may order a bank to refrain from making such a proposed distribution. As of December 31, 2014, HBC would be required to obtain regulatory approval from the California Department of Business Oversight for a dividend or other distribution to HCC. Similar restrictions applied to the amount and sum of loan advances and other transfers of funds from HBC to the parent company. | ||||||||||||||||||||
Parent_Company_only_Condensed_
Parent Company only Condensed Financial Information | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Parent Company only Condensed Financial Information | |||||||||||
Parent Company only Condensed Financial Information | |||||||||||
(18) Parent Company only Condensed Financial Information | |||||||||||
The condensed financial statements of Heritage Commerce Corp (parent company only) are as follows: | |||||||||||
Condensed Balance Sheets | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
(Dollars in thousands) | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 10,159 | $ | 19,009 | |||||||
Investment in subsidiary bank | 173,453 | 155,958 | |||||||||
Other assets | 953 | — | |||||||||
| | | | | | | | ||||
Total assets | $ | 184,565 | $ | 174,967 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Liabilities and Shareholder's Equity | |||||||||||
Other liabilities | 207 | 1,571 | |||||||||
Shareholder's equity | 184,358 | 173,396 | |||||||||
| | | | | | | | ||||
Total liabilities and shareholder's equity | $ | 184,565 | $ | 174,967 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Condensed Statements of Income | |||||||||||
For the Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands) | |||||||||||
Interest income | $ | — | $ | — | $ | 1 | |||||
Dividend from subsidiary bank | — | 16,000 | 45,000 | ||||||||
Interest expense | — | (229 | ) | (1,383 | ) | ||||||
Other expenses | (2,033 | ) | (2,080 | ) | (2,615 | ) | |||||
| | | | | | | | | | | |
Income (loss) before income taxes and equity in net income of subsidiary bank | (2,033 | ) | 13,691 | 41,003 | |||||||
Equity in net income of subsidiary bank: | |||||||||||
Reduction in contributed capital and distribution from subsidiary bank | — | (16,000 | ) | (45,000 | ) | ||||||
Net income of subsidiary bank | 14,614 | 13,155 | 12,710 | ||||||||
Income tax benefit | 846 | 694 | 1,196 | ||||||||
| | | | | | | | | | | |
Net income | 13,427 | 11,540 | 9,909 | ||||||||
Dividends and discount accretion on preferred stock | (1,008 | ) | (336 | ) | (1,206 | ) | |||||
| | | | | | | | | | | |
Net income available to common shareholders | $ | 12,419 | $ | 11,204 | $ | 8,703 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Condensed Statements of Cash Flows | |||||||||||
For the Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net Income | $ | 13,427 | $ | 11,540 | $ | 9,909 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||||||
Amortization of restricted stock award, net of forfeitures and taxes | (9 | ) | 200 | 148 | |||||||
Equity in undistributed loss/(net income) of subsidiary bank | (14,614 | ) | 2,845 | 32,290 | |||||||
Net change in other assets and liabilities | (2,158 | ) | 4,478 | (744 | ) | ||||||
| | | | | | | | | | | |
Net cash (used in) provided by operating activities | (3,354 | ) | 19,063 | 41,603 | |||||||
Cash flows from financing activities: | |||||||||||
Repayment of subordinated debt | — | (9,279 | ) | (14,423 | ) | ||||||
Payment of cash dividends | (5,758 | ) | (1,916 | ) | (373 | ) | |||||
Repayment of preferred stock | — | — | (40,000 | ) | |||||||
Exercise of stock options | 262 | 88 | 39 | ||||||||
Payment of repurchase of common stock warrant | — | (140 | ) | — | |||||||
| | | | | | | | | | | |
Net cash used in financing activities | (5,496 | ) | (11,247 | ) | (54,757 | ) | |||||
| | | | | | | | | | | |
Net (decrease) increase in cash and cash equivalents | (8,850 | ) | 7,816 | (13,154 | ) | ||||||
Cash and cash equivalents, beginning of year | 19,009 | 11,193 | 24,347 | ||||||||
| | | | | | | | | | | |
Cash and cash equivalents, end of year | $ | 10,159 | $ | 19,009 | $ | 11,193 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Quarterly_Financial_Data_Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
(19) Quarterly Financial Data (Unaudited) | ||||||||||||||
The following table discloses the Company's selected unaudited quarterly financial data: | ||||||||||||||
For the Quarter Ended | ||||||||||||||
12/31/2014(1) | 9/30/2014(2) | 6/30/14 | 3/31/14 | |||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||
Interest income | $ | 16,717 | $ | 14,492 | $ | 14,192 | $ | 13,855 | ||||||
Interest expense | 625 | 500 | 507 | 521 | ||||||||||
| | | | | | | | | | | | | | |
Net interest income | 16,092 | 13,992 | 13,685 | 13,334 | ||||||||||
Provision (credit) for loan losses | (106 | ) | (24 | ) | (198 | ) | (10 | ) | ||||||
| | | | | | | | | | | | | | |
Net interest income after provision for loan losses | 16,198 | 14,016 | 13,883 | 13,344 | ||||||||||
Noninterest income | 1,812 | 1,870 | 2,047 | 2,017 | ||||||||||
Noninterest expense | 12,415 | 10,492 | 10,769 | 10,546 | ||||||||||
| | | | | | | | | | | | | | |
Income before income taxes | 5,595 | 5,394 | 5,161 | 4,815 | ||||||||||
Income tax expense | 1,993 | 1,969 | 1,837 | 1,739 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 3,602 | 3,425 | 3,324 | 3,076 | ||||||||||
Dividends on preferred stock | (280 | ) | (280 | ) | (224 | ) | (224 | ) | ||||||
| | | | | | | | | | | | | | |
Net income available to common shareholders | 3,322 | 3,145 | 3,100 | 2,852 | ||||||||||
Undistributed earnings allocated to Series C Preferred Stock | (349 | ) | (320 | ) | (358 | ) | (315 | ) | ||||||
| | | | | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 2,973 | $ | 2,825 | $ | 2,742 | $ | 2,537 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Earnings per common share | ||||||||||||||
Basic | $ | 0.11 | $ | 0.11 | $ | 0.1 | $ | 0.1 | ||||||
Diluted | $ | 0.11 | $ | 0.11 | $ | 0.1 | $ | 0.1 | ||||||
-1 | The Company's selected unaudited quarterly financial data for the quarter ended December 31, 2014 includes BVF acquisition and integration costs of $609,000, and the results of operations for Bay View Funding for the months of November and December 2014. | |||||||||||||
-2 | The Company's selected unaudited quarterly financial data for the quarter ended September 30, 2014 includes BVF acquisition and integration costs of $234,000. | |||||||||||||
For the Quarter Ended | ||||||||||||||
12/31/13 | 9/30/13 | 6/30/13 | 3/31/13 | |||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||
Interest income | $ | 13,623 | $ | 13,458 | $ | 12,838 | $ | 12,867 | ||||||
Interest expense | 574 | 627 | 685 | 714 | ||||||||||
| | | | | | | | | | | | | | |
Net interest income | 13,049 | 12,831 | 12,153 | 12,153 | ||||||||||
Provision (credit) for loan losses | (12 | ) | (534 | ) | (270 | ) | — | |||||||
| | | | | | | | | | | | | | |
Net interest income after provision for loan losses | 13,061 | 13,365 | 12,423 | 12,153 | ||||||||||
Noninterest income | 1,898 | 1,738 | 1,915 | 1,663 | ||||||||||
Noninterest expense | 9,851 | 10,060 | 10,089 | 10,470 | ||||||||||
| | | | | | | | | | | | | | |
Income before income taxes | 5,108 | 5,043 | 4,249 | 3,346 | ||||||||||
Income tax expense | 1,754 | 1,830 | 1,456 | 1,166 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 3,354 | 3,213 | 2,793 | 2,180 | ||||||||||
Dividends on preferred stock | (168 | ) | (168 | ) | — | — | ||||||||
| | | | | | | | | | | | | | |
Net income available to common shareholders | 3,186 | 3,045 | 2,793 | 2,180 | ||||||||||
Undistributed earnings allocated to Series C Preferred Stock | (421 | ) | (395 | ) | (489 | ) | (382 | ) | ||||||
| | | | | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 2,765 | $ | 2,650 | $ | 2,304 | $ | 1,798 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Earnings per common share | ||||||||||||||
Basic | $ | 0.1 | $ | 0.1 | $ | 0.09 | $ | 0.07 | ||||||
Diluted | $ | 0.1 | $ | 0.1 | $ | 0.09 | $ | 0.07 | ||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |
Dec. 31, 2014 | ||
Summary of Significant Accounting Policies | ||
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation | |
Heritage Commerce Corp ("HCC") operates as a registered bank holding company for its wholly-owned subsidiary Heritage Bank of Commerce ("HBC" or the "Bank"), collectively referred to as the "Company". HBC was incorporated on November 23, 1993 and commenced operations on June 8, 1994. HBC is a California state chartered bank which offers a full range of commercial and personal banking services to residents and the business/professional community in Santa Clara, Alameda, and Contra Costa counties, California. As discussed in Note 7, the Company acquired BVF/CSNK Acquisition Corp., a Delaware corporation ("Bay View Funding" or "BVF") on November 1, 2014, and BVF became a wholly owned subsidiary of HBC. Based in Santa Clara, California, BVF is the parent company of CSNK Working Capital Finance Corp. dba Bay View Funding, which provides business-essential working capital factoring financing to various industries throughout the United States. | ||
The consolidated financial statements are prepared in accordance with accounting policies generally accepted in the United States of America and general practices in the banking industry. The financial statements include the accounts of the Company. All inter-company accounts and transactions have been eliminated in consolidation. | ||
The Company also established the following wholly-owned Delaware business trusts that were formed to issue trust preferred and related common securities: Heritage Capital Trust I and Heritage Statutory Trust I, formed in 2000, Heritage Statutory Trust II, formed in 2001, and Heritage Statutory Trust III, formed in 2002 ("Trusts"). During the third quarter of 2012 the Company dissolved the Heritage Statutory Trust I and the Heritage Capital Trust I. During the third quarter of 2013, the Company dissolved the Heritage Statutory Trust II and the Heritage Statutory Trust III. | ||
The Trusts issued their preferred securities to investors, and used the proceeds to purchase subordinated debt issued by the Company. The subordinated debt payable to the Trusts was recorded as debt of the Company. The Company had fully and unconditionally guaranteed the trust preferred securities along with all obligations of the Trusts under the trust agreements. Interest income from the subordinated debt was the source of revenues for these Trusts. In accordance with generally accepted accounting principles, the Trusts were not consolidated in the Company's financial statements. | ||
Use of Estimates | Use of Estimates | |
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | ||
Cash and Cash Equivalents | Cash and Cash Equivalents | |
Cash and cash equivalents include cash on hand, amounts due from banks, amounts held at the Federal Reserve Bank, and Federal funds sold. The Company is required to maintain reserves against certain of the deposit accounts with the Federal Reserve Bank. Federal funds are generally sold and purchased for one-day periods. | ||
Cash Flows | Cash Flows | |
Net cash flows are reported for customer loan and deposit transactions, notes payable, repurchase agreements and other short-term borrowings. | ||
Securities | Securities | |
The Company classifies its securities as either available-for-sale or held-to-maturity at the time of purchase. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of taxes. | ||
A decline in the fair value of any available-for-sale or held-to-maturity security below amortized cost that is deemed other than temporary results in a charge to earnings and the corresponding establishment of a new cost basis for the security. In estimating other-than-temporary losses, management considers (1) the length of time and extent that fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the fair value decline was affected by macroeconomic conditions, and (4) whether the Company has the intention to sell the security or more likely than not will be required to sell the security before any anticipated recovery in fair value. | ||
Interest income includes amortization of purchase premiums or discounts. Premiums and discounts are amortized, or accreted, over the life of the related security as an adjustment to income using a method that approximates the interest method. Realized gains and losses are recorded on the trade date and determined using the specific identification method for the cost of securities sold. | ||
Loan Sales and Servicing | Loan Sales and Servicing | |
The Company holds for sale the conditionally guaranteed portion of certain loans guaranteed by the Small Business Administration or the U.S. Department of Agriculture (collectively referred to as "SBA loans"). These loans are carried at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. | ||
Gains or losses on SBA loans held-for-sale are recognized upon completion of the sale, based on the difference between the selling price and the carrying value of the related loan sold. | ||
SBA loans are sold with servicing retained. Servicing assets recognized separately upon the sale of SBA loans consist of servicing rights and, for loans sold prior to 2009, interest-only strip receivables ("I/O strips"). The Company accounts for the sale and servicing of SBA loans based on the financial and servicing assets it controls and liabilities it has incurred, reversing recognition of financial assets when control has been surrendered, and reversing recognition of liabilities when extinguished. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans. Servicing rights are amortized in proportion to and over the period of net servicing income and are assessed for impairment on an ongoing basis. Impairment is determined by stratifying the servicing rights based on interest rates and terms. Any servicing assets in excess of the contractually specified servicing fees are reclassified at fair value as an I/O strip receivable and treated like an available for sale security. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance. The servicing rights, net of any required valuation allowance, and I/O strip receivable are included in other assets on the consolidated balance sheets. | ||
Servicing income, net of amortization of servicing rights, is recognized as noninterest income. The initial fair value of I/O strip receivables is amortized against interest income on loans. | ||
Loans | Loans | |
Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan origination fees and costs and an allowance for loan losses. The majority of the Company's loans have variable interest rates. Interest on loans is accrued on the unpaid principal balance and is credited to income using the effective yield interest method. | ||
A loan portfolio segment is defined as the level at which the Company uses a systematic methodology to determine the allowance for loan losses. A loan portfolio class is defined as a group of loans having similar risk characteristics and methods for monitoring and assessing risk. | ||
For all loan classes, when a loan is classified as nonaccrual, the accrual of interest is discontinued, any accrued and unpaid interest is reversed, and the amortization of deferred loan fees and costs is discontinued. For all loan classes, loans are classified as nonaccrual when the payment of principal or interest is 90 days past due, unless the loan is well secured and in the process of collection. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. In certain circumstances, loans that are under 90 days past due may also be classified as nonaccrual. Any interest or principal payments received on nonaccrual loans are applied toward reduction of principal. Nonaccrual loans generally are not returned to performing status until the obligation is brought current, the loan has performed in accordance with the contract terms for a reasonable period of time, and the ultimate collectability of the contractual principal and interest is no longer in doubt. | ||
Non-refundable loan fees and direct origination costs are deferred and recognized over the expected lives of the related loans using the effective yield interest method. | ||
Allowance for Loan Losses | Allowance for Loan Losses | |
The allowance for loan losses is an estimate of probable incurred losses in the loan portfolio. Loans are charged-off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance for loan losses. Management's methodology for estimating the allowance balance consists of several key elements, which include specific allowances on individual impaired loans and the formula driven allowances on pools of loans with similar risk characteristics. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management's judgment, should be charged off. | ||
Specific allowances are established for impaired loans. Management considers a loan to be impaired when it is probable that the Company will be unable to collect all amounts due according to the original contractual terms of the loan agreement, including scheduled interest payments. Loans for which the terms have been modified with a concession granted, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. When a loan is considered to be impaired, the amount of impairment is measured based on the fair value of the collateral, less costs to sell, if the loan is collateral dependent, or on the present value of expected future cash flows or values that are observable in the secondary market if the loan is not collateral dependent. The amount of any impairment will be charged off against the allowance for loan losses if the amount is a confirmed loss or, alternatively, a specific allocation within the allowance will be established. Loans that are considered impaired are specifically excluded from the formula portion of the allowance for loan losses analysis. | ||
The formula driven allowance on pools of loans covers all loans that are not impaired and is based on historical losses of each loan segment adjusted for current factors. In calculating the historical component of our allowance, we aggregate our loans into one of three loan segments: Commercial, Real Estate and Consumer. Each segment of loans in the portfolio possess varying degrees of risk, based on, among other things, the type of loan being made, the purpose of the loan, the type of collateral securing the loan, and the sensitivity the borrower has to changes in certain external factors such as economic conditions. The following provides a summary of the risks associated with various segments of the Company's loan portfolio, which are factors management regularly considers when evaluating the adequacy of the allowance: | ||
• | Commercial loans consist primarily of commercial and industrial loans (business lines of credit), and other commercial purpose loans. Repayment of commercial and industrial loans is generally provided from the cash flows of the related business to which the loan was made. Adverse changes in economic conditions may result in a decline in business activity, which may impact a borrower's ability to continue to make scheduled payments. The factored receivables at BVF are included in the Company's commercial loan portfolio; however, they are evaluated for risk primarily based on the agings of the receivables. Faster turning receivables imply less risk and therefore warrant a lower associated allowance. Should the overall aging for the portfolio increase, this structure will by formula increase the allowance to reflect the increasing risk. Should the portfolio turn more quickly, it would reduce the associated allowance to reflect the reducing risk. | |
• | Real estate loans consist primarily of loans secured by commercial and residential real estate. Also included in this segment are land and construction loans and home equity lines of credit secured by real estate. As the majority of this segment is comprised of commercial real estate loans, risks associated with this segment lay primarily within these loan types. Adverse economic conditions may result in a decline in business activity and increased vacancy rates for commercial properties. These factors, in conjunction with a decline in real estate prices, may expose the Company to the potential for losses if a borrower cannot continue to service the loan with operating revenues, and the value of the property has declined to a level such that it no longer fully covers the Company's recorded investment in the loan. | |
• | Consumer loans consist primarily of a large number of small loans and lines of credit. The majority of installment loans are made for consumer and business purchases. Weakened economic conditions may result in an increased level of delinquencies within this segment, as economic pressures may impact the capacity of such borrowers to repay their obligations. | |
As a result of the matters mentioned above, changes in the financial condition of individual borrowers, economic conditions, historical loss experience and the condition of the various markets in which collateral may be sold may all affect the required level of the allowance for loan losses and the associated provision for loan losses. | ||
