Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 31, 2023 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Sep. 30, 2023 | |
Entity File Number | 001-38412 | |
Entity Registrant Name | BRIDGEWATER BANCSHARES, INC. | |
Entity Incorporation, State or Country Code | MN | |
Entity Tax Identification Number | 26-0113412 | |
Entity Address, Address Line One | 4450 Excelsior Boulevard, Suite 100 | |
Entity Address, City or Town | St. Louis Park | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55416 | |
City Area Code | 952 | |
Local Phone Number | 893-6868 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 28,000,570 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001341317 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock | |
Trading Symbol | BWB | |
Security Exchange Name | NASDAQ | |
Depositary Shares | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Depositary Shares | |
Trading Symbol | BWBBP | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and Cash Equivalents | $ 124,358 | $ 87,043 |
Bank-Owned Certificates of Deposit | 1,225 | 1,181 |
Securities Available for Sale, at Fair Value | 553,076 | 548,613 |
Loans, Net of Allowance for Credit Losses of $50,585 at September 30, 2023 (unaudited) and $47,996 at December 31, 2022 | 3,664,464 | 3,512,157 |
Federal Home Loan Bank (FHLB) Stock, at Cost | 17,056 | 19,606 |
Premises and Equipment, Net | 49,331 | 48,445 |
Accrued Interest | 15,182 | 13,479 |
Goodwill | 2,626 | 2,626 |
Other Intangible Assets, Net | 197 | 288 |
Bank-Owned Life Insurance | 34,209 | 33,485 |
Other Assets | 95,346 | 78,739 |
Total Assets | 4,557,070 | 4,345,662 |
Deposits: | ||
Noninterest Bearing | 754,297 | 884,272 |
Interest Bearing | 2,921,212 | 2,532,271 |
Total Deposits | 3,675,509 | 3,416,543 |
Federal Funds Purchased | 287,000 | |
Notes Payable | 13,750 | 13,750 |
FHLB Advances | 294,500 | 97,000 |
Subordinated Debentures, Net of Issuance Costs | 79,192 | 78,905 |
Accrued Interest Payable | 3,816 | 2,831 |
Other Liabilities | 74,343 | 55,569 |
Total Liabilities | 4,141,110 | 3,951,598 |
SHAREHOLDERS' EQUITY | ||
Preferred Stock- $0.01 par value; Authorized 10,000,000 Preferred Stock - Issued and Outstanding 27,600 Series A shares ($2,500 liquidation preference) at September 30, 2023 (unaudited) and December 31, 2022 | 66,514 | 66,514 |
Common Stock- $0.01 par value; Authorized 75,000,000 Common Stock - Issued and Outstanding 28,015,505 at September 30, 2023 (unaudited) and 27,751,950 at December 31, 2022 | 280 | 278 |
Additional Paid-In Capital | 100,120 | 96,529 |
Retained Earnings | 272,812 | 248,685 |
Accumulated Other Comprehensive Loss | (23,766) | (17,942) |
Total Shareholders' Equity | 415,960 | 394,064 |
Total Liabilities and Equity | $ 4,557,070 | $ 4,345,662 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Allowance of loan loss | $ 50,585 | $ 47,996 |
Preferred shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 28,015,505 | 27,751,950 |
Common stock, shares outstanding (in shares) | 28,015,505 | 27,751,950 |
Series A Preferred Stock | ||
Preferred stock, shares issued (in shares) | 27,600 | 27,600 |
Preferred stock, shares outstanding (in shares) | 27,600 | 27,600 |
Liquidation preference | $ 2,500 | $ 2,500 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
INTEREST INCOME | ||||
Loans, Including Fees | $ 48,999 | $ 37,666 | $ 141,675 | $ 103,768 |
Investment Securities | 6,507 | 4,372 | 18,962 | 10,567 |
Other | 1,303 | 321 | 3,165 | 500 |
Total Interest Income | 56,809 | 42,359 | 163,802 | 114,835 |
INTEREST EXPENSE | ||||
Deposits | 27,225 | 5,984 | 66,597 | 12,598 |
Notes Payable | 296 | 844 | ||
FHLB Advances | 2,316 | 329 | 5,269 | 646 |
Subordinated Debentures | 1,003 | 1,242 | 2,979 | 3,658 |
Federal Funds Purchased | 548 | 709 | 8,253 | 1,128 |
Total Interest Expense | 31,388 | 8,264 | 83,942 | 18,030 |
NET INTEREST INCOME | 25,421 | 34,095 | 79,860 | 96,805 |
Provision for (Recovery of) Credit Losses | (600) | 1,500 | 75 | 6,200 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 26,021 | 32,595 | 79,785 | 90,605 |
NONINTEREST INCOME | ||||
Customer Service Fees | 379 | 313 | 1,096 | 892 |
Net Gain (Loss) on Sales of Available for Sale Securities | (6) | 52 | ||
Other Income | 1,347 | 1,074 | 3,994 | 3,650 |
Total Noninterest Income | 1,726 | 1,387 | 5,084 | 4,594 |
NONINTEREST EXPENSE | ||||
Salaries and Employee Benefits | 9,519 | 9,449 | 26,923 | 27,120 |
Occupancy and Equipment | 1,101 | 1,086 | 3,385 | 3,213 |
Other Expense | 4,730 | 3,622 | 13,613 | 11,084 |
Total Noninterest Expense | 15,350 | 14,157 | 43,921 | 41,417 |
INCOME BEFORE INCOME TAXES | 12,397 | 19,825 | 40,948 | 53,782 |
Provision for Income Taxes | 2,768 | 5,312 | 9,861 | 14,125 |
NET INCOME | 9,629 | 14,513 | 31,087 | 39,657 |
Preferred Stock Dividends | (1,013) | (1,013) | (3,040) | (3,040) |
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS | $ 8,616 | $ 13,500 | $ 28,047 | $ 36,617 |
EARNINGS PER SHARE | ||||
Basic (in dollars per share) | $ 0.31 | $ 0.49 | $ 1.01 | $ 1.32 |
Diluted (in dollars per share) | $ 0.30 | $ 0.47 | $ 0.99 | $ 1.27 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Consolidated Statements of Comprehensive Income | ||||
Net Income (Loss) | $ 9,629 | $ 14,513 | $ 31,087 | $ 39,657 |
Other Comprehensive Loss: | ||||
Unrealized Losses on Available for Sale Securities | (10,151) | (18,073) | (14,338) | (56,487) |
Unrealized Gains on Cash Flow Hedges | 7,763 | 7,725 | 10,167 | 21,117 |
Reclassification Adjustment for (Gains) Losses Realized in Income | (1,623) | (119) | (4,004) | 511 |
Income Tax Impact | 1,153 | 4,808 | 2,351 | 9,133 |
Total Other Comprehensive Loss, Net of Tax | (2,858) | (5,659) | (5,824) | (25,726) |
Comprehensive Income | $ 6,771 | $ 8,854 | $ 25,263 | $ 13,931 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) $ in Thousands | Preferred Stock Adjusted for Change in Accounting Principle | Preferred Stock | Common Stock Adjusted for Change in Accounting Principle | Common Stock | Additional Paid In Capital Adjusted for Change in Accounting Principle | Additional Paid In Capital | Retained Earnings Cumulative Effect of Change | Retained Earnings Adjusted for Change in Accounting Principle | Retained Earnings | Accumulated Other Comprehensive Loss Adjusted for Change in Accounting Principle | Accumulated Other Comprehensive Loss | Cumulative Effect of Change | Adjusted for Change in Accounting Principle | Total |
Balance at the beginning at Dec. 31, 2021 | $ 66,514 | $ 282 | $ 104,123 | $ 199,347 | $ 9,006 | $ 379,272 | ||||||||
Balance at the beginning (in shares) at Dec. 31, 2021 | 28,206,566 | |||||||||||||
Stock-based Compensation | 2,557 | 2,557 | ||||||||||||
Stock-based Compensation (in shares) | 14,400 | |||||||||||||
Comprehensive Income (Loss) | 39,657 | (25,726) | 13,931 | |||||||||||
Stock Options Exercised | 106 | 106 | ||||||||||||
Stock Options Exercised (in shares) | 28,000 | |||||||||||||
Stock Repurchases | $ (6) | (10,772) | (10,778) | |||||||||||
Stock Repurchases (in shares) | (662,765) | |||||||||||||
Forfeiture of Restricted Stock Awards | (3) | (3) | ||||||||||||
Forfeiture of Restricted Stock Awards (in shares) | (1,000) | |||||||||||||
Vested Restricted Stock Units (in shares) | 5,100 | |||||||||||||
Restricted Shares Withheld for Taxes | (38) | (38) | ||||||||||||
Restricted Shares Withheld for Taxes (in shares) | (2,323) | |||||||||||||
Preferred Stock Dividend | (3,040) | (3,040) | ||||||||||||
Balance at the end at Sep. 30, 2022 | 66,514 | $ 276 | 95,973 | 235,964 | (16,720) | 382,007 | ||||||||
Balance at the end (in shares) at Sep. 30, 2022 | 27,587,978 | |||||||||||||
Balance at the beginning at Jun. 30, 2022 | 66,514 | $ 277 | 96,689 | 222,464 | (11,061) | 374,883 | ||||||||
Balance at the beginning (in shares) at Jun. 30, 2022 | 27,677,372 | |||||||||||||
Stock-based Compensation | 876 | 876 | ||||||||||||
Stock-based Compensation (in shares) | 4,744 | |||||||||||||
Comprehensive Income (Loss) | 14,513 | (5,659) | 8,854 | |||||||||||
Stock Options Exercised | 41 | 41 | ||||||||||||
Stock Options Exercised (in shares) | 3,250 | |||||||||||||
Stock Repurchases | $ (1) | (1,615) | (1,616) | |||||||||||
Stock Repurchases (in shares) | (99,310) | |||||||||||||
Vested Restricted Stock Units (in shares) | 3,000 | |||||||||||||
Restricted Shares Withheld for Taxes | (18) | (18) | ||||||||||||
Restricted Shares Withheld for Taxes (in shares) | (1,078) | |||||||||||||
Preferred Stock Dividend | (1,013) | (1,013) | ||||||||||||
Balance at the end at Sep. 30, 2022 | 66,514 | $ 276 | 95,973 | 235,964 | (16,720) | 382,007 | ||||||||
Balance at the end (in shares) at Sep. 30, 2022 | 27,587,978 | |||||||||||||
Balance at the beginning at Dec. 31, 2022 | $ 66,514 | 66,514 | $ 278 | $ 278 | $ 96,529 | 96,529 | $ (3,920) | $ 244,765 | 248,685 | $ (17,942) | (17,942) | $ (3,920) | $ 390,144 | 394,064 |
Balance at the beginning (in shares) at Dec. 31, 2022 | 27,751,950 | 27,751,950 | ||||||||||||
Stock-based Compensation | 2,910 | 2,910 | ||||||||||||
Stock-based Compensation (in shares) | 35,460 | |||||||||||||
Comprehensive Income (Loss) | 31,087 | (5,824) | 25,263 | |||||||||||
Stock Options Exercised | $ 2 | 715 | $ 717 | |||||||||||
Stock Options Exercised (in shares) | 226,000 | 226,000 | ||||||||||||
Forfeiture of Restricted Stock Awards (in shares) | (250) | |||||||||||||
Vested Restricted Stock Units (in shares) | 5,225 | |||||||||||||
Restricted Shares Withheld for Taxes | (34) | $ (34) | ||||||||||||
Restricted Shares Withheld for Taxes (in shares) | (2,880) | |||||||||||||
Preferred Stock Dividend | (3,040) | (3,040) | ||||||||||||
Balance at the end at Sep. 30, 2023 | 66,514 | $ 280 | 100,120 | 272,812 | (23,766) | 415,960 | ||||||||
Balance at the end (in shares) at Sep. 30, 2023 | 28,015,505 | |||||||||||||
Balance at the beginning at Jun. 30, 2023 | 66,514 | $ 280 | 99,044 | 264,196 | (20,908) | 409,126 | ||||||||
Balance at the beginning (in shares) at Jun. 30, 2023 | 27,973,995 | |||||||||||||
Stock-based Compensation | 997 | 997 | ||||||||||||
Stock-based Compensation (in shares) | 12,588 | |||||||||||||
Comprehensive Income (Loss) | 9,629 | (2,858) | 6,771 | |||||||||||
Stock Options Exercised | 90 | 90 | ||||||||||||
Stock Options Exercised (in shares) | 27,000 | |||||||||||||
Vested Restricted Stock Units (in shares) | 3,000 | |||||||||||||
Restricted Shares Withheld for Taxes | (11) | (11) | ||||||||||||
Restricted Shares Withheld for Taxes (in shares) | (1,078) | |||||||||||||
Preferred Stock Dividend | (1,013) | (1,013) | ||||||||||||
Balance at the end at Sep. 30, 2023 | $ 66,514 | $ 280 | $ 100,120 | $ 272,812 | $ (23,766) | $ 415,960 | ||||||||
Balance at the end (in shares) at Sep. 30, 2023 | 28,015,505 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net Income | $ 31,087 | $ 39,657 | |||
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: | |||||
Net Amortization on Securities Available for Sale | 196 | 1,712 | |||
Net (Gain) Loss on Sales of Securities Available for Sale | 6 | (52) | |||
Provision for Credit Losses on Loans | $ 0 | $ 1,500 | 2,050 | 6,200 | |
Provision (Credit) for Off-Balance Sheet Exposures | (600) | (1,975) | |||
Depreciation of Premises and Equipment | 1,901 | 1,911 | |||
Amortization of Other Intangible Assets | 91 | 143 | |||
Amortization of Right-of Use Asset | 396 | ||||
Amortization of Subordinated Debt Issuance Costs | 287 | 320 | |||
Stock-based Compensation | 2,910 | 2,557 | |||
Changes in Operating Assets and Liabilities: | |||||
Accrued Interest Receivable and Other Assets | (8,923) | (7,859) | |||
Accrued Interest Payable and Other Liabilities | 10,457 | 35,780 | |||
Net Cash Provided by Operating Activities | 38,483 | 80,369 | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
(Increase) Decrease in Bank-Owned Certificates of Deposit | (44) | 694 | |||
Proceeds from Sales of Securities Available for Sale | 26,976 | 25,066 | |||
Proceeds from Maturities, Paydowns, Payups and Calls of Securities Available for Sale | 23,812 | 30,253 | |||
Purchases of Securities Available for Sale | (63,777) | (210,432) | |||
Net Increase in Loans | (155,123) | (560,786) | |||
Net Increase in FHLB Stock | 2,550 | (10,361) | |||
Purchases of Premises and Equipment | (2,787) | (1,457) | |||
Proceeds from Sales of Foreclosed Assets | 116 | ||||
Purchase of Bank-Owned Life Insurance | (7,407) | ||||
Net Cash Used in Investing Activities | (168,277) | (734,430) | |||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Net Increase in Deposits | 258,966 | 358,837 | |||
Net (Decrease) Increase in Federal Funds Purchased | (287,000) | 212,000 | |||
Proceeds from FHLB Advances | 486,500 | 29,000 | |||
Principal Payments on FHLB Advances | (289,000) | ||||
Preferred Stock Dividends Paid | (3,040) | (3,040) | |||
Stock Options Exercised | 717 | 106 | |||
Stock Repurchases | (10,778) | ||||