The estimated loss factors for pools of loans that are not impaired are based on determining the probability of default and loss given default for loans within each segment of the portfolio, adjusted for significant factors that, in management's judgment, affect collectibility as of the evaluation date. The Company's historical delinquency experience and loss experience are utilized to determine the probability of default and loss given default for segments of the portfolio where the Company has experienced losses in the past. For segments of the portfolio where the Company has no significant prior loss experience, the Company uses quantifiable observable industry data to determine the probability of default and loss given default. Risk factors impacting loans in each of the portfolio segments include broad deterioration of property values, reduced consumer and business spending as a result of continued high unemployment and reduced credit availability and lack of confidence in a sustainable recovery. The historical loss experience is adjusted for management's estimate of the impact of other factors based on the risks present for each portfolio segment. These other factors include consideration of the following: the overall level of concentrations and trends of classified loans; loan concentrations within a portfolio segment or division of a portfolio segment; identification of certain loan types with higher risk than other loans; existing internal risk factors; and management's evaluation of the impact of local and national economic conditions on each of our loan types. | ||
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments | |
Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. | ||
Federal Home Loan Bank and Federal Reserve Bank Stock | Federal Home Loan Bank and Federal Reserve Bank Stock | |
As a member of the Federal Home Loan Bank ("FHLB") system, the Bank is required to own common stock in the FHLB based on the Bank's level of borrowings and outstanding FHLB advances. FHLB stock is carried at cost and classified as a restricted security. Both cash and stock dividends are reported as income. | ||
As a member of the Federal Reserve Bank ("FRB") of San Francisco, the Bank is required to own stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends received are reported as income. | ||
Company Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan | Company Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan | |
The Company has purchased life insurance policies on certain directors and officers. Company owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The purchased insurance is subject to split-dollar insurance agreements with the insured participants, which continues after the participant's employment and retirement. | ||
Accounting guidance requires that a liability be recorded primarily over the participant's service period when a split-dollar life insurance agreement continues after a participant's employment or retirement. The required accrued liability is based on either the post-employment benefit cost for the continuing life insurance or the future death benefit depending on the contractual terms of the underlying agreement. | ||
Premises and Equipment | Premises and Equipment | |
Land is carried at cost. Premises and equipment are stated at cost. Depreciation and amortization are computed on the straight-line basis over the lesser of the respective lease terms or estimated useful lives. The Company owns one building which is being depreciated over 40 years. Furniture, equipment, and leasehold improvements are depreciated over estimated useful lives generally ranging from five to fifteen years. The Company evaluates the recoverability of long-lived assets on an ongoing basis. | ||
Business Combinations Policy [Policy Text Block] | Business Combinations | |
The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. | ||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | |
Goodwill resulted from the acquisition of Bay View Funding on November 1, 2014, and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. | ||
Other intangible assets consist of core deposit and customer relationship intangible assets arising from the Diablo Valley Bank acquisition in June 2007, and a below market value lease intangible asset, customer relationship and brokered relationship intangible assets, and a non-compete agreement intangible asset arising from the Bay View Funding acquisition in November 2014. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposits intangible asset from the acquisition of Diablo Valley Bank is being amortized on an accelerated method over ten years. The customer relationship intangible from the acquisition of Diablo Valley Bank was being amortized on an accelerated method over seven years, and was fully amortized at December 31, 2014. The below market value lease intangible asset, customer relationship and brokered relationship intangible assets, and non-compete agreement intangible asset from the acquisition of Bay View Funding are being amortized on the straight-line method over three, ten, and three years, respectively. | ||
Foreclosed Assets | Foreclosed Assets | |
Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through operations. Operating costs after acquisition are expensed. Gains and losses on disposition are included in noninterest expense. | ||
The carrying value of foreclosed assets was $696,000 and $575,000 at December 31, 2014 and 2013, respectively, and is included in other assets on the consolidated balance sheets. | ||
Retirement Plans | Retirement Plans | |
Expenses for the Company's non-qualified, unfunded defined benefits plan consists of service and interest cost and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service. | ||
Loss Contingencies | Loss Contingencies | |
Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company's accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated. The Company's accounting policy for uncertain recoveries is to recognize the anticipated recovery when realization is deemed probable. | ||
Income Taxes | Income Taxes | |
The Company files consolidated Federal and combined state income tax returns. Income tax expense is the total of the current year income tax payable or refunded, the change in deferred tax assets and liabilities, and low income housing investment losses, net of tax benefits received. Some items of income and expense are recognized in different years for tax purposes when applying generally accepted accounting principles, leading to timing differences between the Company's actual tax liability and the amount accrued for this liability based on book income. These temporary differences comprise the "deferred" portion of the Company's tax expense or benefit, which is accumulated on the Company's books as a deferred tax asset or deferred tax liability until such time as they reverse. | ||
Realization of the Company's deferred tax assets is primarily dependent upon the Company generating sufficient taxable income to obtain benefit from the reversal of net deductible temporary differences and utilization of tax credit carryforwards for Federal and California state income tax purposes. The amount of deferred tax assets considered realizable is subject to adjustment in future periods based on estimates of future taxable income. Under generally accepted accounting principles, a valuation allowance is required to be recognized if it is "more likely than not" that a deferred tax asset will not be realized. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning management's evaluation of both positive and negative evidence, including forecasts of future income, cumulative losses, applicable tax planning strategies, and assessments of current and future economic and business conditions. | ||
The Company had net deferred tax assets of $18,527,000 and $23,326,000 at December 31, 2014, and December 31, 2013, respectively. After consideration of the matters in the preceding paragraph, the Company determined that it is more likely than not that the net deferred tax asset at December 31, 2014 and 2013 will be fully realized in future years. | ||
A tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. | ||
Stock-Based Compensation | Stock-Based Compensation | |
Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company's common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost recognized reflects estimated forfeitures, adjusted as necessary for actual forfeitures. | ||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | |
Comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss) because they have been recorded directly in equity under the provisions of certain accounting guidance. The Company's sources of other comprehensive income (loss) are unrealized gains and losses on securities available-for-sale, and I/O strips, which are treated like available-for-sale securities, and the liabilities related to the Company's defined benefit pension plan and the split-dollar life insurance benefit plan. Reclassification adjustments result from gains or losses on securities that were realized and included in net income (loss) of the current period that also had been included in other comprehensive income as unrealized holding gains and losses. | ||
Segment Reporting | Segment Reporting | |
HBC is an independent community business bank with eleven branch offices that offer similar products to customers. Bay View Funding, a subsidiary of Heritage Bank of Commerce, provides factoring financing, which are included in HBC's commercial loan portfolio. No customer accounts for more than 10 percent of revenues for HBC or the Company. While the chief decision-makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company wide basis. Management evaluates the Company's performance as a whole and does not allocate resources based on the performance of different lending or transaction activities. Accordingly, the Company and its subsidiary bank all operate as one business segment. | ||
Reclassifications | Reclassifications | |
Certain items in the consolidated financial statements for the years ended December 31, 2013 and 2012 were reclassified to conform to the 2014 presentation. These reclassifications did not affect previously reported net income. | ||
Adoption of New Accounting Standards | Adoption of New Accounting Standards | |
In January 2014, the Financial Accounting Standards Board ("FASB") amended existing guidance clarifying that an in substance repossession or foreclosure occurs, and a creditor is considered to have received physical possession of residential real estate property collateralizing a consumer mortgage loan, upon either (1) the creditor obtaining legal title to the residential real estate property upon completion of a foreclosure or (2) the borrower conveying all interest in the residential real estate property to the creditor to satisfy that loan through completion of a deed in lieu of foreclosure or through a similar legal agreement. Additionally, the amendments require interim and annual disclosure of both (1) the amount of foreclosed residential real estate property held by the creditor and (2) the recorded investment in consumer mortgage loans collateralized by residential real estate property that are in the process of foreclosure according to local requirements of the applicable jurisdiction. The amendments in this update are effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2014. For entities other than public business entities, the amendments in this update are effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. The Company has evaluated the adoption of the new guidance and has determined it will not have a material impact on the consolidated financial statements. | ||
In January 2014, the FASB issued guidance for accounting for investments in qualified affordable housing projects, which represents a consensus of the Emerging Issues Task Force and sets forth new accounting for qualifying investments in flow through limited liability entities that invest in affordable housing projects. The new guidance allows a limited liability investor that meets certain conditions to amortize the cost of its investment in proportion to the tax credits and other tax benefits it receives. The new accounting method, referred to as the proportional amortization method, allows amortization of the tax credit investment to be reflected along with the primary benefits, the tax credits and other tax benefits, on a net basis in the income statement within the income tax expense (benefit) line. For public business entities, the guidance is effective for interim and annual periods beginning after December 15, 2014. For all other entities, the guidance is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. If elected, the proportional amortization method is required to be applied retrospectively. Early adoption is permitted in the annual period for which financial statements have not been issued. | ||
The Company adopted the proportional amortization method of accounting for its low income housing investments in the third quarter of 2014. The Company quantified the impact of adopting the proportional amortization method compared to the equity method to its current year and prior period financial statements. The Company determined that the adoption of the proportional amortization method did not have a material impact to its financial statements. The low income housing investment losses, net of the tax benefits received, are included in income tax expense for all periods reflected on the consolidated income statements. See Note 11 — Income Taxes for more information on the adoption of the proportional method of accounting for low income housing investments. | ||
In May 2014, the FASB issued an update to the guidance for accounting for revenue from contracts with customers. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (for example, insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The guidance provides steps to follow to achieve the core principle. An entity should disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Qualitative and quantitative information is required about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The amendments in this update become effective for annual periods and interim periods within those annual periods beginning after December 15, 2016. We are evaluating the impact of adopting the new guidance on the consolidated financial statements. | ||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Income (''AOCI'') (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accumulated Other Comprehensive Income ("AOCI") | ||||||||||||||
Schedule of changes in AOCI by component | ||||||||||||||
For the Years Ended December 31, 2014, 2013, and 2012 | ||||||||||||||
Unrealized | Unamortized | Defined | Total(1) | |||||||||||
Gains (Losses) on | Unrealized | Benefit | ||||||||||||
Available- | Gain on | Pension | ||||||||||||
for-Sale | Available- | Plan | ||||||||||||
Securities | for-Sale | Items(1) | ||||||||||||
and I/O | Securities | |||||||||||||
Strips(1) | Reclassified | |||||||||||||
to Held-to- | ||||||||||||||
Maturity(1) | ||||||||||||||
(Dollars in thousands) | ||||||||||||||
Beginning balance January 1, 2014, net of taxes | $ | (430 | ) | $ | 466 | $ | (4,065 | ) | $ | (4,029 | ) | |||
Other comprehensive income (loss) before reclassification, net of taxes | 4,152 | — | (1,910 | ) | 2,242 | |||||||||
Amounts reclassified from other comprehensive income (loss), net of taxes | (56 | ) | (31 | ) | 23 | (64 | ) | |||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income (loss), net of taxes | 4,096 | (31 | ) | (1,887 | ) | 2,178 | ||||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2014, net of taxes | $ | 3,666 | $ | 435 | $ | (5,952 | ) | $ | (1,851 | ) | ||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Beginning balance January 1, 2013, net of taxes | 7,887 | 497 | (5,703 | 2,681 | ||||||||||
$ | $ | $ | ) | $ | ||||||||||
Other comprehensive income (loss) before reclassification, net of taxes | (8,295 | ) | — | 1,518 | (6,777 | ) | ||||||||
Amounts reclassified from other comprehensive income (loss), net of taxes | (22 | ) | (31 | ) | 120 | 67 | ||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income (loss), net of taxes | (8,317 | ) | (31 | ) | 1,638 | (6,710 | ) | |||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2013, net of taxes | $ | (430 | ) | $ | 466 | $ | (4,065 | ) | $ | (4,029 | ) | |||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Beginning balance January 1, 2012, net of taxes | 6,210 | (5,255 | 955 | |||||||||||
$ | $ | — | $ | ) | $ | |||||||||
Other comprehensive income (loss) before reclassification, net of taxes | 2,582 | — | (568 | ) | 2,014 | |||||||||
| | | | | | | | | | | | | | |
Amounts reclassified from other comprehensive income (loss), net of taxes | (905 | ) | 497 | 120 | (288 | ) | ||||||||
| | | | | | | | | | | | | | |
Net current period other comprehensive income, net of taxes | 1,677 | 497 | (448 | ) | 1,726 | |||||||||
| | | | | | | | | | | | | | |
Ending balance December 31, 2012, net of taxes | $ | 7,887 | $ | 497 | $ | (5,703 | ) | $ | 2,681 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | Amounts in parenthesis indicate debits. | |||||||||||||
Schedule of reclassifications out of AOCI into net income | ||||||||||||||
Amounts Reclassified from | ||||||||||||||
AOCI(1) | ||||||||||||||
For the Year Ended | ||||||||||||||
December 31, | Affected Line Item Where | |||||||||||||
Details About AOCI Components | 2014 | 2013 | 2012 | Net Income is Presented | ||||||||||
(Dollars in thousands) | ||||||||||||||
Unrealized gains on available-for-sale securities and I/O strips | $ | 97 | $ | 38 | $ | 1,560 | Realized gains on sale of securities | |||||||
(41 | ) | (16 | ) | (655 | ) | Income tax expense | ||||||||
| | | | | | | | | | | | |||
56 | 22 | 905 | Net of tax | |||||||||||
| | | | | | | | | | | | |||
Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity | 54 | 54 | (857 | ) | Interest income on taxable securities | |||||||||
(23 | ) | (23 | ) | 360 | Income tax (expense) benefit | |||||||||
| | | | | | | | | | | | |||
31 | 31 | (497 | ) | Net of tax | ||||||||||
| | | | | | | | | | | | |||
Amortization of defined benefit pension plan items(2) | ||||||||||||||
Prior service cost | — | — | (27 | ) | ||||||||||
Prior transition obligation | 102 | 84 | 73 | |||||||||||
Actuarial losses | (142 | ) | (291 | ) | (253 | ) | ||||||||
| | | | | | | | | | | | |||
(40 | ) | (207 | ) | (207 | ) | Income before income tax | ||||||||
17 | 87 | 87 | Income tax benefit | |||||||||||
| | | | | | | | | | | | |||
(23 | ) | (120 | ) | (120 | ) | Net of tax | ||||||||
| | | | | | | | | | | | |||
Total reclassification for the year | $ | 64 | $ | (67 | ) | $ | 288 | |||||||
| | | | | | | | | | | | |||
| | | | | | | | | | | | |||
-1 | Amounts in parenthesis indicate debits. | |||||||||||||
-2 | This AOCI component is included in the computation of net periodic benefit cost (see Note 13 — Benefit Plans). | |||||||||||||
Securities_Tables
Securities (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Securities | ||||||||||||||||||||
Schedule of amortized cost and estimated fair value of securities | ||||||||||||||||||||
2014 | Amortized | Gross | Gross | Estimated | ||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||
Gains | (Losses) | Value | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 150,570 | $ | 3,867 | $ | (265 | ) | $ | 154,172 | |||||||||||
Corporate bonds | 35,927 | 959 | (23 | ) | 36,863 | |||||||||||||||
Trust preferred securities | 15,000 | 300 | — | 15,300 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 201,497 | $ | 5,126 | $ | (288 | ) | $ | 206,335 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 15,480 | $ | 44 | $ | (118 | ) | $ | 15,406 | |||||||||||
Municipals — tax exempt | 79,882 | 1,011 | (1,346 | ) | 79,547 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 95,362 | $ | 1,055 | $ | (1,464 | ) | $ | 94,953 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
2013 | Amortized | Gross | Gross | Estimated | ||||||||||||||||
Cost | Unrealized | Unrealized | Fair | |||||||||||||||||
Gains | (Losses) | Value | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 208,644 | $ | 2,465 | $ | (3,465 | ) | $ | 207,644 | |||||||||||
Corporate bonds | 53,002 | 527 | (1,483 | ) | 52,046 | |||||||||||||||
Trust preferred securities | 20,849 | — | (439 | ) | 20,410 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 282,495 | $ | 2,992 | $ | (5,387 | ) | $ | 280,100 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 15,932 | $ | — | $ | (470 | ) | $ | 15,462 | |||||||||||
Municipals — tax exempt | 79,989 | 54 | (9,473 | ) | 70,570 | |||||||||||||||
| | | | | | | | | | | | | | |||||||
Total | $ | 95,921 | $ | 54 | $ | (9,943 | ) | $ | 86,032 | |||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of securities with unrealized losses | ||||||||||||||||||||
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||
2014 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | (Losses) | Value | (Losses) | Value | (Losses) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 12,491 | $ | (27 | ) | $ | 35,614 | $ | (238 | ) | $ | 48,105 | $ | (265 | ) | |||||
Corporate bonds | — | — | 5,148 | (23 | ) | 5,148 | (23 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 12,491 | $ | (27 | ) | $ | 40,762 | $ | (261 | ) | $ | 53,253 | $ | (288 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 4,869 | $ | (29 | ) | $ | 4,974 | $ | (89 | ) | $ | 9,843 | $ | (118 | ) | |||||
Municipals — Tax Exempt | 1,884 | (16 | ) | 42,867 | (1,330 | ) | 44,751 | (1,346 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 6,753 | $ | (45 | ) | $ | 47,841 | $ | (1,419 | ) | $ | 54,594 | $ | (1,464 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Less Than 12 Months | 12 Months or More | Total | ||||||||||||||||||
2013 | Fair | Unrealized | Fair | Unrealized | Fair | Unrealized | ||||||||||||||
Value | (Losses) | Value | (Losses) | Value | (Losses) | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Securities available-for-sale: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 87,798 | $ | (2,869 | ) | $ | 8,920 | $ | (596 | ) | $ | 96,718 | $ | (3,465 | ) | |||||
Corporate bonds | 38,092 | (1,322 | ) | 1,860 | (161 | ) | 39,952 | (1,483 | ) | |||||||||||
Trust preferred securities | 20,410 | (439 | ) | — | — | 20,410 | (439 | ) | ||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 146,300 | $ | (4,630 | ) | $ | 10,780 | $ | (757 | ) | $ | 157,080 | $ | (5,387 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Securities held-to-maturity: | ||||||||||||||||||||
Agency mortgage-backed securities | $ | 5,978 | $ | (101 | ) | $ | 9,134 | $ | (369 | ) | $ | 15,112 | $ | (470 | ) | |||||
Municipals — Tax Exempt | 38,177 | (4,421 | ) | 25,520 | (5,052 | ) | 63,697 | (9,473 | ) | |||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 44,155 | $ | (4,522 | ) | $ | 34,654 | $ | (5,421 | ) | $ | 78,809 | $ | (9,943 | ) | |||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of proceeds from sales of securities and the resulting gains and losses | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Proceeds | $ | 108,603 | $ | 26,944 | $ | 40,587 | ||||||||||||||
Gross gains | 1,008 | 310 | 1,560 | |||||||||||||||||
Gross losses | (911 | ) | (272 | ) | — | |||||||||||||||
Schedule of amortized cost and estimated fair values of securities, by contractual maturity | ||||||||||||||||||||
Available-for-sale | ||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Due after one through five years | $ | 6,335 | $ | 6,713 | ||||||||||||||||
Due after five through ten years | 29,592 | 30,150 | ||||||||||||||||||
Due after ten years | 15,000 | 15,300 | ||||||||||||||||||
Agency mortgage-backed securities | 150,570 | 154,172 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | $ | 201,497 | $ | 206,335 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Held-to-maturity | ||||||||||||||||||||
Amortized | Estimated | |||||||||||||||||||
Cost | Fair Value | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Due after five through ten years | 5,883 | 6,050 | ||||||||||||||||||
Due after ten years | 73,999 | 73,497 | ||||||||||||||||||
Agency mortgage-backed securities | 15,480 | 15,406 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total | $ | 95,362 | $ | 94,953 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Loans_and_Loan_Servicing_Table
Loans and Loan Servicing (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Loans and Loan Servicing | ||||||||||||||||||||
Schedule of loans | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Loans held-for-investment: | ||||||||||||||||||||
Commercial | $ | 462,403 | $ | 393,074 | ||||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 478,335 | 423,288 | ||||||||||||||||||
Land and construction | 67,980 | 31,443 | ||||||||||||||||||
Home equity | 61,644 | 51,815 | ||||||||||||||||||
Consumer | 18,867 | 15,677 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Loans | 1,089,229 | 915,297 | ||||||||||||||||||
Deferred loan fees, net | (586 | ) | (384 | ) | ||||||||||||||||
| | | | | | | | |||||||||||||
Loans, net of deferred fees | 1,088,643 | 914,913 | ||||||||||||||||||
Allowance for loan losses | (18,379 | ) | (19,164 | ) | ||||||||||||||||
| | | | | | | | |||||||||||||
Loans, net | $ | 1,070,264 | $ | 895,749 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Schedule of changes in allowance for loan losses | ||||||||||||||||||||
For the Year Ended December 31, 2014 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
Charge-offs | (815 | ) | (87 | ) | (25 | ) | (927 | ) | ||||||||||||
Recoveries | 418 | 62 | — | 480 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net charge-offs | (397 | ) | (25 | ) | (25 | ) | (447 | ) | ||||||||||||
Provision (credit) for loan losses | (949 | ) | 547 | 64 | (338 | ) | ||||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 11,187 | $ | 7,070 | $ | 122 | $ | 18,379 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 12,866 | $ | 6,034 | $ | 127 | $ | 19,027 | ||||||||||||
Charge-offs | (1,676 | ) | (276 | ) | — | (1,952 | ) | |||||||||||||
Recoveries | 2,621 | 283 | 1 | 2,905 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net recoveries | 945 | 7 | 1 | 953 | ||||||||||||||||
Provision (credit) for loan losses | (1,278 | ) | 507 | (45 | ) | (816 | ) | |||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
For the Year Ended December 31, 2012 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 13,215 | $ | 7,338 | $ | 147 | $ | 20,700 | ||||||||||||
Charge-offs | (3,935 | ) | (1,528 | ) | — | (5,463 | ) | |||||||||||||
Recoveries | 776 | 230 | — | 1,006 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Net charge-offs | (3,159 | ) | (1,298 | ) | — | (4,457 | ) | |||||||||||||
Provision (credit) for loan losses | 2,810 | (6 | ) | (20 | ) | 2,784 | ||||||||||||||
| | | | | | | | | | | | | | |||||||
Balance, end of year | $ | 12,866 | $ | 6,034 | $ | 127 | $ | 19,027 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | ||||||||||||||||||||
December 31, 2014 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 404 | $ | — | $ | — | $ | 404 | ||||||||||||
Collectively evaluated for impairment | 10,783 | 7,070 | 122 | 17,975 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total allowance balance | $ | 11,187 | $ | 7,070 | $ | 122 | $ | 18,379 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 2,701 | $ | 3,315 | $ | 6 | $ | 6,022 | ||||||||||||
Collectively evaluated for impairment | 459,702 | 604,644 | 18,861 | 1,083,207 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total loan balance | $ | 462,403 | $ | 607,959 | $ | 18,867 | $ | 1,089,229 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
December 31, 2013 | ||||||||||||||||||||
Commercial | Real Estate | Consumer | Total | |||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Allowance for loan losses: | ||||||||||||||||||||
Ending allowance balance attributable to loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 1,694 | $ | 741 | $ | 21 | $ | 2,456 | ||||||||||||
Collectively evaluated for impairment | 10,839 | 5,807 | 62 | 16,708 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total allowance balance | $ | 12,533 | $ | 6,548 | $ | 83 | $ | 19,164 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Loans: | ||||||||||||||||||||
Individually evaluated for impairment | $ | 4,906 | $ | 6,790 | $ | 122 | $ | 11,818 | ||||||||||||
Collectively evaluated for impairment | 388,168 | 499,756 | 15,555 | 903,479 | ||||||||||||||||
| | | | | | | | | | | | | | |||||||
Total loan balance | $ | 393,074 | $ | 506,546 | $ | 15,677 | $ | 915,297 | ||||||||||||
| | | | | | | | | | | | | | |||||||
| | | | | | | | | | | | | | |||||||
Schedule of loans held-for-investment individually evaluated for impairment by class of loans | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Unpaid | Recorded | Allowance | Unpaid | Recorded | Allowance | |||||||||||||||
Principal | Investment | for Loan | Principal | Investment | for Loan | |||||||||||||||
Balance | Losses | Balance | Losses | |||||||||||||||||
Allocated | Allocated | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
With no related allowance recorded: | ||||||||||||||||||||
Commercial | $ | 2,282 | $ | 1,872 | $ | — | $ | 1,999 | $ | 1,915 | $ | — | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 2,510 | 1,651 | — | 2,831 | 2,831 | — | ||||||||||||||
Land and construction | 1,808 | 1,319 | — | 1,761 | 1,761 | — | ||||||||||||||
Home Equity | 345 | 345 | — | 377 | 377 | — | ||||||||||||||
Consumer | 6 | 6 | — | — | — | — | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total with no related allowance recorded | 6,951 | 5,193 | — | 6,968 | 6,884 | — | ||||||||||||||
With an allowance recorded: | ||||||||||||||||||||
Commercial | 829 | 829 | 404 | 3,225 | 2,991 | 1,694 | ||||||||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | — | — | — | 1,531 | 1,531 | 451 | ||||||||||||||
Land and construction | — | — | — | — | — | — | ||||||||||||||
Home Equity | — | — | — | 290 | 290 | 290 | ||||||||||||||
Consumer | — | — | — | 122 | 122 | 21 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total with an allowance recorded | 829 | 829 | 404 | 5,168 | 4,934 | 2,456 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 7,780 | $ | 6,022 | $ | 404 | $ | 12,136 | $ | 11,818 | $ | 2,456 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||||||||||||||||||||
For the Year Ended December 31, 2014 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
Commercial | Commercial and | Land and | Home | Consumer | Total | |||||||||||||||
Residential | Construction | Equity | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Average of impaired loans during the period | $ | 4,069 | $ | 2,758 | $ | 1,628 | $ | 529 | $ | 56 | $ | 9,040 | ||||||||
Interest income during impairment | $ | 56 | $ | — | $ | — | $ | — | $ | — | $ | 56 | ||||||||
Cash-basis interest earned | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
For the Year Ended December 31, 2013 | ||||||||||||||||||||
Real Estate | ||||||||||||||||||||
Commercial | Commercial and | Land and | Home | Consumer | Total | |||||||||||||||
Residential | Construction | Equity | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Average of impaired loans during the period | $ | 6,855 | $ | 4,921 | $ | 2,028 | $ | 2,064 | $ | 135 | $ | 16,003 | ||||||||
Interest income during impairment | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Cash-basis interest earned | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||
Schedule of nonperforming loans | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Nonaccrual loans — held-for-investment | $ | 5,855 | $ | 11,326 | ||||||||||||||||
Restructured and loans over 90 days past due and still accruing | — | 492 | ||||||||||||||||||
| | | | | | | | |||||||||||||
Total nonperforming loans | $ | 5,855 | $ | 11,818 | ||||||||||||||||
| | | | | | | | |||||||||||||
| | | | | | | | |||||||||||||
Other restructured loans | $ | 167 | $ | — | ||||||||||||||||
Impaired loans, excluding loans held-for-sale | $ | 6,022 | $ | 11,818 | ||||||||||||||||
Schedule of nonperforming loans by class | ||||||||||||||||||||
2014 | 2013 | |||||||||||||||||||
Nonaccrual | Restructured and | Total | Nonaccrual | Restructured and | Total | |||||||||||||||
Loans over 90 | Loans over 90 Days | |||||||||||||||||||
Days Past Due and | Past Due and | |||||||||||||||||||
Still Accruing | Still Accruing | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 2,534 | $ | — | $ | 2,534 | $ | 4,414 | $ | 492 | $ | 4,906 | ||||||||
Real estate: | — | |||||||||||||||||||
Commercial and residential | 1,651 | — | 1,651 | 4,363 | — | 4,363 | ||||||||||||||
Land and construction | 1,320 | — | 1,320 | 1,761 | — | 1,761 | ||||||||||||||
Home equity | 344 | — | 344 | 666 | — | 666 | ||||||||||||||
Consumer | 6 | — | 6 | 122 | — | 122 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 5,855 | $ | — | $ | 5,855 | $ | 11,326 | $ | 492 | $ | 11,818 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of aging of past due loans by class of loans | ||||||||||||||||||||
The following table presents the aging of past due loans as of December 31, 2014 by class of loans: | ||||||||||||||||||||
30 - 59 | 60 - 89 | 90 Days or | Total | Loans Not | Total | |||||||||||||||
Days | Days | Greater | Past Due | Past Due | ||||||||||||||||
Past Due | Past Due | Past Due | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 3,002 | $ | 195 | $ | 1,978 | $ | 5,175 | $ | 457,228 | $ | 462,403 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | — | — | 1,065 | 1,065 | 477,270 | 478,335 | ||||||||||||||
Land and construction | — | — | — | — | 67,980 | 67,980 | ||||||||||||||
Home equity | — | — | — | — | 61,644 | 61,644 | ||||||||||||||
Consumer | — | — | — | — | 18,867 | 18,867 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 3,002 | $ | 195 | $ | 3,043 | $ | 6,240 | $ | 1,082,989 | $ | 1,089,229 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
The following table presents the aging of past due loans as of December 31, 2013 by class of loans: | ||||||||||||||||||||
30 - 59 | 60 - 89 | 90 Days or | Total | Loans Not | Total | |||||||||||||||
Days | Days | Greater | Past Due | Past Due | ||||||||||||||||
Past Due | Past Due | Past Due | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 3,314 | $ | 428 | $ | 2,865 | $ | 6,607 | $ | 386,467 | $ | 393,074 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 1,559 | — | 1,065 | 2,624 | 420,664 | 423,288 | ||||||||||||||
Land and construction | — | — | — | — | 31,443 | 31,443 | ||||||||||||||
Home equity | 28 | — | 290 | 318 | 51,497 | 51,815 | ||||||||||||||
Consumer | — | — | 89 | 89 | 15,588 | 15,677 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 4,901 | $ | 428 | $ | 4,309 | $ | 9,638 | $ | 905,659 | $ | 915,297 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Summary of loan portfolio by loan type and credit quality classification | ||||||||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||||||||
Nonclassified | Classified | Total | Nonclassified | Classified | Total | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | $ | 455,767 | $ | 6,636 | $ | 462,403 | $ | 380,806 | $ | 12,268 | $ | 393,074 | ||||||||
Real estate: | ||||||||||||||||||||
Commercial and residential | 472,061 | 6,274 | 478,335 | 416,992 | 6,296 | 423,288 | ||||||||||||||
Land and construction | 66,660 | 1,320 | 67,980 | 29,682 | 1,761 | 31,443 | ||||||||||||||
Home equity | 60,736 | 908 | 61,644 | 48,818 | 2,997 | 51,815 | ||||||||||||||
Consumer | 18,518 | 349 | 18,867 | 15,336 | 341 | 15,677 | ||||||||||||||
| | | | | | | | | | | | | | | | | | | | |
Total | $ | 1,073,742 | $ | 15,487 | $ | 1,089,229 | $ | 891,634 | $ | 23,663 | $ | 915,297 | ||||||||
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
Schedule of loans by class modified as troubled debt restructurings | ||||||||||||||||||||
During the Year Ended | ||||||||||||||||||||
December 31, 2013 | ||||||||||||||||||||
Troubled Debt Restructurings: | Number | Pre-modification | Post-modification | |||||||||||||||||
of | Outstanding | Outstanding | ||||||||||||||||||
Contracts | Recorded | Recorded | ||||||||||||||||||
Investment | Investment | |||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Commercial | 1 | $ | 211 | $ | 211 | |||||||||||||||
Real Estate-Commercial and residential | 1 | 1,531 | 1,531 | |||||||||||||||||
| | | | | | | | | | | ||||||||||
Total | 2 | $ | 1,742 | $ | 1,742 | |||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Schedule of activity for loan servicing rights | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 525 | $ | 709 | $ | 792 | ||||||||||||||
Additions | 319 | 106 | 184 | |||||||||||||||||
Amortization | (279 | ) | (290 | ) | (267 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Balance, end of year | $ | 565 | $ | 525 | $ | 709 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Schedule of activity for IO strip receivables | ||||||||||||||||||||
2014 | 2013 | 2012 | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Balance, beginning of year | $ | 1,647 | $ | 1,786 | $ | 2,094 | ||||||||||||||
Unrealized loss | (166 | ) | (139 | ) | (308 | ) | ||||||||||||||
| | | | | | | | | | | ||||||||||
Balance, end of year | $ | 1,481 | $ | 1,647 | $ | 1,786 | ||||||||||||||
| | | | | | | | | | | ||||||||||
| | | | | | | | | | | ||||||||||
Premises_and_Equipment_Tables
Premises and Equipment (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Premises and Equipment | ||||||||
Schedule of premises and equipment | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Building | $ | 3,256 | $ | 3,256 | ||||
Land | 2,900 | 2,900 | ||||||
Furniture and equipment | 8,082 | 7,203 | ||||||
Leasehold improvements | 4,658 | 4,225 | ||||||
| | | | | | | | |
18,896 | 17,584 | |||||||
Accumulated depreciation and amortization | (11,445 | ) | (10,344 | ) | ||||
| | | | | | | | |
Premises and equipment, net | $ | 7,451 | $ | 7,240 | ||||
| | | | | | | | |
| | | | | | | | |
Leases_Tables
Leases (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Leases | |||||
Schedule of future minimum payments under non-cancelable operating leases | |||||
Year ending December 31, | (Dollars in thousands) | ||||
2015 | $ | 2,759 | |||
2016 | 2,733 | ||||
2017 | 2,549 | ||||
2018 | 2,034 | ||||
2019 | 1,856 | ||||
Thereafter | 1,127 | ||||
| | | | | |
Total | $ | 13,058 | |||
| | | | | |
| | | | | |
Acquisition_of_Bay_View_Fundin1
Acquisition of Bay View Funding (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Acquisition of Bay View Funding | ||||||||
Summary of the estimated fair values of the assets acquired and liabilities assumed | ||||||||
(Dollars in thousands) | ||||||||
Cash and cash equivalents | $ | 602 | ||||||
Net loans | 42,300 | |||||||
Goodwill | 13,044 | |||||||
Other intangible assets | 2,259 | |||||||
Premises and equipment | 119 | |||||||
Other assets, net | 738 | |||||||
| | | | | ||||
Total assets acquired | 59,062 | |||||||
Borrowings | (31,647 | |||||||
) | ||||||||
Other liabilities | (4,895 | ) | ||||||
| | | | | ||||
Total liabilities assumed | (36,542 | ) | ||||||
| | | | | ||||
Total consideration paid | $ | 22,520 | ||||||
| | | | | ||||
| | | | | ||||
Schedule of unaudited pro forma combined consolidated financial statements and related adjustments | ||||||||
UNAUDITED | 2014 | 2013 | ||||||
(Dollars in thousands, except per share amounts) | ||||||||
Net interest income | $ | 66,105 | $ | 59,998 | ||||
Noninterest income | 8,293 | 8,080 | ||||||
| | | | | | | | |
Total revenue | $ | 74,398 | $ | 68,078 | ||||
| | | | | | | | |
| | | | | | | | |
Net income | $ | 15,141 | $ | 13,397 | ||||
Net income per share — basic | 0.47 | 0.42 | ||||||
$ | $ | |||||||
Net income per share — diluted | $ | 0.47 | $ | 0.42 | ||||
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Goodwill and Other Intangible Assets | |||||
Schedule of estimated amortization expense | |||||
(Dollars in thousands) | |||||
2015 | $ | 755 | |||
2016 | 736 | ||||
2017 | 486 | ||||
2018 | 190 | ||||
2019 | 190 | ||||
Deposits_Tables
Deposits (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Deposits | |||||
Schedule of maturities of time deposits including brokered deposits | |||||
(Dollars in thousands) | |||||
2015 | $ | 230,675 | |||
2016 | 23,791 | ||||
2017 | 728 | ||||
2018 | 29 | ||||
2019 | 1,000 | ||||
| | | | | |
Total | $ | 256,223 | |||
| | | | | |
| | | | | |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Income Taxes | |||||||||||||||||
Schedule of income tax (benefit) | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Currently payable tax: | |||||||||||||||||
Federal | $ | 4,392 | $ | 5,015 | $ | 4,139 | |||||||||||
State | 818 | 63 | 51 | ||||||||||||||
| | | | | | | | | | | |||||||
Total currently payable | 5,210 | 5,078 | 4,190 | ||||||||||||||
Deferred tax (benefit): | |||||||||||||||||
Federal | 1,114 | (130 | ) | 292 | |||||||||||||
State | 1,214 | 1,258 | 1,007 | ||||||||||||||
| | | | | | | | | | | |||||||
Total deferred tax | 2,328 | 1,128 | 1,299 | ||||||||||||||
| | | | | | | | | | | |||||||
Income tax | $ | 7,538 | $ | 6,206 | $ | 5,489 | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of effective tax rate differs from the federal statutory rate | |||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||
Statutory Federal income tax rate | 35.0 | % | 35.0 | % | 35.0 | % | |||||||||||
State income taxes, net of federal tax benefit | 6.5 | % | 5.3 | % | 4.7 | % | |||||||||||
Low income housing credits, net of investment losses | 0.8 | % | 0.6 | % | -0.6 | % | |||||||||||
Increase in cash surrender value of life insurance | -2.7 | % | -3.5 | % | -4.2 | % | |||||||||||
Non-taxable interest income | -3.2 | % | -2.9 | % | -0.3 | % | |||||||||||
Split-dollar term insurance | 0.1 | % | 0.2 | % | 0.0 | % | |||||||||||