Forfeiture of Restricted Stock Awards | (3) | ||||
Shares Repurchased for Tax Withholdings Upon Vesting of Restricted Stock-Based Awards | (34) | (38) | |||
Net Cash Provided by Financing Activities | 167,109 | 586,084 | |||
NET CHANGE IN CASH AND CASH EQUIVALENTS | 37,315 | (67,977) | |||
Cash and Cash Equivalents Beginning | 87,043 | 143,473 | $ 143,473 | ||
Cash and Cash Equivalents Ending | $ 124,358 | $ 75,496 | 124,358 | 75,496 | $ 87,043 |
SUPPLEMENTAL CASH FLOW DISCLOSURE | |||||
Cash Paid for Interest | 82,670 | 16,905 | |||
Cash Paid for Income Taxes | 8,931 | 14,155 | |||
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES | |||||
Net Investment Securities Purchased but Not Settled | $ 6,007 | $ 5,731 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Description of the Business and Summary of Significant Accounting Policies | |
Description of the Business and Summary of Significant Accounting Policies | Note 1: Description of the Business and Summary of Significant Accounting Policies Organization Bridgewater Bancshares, Inc. (the “Company”) is a financial holding company whose operations consist of the ownership of its wholly-owned subsidiaries, Bridgewater Bank (the “Bank”) and Bridgewater Risk Management, Inc. The Bank commenced operations in 2005 and provides retail and commercial loan and deposit services, principally to customers within the Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area. In 2008, the Bank formed BWB Holdings, LLC, a wholly-owned subsidiary of the Bank, for the purpose of holding repossessed property. In 2018, the Bank formed Bridgewater Investment Management, Inc., a wholly-owned subsidiary of the Bank, for the purpose of holding certain municipal securities and to engage in municipal lending activities. Bridgewater Risk Management, Inc. was incorporated in December 2016 as a wholly-owned insurance company. It insures the Company and its subsidiaries against certain risks unique to the operations of the Company and for which insurance may not be currently available or economically feasible in today’s insurance marketplace. Bridgewater Risk Management pools resources with several other insurance company subsidiaries of financial institutions to spread a limited amount of risk among themselves. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, all normal recurring adjustments which are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. The results of operations for the three and nine-month periods ended September 30, 2023 are not necessarily indicative of the results which may be expected for the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2023. Principles of Consolidation These consolidated financial statements include the amounts of the Company, the Bank, with locations in Bloomington, Greenwood, Minneapolis (2), St. Louis Park, Orono, and St. Paul, Minnesota, BWB Holdings, LLC, Bridgewater Investment Management, Inc., and Bridgewater Risk Management, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates in Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Information available which could affect judgements includes, but is not limited to, changes in interest rates, changes in the performance of the economy, including elevated levels of inflation and possible recession, and changes in the financial condition of borrowers. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses, calculation of deferred tax assets, fair value of financial instruments, and investment securities impairment. Emerging Growth Company The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. In addition, even if the Company complies with the greater obligations of public companies that are not emerging growth companies, the Company may avail itself of the reduced requirements applicable to emerging growth companies from time to time in the future, so long as the Company is an emerging growth company. The Company will continue to be an emerging growth company until the earliest to occur of: (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of common equity securities under the Company’s Registration Statement on Form S-1, which was declared effective by the SEC on March 13, 2018; (2) the last day of the fiscal year in which the Company has $1.235 billion or more in annual revenues; (3) the date on which the Company is deemed to be a “large accelerated filer” under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or (4) the date on which the Company has, during the previous three-year period, issued publicly or privately, more than $1.0 billion in non-convertible debt securities. Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933 for complying with new or revised accounting standards. As an emerging growth company, the Company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company elected to take advantage of the benefits of this extended transition period. Allowance for Credit Losses Securities Available for Sale For any securities classified as available for sale that are in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security, or if it is more likely than not it will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through income with the establishment of an allowance. For securities that do not meet the aforementioned criteria, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration. In making this assessment, management considers the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security, among other factors. If the assessment indicates that a credit loss exists, an allowance for credit losses, or ACL, is recorded for the amount by which the amortized cost basis of the security exceeds the present value of cash flows expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the allowance for credit losses is recognized in other comprehensive income. Changes in the ACL on securities are recorded as a provision for (or recovery of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on securities available for sale is excluded from the estimate of credit losses. Loans The ACL on loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over their contractual life. The contractual term does not consider extensions, renewals or modifications. Loans are charged off against the ACL on loans when management believes the uncollectibility of a loan balance has been confirmed. Recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off. Subsequent recoveries, if any, are credited to the ACL on loans. The ACL on loans is measured on a collective or pooled basis when similar risk characteristics exist. The Company’s pooling method is primarily based on loan purpose and collateral type and generally follows the Company’s loan segmentation for regulatory reporting. The Company has identified the following pools of loans with similar risk characteristics for measuring the ACL on loans: Commercial: Paycheck Protection Program (PPP): Construction and Land Development: 1-4 Family Construction: 1-4 Family Mortgage: Multifamily: Commercial Real Estate (CRE) Owner Occupied: Commercial Real Estate (CRE) Nonowner Occupied: Consumer and Other: Management assesses the adequacy of the ACL on loans on a quarterly basis. Management estimates the ACL on loans using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company uses the weighted-average remaining maturity, or WARM, method as the basis for estimating expected credit losses. The WARM method uses a historical average annual charge off rate. This average annual charge off rate contains loss content over a historical lookback period and is used as a foundation for estimating the ACL on loans for the remaining outstanding balances of loans by segment at the balance sheet date. The average annual charge off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge off rate. The calculation of the unadjusted historical charge off rate is then adjusted for current conditions and for reasonable and supportable forecast periods through qualitative factors prior to being applied to the current balance of the loan segments. Accrued interest receivable on loans available for sale is excluded from the estimate of credit losses. Forecast adjustments to the historical loss rate are based on a forecast of the U.S. national unemployment rate, a forecast of the difference between the 10-year and 3-month treasury rates, and the most recent available BBB rated corporate bond spreads to U.S. Treasury securities, or BBB Spread. The forecast overlay adjustment for the reasonable and supportable forecast assumes an immediate reversion after a one-year forecast period to historical loss rates for the remaining life of the respective loan segment. Qualitative factors are used to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the historic loss factors. Each qualitative loss factor, for each loan segment within the portfolio, incorporates consideration for a minimum to maximum range for loss factors. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses and are applied to each loan segment. The qualitative factors applied to each loan segment include changes in lending policies and procedures, general economic and business conditions, the nature, volume and terms of loans, the experience, depth and ability of lending staff, the quality of the loan review function, the value of underlying collateral, competition, legal and regulatory factors, the volume and severity of watchlist and past due loans, and the level of concentrations. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the pooled evaluations and typically represent collateral dependent loans but may also include other nonperforming loans or modifications. The Company has elected to use the practical expedient to measure individually evaluated loans as collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. The credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale of the collateral. Management may also adjust its assumptions to account for differences between expected and actual losses from period to period. The variability of management’s assumptions could alter the ACL on loans materially and impact future results of operations and financial condition. The loss estimation models and methods used to determine the allowance for credit losses are continually refined and enhanced. Off-Balance Sheet Credit Exposures The Company maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments, financial guarantees, and letters of credit, which is included in other liabilities on the consolidated balance sheet, unless the obligation is unconditionally cancellable. The ACL on off-balance sheet credit exposures is adjusted as a provision for (or recovery of) credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the estimated life of such commitments. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of the loan segment and applied to the amount of commitments expected to fund. Impact of Recently Adopted Accounting Guidance On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13 “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,” The Company adopted CECL using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to retained earnings of $3.9 million as of January 1, 2023 for the cumulative effect of adopting CECL. The transition adjustment included a $650,000 impact due to the increase in ACL related to loans, a $4.8 million impact due the establishment of the allowance for off-balance sheet credit exposures, and a $1.6 million impact on deferred taxes. The following table presents the impact of adopting CECL: January 1, 2023 Impact of As Reported (dollars in thousands) Pre-CECL Adoption CECL Adoption Under CECL Assets: Loans Commercial $ 6,500 $ (1,157) $ 5,343 Paycheck Protection Program 1 (1) — Construction and Land Development 3,911 (1,070) 2,841 1-4 Family Construction 845 (235) 610 Real Estate Mortgage: 1-4 Family Mortgage 4,325 (1,778) 2,547 Multifamily 17,459 3,318 20,777 CRE Owner Occupied 1,965 (943) 1,022 CRE Nonowner Occupied 12,576 2,869 15,445 Consumer and Other 151 (90) 61 Unallocated 263 (263) — Allowance for Credit Losses on Loans $ 47,996 $ 650 $ 48,646 Liabilities: Allowance for Credit Losses on Off-balance Sheet Credit Exposures $ 360 $ 4,850 $ 5,210 In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. Receivables – Troubled Debt Restructurings by Creditors, Impact of Recently Issued Accounting Guidance In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. In March 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements In March 2023, the FASB issued ASU No. 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method amortization method, regardless of the program giving rise to the related income tax credits. This guidance is effective for public business entities for fiscal years including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted in any interim period. The Company is assessing ASU 2023-02 and its impact on its accounting and disclosures. Subsequent Events Subsequent events have been evaluated through November 2, 2023, which is the date the consolidated financial statements were available to be issued. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share | |
Earnings Per Share | Note 2: Earnings Per Share Basic earnings per common share are computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted earnings per common share are computed by dividing net income by the weighted average number of common shares adjusted for the dilutive effect of stock compensation. For the three and nine months ended September 30, 2023, stock options, restricted stock awards and restricted stock units of approximately 1,152,100 and 1,042,500 shares, respectively, were excluded from the calculation because they were deemed to be anti-dilutive. For the three and nine months ended September 30, 2022, stock options, restricted stock awards and restricted stock units of approximately 300,500 shares were excluded from the calculation because their effect would have been anti-dilutive. The following table presents the numerators and denominators for basic and diluted earnings per share computations for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands, except per share data) 2023 2022 2023 2022 Net Income Available to Common Shareholders $ 8,616 $ 13,500 $ 28,047 $ 36,617 Weighted Average Common Stock Outstanding: Weighted Average Common Stock Outstanding (Basic) 27,943,409 27,520,117 27,853,036 27,825,517 Dilutive Effect of Stock Compensation 368,369 1,072,737 486,816 1,057,184 Weighted Average Common Stock Outstanding (Dilutive) 28,311,778 28,592,854 28,339,852 28,882,701 Basic Earnings per Common Share $ 0.31 $ 0.49 $ 1.01 $ 1.32 Diluted Earnings per Common Share 0.30 0.47 0.99 1.27 |
Securities
Securities | 9 Months Ended |
Sep. 30, 2023 | |
Securities | |
Securities | Note 3: Securities The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at September 30, 2023 and December 31, 2022: September 30, 2023 Gross Gross Amortized Unrealized Unrealized (dollars in thousands) Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 2,883 $ — $ (19) $ 2,864 Municipal Bonds 148,725 — (26,228) 122,497 Mortgage-Backed Securities 233,920 137 (23,682) 210,375 Corporate Securities 134,369 268 (12,920) 121,717 SBA Securities 19,779 312 (125) 19,966 Asset-Backed Securities 75,616 388 (347) 75,657 Total Securities Available for Sale $ 615,292 $ 1,105 $ (63,321) $ 553,076 December 31, 2022 Gross Gross Amortized Unrealized Unrealized (dollars in thousands) Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 2,621 $ — $ (41) $ 2,580 Municipal Bonds 156,506 62 (25,214) 131,354 Mortgage-Backed Securities 252,919 2,465 (17,600) 237,784 Corporate Securities 116,871 45 (7,089) 109,827 SBA Securities 20,957 79 (159) 20,877 Asset-Backed Securities 46,623 188 (620) 46,191 Total Securities Available for Sale $ 596,497 $ 2,839 $ (50,723) $ 548,613 Securities with a carrying value of $164.3 million at September 30, 2023 were pledged to secure borrowing capacity. The securities portfolio was unencumbered at December 31, 2022. The following tables present the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023 and December 31, 2022: Less Than 12 Months 12 Months or Greater Total Number of Unrealized Unrealized Unrealized (dollars in thousands, except number of holdings) Holdings Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2023 U.S. Treasury Securities 5 $ 886 $ (5) $ 880 $ (14) $ 1,766 $ (19) Municipal Bonds 218 8,358 (232) 114,139 (25,996) 122,497 (26,228) Mortgage-Backed Securities 140 68,938 (2,205) 135,408 (21,477) 204,346 (23,682) Corporate Securities 109 18,899 (1,024) 94,731 (11,896) 113,630 (12,920) SBA Securities 47 2,319 (6) 6,811 (119) 9,130 (125) Asset-Backed Securities 16 17,215 (130) 14,173 (217) 31,388 (347) Total Securities Available for Sale 535 $ 116,615 $ (3,602) $ 366,142 $ (59,719) $ 482,757 $ (63,321) Less Than 12 Months 12 Months or Greater Total Number of Unrealized Unrealized Unrealized (dollars in thousands, except number of holdings) Holdings Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2022 U.S. Treasury Securities 6 $ 2,330 $ (41) $ — $ — $ 2,330 $ (41) Municipal Bonds 225 59,912 (5,321) 69,424 (19,893) 129,336 (25,214) Mortgage-Backed Securities 130 123,224 (5,427) 62,882 (12,173) 186,106 (17,600) Corporate Securities 100 88,486 (5,121) 17,054 (1,968) 105,540 (7,089) SBA Securities 49 2,498 (6) 9,750 (153) 12,248 (159) Asset-Backed Securities 20 21,919 (396) 6,186 (224) 28,105 (620) Total Securities Available for Sale 530 $ 298,369 $ (16,312) $ 165,296 $ (34,411) $ 463,665 $ (50,723) Beginning January 1, 2023, the Company evaluates all securities quarterly to determine if any securities in a loss position require an allowance for credit losses on securities in accordance with ASC 326 - Measurement of Credit Losses on Financial Instruments At September 30, 2023, 535 debt securities had unrealized losses with aggregate depreciation of approximately 11.6% from the Company’s amortized cost basis. These unrealized losses have not been recognized into income because management does not intend to sell these securities, and it is not more likely than not it will be required to sell the securities before recovery of its amortized cost basis. Furthermore, the unrealized losses are due to changes in interest rates and other market conditions and were not reflective of credit events. To make this determination, consideration is given to such factors as the credit rating of the issuer, level of credit enhancement, changes in credit ratings, market conditions such as current interest rates, any adverse conditions specific to the security, and delinquency status on contractual payments. As of September 30, 2023, there was no allowance for credit losses carried on the Company’s securities portfolio. Accrued interest receivable on securities, which is recorded within accrued interest on the balance sheet, totaled $4.3 million at September 30, 2023 and is excluded from the estimate of credit losses. At December 31, 2022, 530 debt securities had unrealized losses with aggregate depreciation of approximately 9.9% from the Company’s amortized cost basis. For periods prior to the adoption of ASC 326, management conducted a quarterly review and evaluation of its securities for other than temporary impairment. In analyzing whether unrealized losses on debt securities were other than temporary, management considered the length of time and the extent to which the fair value was less than amortized cost, whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, industry analysts’ reports, the financial condition and performance of the issuer, the quality of any underlying assets or credit enhancements, and the Company’s intent and ability to hold the security for a period of time sufficient to allow for a recovery in fair value. No declines were deemed to be other than temporary as of December 31, 2022. The following table presents a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of September 30, 2023. Call date is used when a call of the debt security is expected, as determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed, SBA securities and asset-backed securities because borrowers may have the right to call or prepay obligations without penalties. (dollars in thousands) Amortized Cost Fair Value September 30, 2023 Due in One Year or Less $ 9,779 $ 9,833 Due After One Year Through Five Years 44,811 42,665 Due After Five Years Through 10 Years 179,590 155,444 Due After 10 Years 51,797 39,136 Subtotal 285,977 247,078 Mortgage-Backed Securities 233,920 210,375 SBA Securities 19,779 19,966 Asset-Backed Securities 75,616 75,657 Totals $ 615,292 $ 553,076 The following table presents a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the three and nine months ended September 30, 2023 and September 30, 2022: Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands) 2023 2022 2023 2022 Proceeds From Sales of Securities $ — $ — $ 26,976 $ 25,066 Gross Gains on Sales — — 247 234 Gross Losses on Sales — — (253) (182) |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2023 | |
Loans and Allowance for Credit Losses | |
Loans and Allowance for Credit Losses | Note 4: Loans and Allowance for Credit Losses The following table presents the components of the loan portfolio at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Commercial $ 459,063 $ 435,344 Paycheck Protection Program 791 1,049 Construction and Land Development 294,818 295,554 1-4 Family Construction 64,463 70,242 Real Estate Mortgage: 1-4 Family Mortgage 404,716 355,474 Multifamily 1,378,669 1,306,738 CRE Owner Occupied 159,485 149,905 CRE Nonowner Occupied 951,263 947,008 Total Real Estate Mortgage Loans 2,894,133 2,759,125 Consumer and Other 9,003 8,132 Total Loans, Gross 3,722,271 3,569,446 Allowance for Credit Losses (50,585) (47,996) Net Deferred Loan Fees (7,222) (9,293) Total Loans, Net $ 3,664,464 $ 3,512,157 The following tables present the aging in past due loans and nonaccrual status, with and without an ACL, by loan segment as of September 30, 2023 and December 31, 2022: Accruing Interest 30-89 Days 90 Days or Nonaccrual Nonaccrual (dollars in thousands) Current Past Due More Past Due with ACL without ACL Total September 30, 2023 Commercial $ 458,883 $ 11 $ — $ 74 $ 95 $ 459,063 Paycheck Protection Program 791 — — — — 791 Construction and Land Development 294,732 — — — 86 294,818 1-4 Family Construction 64,463 — — — — 64,463 Real Estate Mortgage: 1-4 Family Mortgage 404,716 — — — — 404,716 Multifamily 1,378,669 — — — — 1,378,669 CRE Owner Occupied 158,991 — — — 494 159,485 CRE Nonowner Occupied 951,263 — — — — 951,263 Consumer and Other 9,003 — — — — 9,003 Totals $ 3,721,511 $ 11 $ — $ 74 $ 675 $ 3,722,271 Accruing Interest 30-89 Days 90 Days or Nonaccrual Nonaccrual (dollars in thousands) Current Past Due More Past Due with ACL without ACL Total December 31, 2022 Commercial $ 435,274 $ 70 $ — $ — $ — $ 435,344 Paycheck Protection Program 1,049 — — — — 1,049 Construction and Land Development 295,448 — — — 106 295,554 1-4 Family Construction 70,242 — — — — 70,242 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 36,875 — — — — 36,875 1st REM - 1-4 Family 50,945 — — — — 50,945 LOCs and 2nd REM - Rentals 27,985 — — — — 27,985 1st REM - Rentals 239,553 116 — — — 239,669 Multifamily 1,306,738 — — — — 1,306,738 CRE Owner Occupied 149,372 — — — 533 149,905 CRE Nonowner Occupied 947,008 — — — — 947,008 Consumer and Other 8,132 — — — — 8,132 Totals $ 3,568,621 $ 186 $ — $ — $ 639 $ 3,569,446 The Company aggregates loans into credit quality indicators based on relevant information about the ability of borrowers to service their debt by using internal reviews in which management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate, and the fair values of collateral securing the loans. The Company analyzes all loans individually to assign a risk rating, grouped into five major categories defined as follows: Pass: Watch: Substandard: Doubtful: Loss : The following table presents loan balances classified by credit quality indicators by year of origination as of September 30, 2023: September 30, 2023 (dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Commercial Pass $ 47,507 $ 141,694 $ 39,407 $ 25,556 $ 19,018 $ 4,735 $ 160,955 $ 438,872 Watch 7 332 38 — 3 1,796 2,184 4,360 Substandard 76 11,462 11 — — 62 4,220 15,831 Total Commercial 47,590 153,488 39,456 25,556 19,021 6,593 167,359 459,063 Current Period Gross Write-offs 96 — — — — — — 96 Paycheck Protection Program Pass — — 791 — — — — 791 Total Paycheck Protection Program — — 791 — — — — 791 Current Period Gross Write-offs — — — — — — — — Construction and Land Development Pass 37,814 194,143 48,288 5,021 — 91 9,375 294,732 Substandard — 86 — — — — — 86 Total Construction and Land Development 37,814 194,229 48,288 5,021 — 91 9,375 294,818 Current Period Gross Write-offs — — — — — — — — 1-4 Family Construction Pass 33,966 13,594 935 358 — — 15,610 64,463 Total 1-4 Family Construction 33,966 13,594 935 358 — — 15,610 64,463 Current Period Gross Write-offs — — — — — — — — Real Estate Mortgage: — 1-4 Family Mortgage Pass 61,412 109,495 87,381 55,250 19,059 4,880 66,575 404,052 Watch — — — — — 1 — 1 Substandard — — — — — 663 — 663 Total 1-4 Family Mortgage 61,412 109,495 87,381 55,250 19,059 5,544 66,575 404,716 Current Period Gross Write-offs — — — — — — — — Multifamily Pass 136,071 437,174 473,938 230,980 42,344 46,635 8,598 1,375,740 Watch 2,929 — — — — — — 2,929 Total Multifamily 139,000 437,174 473,938 230,980 42,344 46,635 8,598 1,378,669 Current Period Gross Write-offs — — — — — — — — CRE Owner Occupied Pass 31,090 48,727 41,274 20,827 5,076 9,728 1,194 157,916 Substandard 200 — 494 — — 875 — 1,569 Total CRE Owner Occupied 31,290 48,727 41,768 20,827 