Other, net | -0.5 | % | 0.3 | % | 1.0 | % | |||||||||||
| | | | | | | | | | | |||||||
Effective tax rate | 36.0 | % | 35.0 | % | 35.6 | % | |||||||||||
| | | | | | | | | | | |||||||
| | | | | | | | | | | |||||||
Schedule of deferred tax assets and liabilities | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Deferred tax assets: | |||||||||||||||||
Defined postretirement benefit obligation | $ | 10,327 | $ | 8,707 | |||||||||||||
Allowance for loan losses | 7,728 | 8,058 | |||||||||||||||
Tax credit carryforwards | 2,441 | 3,958 | |||||||||||||||
Stock compensation | 1,693 | 1,697 | |||||||||||||||
California net operating loss carryforwards | — | 1,138 | |||||||||||||||
Accrued expenses | 1,446 | 1,029 | |||||||||||||||
Securities available-for-sale | — | 668 | |||||||||||||||
Loans | 2 | — | |||||||||||||||
Fixed assets | 702 | 613 | |||||||||||||||
Nonaccrual interest | 25 | 134 | |||||||||||||||
Split-dollar life insurance benefit plan | 112 | 108 | |||||||||||||||
State income taxes | 213 | — | |||||||||||||||
Other | 359 | 451 | |||||||||||||||
| | | | | | | | ||||||||||
Total deferred tax assets | 25,048 | 26,561 | |||||||||||||||
Deferred tax liabilities: | |||||||||||||||||
Securities available-for-sale | (2,351 | ) | — | ||||||||||||||
FHLB stock | (245 | ) | (263 | ) | |||||||||||||
Prepaid expenses | (464 | ) | (481 | ) | |||||||||||||
Intangible assets | (1,334 | ) | (642 | ) | |||||||||||||
I/O strips | (621 | ) | (691 | ) | |||||||||||||
Loan fees | (1,131 | ) | (1,025 | ) | |||||||||||||
Other | (375 | ) | (133 | ) | |||||||||||||
| | | | | | | | ||||||||||
Total deferred tax liabilities | (6,521 | ) | (3,235 | ) | |||||||||||||
| | | | | | | | ||||||||||
Net deferred tax assets | $ | 18,527 | $ | 23,326 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Schedule of tax credit carryforwards | |||||||||||||||||
2014 | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Low income housing credits | $ | 1,388 | (begin to expire in 2030) | ||||||||||||||
Alternative Minimum Tax credits | 870 | (no expiration date) | |||||||||||||||
State tax credits, net of federal tax effects | 181 | (no expiration date) | |||||||||||||||
New Hire Retention Credit | 2 | (expires in 2031) | |||||||||||||||
| | | | | | ||||||||||||
Total tax credit carryforwards | $ | 2,441 | |||||||||||||||
| | | | | | ||||||||||||
| | | | | | ||||||||||||
Schedule of income tax housing investment | |||||||||||||||||
For the Quarter Ended | |||||||||||||||||
For the | |||||||||||||||||
Year Ended | |||||||||||||||||
12/31/14 | 12/31/14 | 9/30/14 | 6/30/14 | 3/31/14 | |||||||||||||
(Dollars in thousands) | |||||||||||||||||
Noninterest expense as originally reported | $ | 44,222 | $ | 12,415 | $ | 10,139 | $ | 10,934 | $ | 10,734 | |||||||
Low income housing investment losses reclassified to income tax expense | — | — | 353 | (165 | ) | (188 | ) | ||||||||||
| | | | | | | | | | | | | | | | | |
Noninterest expense under the proportional method | $ | 44,222 | $ | 12,415 | $ | 10,492 | $ | 10,769 | $ | 10,546 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Income tax expense as originally reported | $ | 7,538 | $ | 1,993 | $ | 2,322 | $ | 1,672 | $ | 1,551 | |||||||
Low income housing investment losses reclassified from noninterest expense | — | — | (353 | ) | 165 | 188 | |||||||||||
| | | | | | | | | | | | | | | | | |
Income tax expense under the proportional method | $ | 7,538 | $ | 1,993 | $ | 1,969 | $ | 1,837 | $ | 1,739 | |||||||
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
Effective tax rate as originally reported | 36 | % | 35.6 | % | 40.4 | % | 33.5 | % | 33.5 | % | |||||||
Effective under the proportional method | 36 | % | 35.6 | % | 36.5 | % | 35.6 | % | 36.1 | % | |||||||
For the | For the | ||||||||||||||||
Year Ended | Year Ended | ||||||||||||||||
12/31/13 | 12/31/12 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Noninterest expense as originally reported | $ | 41,722 | $ | 40,256 | |||||||||||||
Low income housing investment losses reclassified to income tax expense | (1,252 | ) | (1,195 | ) | |||||||||||||
| | | | | | | | ||||||||||
Noninterest expense under the proportional method | $ | 40,470 | $ | 39,061 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Income tax expense as originally reported | $ | 4,954 | $ | 4,294 | |||||||||||||
Low income housing investment losses reclassified from noninterest expense | 1,252 | 1,195 | |||||||||||||||
| | | | | | | | ||||||||||
Income tax expense under the proportional method | $ | 6,206 | $ | 5,489 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Effective tax rate as originally reported | 30 | % | 30.2 | % | |||||||||||||
Effective under the proportional method | 35 | % | 35.6 | % | |||||||||||||
Summary Of Carrying Amount Of Income Tax Housing Investment Text Block | |||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Low income housing investments | $ | 5,268 | $ | 1,227 | |||||||||||||
Future commitments | $ | 1,827 | $ | 59 | |||||||||||||
Equity_Plan_Tables
Equity Plan (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Equity Plan | ||||||||||||||
Schedule of stock option activity under the equity plans | ||||||||||||||
Total Stock Options | Number | Weighted | Weighted | Aggregate | ||||||||||
of Shares | Average | Average | Intrinsic | |||||||||||
Exercise | Remaining | Value | ||||||||||||
Price | Contractual | |||||||||||||
Life (Years) | ||||||||||||||
Outstanding at January 1, 2014 | 1,506,504 | $ | 11.8 | |||||||||||
Granted | 385,050 | $ | 8.15 | |||||||||||
Exercised | (62,567 | ) | $ | 4.19 | ||||||||||
Forfeited or expired | (102,881 | ) | $ | 12.41 | ||||||||||
| | | | | | | | | | | | | | |
Outstanding at December 31, 2014 | 1,726,106 | $ | 11.23 | 5.9 | $ | 2,478,300 | ||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Vested or expected to vest | 1,639,801 | 5.9 | $ | 2,354,385 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Exercisable at December 31, 2014 | 1,176,652 | 4.5 | $ | 1,703,800 | ||||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of information related to the equity Plan | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Intrinsic value of options exercised | $ | 258,467 | $ | 51,000 | $ | 10,000 | ||||||||
Cash received from option exercise | $ | 262,035 | $ | 88,000 | $ | 25,000 | ||||||||
Tax benefit realized from option exercises | $ | 102,710 | $ | 17,245 | $ | 3,000 | ||||||||
Weighted average fair value of options granted | $ | 3.90 | $ | 3.84 | $ | 3.67 | ||||||||
Schedule of assumptions used to estimate the fair value of each option grant on the date of grant | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Expected life in months(1) | 84 | 96 | 84 | |||||||||||
Volatility(1) | 57 | % | 54 | % | 57 | % | ||||||||
Weighted average risk-free interest rate(2) | 2.09 | % | 1.49 | % | 1.31 | % | ||||||||
Expected dividends(3) | 2.06 | % | 0.12 | % | 0.00 | % | ||||||||
-1 | The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding based on historical experience. Volatility is based on the historical volatility of the stock price over the same period of the expected life of the option. | |||||||||||||
-2 | Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the option granted. | |||||||||||||
-3 | Each grant's dividend yield is calculated by annualizing the most recent quarterly cash dividend and dividing that amount by the market price of the Company's common stock as of the grant date. | |||||||||||||
Schedule of restricted stock activity under the equity plans | ||||||||||||||
Total Restricted Stock Award | Number | Weighted | ||||||||||||
of Shares | Average Grant | |||||||||||||
Date Fair | ||||||||||||||
Value | ||||||||||||||
Nonvested shares at January 1, 2014 | 58,000 | $ | 6.28 | |||||||||||
Granted | 90,000 | $ | 8.44 | |||||||||||
Vested | (48,000 | ) | $ | 6.23 | ||||||||||
| | | | | | | | |||||||
Nonvested shares at December 31, 2014 | 100,000 | $ | 8.25 | |||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Benefit_Plans_Tables
Benefit Plans (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Supplemental Retirement Plan | ||||||||
Benefit plans | ||||||||
Schedule of change in projected benefit obligation | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | $ | 20,712 | $ | 21,305 | ||||
Service cost | 714 | 1,214 | ||||||
Actuarial loss (gain) | 3,059 | (1,746 | ) | |||||
Interest cost | 911 | 783 | ||||||
Benefits paid | (826 | ) | (844 | ) | ||||
| | | | | | | | |
Projected benefit obligation at end of year | $ | 24,570 | $ | 20,712 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of amounts recognized in accumulated other comprehensive loss | ||||||||
$ | 6,730 | $ | 3,813 | |||||
Amounts recognized in accumulated other comprehensive loss: | ||||||||
Net actuarial loss | ||||||||
Schedule of weighted-average assumptions used to determine the benefit obligation | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.65 | % | 4.50 | % | ||||
Rate of compensation increase | N/A | N/A | ||||||
Schedule of estimated benefit payments over the next ten years, which reflect anticipated future events, service and other assumptions | ||||||||
Year | Estimated | |||||||
Benefit | ||||||||
Payments | ||||||||
(Dollars in thousands) | ||||||||
2015 | $ | 866 | ||||||
2016 | 1,248 | |||||||
2017 | 1,422 | |||||||
2018 | 1,525 | |||||||
2019 | 1,549 | |||||||
2020 to 2024 | 8,814 | |||||||
Schedule of components of net periodic benefit cost | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Components of net periodic benefit cost: | ||||||||
Service cost | $ | 714 | $ | 1,214 | ||||
Interest cost | 911 | 783 | ||||||
Amortization of net actuarial loss | 142 | 291 | ||||||
| | | | | | | | |
Net periodic benefit cost | $ | 1,767 | $ | 2,288 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of assumption used to determine the net periodic benefit cost | ||||||||
2014 | 2013 | |||||||
Discount rate | 4.50 | % | 3.75 | % | ||||
Rate of compensation increase | N/A | N/A | ||||||
Split-Dollar Life Insurance Benefit Plan | ||||||||
Benefit plans | ||||||||
Schedule of change in projected benefit obligation | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Change in projected benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | $ | 4,353 | $ | 4,717 | ||||
Interest cost | 196 | 177 | ||||||
Actuarial loss (gain) | 92 | (541 | ) | |||||
| | | | | | | | |
Projected benefit obligation at end of year | $ | 4,641 | $ | 4,353 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of amounts recognized in accumulated other comprehensive loss | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Net actuarial loss | $ | 540 | $ | 256 | ||||
Prior transition obligation | 1,507 | 1,597 | ||||||
| | | | | | | | |
Accumulated other comprehensive loss | $ | 2,047 | $ | 1,853 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of weighted-average assumptions used to determine the benefit obligation | ||||||||
2014 | 2013 | |||||||
Discount rate | 3.65 | % | 4.50 | % | ||||
Schedule of components of net periodic benefit cost | ||||||||
2014 | 2013 | |||||||
(Dollars in thousands) | ||||||||
Amortization of prior transition obligation | $ | (102 | ) | $ | (84 | ) | ||
Interest cost | 196 | 177 | ||||||
| | | | | | | | |
Net periodic benefit cost | $ | 94 | $ | 93 | ||||
| | | | | | | | |
| | | | | | | | |
Schedule of assumption used to determine the net periodic benefit cost | ||||||||
2014 | 2013 | |||||||
Discount rate | 4.50 | % | 3.75 | % | ||||
Fair_Value_Tables
Fair Value (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Fair Value | |||||||||||||||||
Schedule of financial assets and liabilities measured on a recurring basis | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
Balance | Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets for | Other | Unobservable | |||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets at December 31, 2014: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Agency mortgage-backed securities | $ | 154,172 | — | $ | 154,172 | — | |||||||||||
Corporate bonds | $ | 36,863 | — | $ | 36,863 | — | |||||||||||
Trust preferred securities | $ | 15,300 | — | $ | 15,300 | — | |||||||||||
I/O strip receivables | $ | 1,481 | — | $ | 1,481 | — | |||||||||||
Assets at December 31, 2013: | |||||||||||||||||
Available-for-sale securities: | |||||||||||||||||
Agency mortgage-backed securities | $ | 207,644 | — | $ | 207,644 | — | |||||||||||
Corporate bonds | $ | 52,046 | — | $ | 52,046 | — | |||||||||||
Trust preferred securities | $ | 20,410 | — | $ | 20,410 | — | |||||||||||
I/O strip receivables | $ | 1,647 | — | $ | 1,647 | — | |||||||||||
Schedule of assets and liabilities measured on a non-recurring basis | |||||||||||||||||
Fair Value Measurements Using | |||||||||||||||||
Balance | Quoted Prices in | Significant | Significant | ||||||||||||||
Active Markets for | Other | Unobservable | |||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets at December 31, 2014: | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 859 | — | — | $ | 859 | |||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 587 | — | — | 587 | |||||||||||||
Land and construction | 1,176 | — | — | 1,176 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | 2,622 | — | — | $ | 2,622 | ||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Foreclosed assets: | |||||||||||||||||
Commercial | $ | 31 | — | — | $ | 31 | |||||||||||
| | | | | | | | | | | | | | ||||
$ | 31 | $ | 31 | ||||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Assets at December 31, 2013: | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 1,780 | — | — | $ | 1,780 | |||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 2,846 | — | — | 2,846 | |||||||||||||
Land and construction | 1,290 | — | — | 1,290 | |||||||||||||
Consumer | 100 | — | — | 100 | |||||||||||||
| | | | | | | | | | | | | | ||||
$ | 6,016 | — | — | $ | 6,016 | ||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Foreclosed assets: | |||||||||||||||||
Land and construction | $ | 575 | — | — | $ | 575 | |||||||||||
| | | | | | | | | | | | | | ||||
$ | 575 | $ | 575 | ||||||||||||||
| | | | | | | | | | | | | | ||||
| | | | | | | | | | | | | | ||||
Schedule of impaired loans held-for-investment and impaired loans held-for-investment carried at fair value | |||||||||||||||||
December 31, 2014 | December 31, 2013 | ||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans held-for-investment: | |||||||||||||||||
Book value of impaired loans held-for-investment carried at fair value | $ | 3,026 | $ | 8,472 | |||||||||||||
Book value of impaired loans held-for-investment carried at cost | 2,996 | 3,346 | |||||||||||||||
| | | | | | | | ||||||||||
Total impaired loans held-for-investment | $ | 6,022 | $ | 11,818 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Impaired loans held-for-investment carried at fair value: | |||||||||||||||||
Book value of impaired loans held-for-investment carried at fair value | $ | 3,026 | $ | 8,472 | |||||||||||||
Specific valuation allowance | (404 | ) | (2,456 | ) | |||||||||||||
| | | | | | | | ||||||||||
Impaired loans held-for-investment carried at fair value, net | $ | 2,622 | $ | 6,016 | |||||||||||||
| | | | | | | | ||||||||||
| | | | | | | | ||||||||||
Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | |||||||||||||||||
December 31, 2014 | |||||||||||||||||
Fair Value | Valuation | Unobservable | Range | ||||||||||||||
Techniques | Inputs | (Weighted Average) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 859 | Market Approach | Discount adjustment for differences between comparable sales | 0% to 3% (3%) | ||||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 587 | Market Approach | Discount adjustment for differences between comparable sales | 0% to 3% (3%) | |||||||||||||
Land and construction | 1,176 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 2% (2%) | |||||||||||||
Foreclosed assets: | |||||||||||||||||
Commercial | 31 | Market Approach | Discount adjustment for differences between comparable sales | Less than 1% | |||||||||||||
December 31, 2013 | |||||||||||||||||
Fair Value | Valuation | Unobservable | Range | ||||||||||||||
Techniques | Inputs | (Weighted Average) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Impaired loans — held-for-investment: | |||||||||||||||||
Commercial | $ | 1,780 | Market Approach | Discount adjustment for differences between comparable sales | 2% to 3% (2%) | ||||||||||||
Real estate: | |||||||||||||||||
Commercial and residential | 2,846 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 15% (2%) | |||||||||||||
Land and construction | 1,290 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 2% (2%) | |||||||||||||
Foreclosed assets: | |||||||||||||||||
Land and construction | 575 | Market Approach | Discount adjustment for differences between comparable sales | 1% to 16% (7%) | |||||||||||||
Schedule of carrying amounts and estimated fair values of financial instruments | |||||||||||||||||
December 31, 2014 Estimated Fair Value | |||||||||||||||||
Carrying | Quoted Prices in | Significant | Significant | Total | |||||||||||||
Amounts | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs (Level 2) | (Level 3) | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 122,403 | $ | 122,403 | $ | — | $ | — | $ | 122,403 | |||||||
Securities available-for-sale | 206,335 | — | 206,335 | — | 206,335 | ||||||||||||
Securities held-to-maturity | 95,362 | — | 94,953 | — | 94,953 | ||||||||||||
Loans (including loans held-for-sale), net | 1,071,436 | — | 1,172 | 1,071,854 | 1,073,026 | ||||||||||||
FHLB and FRB stock | 10,598 | — | — | — | N/A | ||||||||||||
Accrued interest receivable | 5,044 | — | 1,435 | 3,609 | 5,044 | ||||||||||||
Loan servicing rights and I/O strips receivables | 2,046 | — | 3,906 | — | 3,906 | ||||||||||||
Liabilities: | |||||||||||||||||
Time deposits | $ | 256,223 | $ | — | $ | 256,589 | $ | — | $ | 256,589 | |||||||
Other deposits | 1,132,163 | — | 1,132,163 | — | 1,132,163 | ||||||||||||
Accrued interest payable | 201 | — | 201 | — | 201 | ||||||||||||
December 31, 2013 Estimated Fair Value | |||||||||||||||||
Carrying | Quoted Prices in | Significant | Significant | Total | |||||||||||||
Amounts | Active Markets for | Other | Unobservable | ||||||||||||||
Identical Assets | Observable | Inputs | |||||||||||||||
(Level 1) | Inputs | (Level 3) | |||||||||||||||
(Level 2) | |||||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Assets: | |||||||||||||||||
Cash and cash equivalents | $ | 112,605 | $ | 112,605 | $ | — | $ | — | $ | 112,605 | |||||||
Securities available-for-sale | 280,100 | — | 280,100 | — | 280,100 | ||||||||||||
Securities held-to-maturity | 95,921 | — | 86,032 | — | 86,032 | ||||||||||||
Loans (including loans held-for-sale), net | 898,897 | — | 3,148 | 890,368 | 893,516 | ||||||||||||
FHLB and FRB stock | 10,435 | — | — | — | N/A | ||||||||||||
Accrued interest receivable | 4,085 | — | 1,729 | 2,356 | 4,085 | ||||||||||||
Loan servicing rights and I/O strips receivables | 2,172 | — | 4,203 | — | 4,203 | ||||||||||||
Liabilities: | |||||||||||||||||
Time deposits | $ | 277,844 | $ | — | $ | 278,239 | $ | — | $ | 278,239 | |||||||
Other deposits | 1,008,377 | — | 1,008,377 | — | 1,008,377 | ||||||||||||
Accrued interest payable | 192 | — | 192 | — | 192 | ||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Commitments and Contingencies | ||||||||||||||
Schedule of commitments to extend credit | ||||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Fixed | Variable | Fixed | Variable | |||||||||||
Rate | Rate | Rate | Rate | |||||||||||
(Dollars in thousands) | ||||||||||||||
Unused lines of credit and commitments to make loans | $ | 8,164 | $ | 415,146 | $ | 6,136 | $ | 359,955 | ||||||
Standby letters of credit | 3,235 | 12,783 | — | 11,099 | ||||||||||
| | | | | | | | | | | | | | |
$ | 11,399 | $ | 427,929 | $ | 6,136 | $ | 371,054 | |||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Shareholders_Equity_and_Earnin1
Shareholders' Equity and Earnings Per Share (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Shareholders' Equity and Earnings Per Share. | |||||||||||
Schedule of reconciliation of factors used in computing basic and diluted earnings per common share | |||||||||||
Year ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands, except per share amounts) | |||||||||||
Net income available to common shareholders | $ | 12,419 | $ | 11,204 | $ | 8,703 | |||||
Less: undistributed earnings allocated to Series C Preferred Stock | 1,342 | 1,687 | 1,527 | ||||||||
| | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 11,077 | $ | 9,517 | $ | 7,176 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Weighted average common shares outstanding for basic earnings per common share | 26,390,615 | 26,338,161 | 26,303,245 | ||||||||
Dilutive effect of stock options oustanding, using the the treasury stock method | 135,666 | 48,291 | 26,091 | ||||||||
| | | | | | | | | | | |