5,076 10,603 1,194 159,485 Current Period Gross Write-offs — — — — — — — — CRE Nonowner Occupied Pass 123,283 297,158 256,990 84,384 78,708 68,128 5,553 914,204 Watch 6,176 10,173 3,238 — — — — 19,587 Substandard 9,780 4,408 — — 3,284 — — 17,472 Total CRE Nonowner Occupied 139,239 311,739 260,228 84,384 81,992 68,128 5,553 951,263 Current Period Gross Write-offs — — — — — — — — Total Real Estate Mortgage Loans 370,941 907,135 863,315 391,441 148,471 130,910 81,920 2,894,133 Consumer and Other Pass 2,744 290 10 1,501 11 — 4,447 9,003 Total Consumer and Other 2,744 290 10 1,501 11 — 4,447 9,003 Current Period Gross Write-offs 2 — — — — — 31 33 Total Period Gross Write-offs 98 — — — — — 31 129 Total Loans $ 493,055 $ 1,268,736 $ 952,795 $ 423,877 $ 167,503 $ 137,594 $ 278,711 $ 3,722,271 The following table presents the risk category of loans by loan segment as of December 31, 2022: December 31, 2022 (dollars in thousands) Pass Watch Substandard Total Commercial $ 406,192 $ 9,477 $ 19,675 $ 435,344 Paycheck Protection Program 1,049 — — 1,049 Construction and Land Development 294,736 712 106 295,554 1-4 Family Construction 70,242 — — 70,242 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 36,875 — — 36,875 1st REM - 1-4 Family 50,271 674 — 50,945 LOCs and 2nd REM - Rentals 27,978 7 — 27,985 1st REM - Rentals 239,277 — 392 239,669 Multifamily 1,303,468 3,270 — 1,306,738 CRE Owner Occupied 148,268 — 1,637 149,905 CRE Nonowner Occupied 922,657 18,112 6,239 947,008 Consumer and Other 8,132 — — 8,132 Totals $ 3,509,145 $ 32,252 $ 28,049 $ 3,569,446 The following table presents the activity in the allowance for credit losses, by segment, for the three and nine months ended September 30, 2023. On January 1, 2023, the Company adopted CECL, which added $650,000 to the total ACL. Under CECL, the Company recorded a $0 and $2.1 million provision for credit losses on loans during the three and nine months ended September 30, 2023, respectively, compared to a $1.5 million and $6.2 million provision for loan losses in the three and nine months ended September 30, 2022, respectively, under the incurred loss method. Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total Three Months Ended September 30, 2023 Allowance for Credit Losses for Loans: Beginning Balance $ 5,439 $ — $ 3,476 $ 654 $ 2,836 $ 21,164 $ 1,086 $ 15,976 $ 70 $ — $ 50,701 Provision for Credit Losses for Loans 151 — (704) (80) 22 1,052 3 (464) 20 — — Loans Charged-off (96) — — — — — — — (26) — (122) Recoveries of Loans 2 — — — 2 — — — 2 — 6 Total Ending Allowance Balance $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 Nine Months Ended September 30, 2023 Allowance for Credit Losses for Loans: Beginning Balance, Prior to Adoption of CECL $ 6,500 $ 1 $ 3,911 $ 845 $ 4,325 $ 17,459 $ 1,965 $ 12,576 $ 151 $ 263 $ 47,996 Impact of Adopting CECL (1,157) (1) (1,070) (235) (1,778) 3,318 (943) 2,869 (90) (263) 650 Provision for Credit Losses for Loans 242 — (69) (36) 309 1,439 67 67 31 — 2,050 Loans Charged-off (96) — — — — — — — (33) — (129) Recoveries of Loans 7 — — — 4 — — — 7 — 18 Total Ending Allowance Balance $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022, prepared using the previous GAAP incurred loss method prior to the adoption of CECL: Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total Three Months Ended September 30, 2022 Allowance for Loan Losses: Beginning Balance $ 6,275 $ 2 $ 4,134 $ 638 $ 4,206 $ 14,977 $ 1,920 $ 12,235 $ 154 $ 170 $ 44,711 Provision for Loan Losses 70 (1) (363) 60 (257) 1,845 107 47 13 (21) 1,500 Loans Charged-off — — — — — — — — (5) — (5) Recoveries of Loans 3 — — — 281 — — — 1 — 285 Total Ending Allowance Balance $ 6,348 $ 1 $ 3,771 $ 698 $ 4,230 $ 16,822 $ 2,027 $ 12,282 $ 163 $ 149 $ 46,491 Nine Months Ended September 30, 2022 Allowance for Loan Losses: Beginning Balance $ 6,256 $ 13 $ 3,139 $ 618 $ 3,757 $ 12,610 $ 1,495 $ 11,335 $ 147 $ 650 $ 40,020 Provision for Loan Losses 98 (12) 632 80 187 4,212 532 947 25 (501) 6,200 Loans Charged-off (13) — — — — — — — (21) — (34) Recoveries of Loans 7 — — — 286 — — — 12 — 305 Total Ending Allowance Balance $ 6,348 $ 1 $ 3,771 $ 698 $ 4,230 $ 16,822 $ 2,027 $ 12,282 $ 163 $ 149 $ 46,491 The following tables present the balance in the allowance for credit losses and the recorded investment in loans, by segment, based on impairment method as of September 30, 2023 and December 31, 2022: Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total ACL at September 30, 2023 Individually Evaluated for Impairment $ 84 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 84 Collectively Evaluated for Impairment 5,412 — 2,772 574 2,860 22,216 1,089 15,512 66 — 50,501 Totals $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 ALL at December 31, 2022 Individually Evaluated for Impairment $ 71 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 71 Collectively Evaluated for Impairment 6,429 1 3,911 845 4,325 17,459 1,965 12,576 151 263 47,925 Totals $ 6,500 $ 1 $ 3,911 $ 845 $ 4,325 $ 17,459 $ 1,965 $ 12,576 $ 151 $ 263 $ 47,996 Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamily Occupied Occupied and Other Total Loans at September 30, 2023 Individually Evaluated for Impairment $ 15,831 $ — $ 86 $ — $ 663 $ — $ 1,569 $ 17,472 $ — $ 35,621 Collectively Evaluated for Impairment 443,232 791 294,732 64,463 404,053 1,378,669 157,916 933,791 9,003 3,686,650 Totals $ 459,063 $ 791 $ 294,818 $ 64,463 $ 404,716 $ 1,378,669 $ 159,485 $ 951,263 $ 9,003 $ 3,722,271 Loans at December 31, 2022 Individually Evaluated for Impairment $ 19,675 $ — $ 106 $ — $ 392 $ — $ 1,637 $ 6,239 $ — $ 28,049 Collectively Evaluated for Impairment 415,669 1,049 295,448 70,242 355,082 1,306,738 148,268 940,769 8,132 3,541,397 Totals $ 435,344 $ 1,049 $ 295,554 $ 70,242 $ 355,474 $ 1,306,738 $ 149,905 $ 947,008 $ 8,132 $ 3,569,446 The following table presents the amortized cost basis of collateral dependent loans by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of September 30, 2023: Primary Type of Collateral Business ACL (dollars in thousands) Real Estate Assets Other Total Allocation September 30, 2023 Commercial $ — $ 5,459 $ 10,372 $ 15,831 $ 84 Construction and Land Development 86 — — 86 — Real Estate Mortgage: 1-4 Family Mortgage 663 — — 663 — CRE Owner Occupied 1,569 — — 1,569 — CRE Nonowner Occupied 17,472 — — 17,472 — Totals $ 19,790 $ 5,459 $ 10,372 $ 35,621 $ 84 Accrued interest receivable on loans, which is recorded within accrued interest on the balance sheet, totaled $10.8 million at September 30, 2023, and was excluded from the estimate of credit losses. Effective January 1, 2023, the Company adopted the provision of ASU 2022-02, which eliminated the accounting for TDRs, while expanding loan modification and vintage disclosure requirements. For the three months ended September 30, 2023, there were no loan modifications. For the nine months ended September 30, 2023, the Company modified one CRE nonowner occupied loan, with an outstanding balance of $9.6 million, for a borrower experiencing financial difficulty by granting a 12-month extension at a below market rate. There was no forgiveness of principal and this loan was current with its modified terms as of September 30, 2023. Prior to the adoption of ASU 2022-02, at December 31, 2022, there were two loans classified as TDRs with total aggregate outstanding balances of $188,000. Pre-ASC 326 Adoption Impaired Loan Disclosures The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of December 31, 2022: December 31, 2022 Recorded Principal Related (dollars in thousands) Investment Balance Allowance Loans With No Related Allowance for Loan Losses: Commercial $ 19,508 $ 19,508 $ — Construction and Land Development 106 713 — Real Estate Mortgage: 1-4 Family Mortgage 392 392 — CRE Owner Occupied 1,637 1,726 — CRE Nonowner Occupied 6,239 6,239 — Totals 27,882 28,578 — Loans With An Allowance for Loan Losses: Commercial 167 167 71 Totals 167 167 71 Grand Totals $ 28,049 $ 28,745 $ 71 The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three and nine months ended September 30, 2022: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Average Interest Average Interest (dollars in thousands) Investment Recognized Investment Recognized Loans With No Related Allowance for Loan Losses: Commercial $ 9,929 $ 187 $ 11,343 $ 519 Construction and Land Development 114 — 120 — Real Estate Mortgage: 1st REM - 1-4 Family 282 4 286 11 CRE Owner Occupied 1,751 17 1,762 49 CRE Nonowner Occupied 6,333 85 6,431 249 Totals 18,409 293 19,942 828 Loans With An Allowance for Loan Losses: Commercial 84 — 86 1 Real Estate Mortgage: CRE Nonowner Occupied 12,135 127 12,135 370 Totals 12,219 127 12,221 371 Grand Totals $ 30,628 $ 420 $ 32,163 $ 1,199 |
Deposits
Deposits | 9 Months Ended |
Sep. 30, 2023 | |
Deposits. | |
Deposits | Note 5: Deposits The following table presents the composition of deposits at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Transaction Deposits $ 1,535,160 $ 1,336,264 Savings and Money Market Deposits 872,534 1,031,873 Time Deposits 265,737 272,253 Brokered Deposits 1,002,078 776,153 Totals $ 3,675,509 $ 3,416,543 Brokered deposits are comprised of brokered transaction and money market accounts of $177.7 million and $184.3 million as of September 30, 2023 and December 31, 2022, respectively. The following table presents the scheduled maturities of brokered and customer time deposits at September 30, 2023: September 30, (dollars in thousands) 2023 Less than 1 Year $ 397,981 1 to 2 Years 143,267 2 to 3 Years 350,978 3 to 4 Years 63,790 4 to 5 Years 101,357 Greater than 5 Years 32,709 Totals $ 1,090,082 The aggregate amount of time deposits greater than $250,000 was approximately $88.5 million and $92.3 million at September 30, 2023 and December 31, 2022, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | Note 6: Derivative Instruments and Hedging Activities The Company uses derivative financial instruments, which consist of interest rate swaps and interest rate caps, to assist in its interest rate risk management. The notional amount does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual agreements. Derivative financial instruments are reported at fair value in other assets or other liabilities. The accounting for changes in the fair value of a derivative depends on whether it has been designated and qualifies as part of a hedging relationship. For derivatives not designated as hedges, the gain or loss is recognized in current earnings. Non-hedge Derivatives The Company enters into interest rate swaps to facilitate client transactions and meet their financing needs. Upon entering into these instruments to meet client needs, the Company enters into offsetting positions with large U.S. financial institutions in order to minimize the risk to the Company. These swaps are derivatives, but are not designated as hedging instruments. Interest rate swap contracts involve the risk of dealing with counterparties and their ability to meet contractual terms. When the fair value of a derivative instrument contract is positive, this generally indicates that the counterparty or client owes the Company, and results in credit risk to the Company. When the fair value of a derivative instrument contract is negative, the Company owes the client or counterparty and therefore, the Company has no credit risk. The following table presents a summary of the Company’s interest rate swaps to facilitate customer transactions as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Notional Estimated Notional Estimated (dollars in thousands) Amount Fair Value Amount Fair Value Interest rate swap agreements: Assets $ 64,241 $ 9,962 $ 65,315 $ 8,240 Liabilities 64,241 (9,962) 65,315 (8,240) Total $ 128,482 $ — $ 130,630 $ — Cash Flow Hedging Derivatives For derivative instruments that are designated and qualify as a cash flow hedge, the aggregate fair value of the derivative instrument is recorded in other assets or other liabilities with any gain or loss related to changes in fair value recorded in accumulated other comprehensive income, net of tax. The gain or loss is reclassified into earnings in the same period during which the hedged asset or liability affects earnings and is presented in the same income statement line item as the earnings effect of the hedged asset or liability. The Company utilizes cash flow hedges to manage interest rate exposure for the brokered deposit and wholesale borrowing portfolios. During the next 12 months, the Company estimates that $8.6 million will be reclassified to interest expense, as a reduction of the expense. The following table presents a summary of the Company’s interest rate swaps designated as cash flow hedges as of September 30, 2023 and December 31, 2022: (dollars in thousands) September 30, 2023 December 31, 2022 Notional Amount $ 183,000 $ 163,000 Weighted Average Pay Rate 