Shares used in computing diluted earnings per common share | 26,526,282 | 26,386,452 | 26,329,336 | ||||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Basic earnings per share | $ | 0.42 | $ | 0.36 | $ | 0.27 | |||||
Diluted earnings per share | $ | 0.42 | $ | 0.36 | $ | 0.27 | |||||
Capital_Requirements_Tables
Capital Requirements (Tables) | 12 Months Ended | |||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||
Capital Requirements | ||||||||||||||||||||
Schedule of actual capital and required amounts and ratios | ||||||||||||||||||||
Actual | To Be | Required For | ||||||||||||||||||
Well-Capitalized | Capital | |||||||||||||||||||
Under Regulatory | Adequacy | |||||||||||||||||||
Requirements | Purposes | |||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Total Capital | $ | 186,068 | 13.9 | % | $ | 134,109 | 10.0 | % | $ | 107,287 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 169,278 | 12.6 | % | $ | 80,465 | 6.0 | % | $ | 53,644 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 169,278 | 10.6 | % | N/A | N/A | $ | 63,949 | 4.0 | % | ||||||||||
(to average assets) | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Total Capital | $ | 179,916 | 15.3 | % | $ | 117,581 | 10.0 | % | $ | 94,065 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 165,162 | 14.0 | % | $ | 70,549 | 6.0 | % | $ | 47,032 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 165,162 | 11.2 | % | N/A | N/A | $ | 59,083 | 4.0 | % | ||||||||||
(to average assets) | ||||||||||||||||||||
HBC | ||||||||||||||||||||
Capital Requirements | ||||||||||||||||||||
Schedule of actual capital and required amounts and ratios | ||||||||||||||||||||
Actual | To Be | Required For | ||||||||||||||||||
Well-Capitalized | Capital | |||||||||||||||||||
Under Prompt | Adequacy | |||||||||||||||||||
Corrective Action | Purposes | |||||||||||||||||||
Provisions | ||||||||||||||||||||
Amount | Ratio | Amount | Ratio | Amount | Ratio | |||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
As of December 31, 2014 | ||||||||||||||||||||
Total Capital | $ | 175,765 | 13.1 | % | $ | 134,095 | 10.0 | % | $ | 107,276 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 158,976 | 11.9 | % | $ | 80,457 | 6.0 | % | $ | 53,638 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 158,976 | 9.9 | % | $ | 79,959 | 5.0 | % | $ | 63,967 | 4.0 | % | ||||||||
(to average assets) | ||||||||||||||||||||
As of December 31, 2013 | ||||||||||||||||||||
Total Capital | $ | 163,827 | 13.9 | % | $ | 117,872 | 10.0 | % | $ | 94,297 | 8.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 149,037 | 12.6 | % | $ | 70,723 | 6.0 | % | $ | 47,148 | 4.0 | % | ||||||||
(to risk-weighted assets) | ||||||||||||||||||||
Tier 1 Capital | $ | 149,037 | 10.1 | % | $ | 73,858 | 5.0 | % | $ | 59,086 | 4.0 | % | ||||||||
(to average assets) | ||||||||||||||||||||
Parent_Company_only_Condensed_1
Parent Company only Condensed Financial Information (Tables) (Parent Company) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Parent Company | |||||||||||
Condensed financial statements | |||||||||||
Schedule of condensed balance sheets | |||||||||||
Condensed Balance Sheets | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
(Dollars in thousands) | |||||||||||
Assets | |||||||||||
Cash and cash equivalents | $ | 10,159 | $ | 19,009 | |||||||
Investment in subsidiary bank | 173,453 | 155,958 | |||||||||
Other assets | 953 | — | |||||||||
| | | | | | | | ||||
Total assets | $ | 184,565 | $ | 174,967 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Liabilities and Shareholder's Equity | |||||||||||
Other liabilities | 207 | 1,571 | |||||||||
Shareholder's equity | 184,358 | 173,396 | |||||||||
| | | | | | | | ||||
Total liabilities and shareholder's equity | $ | 184,565 | $ | 174,967 | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of condensed statements of income | Condensed Statements of Income | ||||||||||
For the Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands) | |||||||||||
Interest income | $ | — | $ | — | $ | 1 | |||||
Dividend from subsidiary bank | — | 16,000 | 45,000 | ||||||||
Interest expense | — | (229 | ) | (1,383 | ) | ||||||
Other expenses | (2,033 | ) | (2,080 | ) | (2,615 | ) | |||||
| | | | | | | | | | | |
Income (loss) before income taxes and equity in net income of subsidiary bank | (2,033 | ) | 13,691 | 41,003 | |||||||
Equity in net income of subsidiary bank: | |||||||||||
Reduction in contributed capital and distribution from subsidiary bank | — | (16,000 | ) | (45,000 | ) | ||||||
Net income of subsidiary bank | 14,614 | 13,155 | 12,710 | ||||||||
Income tax benefit | 846 | 694 | 1,196 | ||||||||
| | | | | | | | | | | |
Net income | 13,427 | 11,540 | 9,909 | ||||||||
Dividends and discount accretion on preferred stock | (1,008 | ) | (336 | ) | (1,206 | ) | |||||
| | | | | | | | | | | |
Net income available to common shareholders | $ | 12,419 | $ | 11,204 | $ | 8,703 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of condensed statements of cash flows | Condensed Statements of Cash Flows | ||||||||||
For the Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
(Dollars in thousands) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net Income | $ | 13,427 | $ | 11,540 | $ | 9,909 | |||||
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||||||
Amortization of restricted stock award, net of forfeitures and taxes | (9 | ) | 200 | 148 | |||||||
Equity in undistributed loss/(net income) of subsidiary bank | (14,614 | ) | 2,845 | 32,290 | |||||||
Net change in other assets and liabilities | (2,158 | ) | 4,478 | (744 | ) | ||||||
| | | | | | | | | | | |
Net cash (used in) provided by operating activities | (3,354 | ) | 19,063 | 41,603 | |||||||
Cash flows from financing activities: | |||||||||||
Repayment of subordinated debt | — | (9,279 | ) | (14,423 | ) | ||||||
Payment of cash dividends | (5,758 | ) | (1,916 | ) | (373 | ) | |||||
Repayment of preferred stock | — | — | (40,000 | ) | |||||||
Exercise of stock options | 262 | 88 | 39 | ||||||||
Payment of repurchase of common stock warrant | — | (140 | ) | — | |||||||
| | | | | | | | | | | |
Net cash used in financing activities | (5,496 | ) | (11,247 | ) | (54,757 | ) | |||||
| | | | | | | | | | | |
Net (decrease) increase in cash and cash equivalents | (8,850 | ) | 7,816 | (13,154 | ) | ||||||
Cash and cash equivalents, beginning of year | 19,009 | 11,193 | 24,347 | ||||||||
| | | | | | | | | | | |
Cash and cash equivalents, end of year | $ | 10,159 | $ | 19,009 | $ | 11,193 | |||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Quarterly_Financial_Data_Unaud1
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Quarterly Financial Data (Unaudited) | ||||||||||||||
Schedule of the Company's selected unaudited quarterly financial data | ||||||||||||||
For the Quarter Ended | ||||||||||||||
12/31/2014(1) | 9/30/2014(2) | 6/30/14 | 3/31/14 | |||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||
Interest income | $ | 16,717 | $ | 14,492 | $ | 14,192 | $ | 13,855 | ||||||
Interest expense | 625 | 500 | 507 | 521 | ||||||||||
| | | | | | | | | | | | | | |
Net interest income | 16,092 | 13,992 | 13,685 | 13,334 | ||||||||||
Provision (credit) for loan losses | (106 | ) | (24 | ) | (198 | ) | (10 | ) | ||||||
| | | | | | | | | | | | | | |
Net interest income after provision for loan losses | 16,198 | 14,016 | 13,883 | 13,344 | ||||||||||
Noninterest income | 1,812 | 1,870 | 2,047 | 2,017 | ||||||||||
Noninterest expense | 12,415 | 10,492 | 10,769 | 10,546 | ||||||||||
| | | | | | | | | | | | | | |
Income before income taxes | 5,595 | 5,394 | 5,161 | 4,815 | ||||||||||
Income tax expense | 1,993 | 1,969 | 1,837 | 1,739 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 3,602 | 3,425 | 3,324 | 3,076 | ||||||||||
Dividends on preferred stock | (280 | ) | (280 | ) | (224 | ) | (224 | ) | ||||||
| | | | | | | | | | | | | | |
Net income available to common shareholders | 3,322 | 3,145 | 3,100 | 2,852 | ||||||||||
Undistributed earnings allocated to Series C Preferred Stock | (349 | ) | (320 | ) | (358 | ) | (315 | ) | ||||||
| | | | | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 2,973 | $ | 2,825 | $ | 2,742 | $ | 2,537 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Earnings per common share | ||||||||||||||
Basic | $ | 0.11 | $ | 0.11 | $ | 0.1 | $ | 0.1 | ||||||
Diluted | $ | 0.11 | $ | 0.11 | $ | 0.1 | $ | 0.1 | ||||||
-1 | The Company's selected unaudited quarterly financial data for the quarter ended December 31, 2014 includes BVF acquisition and integration costs of $609,000, and the results of operations for Bay View Funding for the months of November and December 2014. | |||||||||||||
-2 | The Company's selected unaudited quarterly financial data for the quarter ended September 30, 2014 includes BVF acquisition and integration costs of $234,000. | |||||||||||||
For the Quarter Ended | ||||||||||||||
12/31/13 | 9/30/13 | 6/30/13 | 3/31/13 | |||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||
Interest income | $ | 13,623 | $ | 13,458 | $ | 12,838 | $ | 12,867 | ||||||
Interest expense | 574 | 627 | 685 | 714 | ||||||||||
| | | | | | | | | | | | | | |
Net interest income | 13,049 | 12,831 | 12,153 | 12,153 | ||||||||||
Provision (credit) for loan losses | (12 | ) | (534 | ) | (270 | ) | — | |||||||
| | | | | | | | | | | | | | |
Net interest income after provision for loan losses | 13,061 | 13,365 | 12,423 | 12,153 | ||||||||||
Noninterest income | 1,898 | 1,738 | 1,915 | 1,663 | ||||||||||
Noninterest expense | 9,851 | 10,060 | 10,089 | 10,470 | ||||||||||
| | | | | | | | | | | | | | |
Income before income taxes | 5,108 | 5,043 | 4,249 | 3,346 | ||||||||||
Income tax expense | 1,754 | 1,830 | 1,456 | 1,166 | ||||||||||
| | | | | | | | | | | | | | |
Net income | 3,354 | 3,213 | 2,793 | 2,180 | ||||||||||
Dividends on preferred stock | (168 | ) | (168 | ) | — | — | ||||||||
| | | | | | | | | | | | | | |
Net income available to common shareholders | 3,186 | 3,045 | 2,793 | 2,180 | ||||||||||
Undistributed earnings allocated to Series C Preferred Stock | (421 | ) | (395 | ) | (489 | ) | (382 | ) | ||||||
| | | | | | | | | | | | | | |
Distributed and undistributed earnings allocated to common shareholders | $ | 2,765 | $ | 2,650 | $ | 2,304 | $ | 1,798 | ||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Earnings per common share | ||||||||||||||
Basic | $ | 0.1 | $ | 0.1 | $ | 0.09 | $ | 0.07 | ||||||
Diluted | $ | 0.1 | $ | 0.1 | $ | 0.09 | $ | 0.07 | ||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Cash and Cash Equivalents | |
Period for which federal funds are sold and purchased | 1 day |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details 2) | 12 Months Ended |
Dec. 31, 2014 | |
item | |
Premises and Equipment | |
Number of buildings owned | 1 |
Building | |
Premises and Equipment | |
Estimated useful life | 40 years |
Furniture and equipment | Minimum | |
Premises and Equipment | |
Estimated useful life | 5 years |
Furniture and equipment | Maximum | |
Premises and Equipment | |
Estimated useful life | 15 years |
Leasehold improvements | Minimum | |
Premises and Equipment | |
Estimated useful life | 5 years |
Leasehold improvements | Maximum | |
Premises and Equipment | |
Estimated useful life | 15 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 3) | 1 Months Ended | |
Jun. 30, 2007 | Nov. 30, 2014 | |
Core deposit | Diablo Valley Bank | ||
Acquired Intangible Assets | ||
Amortization period | 10 years | |
Below market-value lease | BVF | ||
Acquired Intangible Assets | ||
Amortization period | 3 years | |
Customer relationship | Diablo Valley Bank | ||
Acquired Intangible Assets | ||
Amortization period | 7 years | |
Customer relationship and brokered relationship | BVF | ||
Acquired Intangible Assets | ||
Useful life, amortization period | 10 years | |
Non-compete agreements | BVF | ||
Acquired Intangible Assets | ||
Amortization period | 3 years |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | ||
Foreclosed Assets | ||
Carrying value of foreclosed assets | $696,000 | $575,000 |
Income Taxes | ||
Net deferred tax assets | $18,527,000 | $23,326,000 |
Segment Reporting | ||
Number of branch offices of HBC | 11 | |
Number of customers accounting for more than 10 percent of revenue for HBC or the Company | 0 | |
Number of operating segments | 1 |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Income (''AOCI'') (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in AOCI | |||
Balance at the beginning of the period, net of taxes | ($4,029) | $2,681 | $955 |
Other comprehensive income (loss) before reclassification, net of taxes | 2,242 | -6,777 | 2,014 |
Amounts reclassified from other comprehensive income (loss), net of taxes | -64 | 67 | -288 |
Other comprehensive income (loss) | 2,178 | -6,710 | 1,726 |
Balance at the end of the period, net of taxes | -1,851 | -4,029 | 2,681 |
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips | |||
Changes in AOCI | |||
Balance at the beginning of the period, net of taxes | -430 | 7,887 | 6,210 |
Other comprehensive income (loss) before reclassification, net of taxes | 4,152 | -8,295 | 2,582 |
Amounts reclassified from other comprehensive income (loss), net of taxes | -56 | -22 | -905 |
Other comprehensive income (loss) | 4,096 | -8,317 | 1,677 |
Balance at the end of the period, net of taxes | 3,666 | -430 | 7,887 |
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | |||
Changes in AOCI | |||
Balance at the beginning of the period, net of taxes | 466 | 497 | |
Amounts reclassified from other comprehensive income (loss), net of taxes | -31 | -31 | 497 |
Other comprehensive income (loss) | -31 | -31 | 497 |
Balance at the end of the period, net of taxes | 435 | 466 | 497 |
Defined Benefit Pension Plan Items | |||
Changes in AOCI | |||
Balance at the beginning of the period, net of taxes | -4,065 | -5,703 | -5,255 |
Other comprehensive income (loss) before reclassification, net of taxes | -1,910 | 1,518 | -568 |
Amounts reclassified from other comprehensive income (loss), net of taxes | 23 | 120 | 120 |
Other comprehensive income (loss) | -1,887 | 1,638 | -448 |
Balance at the end of the period, net of taxes | ($5,952) | ($4,065) | ($5,703) |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Income (''AOCI'') (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Amount Reclassified from AOCI | |||||||||||
Realized gains on sale of securities | $97 | $38 | $1,560 | ||||||||
Interest income on taxable securities | 7,810 | 9,472 | 11,519 | ||||||||
Income before income taxes | 5,595 | 5,394 | 5,161 | 4,815 | 5,108 | 5,043 | 4,249 | 3,346 | 20,965 | 17,746 | 15,398 |
Income tax expense (benefit) | -1,993 | -1,969 | -1,837 | -1,739 | -1,754 | -1,830 | -1,456 | -1,166 | -7,538 | -6,206 | -5,489 |
Net income | 3,602 | 3,425 | 3,324 | 3,076 | 3,354 | 3,213 | 2,793 | 2,180 | 13,427 | 11,540 | 9,909 |
Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net income | 64 | -67 | 288 | ||||||||
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Realized gains on sale of securities | 97 | 38 | 1,560 | ||||||||
Income tax expense (benefit) | -41 | -16 | -655 | ||||||||
Net income | 56 | 22 | 905 | ||||||||
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Interest income on taxable securities | 54 | 54 | -857 | ||||||||
Income tax expense (benefit) | -23 | -23 | 360 | ||||||||
Net income | 31 | 31 | -497 | ||||||||
Defined Benefit Pension Plan Items | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Prior service cost | -27 | ||||||||||
Prior transition obligation | 102 | 84 | 73 | ||||||||
Actuarial losses | -142 | -291 | -253 | ||||||||
Income before income taxes | -40 | -207 | -207 | ||||||||
Income tax expense (benefit) | 17 | 87 | 87 | ||||||||
Net income | ($23) | ($120) | ($120) |
Securities_Details
Securities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Securities available-for-sale: | ||
Amortized Cost | $201,497 | $282,495 |
Gross Unrealized Gains | 5,126 | 2,992 |
Gross Unrealized Losses | -288 | -5,387 |
Estimated Fair Value | 206,335 | 280,100 |
Agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | 150,570 | 208,644 |
Gross Unrealized Gains | 3,867 | 2,465 |
Gross Unrealized Losses | -265 | -3,465 |
Estimated Fair Value | 154,172 | 207,644 |
Corporate bonds | ||
Securities available-for-sale: | ||
Amortized Cost | 35,927 | 53,002 |
Gross Unrealized Gains | 959 | 527 |
Gross Unrealized Losses | -23 | -1,483 |
Estimated Fair Value | 36,863 | 52,046 |
Trust preferred securities | ||
Securities available-for-sale: | ||
Amortized Cost | 15,000 | 20,849 |
Gross Unrealized Gains | 300 | |
Gross Unrealized Losses | -439 | |
Estimated Fair Value | $15,300 | $20,410 |
Securities_Details_2
Securities (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Securities held-to-maturity: | ||
Amortized Cost | $95,362 | $95,921 |
Gross Unrealized Gains | 1,055 | 54 |
Gross Unrealized Losses | -1,464 | -9,943 |
Estimated Fair Value | 94,953 | 86,032 |
Agency mortgage-backed securities | ||
Securities held-to-maturity: | ||
Amortized Cost | 15,480 | 15,932 |
Gross Unrealized Gains | 44 | |
Gross Unrealized Losses | -118 | -470 |
Estimated Fair Value | 15,406 | 15,462 |
Municipals - Tax Exempt | ||
Securities held-to-maturity: | ||
Amortized Cost | 79,882 | 79,989 |
Gross Unrealized Gains | 1,011 | 54 |
Gross Unrealized Losses | -1,346 | -9,473 |
Estimated Fair Value | $79,547 | $70,570 |
Securities_Details_3
Securities (Details 3) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Available-for-sale, Fair Value | ||
Less Than 12 Months | $12,491 | $146,300 |
12 Months or More | 40,762 | 10,780 |
Total | 53,253 | 157,080 |
Available-for-sale, Unrealized Losses | ||
Less Than 12 Months | -27 | -4,630 |
12 Months or More | -261 | -757 |
Total | -288 | -5,387 |
Agency mortgage-backed securities | ||
Available-for-sale, Fair Value | ||
Less Than 12 Months | 12,491 | 87,798 |
12 Months or More | 35,614 | 8,920 |
Total | 48,105 | 96,718 |
Available-for-sale, Unrealized Losses | ||
Less Than 12 Months | -27 | -2,869 |
12 Months or More | -238 | -596 |
Total | -265 | -3,465 |
Corporate bonds | ||
Available-for-sale, Fair Value | ||
Less Than 12 Months | 38,092 | |
12 Months or More | 5,148 | 1,860 |
Total | 5,148 | 39,952 |
Available-for-sale, Unrealized Losses | ||
Less Than 12 Months | -1,322 | |
12 Months or More | -23 | -161 |
Total | -23 | -1,483 |
Trust preferred securities | ||
Available-for-sale, Fair Value | ||
Less Than 12 Months | 20,410 | |
Total | 20,410 | |
Available-for-sale, Unrealized Losses | ||
Less Than 12 Months | -439 | |
Total | ($439) |
Securities_Details_4
Securities (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | $6,753 | $44,155 |
12 Months or More | 47,841 | 34,654 |
Total | 54,594 | 78,809 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | -45 | -4,522 |
12 Months or More | -1,419 | -5,421 |
Total | -1,464 | -9,943 |
Agency mortgage-backed securities | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 4,869 | 5,978 |
12 Months or More | 4,974 | 9,134 |
Total | 9,843 | 15,112 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | -29 | -101 |
12 Months or More | -89 | -369 |
Total | -118 | -470 |
Municipals - Tax Exempt | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 1,884 | 38,177 |
12 Months or More | 42,867 | 25,520 |
Total | 44,751 | 63,697 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | -16 | -4,421 |
12 Months or More | -1,330 | -5,052 |
Total | ($1,346) | ($9,473) |
Securities_Details_5
Securities (Details 5) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | item | |
Additional information | ||
Holdings of securities as percentage of shareholders' equity, considered as threshold for disclosure purpose | 10.00% | |
The number of holdings of securities of any one issuer other than the U.S. Government and its sponsored entities | 0 | |
Number of securities held | 361 | 392 |
Number of available for sale securities held | 130 | 163 |
Number of held to maturity securities held | 231 | 229 |
Number of securities with fair values below amortized cost | 151 | 275 |
Total unrealized loss for securities over 12 months | $1,680,000 | $6,178,000 |
Securities_Details_6
Securities (Details 6) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Proceeds from sales of securities and the resulting gains and losses | |||
Proceeds | $108,603,000 | $26,944,000 | $40,587,000 |
Gross gains | 1,008,000 | 310,000 | 1,560,000 |
Gross losses | -911,000 | -272,000 | |
Available-for-sale, Amortized Cost | |||
Due after one through five years | 6,335,000 | ||
Due after five through ten years | 29,592,000 | ||
Due after ten years | 15,000,000 | ||
Agency mortgage-backed securities | 150,570,000 | ||
Total | 201,497,000 | ||
Available-for-sale, Estimated Fair Value | |||
Due after one through five years | 6,713,000 | ||
Due after five through ten years | 30,150,000 | ||
Due after ten years | 15,300,000 | ||
Agency mortgage-backed securities | 154,172,000 | ||
Estimated Fair Value | 206,335,000 | 280,100,000 | |
Held-to-maturity, Amortized Cost | |||
Due after five through ten years | 5,883,000 | ||
Due after ten years | 73,999,000 | ||
Agency mortgage-backed securities | 15,480,000 | ||
Total | 95,362,000 | 95,921,000 | |
Held-to-maturity, Estimated Fair Value | |||
Due after five through ten years | 6,050,000 | ||
Due after ten years | 73,497,000 | ||
Agency mortgage-backed securities | 15,406,000 | ||
Estimated Fair Value | 94,953,000 | 86,032,000 | |
Additional information | |||
Amortized cost of securities pledged to secure public deposits and for other purposes as required or permitted by law or contract | $147,497,000 | $147,455,000 |
Loans_and_Loan_Servicing_Detai
Loans and Loan Servicing (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Loans held-for-investment: | ||||
Loans | $1,089,229 | $915,297 | ||
Deferred loan origination fees, net | -586 | -384 | ||
Loans, net of deferred fees | 1,088,643 | 914,913 | ||
Allowance for loan losses | -18,379 | -19,164 | -19,027 | -20,700 |
Loans, net | 1,070,264 | 895,749 | ||
Commercial | ||||
Loans held-for-investment: | ||||
Loans | 462,403 | 393,074 | ||
Allowance for loan losses | -11,187 | -12,533 | -12,866 | -13,215 |
Real estate | ||||
Loans held-for-investment: | ||||
Loans | 607,959 | 506,546 | ||
Allowance for loan losses | -7,070 | -6,548 | -6,034 | -7,338 |
Real estate | Commercial and residential | ||||
Loans held-for-investment: | ||||
Loans | 478,335 | 423,288 | ||
Real estate | Land and construction | ||||
Loans held-for-investment: | ||||
Loans | 67,980 | 31,443 | ||
Real estate | Home equity | ||||
Loans held-for-investment: | ||||
Loans | 61,644 | 51,815 | ||
Consumer | ||||
Loans held-for-investment: | ||||
Loans | 18,867 | 15,677 | ||
Allowance for loan losses | ($122) | ($83) | ($127) | ($147) |
Loans_and_Loan_Servicing_Detai1
Loans and Loan Servicing (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Changes in allowance for loan losses | ||||||||||
Balance, beginning of period | $19,164 | $19,164 | $19,027 | $20,700 | ||||||
Charge-offs | -927 | -1,952 | -5,463 | |||||||
Recoveries | 480 | 2,905 | 1,006 | |||||||
Net (charge-offs) recoveries | -447 | 953 | -4,457 | |||||||
Provision (credit) for loan losses | -106 | -24 | -198 | -10 | -12 | -534 | -270 | -338 | -816 | 2,784 |
Balance, end of period | 18,379 | 19,164 | 18,379 | 19,164 | 19,027 | |||||
Balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | ||||||||||
Allowance for loan losses, Individually evaluated for impairment | 404 | 2,456 | 404 | 2,456 | ||||||
Allowance for loan losses, Collectively evaluated for impairment | 17,975 | 16,708 | 17,975 | 16,708 | ||||||
Total allowance balance | 18,379 | 19,164 | 18,379 | 19,164 | 19,027 | |||||
Loans, Individually evaluated for impairment | 6,022 | 11,818 | 6,022 | 11,818 | ||||||
Loans, Collectively evaluated for impairment | 1,083,207 | 903,479 | 1,083,207 | 903,479 | ||||||
Total loan balance | 1,089,229 | 915,297 | 1,089,229 | 915,297 | ||||||
Commercial | ||||||||||
Changes in allowance for loan losses | ||||||||||
Balance, beginning of period | 12,533 | 12,533 | 12,866 | 13,215 | ||||||
Charge-offs | -815 | -1,676 | -3,935 | |||||||
Recoveries | 418 | 2,621 | 776 | |||||||
Net (charge-offs) recoveries | -397 | 945 | -3,159 | |||||||
Provision (credit) for loan losses | -949 | -1,278 | 2,810 | |||||||
Balance, end of period | 11,187 | 12,533 | 11,187 | 12,533 | 12,866 | |||||
Balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | ||||||||||
Allowance for loan losses, Individually evaluated for impairment | 404 | 1,694 | 404 | 1,694 | ||||||
Allowance for loan losses, Collectively evaluated for impairment | 10,783 | 10,839 | 10,783 | 10,839 | ||||||
Total allowance balance | 11,187 | 12,533 | 11,187 | 12,533 | 12,866 | |||||
Loans, Individually evaluated for impairment | 2,701 | 4,906 | 2,701 | 4,906 | ||||||
Loans, Collectively evaluated for impairment | 459,702 | 388,168 | 459,702 | 388,168 | ||||||
Total loan balance | 462,403 | 393,074 | 462,403 | 393,074 | ||||||
Real estate | ||||||||||
Changes in allowance for loan losses | ||||||||||
Balance, beginning of period | 6,548 | 6,548 | 6,034 | 7,338 | ||||||
Charge-offs | -87 | -276 | -1,528 | |||||||
Recoveries | 62 | 283 | 230 | |||||||
Net (charge-offs) recoveries | -25 | 7 | -1,298 | |||||||
Provision (credit) for loan losses | 547 | 507 | -6 | |||||||
Balance, end of period | 7,070 | 6,548 | 7,070 | 6,548 | 6,034 | |||||
Balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | ||||||||||
Allowance for loan losses, Individually evaluated for impairment | 741 | 741 | ||||||||
Allowance for loan losses, Collectively evaluated for impairment | 7,070 | 5,807 | 7,070 | 5,807 | ||||||
Total allowance balance | 7,070 | 6,548 | 7,070 | 6,548 | 6,034 | |||||
Loans, Individually evaluated for impairment | 3,315 | 6,790 | 3,315 | 6,790 | ||||||
Loans, Collectively evaluated for impairment | 604,644 | 499,756 | 604,644 | 499,756 | ||||||
Total loan balance | 607,959 | 506,546 | 607,959 | 506,546 | ||||||
Consumer | ||||||||||
Changes in allowance for loan losses | ||||||||||
Balance, beginning of period | 83 | 83 | 127 | 147 | ||||||
Charge-offs | -25 | |||||||||
Recoveries | 1 | |||||||||
Net (charge-offs) recoveries | -25 | 1 | ||||||||
Provision (credit) for loan losses | 64 | -45 | -20 | |||||||
Balance, end of period | 122 | 83 | 122 | 83 | 127 | |||||
Balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | ||||||||||
Allowance for loan losses, Individually evaluated for impairment | 21 | 21 | ||||||||
Allowance for loan losses, Collectively evaluated for impairment | 122 | 62 | 122 | 62 | ||||||
Total allowance balance | 122 | 83 | 122 | 83 | 127 | |||||
Loans, Individually evaluated for impairment | 6 | 122 | 6 | 122 | ||||||
Loans, Collectively evaluated for impairment | 18,861 | 15,555 | 18,861 | 15,555 | ||||||
Total loan balance | $18,867 | $15,677 | $18,867 | $15,677 |
Loans_and_Loan_Servicing_Detai2
Loans and Loan Servicing (Details 3) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Unpaid Principal Balance | ||
Total with no related allowance recorded | $6,951 | $6,968 |
Total with an allowance recorded | 829 | 5,168 |
Total | 7,780 | 12,136 |
Recorded Investment | ||
Total with no related allowance recorded | 5,193 | 6,884 |
Total with an allowance recorded | 829 | 4,934 |
Total | 6,022 | 11,818 |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 404 | 2,456 |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | 9,040 | 16,003 |
Interest income during impairment | 56 | |
Commercial | ||
Unpaid Principal Balance | ||
Total with no related allowance recorded | 2,282 | 1,999 |
Total with an allowance recorded | 829 | 3,225 |
Recorded Investment | ||
Total with no related allowance recorded | 1,872 | 1,915 |
Total with an allowance recorded | 829 | 2,991 |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 404 | 1,694 |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | 4,069 | 6,855 |
Interest income during impairment | 56 | |
Real estate | Commercial and residential | ||
Unpaid Principal Balance | ||
Total with no related allowance recorded | 2,510 | 2,831 |
Total with an allowance recorded | 1,531 | |
Recorded Investment | ||
Total with no related allowance recorded | 1,651 | 2,831 |
Total with an allowance recorded | 1,531 | |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 451 | |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | 2,758 | 4,921 |
Real estate | Land and construction | ||
Unpaid Principal Balance | ||
Total with no related allowance recorded | 1,808 | 1,761 |
Recorded Investment | ||
Total with no related allowance recorded | 1,319 | 1,761 |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | 1,628 | 2,028 |
Real estate | Home equity | ||
Unpaid Principal Balance | ||
Total with no related allowance recorded | 345 | 377 |
Total with an allowance recorded | 290 | |
Recorded Investment | ||
Total with no related allowance recorded | 345 | 377 |
Total with an allowance recorded | 290 | |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 290 | |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | 529 | 2,064 |
Consumer | ||
Unpaid Principal Balance | ||
Total with no related allowance recorded | 6 | |
Total with an allowance recorded | 122 | |
Recorded Investment | ||
Total with no related allowance recorded | 6 | |
Total with an allowance recorded | 122 | |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 21 | |
Average impaired loans with interest recognized and cash-basis interest earned on impaired loans | ||
Average of impaired loans during the period | $56 | $135 |
Loans_and_Loan_Servicing_Detai3
Loans and Loan Servicing (Details 4) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Nonperforming loans by class | ||
Nonaccrual | $5,855,000 | $11,326,000 |
Restructured and loans over 90 days past due and still accruing | 492,000 | |
Total nonperforming loans | 5,855,000 | 11,818,000 |
Other restructured loans | 167,000 | |
Total | 6,022,000 | 11,818,000 |
Aging of past due loans by class of loans | ||
30-59 Days Past Due | 3,002,000 | 4,901,000 |
60-89 Days Past Due | 195,000 | 428,000 |
90 Days or Greater Past Due | 3,043,000 | 4,309,000 |
Total Past Due | 6,240,000 | 9,638,000 |
Loans Not Past Due | 1,082,989,000 | 905,659,000 |
Total loan balance | 1,089,229,000 | 915,297,000 |
30 days or greater past due nonaccrual loans | 3,130,000 | 5,900,000 |
Less than 30 days past due nonaccrual loans held-for-investment | 2,725,000 | 5,426,000 |
Commercial | ||
Nonperforming loans by class | ||
Nonaccrual | 2,534,000 | 4,414,000 |
Restructured and loans over 90 days past due and still accruing | 492,000 | |
Total nonperforming loans | 2,534,000 | 4,906,000 |
Aging of past due loans by class of loans | ||
30-59 Days Past Due | 3,002,000 | 3,314,000 |
60-89 Days Past Due | 195,000 | 428,000 |
90 Days or Greater Past Due | 1,978,000 | 2,865,000 |
Total Past Due | 5,175,000 | 6,607,000 |
Loans Not Past Due | 457,228,000 | 386,467,000 |
Total loan balance | 462,403,000 | 393,074,000 |
Real estate | ||
Aging of past due loans by class of loans | ||
Total loan balance | 607,959,000 | 506,546,000 |
Real estate | Commercial and residential | ||
Nonperforming loans by class | ||
Nonaccrual | 1,651,000 | 4,363,000 |
Total nonperforming loans | 1,651,000 | 4,363,000 |
Aging of past due loans by class of loans | ||
30-59 Days Past Due | 1,559,000 | |
90 Days or Greater Past Due | 1,065,000 | 1,065,000 |
Total Past Due | 1,065,000 | 2,624,000 |
Loans Not Past Due | 477,270,000 | 420,664,000 |
Total loan balance | 478,335,000 | 423,288,000 |
Real estate | Land and construction | ||
Nonperforming loans by class | ||
Nonaccrual | 1,320,000 | 1,761,000 |
Total nonperforming loans | 1,320,000 | 1,761,000 |
Aging of past due loans by class of loans | ||
Loans Not Past Due | 67,980,000 | 31,443,000 |
Total loan balance | 67,980,000 | 31,443,000 |
Real estate | Home equity | ||
Nonperforming loans by class | ||
Nonaccrual | 344,000 | 666,000 |
Total nonperforming loans | 344,000 | 666,000 |
Aging of past due loans by class of loans | ||
30-59 Days Past Due | 28,000 | |
90 Days or Greater Past Due | 290,000 | |
Total Past Due | 318,000 | |
Loans Not Past Due | 61,644,000 | 51,497,000 |
Total loan balance | 61,644,000 | 51,815,000 |
Consumer | ||
Nonperforming loans by class | ||
Nonaccrual | 6,000 | 122,000 |
Total nonperforming loans | 6,000 | 122,000 |
Aging of past due loans by class of loans | ||
90 Days or Greater Past Due | 89,000 | |
Total Past Due | 89,000 | |
Loans Not Past Due | 18,867,000 | 15,588,000 |
Total loan balance | $18,867,000 | $15,677,000 |
Loans_and_Loan_Servicing_Detai4
Loans and Loan Servicing (Details 5) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Loan portfolio by loan type and credit quality classification | ||
Balance to report | $1,070,264 | $895,749 |
Total loan balance | 1,089,229 | 915,297 |
Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 1,073,742 | 891,634 |
Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 15,487 | 23,663 |
Loan classified as loss | ||
Loan portfolio by loan type and credit quality classification | ||
Recovery value | 0 | |
Balance to report | 0 | 0 |
Commercial | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 462,403 | 393,074 |
Commercial | Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 455,767 | 380,806 |
Commercial | Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 6,636 | 12,268 |
Real estate | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 607,959 | 506,546 |
Real estate | Commercial and residential | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 478,335 | 423,288 |
Real estate | Commercial and residential | Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 472,061 | 416,992 |
Real estate | Commercial and residential | Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 6,274 | 6,296 |
Real estate | Land and construction | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 67,980 | 31,443 |
Real estate | Land and construction | Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 66,660 | 29,682 |
Real estate | Land and construction | Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 1,320 | 1,761 |
Real estate | Home equity | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 61,644 | 51,815 |
Real estate | Home equity | Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 60,736 | 48,818 |
Real estate | Home equity | Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 908 | 2,997 |
Consumer | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 18,867 | 15,677 |
Consumer | Nonclassified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | 18,518 | 15,336 |
Consumer | Classified | ||
Loan portfolio by loan type and credit quality classification | ||
Total loan balance | $349 | $341 |
Loans_and_Loan_Servicing_Detai5
Loans and Loan Servicing (Details 6) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Loans and Loan Servicing | ||
Recorded investment of troubled debt restructurings | $1,083,000 | $3,722,000 |
Troubled debt restructurings, nonaccrual loans | 916,000 | 3,230,000 |
Troubled debt restructurings, accruing loans | 167,000 | 492,000 |
Specific reserves | 113,000 | 1,186,000 |
Additional amount of loan classified as a troubled debt restructurings | $0 | $0 |
Loans_and_Loan_Servicing_Detai6
Loans and Loan Servicing (Details 7) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | item | |
Loans by class modified as troubled debt restructurings | ||
Number of defaults on troubled debt restructurings | 0 | 2 |
Pre-modification Outstanding Recorded Investment | $1,742,000 | |
Post-modification Outstanding Recorded Investment | 1,742,000 | |
Net charge-offs under troubled debt restructurings | 0 | 0 |
Increased allowance for loan losses due to troubled debt restructurings | 491,000 | |
Default period contractually past due under modified terms | 30 days | |
Number of defaults on troubled debt restructurings | 0 | 0 |
Commercial | ||
Loans by class modified as troubled debt restructurings | ||
Number of defaults on troubled debt restructurings | 1 | |
Pre-modification Outstanding Recorded Investment | 211,000 | |
Post-modification Outstanding Recorded Investment | 211,000 | |
Consumer | ||
Loans by class modified as troubled debt restructurings | ||
Number of defaults on troubled debt restructurings | 1 | |
Pre-modification Outstanding Recorded Investment | 1,531,000 | |
Post-modification Outstanding Recorded Investment | $1,531,000 |
Loans_and_Loan_Servicing_Detai7
Loans and Loan Servicing (Details 8) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Loans and Loan Servicing | ||
Serviced SBA loans sold to secondary market | $130,611,000 | $135,513,000 |
Weighted average servicing rate for loans serviced (as a percent) | 1.20% | 1.34% |
Loans_and_Loan_Servicing_Detai8
Loans and Loan Servicing (Details 9) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Loan servicing rights | |||
Activity for loan servicing rights and I/O strip receivables | |||
Balance, beginning of year | $525 | $709 | $792 |
Additions | 319 | 106 | 184 |
Amortization | -279 | -290 | -267 |
Balance, end of year | 565 | 525 | 709 |
Valuation allowance | 0 | 0 | |
I/O strip receivables | |||
Activity for loan servicing rights and I/O strip receivables | |||
Balance, beginning of year | 1,647 | 1,786 | 2,094 |
Unrealized gain (loss) | -166 | -139 | -308 |
Balance, end of year | $1,481 | $1,647 | $1,786 |
Loans_and_Loan_Servicing_Detai9
Loans and Loan Servicing (Details 10) (Loan servicing rights, USD $) | 12 Months Ended | |
Dec. 31, 2013 | Dec. 31, 2012 | |
Loan servicing rights | ||
Key economic assumptions and the sensitivity of the fair value to immediate 10% and 20% changes to the CPR assumption, and 1% and 2% changes to the discount rate assumption | ||
Carrying amount/fair value | $2,426,000 | $2,556,000 |
Prepayment speed assumption (annual rate) (as a percent) | 7.32% | 6.83% |
Residual cash flow discount rate assumption (annual) (as a percent) | 12.11% | 13.55% |
Premises_and_Equipment_Details
Premises and Equipment (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Premises and equipment | |||
Premises and equipment, gross | $18,896,000 | $17,584,000 | |
Accumulated depreciation and amortization | -11,445,000 | -10,344,000 | |
Premises and equipment, net | 7,451,000 | 7,240,000 | |
Depreciation and amortization expense | 725,000 | 729,000 | 750,000 |
Building | |||
Premises and equipment | |||
Premises and equipment, gross | 3,256,000 | 3,256,000 | |
Land | |||
Premises and equipment | |||
Premises and equipment, gross | 2,900,000 | 2,900,000 | |
Furniture and equipment | |||
Premises and equipment | |||
Premises and equipment, gross | 8,082,000 | 7,203,000 | |
Leasehold improvements | |||
Premises and equipment | |||
Premises and equipment, gross | $4,658,000 | $4,225,000 |
Leases_Details
Leases (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Leases | |||
Operating leases term, including renewal options, low end of the range | 5 years | ||
Operating leases term, including renewal options, high end of the range | 15 years | ||
Future minimum payments under non-cancelable operating leases | |||
2015 | $2,759,000 | ||
2016 | 2,733,000 | ||
2017 | 2,549,000 | ||
2017 | 2,034,000 | ||
2018 | 1,856,000 | ||
Thereafter | 1,127,000 | ||
Total | 13,058,000 | ||
Rent expense under operating leases | |||
Rent expense | $2,692,000 | $2,719,000 | $2,735,000 |
Acquisition_of_Bay_View_Fundin2
Acquisition of Bay View Funding (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 2 Months Ended | ||||||||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 01, 2014 | Oct. 08, 2014 | Dec. 31, 2014 | |
Business Acquisition | ||||||||||||||
Net interest income | $16,198,000 | $14,016,000 | $13,883,000 | $13,344,000 | $13,061,000 | $13,365,000 | $12,423,000 | $12,153,000 | $57,441,000 | $51,002,000 | $45,594,000 | |||
Noninterest income | 1,812,000 | 1,870,000 | 2,047,000 | 2,017,000 | 1,898,000 | 1,738,000 | 1,915,000 | 1,663,000 | 7,746,000 | 7,214,000 | 8,865,000 | |||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||
Net loans | 42,300,000 | 42,300,000 | 42,300,000 | |||||||||||
Goodwill | 13,044,000 | 13,044,000 | 13,044,000 | |||||||||||
Premises and equipment | 119,000 | 119,000 | 119,000 | |||||||||||
Other assets, net | 738,000 | 738,000 | 738,000 | |||||||||||
Borrowings | -31,647,000 | -31,647,000 | -31,647,000 | |||||||||||
Other liabilities | -4,895,000 | -4,895,000 | -4,895,000 | |||||||||||
BVF | ||||||||||||||
Business Acquisition | ||||||||||||||
Aggregate purchase price | 22,520,000 | |||||||||||||
Payment delivered | 20,268,000 | |||||||||||||
Amount deposited into an escrow account | 2,252,000 | |||||||||||||
Percentage of total purchase price deposited into an escrow account | 10.00% | |||||||||||||
Period for release of escrow account from the closing date | 18 months | |||||||||||||
Net interest income | 1,958,000 | |||||||||||||
Noninterest income | 84,000 | |||||||||||||
Net income | 558,000 | |||||||||||||
Pre-tax acquisition costs | 895,000 | |||||||||||||
Expected duration of portfolio | 60 days | |||||||||||||
Average life of factored receivables | 31 days | |||||||||||||
Not expected to be collected on receivables | 42,413,000 | |||||||||||||
Not expected to be collected on receivables | 113,000 | |||||||||||||
Not expected to be collected on receivables (as a percent) | 0.30% | |||||||||||||
Estimated fair values of the assets acquired and liabilities assumed | ||||||||||||||
Cash and cash equivalents | 602,000 | |||||||||||||
Net loans | 42,300,000 | |||||||||||||
Goodwill | 13,044,000 | 13,044,000 | 13,044,000 | 13,044,000 | ||||||||||
Customer relationship and brokered relationship intangible assets | 2,259,000 | |||||||||||||
Premises and equipment | 119,000 | |||||||||||||
Other assets, net | 738,000 | |||||||||||||
Total assets acquired | 59,062,000 | |||||||||||||
Borrowings | -31,647,000 | |||||||||||||
Other liabilities | -4,895,000 | |||||||||||||
Total liabilities | -36,542,000 | |||||||||||||
Net assets acquired | $22,520,000 |
Acquisition_of_Bay_View_Fundin3
Acquisition of Bay View Funding (Details 2) (BVF, USD $) | 12 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
BVF | ||
Pro forma information | ||