2.00 % 1.90 % Weighted Average Receive Rate 5.40 % 3.47 % Weighted Average Maturity (Years) 4.30 5.15 Net Unrealized Gain $ 11,139 $ 9,175 The Company purchases interest rate caps, designated as cash flow hedges, of certain deposit liabilities. The interest rate caps require receipt of variable amounts from the counterparties when interest rates rise above the strike price in the contracts. For the three and nine months ended September 30, 2023, the company recognized amortization expense on the interest rate caps of $198,000 and $593,000, respectively, which was recorded as a component of interest expense on brokered deposits and FHLB advances. For the three and nine months ended September 30, 2022, the company recognized amortization expense on the interest rate caps of $204,000 and $574,000, respectively, which was recorded as a component of interest expense on brokered deposits and FHLB advances. The following table presents a summary of the Company’s interest rate caps designated as cash flow hedges as of September 30, 2023 and December 31, 2022: (dollars in thousands) September 30, 2023 December 31, 2022 Notional Amount $ 125,000 $ 125,000 Unamortized Premium Paid 5,279 5,872 Weighted Average Strike Rate 0.96 % 0.96 % Weighted Average Maturity (Years) 6.60 7.35 The following table presents a summary of the Company’s interest rate contracts as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Notional Estimated Notional Estimated (dollars in thousands) Amount Fair Value Amount Fair Value Interest rate swap agreements: Assets $ 183,000 $ 11,139 $ 125,000 $ 10,477 Liabilities — — 38,000 (1,302) Interest rate cap agreements: Assets 125,000 23,006 125,000 19,406 The Company is party to collateral support agreements with certain derivative counterparties. These agreements require that the Company maintain collateral based on the fair values of derivative transactions. In the event of default by the Company, the counterparty would be entitled to the collateral. As of September 30, 2023 and December 31, 2022, the Company pledged no cash collateral for the Company’s derivative contracts. In addition, as of September 30, 2023 and December 31, 2022, the Company's counterparties pledged cash collateral to the Company of $46.0 million and $36.4 million, respectively. The following table summarizes gross and net information about derivative instruments that are eligible for offset in the balance sheet at September 30, 2023 and December 31, 2022: Gross Amounts Not Offset in the Balance Sheet Net Amounts of Gross Amounts Gross Amounts Assets (Liabilities) of Recognized Offset in the Presented in the Financial Cash Collateral Net Assets (dollars in thousands) Assets (Liabilities) Balance Sheet Balance Sheet Instruments Received (Paid) (Liabilities) September 30, 2023 Assets $ 44,107 $ — $ 44,107 $ — $ 46,023 $ (1,916) Liabilities (9,962) — (9,962) — — (9,962) December 31, 2022 Assets $ 38,123 $ — $ 38,123 $ — $ 36,353 $ 1,770 Liabilities (9,542) — (9,542) — — (9,542) The following table presents the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2023 2022 2023 2022 Derivatives in Location of Gain (Loss) Gain (Loss) Loss Cash Flow Hedging Reclassified Reclassified from Reclassified from Relationships from AOCI into Income AOCI into Earnings AOCI into Earnings Interest rate swaps Interest expense $ 1,575 $ 288 $ 4,169 $ (24) Interest rate caps Interest expense 48 (169) (159) (539) No amounts were reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness for these derivatives during the three and nine months ended September 30, 2023 and 2022, and no amounts are expected to be reclassified from accumulated other comprehensive income into net income related to hedge ineffectiveness over the next twelve months. |
Federal Home Loan Bank Advances
Federal Home Loan Bank Advances and Other Borrowings | 9 Months Ended |
Sep. 30, 2023 | |
Federal Home Loan Bank Advances and Other Borrowings | |
Federal Home Loan Bank Advances and Other Borrowings | Note 7: Federal Home Loan Bank Advances and Other Borrowings Federal Home Loan Bank Advances. The Company has entered into an Advances, Pledge, and Security Agreement with the FHLB whereby specific mortgage loans of the Bank with aggregate principal balances of The following table presents FHLB advances, by maturity, at September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted Weighted Average Total Average Total (dollars in thousands) Rate Outstanding Rate Outstanding Less than 1 Year 5.26 % $ 208,000 4.30 % $ 83,000 1 to 2 Years 4.31 25,000 1.05 5,000 2 to 3 Years 4.06 17,500 1.22 5,000 3 to 4 Years 3.35 21,500 0.78 4,000 4 to 5 Years 4.01 22,500 — — Totals $ 294,500 $ 97,000 Line of Credit. On September 1, 2022, the Company entered into a second amendment to the agreement which increased the maximum principal amount of the Company’s revolving line of credit from $25.0 million to $40.0 million and extended the maturity date from February 28, 2023 to September 1, 2024. As of September 30, 2023 and December 31, 2022, there was an outstanding balance of $13.8 million under the revolving line of credit. |
Subordinated Debentures
Subordinated Debentures | 9 Months Ended |
Sep. 30, 2023 | |
Subordinated Debentures | |
Subordinated Debentures | Note 8: Subordinated Debentures The following table presents a summary of the Company’s subordinated debentures as of September 30, 2023 and December 31, 2022: Total Debt Total Debt Date First Maturity Outstanding Outstanding Interest Name Established Redemption Date Date September 30, 2023 December 31, 2022 Rate Coupon Structure (dollars in thousands) 2030 Notes June 19, 2020 July 1, 2025 July 1, 2030 $ 50,000 $ 50,000 5.25 % Fixed-to-Floating (1) 2031 Notes July 8, 2021 July 15, 2026 July 15, 2031 30,000 30,000 3.25 % Fixed-to-Floating (2) Subordinated Debentures 80,000 80,000 Debt Issuance Costs (808) (1,095) Subordinated Debentures, Net of Issuance Costs $ 79,192 $ 78,905 (1) Migrates to three month term SOFR + 5.13% beginning July 1, 2025 until either the early redemption date or the maturity date. (2) Migrates to three month term SOFR + 2.52% beginning July 15, 2026 until either the early redemption date or the maturity date. |
Commitments, Contingencies and
Commitments, Contingencies and Credit Risk | 9 Months Ended |
Sep. 30, 2023 | |
Commitments, Contingencies and Credit Risk | |
Commitments, Contingencies and Credit Risk | Note 9: Commitments, Contingencies and Credit Risk Financial Instruments with Off-Balance Sheet Credit Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the consolidated balance sheets. The Company’s exposure to credit loss is represented by the contractual, or notional, amount of these commitments. The Company follows the same credit policies in making commitments as it does for on-balance sheet instruments. Since some of the commitments are expected to expire without being drawn upon and some of the commitments may not be drawn upon to the total extent of the commitment, the notional amount of these commitments does not necessarily represent future cash requirements. The following table presents commitments outstanding at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Unfunded Commitments Under Lines of Credit $ 570,363 $ 848,734 Letters of Credit 107,292 115,769 Totals $ 677,655 $ 964,503 The Company had outstanding letters of credit with the FHLB in total amounts of $66.8 million and $78.4 million at September 30, 2023 and December 31, 2022, respectively, on behalf of customers and to secure public deposits. The ACL for off-balance sheet credit exposures was $3.2 million at September 30, 2023 and is separately classified on the balance sheet within other liabilities. Prior to the adoption of CECL, the Company’s ACL for off-balance sheet credit exposures was not material. The following table presents the balance and activity in the allowance for credit losses for off-balance sheet credit exposures for the three and nine months ended September 30, 2023: Three Months Ended Nine Months Ended (dollars in thousands) September 30, 2023 September 30, 2023 Allowance for Credit Losses: Beginning Balance, Prior to Adoption of CECL $ 3,835 $ 360 Impact of Adopting CECL — 4,850 Provision for (Recovery of) Off-Balance Sheet Credit Exposures (600) (1,975) Total Ending Balance $ 3,235 $ 3,235 Legal Contingencies Neither the Company nor any of its subsidiaries is a party, and no property of these entities is subject, to any material pending legal proceedings, other than ordinary routine litigation incidental to the Bank’s business. The Company does not know of any material proceeding contemplated by a governmental authority against the Company or any of its subsidiaries. |
Stock Options and Restricted St
Stock Options and Restricted Stock | 9 Months Ended |
Sep. 30, 2023 | |
Stock Options and Restricted Stock | |
Stock Options and Restricted Stock | Note 10: Stock Options and Restricted Stock In 2012, the Company adopted the Bridgewater Bancshares, Inc. 2012 Combined Incentive and Non-Statutory Stock Option Plan (the “2012 Plan”) under which the Company was able to grant options to its directors, officers, and employees for up to 750,000 shares of common stock. Both incentive stock options and nonqualified stock options were granted under the 2012 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant, and the maximum term of each outstanding option is ten years. All outstanding options have been granted with vesting periods of four In 2017, the Company adopted the Bridgewater Bancshares, Inc. 2017 Combined Incentive and Non-Statutory Stock Option Plan (the “2017 Plan”). Under the 2017 Plan, the Company may grant options to its directors, officers, employees and consultants for up to 1,500,000 shares of common stock. Both incentive stock options and nonqualified stock options may be granted under the 2017 Plan. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each outstanding option is ten years. All outstanding options have been granted with vesting periods of four In 2019, the Company adopted the Bridgewater Bancshares, Inc. 2019 Equity Incentive Plan (the “2019 EIP”). Under the 2019 EIP, the Company may grant incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,000,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award is ten years. All outstanding awards have been granted with a vesting period of four years. As of September 30, 2023 and December 31, 2022, there were -0- and 231,363 shares, respectively, of the Company’s common stock reserved for future grants under the 2019 EIP. At the 2023 Annual Meeting of Shareholders (the "Annual Meeting") of the Company, which was held on April 25, 2023, the Company's shareholders approved the Bridgewater Bancshares, Inc. 2023 Equity Incentive Plan (the "2023 EIP"), which the Company's board of directors adopted on February 28, 2023, subject to shareholder approval at the Annual Meeting. Under the 2023 EIP, the Company may grant incentive and nonqualified stock options, stock appreciation rights, stock awards, restricted stock units, restricted stock and cash incentive awards. The Company may grant these awards to its directors, officers, employees and certain other service providers for up to 1,500,000 shares of common stock. The exercise price of each option equals the fair market value of the Company’s stock on the date of grant and the maximum term of each award is ten years. All outstanding awards have been granted with a vesting period of four years. As of September 30, 2023, there were 1,438,137 shares of the Company’s common stock reserved for future grants under the 2023 EIP. Stock Options The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on an industry index as described below. The expected term of options granted is based on historical data and represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Historically, the Company has not paid a dividend on its common stock and does not expect to do so in the near future. The Company used the S&P 600 CM Bank Index as its historical volatility index. The S&P 600 CM Bank Index is an index of publicly traded small capitalization, regional, commercial banks located throughout the United States. There were 51 banks in the index ranging in market capitalization from $500 million up to $4.0 billion. The weighted average assumptions used in the model of valuing stock option grants for the nine months ended September 30, 2023, are as follows: September 30, 2023 Dividend Yield — % Expected Life 7 Years Expected Volatility 42.25 % Risk-Free Interest Rate 4.15 % The following table presents a summary of the status of the Company’s outstanding stock options for the nine months ended September 30, 2023: September 30, 2023 Weighted Average Shares Exercise Price Outstanding at Beginning of Year 1,913,444 $ 9.35 Granted 239,000 10.65 Exercised (226,000) 3.17 Forfeitures (9,000) 