Net interest income | $66,105 | $59,998 |
Noninterest income | 8,293 | 8,080 |
Total revenue | 74,398 | 68,078 |
Net income | $15,141 | $13,397 |
Net income per share - basic (in dollars per share) | $0.47 | $0.42 |
Net income per share - diluted (in dollars per share) | $0.47 | $0.42 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | Dec. 31, 2014 | Nov. 01, 2014 |
In Thousands, unless otherwise specified | ||
Goodwill | ||
Goodwill | $13,044 | |
BVF | ||
Goodwill | ||
Goodwill | $13,044 | $13,044 |
Goodwill_and_Other_Intangible_3
Goodwill and Other Intangible Assets (Details 2) (USD $) | 1 Months Ended | |||
Jun. 30, 2007 | Nov. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Diablo Valley Bank | ||||
Other Intangible Assets | ||||
Accumulated amortization | $4,257,000 | $3,798,000 | ||
Diablo Valley Bank | Core deposit | ||||
Other Intangible Assets | ||||
Intangible assets acquired | 5,049,000 | |||
Amortization period | 10 years | |||
Diablo Valley Bank | Customer relationship | ||||
Other Intangible Assets | ||||
Intangible assets acquired | 276,000 | |||
Amortization period | 7 years | |||
BVF | ||||
Other Intangible Assets | ||||
Accumulated amortization | 51,000 | |||
BVF | Below market-value lease | ||||
Other Intangible Assets | ||||
Intangible assets acquired | 109,000 | |||
Amortization period | 3 years | |||
BVF | Customer relationship and brokered relationship | ||||
Other Intangible Assets | ||||
Intangible assets acquired | 1,900,000 | |||
Useful life, amortization period | 10 years | |||
BVF | Non-compete agreements | ||||
Other Intangible Assets | ||||
Intangible assets acquired | $250,000 | |||
Amortization period | 3 years |
Goodwill_and_Other_Intangible_4
Goodwill and Other Intangible Assets (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Estimated amortization expense | ||
2015 | $755,000 | |
2016 | 736,000 | |
2017 | 486,000 | |
2018 | 190,000 | |
2019 | 190,000 | |
Impairment of intangible assets | ||
Impairment of intangible assets | 0 | 0 |
Diablo Valley Bank | ||
Estimated amortization expense | ||
2015 | 446,000 | |
2016 | 427,000 | |
2017 | 195,000 | |
2018 | 0 | |
2019 | 0 | |
BVF | ||
Estimated amortization expense | ||
2015 | 309,000 | |
2016 | 309,000 | |
2017 | 291,000 | |
2018 | 190,000 | |
2019 | $190,000 |
Deposits_Details
Deposits (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Deposits | ||
Time deposits, including deposits within the CDARS and brokered deposits, $250,000 or more | $193,228,000 | $213,769,000 |
Money market deposits from law firm for legal settlements | 27,463,000 | |
Scheduled maturities of time deposits including brokered deposits for the next five years | ||
2015 | 230,675,000 | |
2016 | 23,791,000 | |
2017 | 728,000 | |
2018 | 29,000 | |
2019 | 1,000,000 | |
Total | 256,223,000 | |
Additional information | ||
Fair value of securities pledged | 109,764,000 | 107,965,000 |
Certificate of deposits from State of California | 98,019,000 | 98,022,000 |
Money market accounts under CDARS program | 4,036,000 | 34,789,000 |
Time deposits under CDARS program | 7,212,000 | 5,669,000 |
CDARS - money market and time deposits | 11,248,000 | 40,458,000 |
Deposits from executive officers, directors, and their affiliates | $2,593,000 | $3,122,000 |
Borrowing_Arrangements_Details
Borrowing Arrangements (Details) (USD $) | 0 Months Ended | ||||
Nov. 05, 2014 | Dec. 17, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Nov. 01, 2014 | |
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
FHLB overnight borrowings | $0 | $0 | |||
Securities pledged as collateral | 109,764,000 | 107,965,000 | |||
Federal funds purchased | 0 | 0 | |||
FRB | |||||
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
Loans pledged as collateral | 387,972,000 | 323,209,000 | |||
Available borrowing capacity | 260,439,000 | 241,515,000 | |||
Amount outstanding | 0 | 0 | |||
Line of credit | |||||
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
Available borrowing capacity | 55,000,000 | ||||
FHLB | |||||
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
Loans pledged as collateral | 246,635,000 | 253,472,000 | |||
Securities pledged as collateral | 0 | 0 | |||
Maximum borrowing capacity | 139,990,000 | 125,330,000 | |||
BVF | Line of credit | |||||
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
Amount outstanding | 1,000,000 | ||||
Repayment of borrowings | 1,000,000 | ||||
BVF | Revolving bank line of credit | |||||
Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit | |||||
Maximum borrowing capacity | 32,500,000 | ||||
Repayment of borrowings | 14,002,000 | ||||
Prepayment premium paid | $325,000 |
Borrowing_Arrangements_Details1
Borrowing Arrangements (Details 3) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Sep. 30, 2012 | Sep. 30, 2013 | |
Subordinated debentures | |||
Subordinated Debt | |||
Period of interest payment deferment | 5 years | ||
Subordinated debentures | 10.875% fixed-rate subordinated debentures | Heritage Capital Trust I | |||
Subordinated Debt | |||
Interest rate (as a percent) | 10.88% | ||
Floating rate subordinated debt, redemption amount | $7,000,000 | ||
Subordinated debentures | 10.600% fixed-rate subordinated debentures | Heritage Statutory Trust I | |||
Subordinated Debt | |||
Interest rate (as a percent) | 10.60% | ||
Floating rate subordinated debt, redemption amount | 7,000,000 | ||
Junior subordinated debentures | Floating Rate Junior Subordinated Debentures due July 31, 2031 | Heritage Statutory Trust II | |||
Subordinated Debt | |||
Floating rate subordinated debt, redemption amount | 5,000,000 | ||
Junior subordinated debentures | Floating Rate Junior Subordinated Debentures due September 26, 2032 | Heritage Statutory Trust III | |||
Subordinated Debt | |||
Floating rate subordinated debt, redemption amount | $4,000,000 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Currently payable tax: | |||||||||||
Federal | $4,392 | $5,015 | $4,139 | ||||||||
State | 818 | 63 | 51 | ||||||||
Total currently payable | 5,210 | 5,078 | 4,190 | ||||||||
Deferred tax (benefit): | |||||||||||
Federal | 1,114 | -130 | 292 | ||||||||
State | 1,214 | 1,258 | 1,007 | ||||||||
Total deferred tax (benefit) | 2,328 | 1,128 | 1,299 | ||||||||
Income tax (benefit) | $1,993 | $1,969 | $1,837 | $1,739 | $1,754 | $1,830 | $1,456 | $1,166 | $7,538 | $6,206 | $5,489 |
Effective tax rate differs from the federal statutory rate | |||||||||||
Statutory Federal income tax rate (as a percent) | 35.00% | 35.00% | 35.00% | ||||||||
State income taxes, net of federal tax benefit (as a percent) | 6.50% | 5.30% | 4.70% | ||||||||
Low income housing credits, net of investment losses (as a percent) | 0.80% | 0.60% | -0.60% | ||||||||
Increase in cash surrender value of life insurance (as a percent) | -2.70% | -3.50% | -4.20% | ||||||||
Non-taxable interest income (as a percent) | -3.20% | -2.90% | -0.30% | ||||||||
Split dollar term insurance (as a percent) | 0.10% | 0.20% | 0.00% | ||||||||
Other, net (as a percent) | -0.50% | 0.30% | 1.00% | ||||||||
Effective tax rate (as a percent) | 36.00% | 35.00% | 35.60% |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Deferred tax assets: | ||
Defined postretirement benefit obligation | $10,327 | $8,707 |
Allowance for loan losses | 7,728 | 8,058 |
Tax credit carryforwards | 2,441 | 3,958 |
Stock compensation | 1,693 | 1,697 |
California net operating loss carryforwards | 1,138 | |
Accrued expenses | 1,446 | 1,029 |
Securities available-for-sale | 668 | |
Fixed assets | 702 | 613 |
Loans | 2 | |
Nonaccrual interest | 25 | 134 |
Split-dollar life insurance benefit plan | 112 | 108 |
State income taxes | 213 | |
Other | 359 | 451 |
Total deferred tax assets | 25,048 | 26,561 |
Deferred tax liabilities: | ||
Securities available-for-sale | -2,351 | |
FHLB stock | -245 | -263 |
Prepaid expenses | -464 | -481 |
Intangible assets | -1,334 | -642 |
I/O strips | -621 | -691 |
Loan fees | -1,131 | -1,025 |
Other | -375 | -133 |
Total deferred tax liabilities | -6,521 | -3,235 |
Net deferred tax assets | $18,527 | $23,326 |
Income_Taxes_Details_3
Income Taxes (Details 3) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Tax credit carryforwards | |
Total tax credit carryforwards | $2,441 |
Low income housing credits | |
Tax credit carryforwards | |
Total tax credit carryforwards | 1,388 |
Alternative Minimum Tax credits | |
Tax credit carryforwards | |
Total tax credit carryforwards | 870 |
State tax credits, net of federal tax effects | |
Tax credit carryforwards | |
Total tax credit carryforwards | 181 |
New Hire Retention Credit | |
Tax credit carryforwards | |
Total tax credit carryforwards | $2 |
Income_Taxes_Details_4
Income Taxes (Details 4) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Operating loss carryforward | |
Reserve for income taxes for uncertain tax positions | $250,000 |
State | California | |
Operating loss carryforward | |
Carryback percentage on state net operating losses | 75.00% |
Income_Taxes_Details_5
Income Taxes (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Net deferred tax assets | |||||||
Net deferred tax assets | $18,527,000 | $18,527,000 | $23,326,000 | ||||
Noninterest expense as originally reported | 12,415,000 | 10,139,000 | 10,934,000 | 10,734,000 | 44,222,000 | 41,722,000 | 40,256,000 |
Low income housing investment losses reclassified to income tax expense | 353,000 | -165,000 | -188,000 | -1,252,000 | -1,195,000 | ||
Noninterest expense under the proportional method | 12,415,000 | 10,492,000 | 10,769,000 | 10,546,000 | 44,222,000 | 40,470,000 | 39,061,000 |
Income tax expense as originally reported | 1,993,000 | 2,322,000 | 1,672,000 | 1,551,000 | 7,538,000 | 4,954,000 | 4,294,000 |
Low income housing investment losses reclassified from noninterest expense | -353,000 | 165,000 | 188,000 | 1,252,000 | 1,195,000 | ||
Income tax expense under the proportional method | 1,993,000 | 1,969,000 | 1,837,000 | 1,739,000 | 7,538,000 | 6,206,000 | 5,489,000 |
Effective tax rate as originally reported | 35.60% | 40.40% | 33.50% | 33.50% | 36.00% | 30.00% | 30.20% |
Effective under the proportional method | 35.60% | 36.50% | 35.60% | 36.10% | 36.00% | 35.00% | 35.60% |
Net deferred tax assets carrying amount | |||||||
Low income housing investments | 5,268,000 | 1,227,000 | |||||
Future commitments | 1,827,000 | 59,000 | |||||
Future commitments | |||||||
2015 | 1,193,000 | ||||||
2016 | 550,000 | ||||||
2017 through 2023 | 84,000 | ||||||
Components of low income housing investment | |||||||
Low income housing tax credits | 581,000 | 731,000 | |||||
Low income housing investment losses | 338,000 | 263,000 | |||||
Low income housing investment expense | $174,000 |
Equity_Plan_Details
Equity Plan (Details) | 12 Months Ended |
Dec. 31, 2014 | |
2013 Plan | |
Equity plan | |
Number of shares available for future grants | 1,273,816 |
Options | |
Equity plan | |
Vesting period | 4 years |
Options | Maximum | |
Equity plan | |
Expiration term | 10 years |
Restricted stock | |
Equity plan | |
Number of equity awards issued (in shares) | 90,000 |
Nonqualified stock options | |
Equity plan | |
Number of equity awards issued (in shares) | 385,050 |
Equity_Plan_Details_2
Equity Plan (Details 2) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Options | |||
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 1,506,504 | ||
Granted (in shares) | 385,050 | ||
Exercised (in shares) | -62,567 | ||
Forfeited or expired (in shares) | -102,881 | ||
Outstanding at the end of the period (in shares) | 1,726,106 | 1,506,504 | |
Vested or expected to vest (in shares) | 1,639,801 | ||
Exercisable at the end of the period (in shares) | 1,176,652 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $11.80 | ||
Granted (in dollars per share) | $8.15 | ||
Exercised (in dollars per share) | $4.19 | ||
Forfeited or expired (in dollars per share) | $12.41 | ||
Outstanding at the end of the period (in dollars per share) | $11.23 | $11.80 | |
Weighted Average Remaining Contractual Life | |||
Outstanding at the end of the period | 5 years 10 months 24 days | ||
Vested or expected to vest | 5 years 10 months 24 days | ||
Exercisable at the end of the period | 4 years 6 months | ||
Aggregate Intrinsic Value | |||
Outstanding at the end of the period (in dollars) | $2,478,300 | ||
Vested or expected to vest (in dollars) | 2,354,385 | ||
Exercisable at the end of the period (in dollars) | 1,703,800 | ||
Information related to the equity plan | |||
Intrinsic value of options exercised | 258,467 | 51,000 | 10,000 |
Cash received from option exercise | 262,035 | 88,000 | 25,000 |
Tax benefit realized from option exercises | 102,710 | 17,245 | 3,000 |
Weighted average fair value of options granted (in dollars per share) | $3.90 | $3.84 | $3.67 |
Unrecognized compensation cost information | |||
Total unrecognized compensation cost related to nonvested stock options granted (in dollars) | 2,092,000 | ||
Expected weighted-average period for recognition of compensation costs related to nonvested stock options | 2 years 8 months 16 days | ||
Assumptions used to estimate the fair value of each option grant on the date of grant | |||
Expected life in months | 84 months | 96 months | 84 months |
Volatility (as a percent) | 57.00% | 54.00% | 57.00% |
Weighted average risk-free interest rate (as a percent) | 2.09% | 1.49% | 1.31% |
Expected dividends (as a percent) | 2.06% | 0.12% | 0.00% |
Restricted stock | |||
Unrecognized compensation cost information | |||
Total unrecognized compensation cost related to nonvested stock options granted (in dollars) | $714,000 | ||
Expected weighted-average period for recognition of compensation costs related to nonvested stock options | 3 years 9 months | ||
Number of Shares | |||
Nonvested shares at the beginning of the period (in shares) | 58,000 | ||
Granted (in shares) | 90,000 | ||
Vested (in shares) | -48,000 | ||
Nonvested shares at the end of the period (in shares) | 100,000 | ||
Weighted Average Grant Date Fair Value | |||
Nonvested shares at the beginning of the period (in dollars per share) | $6.28 | ||
Granted (in dollars per share) | $8.44 | ||
Vested (in dollars per share) | $6.23 | ||
Nonvested shares at the end of the period (in dollars per share) | $8.25 |
Benefit_Plans_Details
Benefit Plans (Details) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
item | |||
401 (k) Savings Plan | |||
Maximum discretionary contribution matched by employer for each employee's contribution | $1,000 | $1,000 | $1,000 |
Contribution expense | 206,000 | 196,000 | 187,000 |
Employee Stock Ownership Plan | |||
Minimum number of hours of service required for plan eligibility | 1,000 | ||
Number of shares of Company's common stock owned by ESOP | 125,713 | ||
Deferred Compensation Plan | |||
Maximum percentage of board fees deferred by participating director into deferred account | 100.00% | ||
Maximum term of distribution schedule elected by director | 10 years | ||
Deferred compensation obligation | $50,000 | $173,000 | |
Number of former directors for whom life insurance policies purchased | 2 | ||
Term for commencement of disbursement of deferred fees after death of director | 1 month |
Benefit_Plans_Details_2
Benefit Plans (Details 2) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
item | ||
Supplemental Retirement Plan | ||
Benefit plans | ||
Plan assets associated with the plan | $0 | |
Combined number of active and retired/terminated participants in the defined benefit plan | 53 | |
Vesting period of defined benefit stated amount, minimum | 9 years | |
Change in projected benefit obligation | ||
Projected benefit obligation at beginning of year | 20,712,000 | 21,305,000 |
Service cost | 714,000 | 1,214,000 |
Actuarial loss (gain) | 3,059,000 | -1,746,000 |
Interest cost | 911,000 | 783,000 |
Benefits paid | -826,000 | -844,000 |
Projected benefit obligation at end of period | 24,570,000 | 20,712,000 |
Amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 6,730,000 | 3,813,000 |
Weighted-average assumptions used to determine the benefit obligation at year-end: | ||
Discount rate (as a percent) | 3.65% | 4.50% |
Estimated benefit payments | ||
2015 | 866,000 | |
2016 | 1,248,000 | |
2017 | 1,422,000 | |
2018 | 1,525,000 | |
2019 | 1,549,000 | |
2020 to 2023 | 8,814,000 | |
Components of net periodic benefit cost: | ||
Service cost | 714,000 | 1,214,000 |
Interest cost | 911,000 | 783,000 |
Amortization of net actuarial loss | 142,000 | 291,000 |
Net periodic benefit cost | 1,767,000 | 2,288,000 |
Estimated net actuarial loss and prior service that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | ||
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | 386,000 | 142,000 |
Weighted-average assumption used to determine the net periodic benefit cost: | ||
Discount rate (as a percent) | 4.50% | 3.75% |
Split-Dollar Life Insurance Benefit Plan | ||
Change in projected benefit obligation | ||
Projected benefit obligation at beginning of year | 4,353,000 | 4,717,000 |
Actuarial loss (gain) | 92,000 | -541,000 |
Interest cost | 196,000 | 177,000 |
Projected benefit obligation at end of period | 4,641,000 | 4,353,000 |
Amounts recognized in accumulated other comprehensive loss | ||
Net actuarial loss | 540,000 | 256,000 |
Prior transition obligation | 1,507,000 | 1,597,000 |
Accumulated other comprehensive loss | 2,047,000 | 1,853,000 |
Weighted-average assumptions used to determine the benefit obligation at year-end: | ||
Discount rate (as a percent) | 3.65% | 4.50% |
Components of net periodic benefit cost: | ||
Amortization of prior transition obligation | -102,000 | -84,000 |
Interest cost | 196,000 | 177,000 |
Net periodic benefit cost | 94,000 | 93,000 |
Estimated net actuarial loss and prior service that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | ||
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | $90,000 | $90,000 |
Weighted-average assumption used to determine the net periodic benefit cost: | ||
Discount rate (as a percent) | 4.50% | 3.75% |
Fair_Value_Details
Fair Value (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | $206,335,000 | $280,100,000 |
Foreclosed assets: | 696,000 | 575,000 |
Agency mortgage-backed securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 154,172,000 | 207,644,000 |
Corporate bonds | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 36,863,000 | 52,046,000 |
Trust preferred securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 15,300,000 | 20,410,000 |
Carried at fair value, net | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 206,335,000 | 280,100,000 |
Carried at fair value, net | Significant Other Observable Inputs (Level 2) | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 206,335,000 | 280,100,000 |
Recurring basis | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Transfers between Level 1 and Level 2 | 0 | 0 |
Transfers between Level 2 and Level 1 | 0 | 0 |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
I/O strip receivables | 1,481,000 | 1,647,000 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Agency mortgage-backed securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 154,172,000 | 207,644,000 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 36,863,000 | 52,046,000 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Trust preferred securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 15,300,000 | 20,410,000 |
Recurring basis | Carried at fair value, net | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
I/O strip receivables | 1,481,000 | 1,647,000 |
Recurring basis | Carried at fair value, net | Agency mortgage-backed securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 154,172,000 | 207,644,000 |
Recurring basis | Carried at fair value, net | Corporate bonds | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 36,863,000 | 52,046,000 |
Recurring basis | Carried at fair value, net | Trust preferred securities | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Available-for-sale securities | 15,300,000 | 20,410,000 |
Non-recurring basis | Level 3 | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 2,622,000 | 6,016,000 |
Foreclosed assets: | 31,000 | 575,000 |
Non-recurring basis | Level 3 | Land and construction | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Foreclosed assets: | 575,000 | |
Non-recurring basis | Level 3 | Commercial | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 859,000 | 1,780,000 |
Foreclosed assets: | 31,000 | |
Non-recurring basis | Level 3 | Real estate | Commercial and residential | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 587,000 | 2,846,000 |
Non-recurring basis | Level 3 | Real estate | Land and construction | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 1,176,000 | 1,290,000 |
Non-recurring basis | Level 3 | Consumer | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 100,000 | |
Non-recurring basis | Carried at fair value, net | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 2,622,000 | 6,016,000 |
Foreclosed assets: | 31,000 | 575,000 |
Non-recurring basis | Carried at fair value, net | Land and construction | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Foreclosed assets: | 575,000 | |