13.04 Outstanding at Period End 1,917,444 $ 10.22 Options Exercisable at Period End 1,378,194 $ 8.88 For the three months ended September 30, 2023 and 2022, the Company recognized compensation expense for stock options of $230,000 and $326,000, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized compensation expense for stock options of $601,000 and $926,000, respectively. The following table presents information pertaining to options outstanding at September 30, 2023: Options Outstanding Options Exercisable Weighted Average Number of Weighted Average Remaining Contractual Number of Weighted Average Range of Exercise Prices Options Exercise Price Life in Years Options Exercise Price $ 3.00 - 3.99 88,500 $ 3.07 0.4 88,500 $ 3.07 7.00 - 7.99 893,416 7.47 4.0 893,416 7.47 8.00 - 8.99 17,500 8.76 6.5 11,250 8.76 10.00 - 10.99 249,000 10.63 9.7 7,500 10.08 11.00 - 11.99 85,000 11.27 5.6 68,000 11.27 12.00 - 12.99 263,528 12.90 5.9 206,778 12.90 13.00 - 13.99 25,000 13.22 4.6 25,000 13.22 17.00 - 17.99 295,500 17.50 8.3 77,750 17.50 Totals 1,917,444 $ 10.22 5.6 1,378,194 $ 8.88 As of September 30, 2023, there was $2.2 million of total unrecognized compensation cost related to nonvested stock options granted under the 2012 Plan, 2017 Plan, 2019 EIP, and 2023 EIP that is expected to be recognized over a weighted-average period of 2.7 years. The following table presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Shares Date Fair Value Nonvested Options at December 31, 2022 421,375 $ 4.87 Granted 239,000 5.39 Vested (116,125) 4.78 Forfeited (5,000) 5.74 Nonvested Options at September 30, 2023 539,250 $ 5.11 Restricted Stock Awards In 2019 and 2020, the Company granted restricted stock awards out of the 2019 EIP. These awards vest in equal annual installments on the first four The following table presents an analysis of nonvested restricted stock awards outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Shares Date Fair Value Nonvested Awards at December 31, 2022 38,762 $ 12.50 Granted — — Vested (2,785) 10.32 Forfeited (250) 12.92 Nonvested Awards at September 30, 2023 35,727 $ 12.67 Compensation expense associated with the restricted stock awards is recognized on a straight-line basis over the period that the restrictions associated with the awards lapse based on the total cost of the award at the grant date. For the three months ended September 30, 2023 and 2022, the Company recognized compensation expense for restricted stock awards of $112,000 and $113,000, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized compensation expense for restricted stock awards of $333,000 and $335,000, respectively. As of September 30, 2023, there was $97,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the 2019 EIP that is expected to be recognized over a weighted-average period of 0.2 years. In addition, during the nine months ended September 30, 2023, the Company issued 35,460 shares of unrestricted common stock to non-employee directors, as a part of their compensation for their annual services on the Company’s board of directors. The aggregate value of the shares issued to non-employee directors of $355,000 was included in stock based compensation expense in the accompanying consolidated statements of shareholders’ equity. Restricted Stock Units In 2020, the Company began granting restricted stock units out of the 2019 EIP. Restricted stock units granted out of the 2019 EIP represent the right to receive one share of Company stock upon vesting and vest in equal annual installments on the first four The following table presents an analysis of nonvested restricted stock units outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Units Date Fair Value Nonvested Units at December 31, 2022 351,310 $ 16.30 Granted 82,969 15.59 Vested (5,225) 16.20 Forfeited (10,253) 17.79 Nonvested Units at September 30, 2023 418,801 $ 16.13 Compensation expense associated with the restricted stock units is recognized on a straight-line basis over the period that the restrictions associated with the units lapse based on the total cost of the unit at the grant date. For the three months ended September 30, 2023 and 2022, the Company recognized compensation expense for restricted stock units of $535,000 and $358,000, respectively. For the nine months ended September 30, 2023 and 2022, the Company recognized compensation expense for the restricted stock of $1.6 million and $1.1 million, respectively. As of September 30, 2023, there was $5.0 million of total unrecognized compensation cost related to nonvested restricted stock units granted under the 2019 EIP that is expected to be recognized over a weighted-average period of 2.4 years. |
Regulatory Capital
Regulatory Capital | 9 Months Ended |
Sep. 30, 2023 | |
Regulatory Capital | |
Regulatory Capital | Note 11: Regulatory Capital The Company and the Bank are subject to various regulatory requirements administered by federal 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. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank must also meet certain specific capital guidelines under the regulatory framework for prompt corrective action. The 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 ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets (referred to as the “leverage ratio”), as defined under the applicable regulatory capital rules. The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of September 30, 2023 and December 31, 2022: Minimum Required For Capital Adequacy To be Well Capitalized For Capital Adequacy Purposes Plus Capital Under Prompt Corrective Actual Purposes Conservation Buffer Action Regulations (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2023 Company (Consolidated): Total Risk-based Capital $ 567,202 13.88 % $ 326,865 8.00 % $ 429,010 10.50 % N/A N/A Tier 1 Risk-based Capital 436,903 10.69 245,149 6.00 347,294 8.50 N/A N/A Common Equity Tier 1 Capital 370,389 9.07 183,861 4.50 286,007 7.00 N/A N/A Tier 1 Leverage Ratio 436,903 9.62 181,605 4.00 181,605 4.00 N/A N/A Bank: Total Risk-based Capital $ 543,914 13.33 % $ 326,519 8.00 % $ 428,556 10.50 % $ 408,149 10.00 % Tier 1 Risk-based Capital 492,861 12.08 244,889 6.00 346,926 8.50 326,519 8.00 Common Equity Tier 1 Capital 492,861 12.08 183,667 4.50 285,704 7.00 265,297 6.50 Tier 1 Leverage Ratio 492,861 10.88 181,256 4.00 181,256 4.00 226,570 5.00 Minimum Required For Capital Adequacy To be Well Capitalized For Capital Adequacy Purposes Plus Capital Under Prompt Corrective Actual Purposes Conservation Buffer Action Regulations (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2022 Company (Consolidated): Total Risk-based Capital $ 536,352 13.15 % $ 326,190 8.00 % $ 428,125 10.50 % N/A N/A Tier 1 Risk-based Capital 409,092 10.03 244,643 6.00 346,577 8.50 N/A N/A Common Equity Tier 1 Capital 342,578 8.40 183,482 4.50 285,417 7.00 N/A N/A Tier 1 Leverage Ratio 409,092 9.55 171,368 4.00 171,368 4.00 N/A N/A Bank: Total Risk-based Capital $ 508,760 12.47 % $ 326,288 8.00 % $ 428,253 10.50 % $ 407,860 10.00 % Tier 1 Risk-based Capital 460,404 11.29 244,716 6.00 346,681 8.50 326,288 8.00 Common Equity Tier 1 Capital 460,404 11.29 183,537 4.50 285,502 7.00 265,109 6.50 Tier 1 Leverage Ratio 460,404 10.76 171,113 4.00 171,113 4.00 213,891 5.00 The Company and the Bank must maintain a capital conservation buffer, as defined by regulatory guidelines, in order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers. |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurement | |
Fair Value Measurement | Note 12: Fair Value Measurement The Company categorizes its assets and liabilities measured at fair value into a three-level hierarchy based on the priority of the inputs to the valuation technique used to determine fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used in the determination of the fair value measurement fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. Assets and liabilities valued at fair value are categorized based on the inputs to the valuation techniques as follows: Level 1 – Inputs that utilized quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 – Inputs that include quoted prices for similar assets and liabilities in active markets and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instruments. Fair values for these instruments are estimated using pricing models, quoted prices of securities with similar characteristics, or discounted cash flows. Level 3 – Inputs that are unobservable for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity. Subsequent to initial recognition, the Company may re-measure the carrying value of assets and liabilities measured on a nonrecurring basis to fair value. Adjustments to fair value usually result when certain assets are impaired. Such assets are written down from their carrying amounts to their fair value. Professional standards allow entities the irrevocable option to elect to measure certain financial instruments and other items at fair value for the initial and subsequent measurement on an instrument-by-instrument basis. The Company adopted the policy to value certain financial instruments at fair value. The Company has not elected to measure any existing financial instruments at fair value; however, it may elect to measure newly acquired financial instruments at fair value in the future. Recurring Basis The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value of Financial Assets: Securities Available for Sale: U.S. Treasury Securities $ 2,864 $ — $ — $ 2,864 Municipal Bonds — 122,497 — 122,497 Mortgage-Backed Securities — 210,375 — 210,375 Corporate Securities — 121,717 — 121,717 SBA Securities — 19,966 — 19,966 Asset-Backed Securities — 75,657 — 75,657 Interest Rate Caps — 23,006 — 23,006 Interest Rate Swaps — 21,101 — 21,101 Total Fair Value of Financial Assets $ 2,864 $ 594,319 $ — $ 597,183 Fair Value of Financial Liabilities: Interest Rate Swaps $ — $ 9,962 $ — $ 9,962 Total Fair Value of Financial Liabilities $ — $ 9,962 $ — $ 9,962 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value of Financial Assets: Securities Available for Sale: U.S. Treasury Securities $ 2,580 $ — $ — $ 2,580 Municipal Bonds — 131,354 — 131,354 Mortgage-Backed Securities — 237,784 — 237,784 Corporate Securities — 109,827 — 109,827 SBA Securities — 20,877 — 20,877 Asset-Backed Securities — 46,191 — 46,191 Interest Rate Caps — 19,406 — 19,406 Interest Rate Swaps — 18,717 — 18,717 Total Fair Value of Financial Assets $ 2,580 $ 584,156 $ — $ 586,736 Fair Value of Financial Liabilities: Interest Rate Swaps $ — $ 9,542 $ — $ 9,542 Total Fair Value of Financial Liabilities $ — $ 9,542 $ — $ 9,542 Investment Securities When available, the Company uses quoted market prices to determine the fair value of investment securities; such items are classified in Level 1 of the fair value hierarchy. For the Company’s investments, when quoted prices are not available for identical securities in an active market, the Company determines fair value utilizing vendors who apply matrix pricing for similar bonds where no price is observable or may compile prices from various sources. These models are primarily industry-standard models that consider various assumptions, including time value, yield curve, volatility factors, prepayment speeds, default rates, loss severity, current market, and contractual prices for the underlying financial instruments, as well as other relevant economic measures. Substantially, all of these assumptions are observable in the marketplace and can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. Fair values from these models are verified, where possible, against quoted market prices for recent trading activity of assets with similar characteristics to the security being valued. Such methods are generally classified as Level 2. However, when prices from independent sources vary, or cannot be obtained or corroborated, a security is generally classified as Level 3. Interest Rate Caps Interest Rate Swaps Interest rate swaps are traded in over-the-counter markets where quoted market prices are not readily available. For those interest rate swaps, fair value is determined using internally developed models of a third party that uses primarily market observable inputs, such as yield curves and option volatilities, and accordingly are valued using Level 2 inputs. Nonrecurring Basis Certain assets are measured at fair value on a nonrecurring basis. These assets are not measured at fair value on an ongoing basis; however, they are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment or a change in the amount of previously recognized impairment. The following tables present net impairment losses related to nonrecurring fair value measurements of certain assets at September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Loss Individually Evaluated Loans $ — $ 175 $ — $ 179 Totals $ — $ 175 $ — $ 179 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 96 $ — $ 71 Totals $ — $ 96 $ — $ 71 Individually Evaluated Loans (Impaired Loans prior to January 1, 2023) In accordance with the provisions of the individually evaluated loan guidance, credit loss is measured on loans when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. The Company has elected to use the practical expedient to measure individually evaluated loans as collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. The credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale of the collateral. Those individually evaluated loans not requiring an allowance represent loans for which the fair value of the expected repayments or collateral exceeds the recorded investments in such loans. Individually evaluated loans for which an allowance is established based on the fair value of collateral require classification in the fair value hierarchy. Collateral values are estimated using Level 2 inputs based on customized discounting criteria. Credit loss amounts on individually evaluated loans represent specific valuation allowance and write-downs during the period presented that were individually evaluated for impairment based on the estimated fair value of the collateral less estimated selling costs, excluding impaired loans fully charged-off. Fair Value Disclosure of fair value information about financial instruments, for which it is practicable to estimate that value, is required whether or not recognized in the consolidated balance sheets. In cases where quoted market prices are not available, fair values are based on estimates using present value of cash flow or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimate of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases could not be realized in immediate settlement of the instruments. Certain financial instruments with a fair value that is not practicable to estimate and all non-financial instruments are excluded from the disclosure requirements. Accordingly, the aggregate fair value amounts presented do not necessarily represent the underlying value of the Company. Fair value estimates are made at a specific point in time based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular instrument. Because no market exists for a significant portion of the Company’s financial instruments, 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 that could affect the estimates. Fair value estimates are based on existing on and off-balance sheet financial instruments without attempting to estimate the value of anticipated future business. Deposits with no stated maturities are defined as having a fair value equivalent to the amount payable on demand. This prohibits adjusting fair value derived from retaining those deposits for an expected future period of time. This component, commonly referred to as a deposit base intangible, is neither considered in the above amounts nor is it recorded as an intangible asset on the balance sheet. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates. The following tables present the carrying amounts and estimated fair values of financial instruments at September 30, 2023 and December 31, 2022: September 30, 2023 Fair Value Hierarchy Carrying Estimated (dollars in thousands) Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 124,358 $ 124,358 $ — $ — $ 124,358 Bank-Owned Certificates of Deposit 1,225 — 1,210 — 1,210 Securities Available for Sale 553,076 2,864 550,212 — 553,076 FHLB Stock, at Cost 17,056 — 17,056 — 17,056 Loans, Net 3,664,464 — 3,522,379 — 3,522,379 Accrued Interest Receivable 15,182 — 15,182 — 15,182 Interest Rate Caps 23,006 — 23,006 — 23,006 Interest Rate Swaps 21,101 — 21,101 — 21,101 Financial Liabilities: Deposits $ 3,675,509 $ — $ 3,653,876 $ — $ 3,653,876 Notes Payable 13,750 — 13,771 — 13,771 FHLB Advances 294,500 — 292,436 — 292,436 Subordinated Debentures 79,192 — 71,794 — 71,794 Accrued Interest Payable 3,816 — 3,816 — 3,816 Interest Rate Swaps 9,962 — 9,962 — 9,962 December 31, 2022 Fair Value Hierarchy Carrying Estimated (dollars in thousands) Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 87,043 $ 87,043 $ — $ — $ 87,043 Bank-Owned Certificates of Deposit 1,181 — 1,173 — 1,173 Securities Available for Sale 548,613 2,580 546,033 — 548,613 FHLB Stock, at Cost 19,606 — 19,606 — 19,606 Loans, Net 3,512,157 — 3,314,190 — 3,314,190 Accrued Interest Receivable 13,479 — 13,479 — 13,479 Interest Rate Caps 19,406 — 19,406 — 19,406 Interest Rate Swaps 18,717 — 18,717 — 18,717 Financial Liabilities: Deposits $ 3,416,543 $ — $ 3,390,416 $ — $ 3,390,416 Federal Funds Purchased 287,000 — 287,000 — 287,000 Notes Payable 13,750 — 13,473 — 13,473 FHLB Advances 97,000 — 96,061 — 96,061 Subordinated Debentures 78,905 — 70,931 — 70,931 Accrued Interest Payable 2,831 — 2,831 — 2,831 Interest Rate Swaps 9,542 — 9,542 — 9,542 The following methods and assumptions were used by the Company to estimate fair value of consolidated financial statements not previously discussed. Cash and due from banks Bank-owned certificates of deposit FHLB stock Loans, net Accrued interest receivable Deposits Federal funds purchased FHLB advances Subordinated debentures Accrued interest payable Off-balance sheet instruments Limitations |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2023 | |
Subsequent Events | |
Subsequent Events | Note 13: Subsequent Events On October 25, 2023, the Company’s Board of Directors announced a quarterly cash dividend of $36.72 per share ($0.3672 per depositary share) on its 5.875% Non-Cumulative Perpetual Preferred Stock, Series A (“Series A Preferred Stock”), payable on December 1, 2023, to shareholders of record on the Series A Preferred Stock at the close of business on November 15, 2023. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Description of the Business and Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include all disclosures necessary for a complete presentation of the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of shareholders’ equity and consolidated statements of cash flows in conformity with U.S. generally accepted accounting principles (“GAAP”). However, all normal recurring adjustments which are, in the opinion of management, necessary for the fair presentation of the interim financial statements have been included. The results of operations for the three and nine-month periods ended September 30, 2023 are not necessarily indicative of the results which may be expected for the entire year. For further information, refer to the consolidated financial statements and footnotes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 7, 2023. |
Principles of Consolidation | Principles of Consolidation These consolidated financial statements include the amounts of the Company, the Bank, with locations in Bloomington, Greenwood, Minneapolis (2), St. Louis Park, Orono, and St. Paul, Minnesota, BWB Holdings, LLC, Bridgewater Investment Management, Inc., and Bridgewater Risk Management, Inc. All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates in Preparation of Financial Statements | Use of Estimates in Preparation of Financial Statements The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Information available which could affect judgements includes, but is not limited to, changes in interest rates, changes in the performance of the economy, including elevated levels of inflation and possible recession, and changes in the financial condition of borrowers. Material estimates that are particularly susceptible to significant change in the near term include the determination of the allowance for credit losses, calculation of deferred tax assets, fair value of financial instruments, and investment securities impairment. |
Allowance for Credit Losses - Securities Available for Sale | Securities Available for Sale For any securities classified as available for sale that are in an unrealized loss position at the balance sheet date, the Company assesses whether or not it intends to sell the security, or if it is more likely than not it will be required to sell the security, before recovery of its amortized cost basis. If either criteria is met, the security's amortized cost basis is written down to fair value through income with the establishment of an allowance. For securities that do not meet the aforementioned criteria, the Company evaluates whether any portion of the decline in fair value is the result of credit deterioration. In making this assessment, management considers the extent to which the amortized cost of the security exceeds its fair value, changes in credit ratings and any other known adverse conditions related to the specific security, among other factors. If the assessment indicates that a credit loss exists, an allowance for credit losses, or ACL, is recorded for the amount by which the amortized cost basis of the security exceeds the present value of cash flows expected to be collected, limited by the amount by which the amortized cost exceeds fair value. Any impairment not recognized in the allowance for credit losses is recognized in other comprehensive income. Changes in the ACL on securities are recorded as a provision for (or recovery of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of a security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on securities available for sale is excluded from the estimate of credit losses. |
Loans | Loans The ACL on loans is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on loans over their contractual life. The contractual term does not consider extensions, renewals or modifications. Loans are charged off against the ACL on loans when management believes the uncollectibility of a loan balance has been confirmed. Recoveries do not exceed the aggregate of amounts previously charged off or expected to be charged off. Subsequent recoveries, if any, are credited to the ACL on loans. The ACL on loans is measured on a collective or pooled basis when similar risk characteristics exist. The Company’s pooling method is primarily based on loan purpose and collateral type and generally follows the Company’s loan segmentation for regulatory reporting. The Company has identified the following pools of loans with similar risk characteristics for measuring the ACL on loans: Commercial: Paycheck Protection Program (PPP): Construction and Land Development: 1-4 Family Construction: 1-4 Family Mortgage: Multifamily: Commercial Real Estate (CRE) Owner Occupied: Commercial Real Estate (CRE) Nonowner Occupied: Consumer and Other: Management assesses the adequacy of the ACL on loans on a quarterly basis. Management estimates the ACL on loans using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The Company uses the weighted-average remaining maturity, or WARM, method as the basis for estimating expected credit losses. The WARM method uses a historical average annual charge off rate. This average annual charge off rate contains loss content over a historical lookback period and is used as a foundation for estimating the ACL on loans for the remaining outstanding balances of loans by segment at the balance sheet date. The average annual charge off rate is applied to the contractual term, further adjusted for estimated prepayments, to determine the unadjusted historical charge off rate. The calculation of the unadjusted historical charge off rate is then adjusted for current conditions and for reasonable and supportable forecast periods through qualitative factors prior to being applied to the current balance of the loan segments. Accrued interest receivable on loans available for sale is excluded from the estimate of credit losses. Forecast adjustments to the historical loss rate are based on a forecast of the U.S. national unemployment rate, a forecast of the difference between the 10-year and 3-month treasury rates, and the most recent available BBB rated corporate bond spreads to U.S. Treasury securities, or BBB Spread. The forecast overlay adjustment for the reasonable and supportable forecast assumes an immediate reversion after a one-year forecast period to historical loss rates for the remaining life of the respective loan segment. Qualitative factors are used to cover losses that are expected but, in the Company’s assessment, may not be adequately represented in the quantitative analysis or the forecasts described above. These qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the historic loss factors. Each qualitative loss factor, for each loan segment within the portfolio, incorporates consideration for a minimum to maximum range for loss factors. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses and are applied to each loan segment. The qualitative factors applied to each loan segment include changes in lending policies and procedures, general economic and business conditions, the nature, volume and terms of loans, the experience, depth and ability of lending staff, the quality of the loan review function, the value of underlying collateral, competition, legal and regulatory factors, the volume and severity of watchlist and past due loans, and the level of concentrations. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the pooled evaluations and typically represent collateral dependent loans but may also include other nonperforming loans or modifications. The Company has elected to use the practical expedient to measure individually evaluated loans as collateral dependent when repayment is expected to be provided substantially through the operation or sale of the collateral. The credit loss is measured as the difference between the amortized cost basis of the loan and the fair value of the underlying collateral. The fair value of the collateral is adjusted for the estimated cost to sell if repayment or satisfaction of a loan is dependent on the sale of the collateral. Management may also adjust its assumptions to account for differences between expected and actual losses from period to period. The variability of management’s assumptions could alter the ACL on loans materially and impact future results of operations and financial condition. The loss estimation models and methods used to determine the allowance for credit losses are continually refined and enhanced. |