Non-recurring basis | Carried at fair value, net | Commercial | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 859,000 | 1,780,000 |
Foreclosed assets: | 31,000 | |
Non-recurring basis | Carried at fair value, net | Real estate | Commercial and residential | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 587,000 | 2,846,000 |
Non-recurring basis | Carried at fair value, net | Real estate | Land and construction | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | 1,176,000 | 1,290,000 |
Non-recurring basis | Carried at fair value, net | Consumer | ||
Financial assets and liabilities measured on a recurring and non-recurring basis | ||
Impaired loans - held-for-investment: | $100,000 |
Fair_Value_Details_2
Fair Value (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Impaired loans held-for-investment | ||
Impaired loans held-for-investment | $6,022 | $11,818 |
Specific valuation allowance | -404 | -2,456 |
Carried at fair value | ||
Impaired loans held-for-investment | ||
Impaired loans held-for-investment | 3,026 | 8,472 |
Carried at cost | ||
Impaired loans held-for-investment | ||
Impaired loans held-for-investment | 2,996 | 3,346 |
Carried at fair value, net | ||
Impaired loans held-for-investment | ||
Impaired loans held-for-investment carried at fair value, net | $2,622 | $6,016 |
Fair_Value_Details_3
Fair Value (Details 3) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Impaired loans held-for-investment carried at fair value | ||
Partial charge-offs | $107,000 | $318,000 |
Additional provision for loan losses | 100,000 | 508,000 |
Net carrying amount of foreclosed assets | 696,000 | 575,000 |
Valuation allowance on foreclosed assets | $0 | $0 |
Fair_Value_Details_4
Fair Value (Details 4) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Foreclosed assets, Fair Value | 696,000 | 575,000 |
Non-recurring basis | Level 3 | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 2,622,000 | 6,016,000 |
Foreclosed assets, Fair Value | 31,000 | 575,000 |
Non-recurring basis | Level 3 | Land and construction | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Foreclosed assets, Fair Value | 575,000 | |
Non-recurring basis | Level 3 | Foreclosed assets - land and construction | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | |
Non-recurring basis | Level 3 | Foreclosed assets - land and construction | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 16.00% | |
Non-recurring basis | Level 3 | Foreclosed assets - land and construction | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 7.00% | |
Non-recurring basis | Level 3 | Commercial | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 859,000 | 1,780,000 |
Foreclosed assets, Fair Value | 31,000 | |
Non-recurring basis | Level 3 | Commercial | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 2.00% | |
Non-recurring basis | Level 3 | Commercial | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 3.00% |
Non-recurring basis | Level 3 | Commercial | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 2.00% |
Non-recurring basis | Level 3 | Commercial | Foreclosed assets - commercial | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Foreclosed assets, Fair Value | 31,000 | |
Non-recurring basis | Level 3 | Commercial | Foreclosed assets - commercial | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | |
Non-recurring basis | Level 3 | Real estate | Commercial and residential | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 587,000 | 2,846,000 |
Non-recurring basis | Level 3 | Real estate | Commercial and residential | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | |
Non-recurring basis | Level 3 | Real estate | Commercial and residential | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 15.00% |
Non-recurring basis | Level 3 | Real estate | Commercial and residential | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 2.00% |
Non-recurring basis | Level 3 | Real estate | Land and construction | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 1,176,000 | 1,290,000 |
Non-recurring basis | Level 3 | Real estate | Land and construction | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | 1.00% |
Non-recurring basis | Level 3 | Real estate | Land and construction | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 2.00% | 2.00% |
Non-recurring basis | Level 3 | Real estate | Land and construction | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 2.00% | 2.00% |
Non-recurring basis | Carried at fair value, net | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 2,622,000 | 6,016,000 |
Foreclosed assets, Fair Value | 31,000 | 575,000 |
Non-recurring basis | Carried at fair value, net | Land and construction | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Foreclosed assets, Fair Value | 575,000 | |
Non-recurring basis | Carried at fair value, net | Commercial | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 859,000 | 1,780,000 |
Foreclosed assets, Fair Value | 31,000 | |
Non-recurring basis | Carried at fair value, net | Real estate | Commercial and residential | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 587,000 | 2,846,000 |
Non-recurring basis | Carried at fair value, net | Real estate | Land and construction | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 1,176,000 | 1,290,000 |
Fair_Value_Details_5
Fair Value (Details 5) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Assets | ||
Securities available-for-sale | $206,335 | $280,100 |
Securities held-to-maturity | 94,953 | 86,032 |
Liabilities | ||
Time deposits | 256,223 | |
Carrying Amounts | ||
Assets | ||
Cash and cash equivalents | 122,403 | 112,605 |
Securities available-for-sale | 206,335 | 280,100 |
Securities held-to-maturity | 95,362 | 95,921 |
Loans (including loans held-for-sale), net | 1,071,436 | 898,897 |
FHLB and FRB stock | 10,598 | 10,435 |
Accrued interest receivable | 5,044 | 4,085 |
Loan servicing rights and I/O strips receivables | 2,046 | 2,172 |
Liabilities | ||
Time deposits | 256,223 | 277,844 |
Other deposits | 1,132,163 | 1,008,377 |
Accrued interest payable | 201 | 192 |
Carried at fair value, net | ||
Assets | ||
Cash and cash equivalents | 122,403 | 112,605 |
Securities available-for-sale | 206,335 | 280,100 |
Securities held-to-maturity | 94,953 | 86,032 |
Loans (including loans held-for-sale), net | 1,073,026 | 893,516 |
Accrued interest receivable | 5,044 | 4,085 |
Loan servicing rights and I/O strips receivables | 3,906 | 4,203 |
Liabilities | ||
Time deposits | 256,589 | 278,239 |
Other deposits | 1,132,163 | 1,008,377 |
Accrued interest payable | 201 | 192 |
Carried at fair value, net | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 122,403 | 112,605 |
Carried at fair value, net | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Securities available-for-sale | 206,335 | 280,100 |
Securities held-to-maturity | 94,953 | 86,032 |
Loans (including loans held-for-sale), net | 1,172 | 3,148 |
Accrued interest receivable | 1,435 | 1,729 |
Loan servicing rights and I/O strips receivables | 3,906 | 4,203 |
Liabilities | ||
Time deposits | 256,589 | 278,239 |
Other deposits | 1,132,163 | 1,008,377 |
Accrued interest payable | 201 | 192 |
Carried at fair value, net | Level 3 | ||
Assets | ||
Loans (including loans held-for-sale), net | 1,071,854 | 890,368 |
Accrued interest receivable | $3,609 | $2,356 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Commitments and contingencies | ||
Expiration term of commitments | 1 year | |
Reserves in the form of vault cash and balances at Federal Reserve Bank of San Francisco | $11,379,000 | |
Fixed Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | 11,399,000 | 6,136,000 |
Variable Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | 427,929,000 | 371,054,000 |
Unused lines of credit and commitments to make loans | Fixed Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | 8,164,000 | 6,136,000 |
Unused lines of credit and commitments to make loans | Variable Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | 415,146,000 | 359,955,000 |
Standby letters of credit | Fixed Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | 3,235,000 | |
Standby letters of credit | Variable Rate | ||
Commitments and contingencies | ||
Total commitments to extend credit | $12,783,000 | $11,099,000 |
Shareholders_Equity_and_Earnin2
Shareholders' Equity and Earnings Per Share (Details) (USD $) | 3 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Jun. 30, 2013 | Dec. 31, 2013 | Nov. 21, 2008 | Jun. 21, 2010 | Dec. 31, 2014 | Jan. 26, 2015 | |
Shareholders' equity | ||||||
Payments for repurchase of warrant | $140,000 | $140,000 | ||||
Subsequent event | ||||||
Shareholders' equity | ||||||
Dividends per share of common stock and Series C preferred stock (on an as converted basis) | $0.08 | |||||
Series A Preferred Stock | ||||||
Shareholders' equity | ||||||
Preferred stock, shares issued | 40,000 | |||||
Value of stock issued | 40,000,000 | |||||
Liquidation preference (in dollars per share) | $1,000 | |||||
Exercise price of warrant (in dollars per share) | $12.96 | |||||
Allocated fair value of warrant | 1,979,000 | |||||
Payments for repurchase of warrant | $140,000 | |||||
Series C convertible perpetual preferred stock | ||||||
Shareholders' equity | ||||||
Preferred stock, shares issued | 21,004 | |||||
Preferred stock outstanding (in shares) | 21,004 | 21,004 | ||||
Conversion price (in dollars per share) | $3.75 | |||||
Number of common stock into which preferred stock are convertible (in shares) | 5,601,000 | |||||
Liquidation preference (in dollars per share) | $1,000 |
Shareholders_Equity_and_Earnin3
Shareholders' Equity and Earnings Per Share (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Reconciliation of factors used in computing basic and diluted earnings (loss) per common share | |||||||||||
Net income available to common shareholders | $3,322 | $3,145 | $3,100 | $2,852 | $3,186 | $3,045 | $2,793 | $2,180 | $12,419 | $11,204 | $8,703 |
Less: undistributed earnings allocated to Series C Preferred Stock | 349 | 320 | 358 | 315 | 421 | 395 | 489 | 382 | 1,342 | 1,687 | 1,527 |
Distributed and undistributed earnings allocated to common shareholders | $2,973 | $2,825 | $2,742 | $2,537 | $2,765 | $2,650 | $2,304 | $1,798 | $11,077 | $9,517 | $7,176 |
Weighted average common shares outstanding for basic earnings per common share | 26,390,615 | 26,338,161 | 26,303,245 | ||||||||
Dilutive effect of stock options outstanding, using the treasury stock method (in shares) | 135,666 | 48,291 | 26,091 | ||||||||
Shares used in computing diluted earnings per common share | 26,526,282 | 26,386,452 | 26,329,336 | ||||||||
Net income per share - basic | $0.11 | $0.11 | $0.10 | $0.10 | $0.10 | $0.10 | $0.09 | $0.07 | $0.42 | $0.36 | $0.27 |
Net income per share - diluted | $0.11 | $0.11 | $0.10 | $0.10 | $0.10 | $0.10 | $0.09 | $0.07 | $0.42 | $0.36 | $0.27 |
Capital_Requirements_Details
Capital Requirements (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Total Capital (to risk-weighted assets) | ||
Actual, Amount | $186,068 | $179,916 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 134,109 | 117,581 |
Required For Capital Adequacy Purposes, Amount | 107,287 | 94,065 |
Actual, Ratio (as a percent) | 13.90% | 15.30% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 10.00% | 10.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.00% | 8.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | 169,278 | 165,162 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 80,465 | 70,549 |
Required For Capital Adequacy Purposes, Amount | 53,644 | 47,032 |
Actual, Ratio (as a percent) | 12.60% | 14.00% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 6.00% | 6.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | 169,278 | 165,162 |
Required For Capital Adequacy Purposes, Amount | 63,949 | 59,083 |
Actual, Ratio (as a percent) | 10.60% | 11.20% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
HBC | ||
Total Capital (to risk-weighted assets) | ||
Actual, Amount | 175,765 | 163,827 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 134,095 | 117,872 |
Required For Capital Adequacy Purposes, Amount | 107,276 | 94,297 |
Actual, Ratio (as a percent) | 13.10% | 13.90% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 10.00% | 10.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.00% | 8.00% |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | 158,976 | 149,037 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 80,457 | 70,723 |
Required For Capital Adequacy Purposes, Amount | 53,638 | 47,148 |
Actual, Ratio (as a percent) | 11.90% | 12.60% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 6.00% | 6.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | 158,976 | 149,037 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 79,959 | 73,858 |
Required For Capital Adequacy Purposes, Amount | $63,967 | $59,086 |
Actual, Ratio (as a percent) | 9.90% | 10.10% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 5.00% | 5.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Parent_Company_only_Condensed_2
Parent Company only Condensed Financial Information (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
In Thousands, unless otherwise specified | ||||
Assets | ||||
Cash and cash equivalents | $122,403 | $112,605 | $373,565 | $72,872 |
Total assets | 1,617,103 | 1,491,632 | ||
Liabilities and Shareholders' Equity | ||||
Shareholder's equity | 184,358 | 173,396 | 169,741 | 197,831 |
Total liabilities and shareholders' equity | 1,617,103 | 1,491,632 | ||
Parent Company | ||||
Assets | ||||
Cash and cash equivalents | 10,159 | 19,009 | 11,193 | 24,347 |
Investment in subsidiary bank | 173,453 | 155,958 | ||
Other assets | 953 | |||
Total assets | 184,565 | 174,967 | ||
Liabilities and Shareholders' Equity | ||||
Other liabilities | 207 | 1,571 | ||
Shareholder's equity | 184,358 | 173,396 | ||
Total liabilities and shareholders' equity | $184,565 | $174,967 |
Parent_Company_only_Condensed_3
Parent Company only Condensed Financial Information (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Condensed statements of income | |||||||||||
Interest expense | ($625) | ($500) | ($507) | ($521) | ($574) | ($627) | ($685) | ($714) | ($2,153) | ($2,600) | ($4,187) |
Income before income taxes | 5,595 | 5,394 | 5,161 | 4,815 | 5,108 | 5,043 | 4,249 | 3,346 | 20,965 | 17,746 | 15,398 |
Equity in net income of subsidiary bank: | |||||||||||
Income tax benefit | -1,993 | -1,969 | -1,837 | -1,739 | -1,754 | -1,830 | -1,456 | -1,166 | -7,538 | -6,206 | -5,489 |
Net income | 3,602 | 3,425 | 3,324 | 3,076 | 3,354 | 3,213 | 2,793 | 2,180 | 13,427 | 11,540 | 9,909 |
Dividends and discount accretion on preferred stock | -280 | -280 | -224 | -224 | -168 | -168 | -1,008 | -336 | -1,206 | ||
Net income available to common shareholders | 3,322 | 3,145 | 3,100 | 2,852 | 3,186 | 3,045 | 2,793 | 2,180 | 12,419 | 11,204 | 8,703 |
Parent Company | |||||||||||
Condensed statements of income | |||||||||||
Interest income | 1 | ||||||||||
Dividend from subsidiary bank | 16,000 | 45,000 | |||||||||
Interest expense | -229 | -1,383 | |||||||||
Other expenses | -2,033 | -2,080 | -2,615 | ||||||||
Income before income taxes | -2,033 | 13,691 | 41,003 | ||||||||
Equity in net income of subsidiary bank: | |||||||||||
Reduction in contributed capital and distribution from subsidiary bank | -16,000 | -45,000 | |||||||||
Net income of subsidiary bank | 14,614 | 13,155 | 12,710 | ||||||||
Income tax benefit | 846 | 694 | 1,196 | ||||||||
Net income | 13,427 | 11,540 | 9,909 | ||||||||
Dividends and discount accretion on preferred stock | -1,008 | -336 | -1,206 | ||||||||
Net income available to common shareholders | $12,419 | $11,204 | $8,703 |
Parent_Company_only_Condensed_4
Parent Company only Condensed Financial Information (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||||||||||
Net Income (Loss) Attributable to Parent | $3,602 | $3,425 | $3,324 | $3,076 | $3,354 | $3,213 | $2,793 | $2,180 | $13,427 | $11,540 | $9,909 |
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||||||
Amortization of restricted stock awards, net | -9 | 200 | 148 | ||||||||
Net Cash Provided by (used in) Operating Activities, continuing operations | 19,384 | 16,263 | 16,041 | ||||||||
Cash flows from financing activities: | |||||||||||
Repayment of subordinated debt | -9,279 | -14,423 | |||||||||
Payment of cash dividends | -373 | ||||||||||
Repayment of preferred stock | -40,000 | ||||||||||
Exercise of stock options | 262 | 88 | 39 | ||||||||
Payments of repurchase of common stock warrants | -140 | -140 | |||||||||
Net cash provided by (used in) financing activities | 65,022 | -204,394 | 375,183 | ||||||||
Net (decrease) increase in cash and cash equivalents | 9,798 | -260,960 | 300,693 | ||||||||
Cash and cash equivalents, beginning of period | 112,605 | 373,565 | 112,605 | 373,565 | 72,872 | ||||||
Cash and cash equivalents, end of period | 122,403 | 112,605 | 122,403 | 112,605 | 373,565 | ||||||
Parent Company | |||||||||||
Cash flows from operating activities: | |||||||||||
Net Income (Loss) Attributable to Parent | 13,427 | 11,540 | 9,909 | ||||||||
Adjustments to reconcile net income to net cash provided by (used in) operations: | |||||||||||
Amortization of restricted stock awards, net | -9 | 200 | 148 | ||||||||
Equity in undistributed loss/(net income) of subsidiary bank | -14,614 | 2,845 | 32,290 | ||||||||
Net change in other assets and liabilities | -2,158 | 4,478 | -744 | ||||||||
Net Cash Provided by (used in) Operating Activities, continuing operations | -3,354 | 19,063 | 41,603 | ||||||||
Cash flows from financing activities: | |||||||||||
Repayment of subordinated debt | -9,279 | -14,423 | |||||||||
Payment of cash dividends | -5,758 | -1,916 | -373 | ||||||||
Repayment of preferred stock | -40,000 | ||||||||||
Exercise of stock options | 262 | 88 | 39 | ||||||||
Payments of repurchase of common stock warrants | -140 | ||||||||||
Net cash provided by (used in) financing activities | -5,496 | -11,247 | -54,757 | ||||||||
Net (decrease) increase in cash and cash equivalents | -8,850 | 7,816 | -13,154 | ||||||||
Cash and cash equivalents, beginning of period | 19,009 | 11,193 | 19,009 | 11,193 | 24,347 | ||||||
Cash and cash equivalents, end of period | $10,159 | $19,009 | $10,159 | $19,009 | $11,193 |
Quarterly_Financial_Data_Unaud2
Quarterly Financial Data (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Quarterly Financial Data (Unaudited) | |||||||||||
Interest income | $16,717 | $14,492 | $14,192 | $13,855 | $13,623 | $13,458 | $12,838 | $12,867 | $59,256 | $52,786 | $52,565 |
Interest expense | 625 | 500 | 507 | 521 | 574 | 627 | 685 | 714 | 2,153 | 2,600 | 4,187 |
Net interest income before provision for loan losses | 16,092 | 13,992 | 13,685 | 13,334 | 13,049 | 12,831 | 12,153 | 12,153 | 57,103 | 50,186 | 48,378 |
Provision (credit) for loan losses | -106 | -24 | -198 | -10 | -12 | -534 | -270 | -338 | -816 | 2,784 | |
Net interest income after provision for loan losses | 16,198 | 14,016 | 13,883 | 13,344 | 13,061 | 13,365 | 12,423 | 12,153 | 57,441 | 51,002 | 45,594 |
Noninterest income | 1,812 | 1,870 | 2,047 | 2,017 | 1,898 | 1,738 | 1,915 | 1,663 | 7,746 | 7,214 | 8,865 |
Noninterest expense | 12,415 | 10,492 | 10,769 | 10,546 | 9,851 | 10,060 | 10,089 | 10,470 | 44,222 | 40,470 | 39,061 |
Income before income taxes | 5,595 | 5,394 | 5,161 | 4,815 | 5,108 | 5,043 | 4,249 | 3,346 | 20,965 | 17,746 | 15,398 |
Income tax expense | 1,993 | 1,969 | 1,837 | 1,739 | 1,754 | 1,830 | 1,456 | 1,166 | 7,538 | 6,206 | 5,489 |
Net income | 3,602 | 3,425 | 3,324 | 3,076 | 3,354 | 3,213 | 2,793 | 2,180 | 13,427 | 11,540 | 9,909 |
Dividends and discount accretion on preferred stock | -280 | -280 | -224 | -224 | -168 | -168 | -1,008 | -336 | -1,206 | ||
Net income available to common shareholders | 3,322 | 3,145 | 3,100 | 2,852 | 3,186 | 3,045 | 2,793 | 2,180 | 12,419 | 11,204 | 8,703 |
Undistributed earnings allocated to Series C Preferred Stock | -349 | -320 | -358 | -315 | -421 | -395 | -489 | -382 | -1,342 | -1,687 | -1,527 |
Distributed and undistributed earnings allocated to common shareholders | $2,973 | $2,825 | $2,742 | $2,537 | $2,765 | $2,650 | $2,304 | $1,798 | $11,077 | $9,517 | $7,176 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $0.11 | $0.11 | $0.10 | $0.10 | $0.10 | $0.10 | $0.09 | $0.07 | $0.42 | $0.36 | $0.27 |
Diluted (in dollars per share) | $0.11 | $0.11 | $0.10 | $0.10 | $0.10 | $0.10 | $0.09 | $0.07 | $0.42 | $0.36 | $0.27 |
Quarterly_Financial_Data_Unaud3
Quarterly Financial Data (Unaudited) (Details 2) (USD $) | 12 Months Ended | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 |
Quarterly Financial Data (Unaudited) | |||
Acquisition and integration related costs | $895 | ||
BVF | |||
Quarterly Financial Data (Unaudited) | |||
Acquisition and integration related costs | $609 | $234 |
Uncategorized_Items
Uncategorized Items | |
[us-gaap_PreferredStockDiscountOnShares] | 833,000 |