Allowance for Credit Losses - Off-balance Sheet Credit Exposures | Off-Balance Sheet Credit Exposures The Company maintains a separate ACL on off-balance sheet credit exposures, including unfunded loan commitments, financial guarantees, and letters of credit, which is included in other liabilities on the consolidated balance sheet, unless the obligation is unconditionally cancellable. The ACL on off-balance sheet credit exposures is adjusted as a provision for (or recovery of) credit loss expense. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the estimated life of such commitments. The allowance is calculated using the same aggregate reserve rates calculated for the funded portion of the loan segment and applied to the amount of commitments expected to fund. |
Impact of Recent Accounting Standards | Impact of Recently Adopted Accounting Guidance On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13 “ Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses of Financial Instruments,” The Company adopted CECL using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for reporting periods beginning after January 1, 2023 are presented under CECL while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company recorded a net decrease to retained earnings of $3.9 million as of January 1, 2023 for the cumulative effect of adopting CECL. The transition adjustment included a $650,000 impact due to the increase in ACL related to loans, a $4.8 million impact due the establishment of the allowance for off-balance sheet credit exposures, and a $1.6 million impact on deferred taxes. The following table presents the impact of adopting CECL: January 1, 2023 Impact of As Reported (dollars in thousands) Pre-CECL Adoption CECL Adoption Under CECL Assets: Loans Commercial $ 6,500 $ (1,157) $ 5,343 Paycheck Protection Program 1 (1) — Construction and Land Development 3,911 (1,070) 2,841 1-4 Family Construction 845 (235) 610 Real Estate Mortgage: 1-4 Family Mortgage 4,325 (1,778) 2,547 Multifamily 17,459 3,318 20,777 CRE Owner Occupied 1,965 (943) 1,022 CRE Nonowner Occupied 12,576 2,869 15,445 Consumer and Other 151 (90) 61 Unallocated 263 (263) — Allowance for Credit Losses on Loans $ 47,996 $ 650 $ 48,646 Liabilities: Allowance for Credit Losses on Off-balance Sheet Credit Exposures $ 360 $ 4,850 $ 5,210 In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. Receivables – Troubled Debt Restructurings by Creditors, Impact of Recently Issued Accounting Guidance In October 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative. In March 2023, the FASB issued ASU No. 2023-01, Leases (Topic 842): Common Control Arrangements In March 2023, the FASB issued ASU No. 2023-02, Investments Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method amortization method, regardless of the program giving rise to the related income tax credits. This guidance is effective for public business entities for fiscal years including interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted in any interim period. The Company is assessing ASU 2023-02 and its impact on its accounting and disclosures. |
Subsequent Events | Subsequent Events Subsequent events have been evaluated through November 2, 2023, which is the date the consolidated financial statements were available to be issued. |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Description of the Business and Summary of Significant Accounting Policies | |
Schedule of impact of adopting CECL | The following table presents the impact of adopting CECL: January 1, 2023 Impact of As Reported (dollars in thousands) Pre-CECL Adoption CECL Adoption Under CECL Assets: Loans Commercial $ 6,500 $ (1,157) $ 5,343 Paycheck Protection Program 1 (1) — Construction and Land Development 3,911 (1,070) 2,841 1-4 Family Construction 845 (235) 610 Real Estate Mortgage: 1-4 Family Mortgage 4,325 (1,778) 2,547 Multifamily 17,459 3,318 20,777 CRE Owner Occupied 1,965 (943) 1,022 CRE Nonowner Occupied 12,576 2,869 15,445 Consumer and Other 151 (90) 61 Unallocated 263 (263) — Allowance for Credit Losses on Loans $ 47,996 $ 650 $ 48,646 Liabilities: Allowance for Credit Losses on Off-balance Sheet Credit Exposures $ 360 $ 4,850 $ 5,210 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share | |
Schedule of numerators and denominators for basic and diluted earnings per share computations | The following table presents the numerators and denominators for basic and diluted earnings per share computations for the three and nine months ended September 30, 2023 and 2022: Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands, except per share data) 2023 2022 2023 2022 Net Income Available to Common Shareholders $ 8,616 $ 13,500 $ 28,047 $ 36,617 Weighted Average Common Stock Outstanding: Weighted Average Common Stock Outstanding (Basic) 27,943,409 27,520,117 27,853,036 27,825,517 Dilutive Effect of Stock Compensation 368,369 1,072,737 486,816 1,057,184 Weighted Average Common Stock Outstanding (Dilutive) 28,311,778 28,592,854 28,339,852 28,882,701 Basic Earnings per Common Share $ 0.31 $ 0.49 $ 1.01 $ 1.32 Diluted Earnings per Common Share 0.30 0.47 0.99 1.27 |
Securities (Tables)
Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Securities | |
Summary of the amortized cost and estimated fair value of securities with gross unrealized gains and losses | The following tables present the amortized cost and estimated fair value of securities with gross unrealized gains and losses at September 30, 2023 and December 31, 2022: September 30, 2023 Gross Gross Amortized Unrealized Unrealized (dollars in thousands) Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 2,883 $ — $ (19) $ 2,864 Municipal Bonds 148,725 — (26,228) 122,497 Mortgage-Backed Securities 233,920 137 (23,682) 210,375 Corporate Securities 134,369 268 (12,920) 121,717 SBA Securities 19,779 312 (125) 19,966 Asset-Backed Securities 75,616 388 (347) 75,657 Total Securities Available for Sale $ 615,292 $ 1,105 $ (63,321) $ 553,076 December 31, 2022 Gross Gross Amortized Unrealized Unrealized (dollars in thousands) Cost Gains Losses Fair Value Securities Available for Sale: U.S. Treasury Securities $ 2,621 $ — $ (41) $ 2,580 Municipal Bonds 156,506 62 (25,214) 131,354 Mortgage-Backed Securities 252,919 2,465 (17,600) 237,784 Corporate Securities 116,871 45 (7,089) 109,827 SBA Securities 20,957 79 (159) 20,877 Asset-Backed Securities 46,623 188 (620) 46,191 Total Securities Available for Sale $ 596,497 $ 2,839 $ (50,723) $ 548,613 |
Summary of fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | The following tables present the fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at September 30, 2023 and December 31, 2022: Less Than 12 Months 12 Months or Greater Total Number of Unrealized Unrealized Unrealized (dollars in thousands, except number of holdings) Holdings Fair Value Losses Fair Value Losses Fair Value Losses September 30, 2023 U.S. Treasury Securities 5 $ 886 $ (5) $ 880 $ (14) $ 1,766 $ (19) Municipal Bonds 218 8,358 (232) 114,139 (25,996) 122,497 (26,228) Mortgage-Backed Securities 140 68,938 (2,205) 135,408 (21,477) 204,346 (23,682) Corporate Securities 109 18,899 (1,024) 94,731 (11,896) 113,630 (12,920) SBA Securities 47 2,319 (6) 6,811 (119) 9,130 (125) Asset-Backed Securities 16 17,215 (130) 14,173 (217) 31,388 (347) Total Securities Available for Sale 535 $ 116,615 $ (3,602) $ 366,142 $ (59,719) $ 482,757 $ (63,321) Less Than 12 Months 12 Months or Greater Total Number of Unrealized Unrealized Unrealized (dollars in thousands, except number of holdings) Holdings Fair Value Losses Fair Value Losses Fair Value Losses December 31, 2022 U.S. Treasury Securities 6 $ 2,330 $ (41) $ — $ — $ 2,330 $ (41) Municipal Bonds 225 59,912 (5,321) 69,424 (19,893) 129,336 (25,214) Mortgage-Backed Securities 130 123,224 (5,427) 62,882 (12,173) 186,106 (17,600) Corporate Securities 100 88,486 (5,121) 17,054 (1,968) 105,540 (7,089) SBA Securities 49 2,498 (6) 9,750 (153) 12,248 (159) Asset-Backed Securities 20 21,919 (396) 6,186 (224) 28,105 (620) Total Securities Available for Sale 530 $ 298,369 $ (16,312) $ 165,296 $ (34,411) $ 463,665 $ (50,723) |
Schedule of contractual maturities of debt | The following table presents a summary of amortized cost and estimated fair value of debt securities by the lesser of expected call date or contractual maturity as of September 30, 2023. Call date is used when a call of the debt security is expected, as determined by the Company when the security has a market value above its amortized cost. Contractual maturities will differ from expected maturities for mortgage-backed, SBA securities and asset-backed securities because borrowers may have the right to call or prepay obligations without penalties. (dollars in thousands) Amortized Cost Fair Value September 30, 2023 Due in One Year or Less $ 9,779 $ 9,833 Due After One Year Through Five Years 44,811 42,665 Due After Five Years Through 10 Years 179,590 155,444 Due After 10 Years 51,797 39,136 Subtotal 285,977 247,078 Mortgage-Backed Securities 233,920 210,375 SBA Securities 19,779 19,966 Asset-Backed Securities 75,616 75,657 Totals $ 615,292 $ 553,076 |
Summary of the proceeds from sales of securities available for sale, as well as gross gains and losses | The following table presents a summary of the proceeds from sales of securities available for sale, as well as gross gains and losses, for the three and nine months ended September 30, 2023 and September 30, 2022: Three Months Ended Nine Months Ended September 30, September 30, (dollars in thousands) 2023 2022 2023 2022 Proceeds From Sales of Securities $ — $ — $ 26,976 $ 25,066 Gross Gains on Sales — — 247 234 Gross Losses on Sales — — (253) (182) |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Loans and Allowance for Credit Losses | |
Summary of components of loans | The following table presents the components of the loan portfolio at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Commercial $ 459,063 $ 435,344 Paycheck Protection Program 791 1,049 Construction and Land Development 294,818 295,554 1-4 Family Construction 64,463 70,242 Real Estate Mortgage: 1-4 Family Mortgage 404,716 355,474 Multifamily 1,378,669 1,306,738 CRE Owner Occupied 159,485 149,905 CRE Nonowner Occupied 951,263 947,008 Total Real Estate Mortgage Loans 2,894,133 2,759,125 Consumer and Other 9,003 8,132 Total Loans, Gross 3,722,271 3,569,446 Allowance for Credit Losses (50,585) (47,996) Net Deferred Loan Fees (7,222) (9,293) Total Loans, Net $ 3,664,464 $ 3,512,157 |
Summary of aging in past due loans and nonaccrual status, with and without an ACL, by loan segment | The following tables present the aging in past due loans and nonaccrual status, with and without an ACL, by loan segment as of September 30, 2023 and December 31, 2022: Accruing Interest 30-89 Days 90 Days or Nonaccrual Nonaccrual (dollars in thousands) Current Past Due More Past Due with ACL without ACL Total September 30, 2023 Commercial $ 458,883 $ 11 $ — $ 74 $ 95 $ 459,063 Paycheck Protection Program 791 — — — — 791 Construction and Land Development 294,732 — — — 86 294,818 1-4 Family Construction 64,463 — — — — 64,463 Real Estate Mortgage: 1-4 Family Mortgage 404,716 — — — — 404,716 Multifamily 1,378,669 — — — — 1,378,669 CRE Owner Occupied 158,991 — — — 494 159,485 CRE Nonowner Occupied 951,263 — — — — 951,263 Consumer and Other 9,003 — — — — 9,003 Totals $ 3,721,511 $ 11 $ — $ 74 $ 675 $ 3,722,271 Accruing Interest 30-89 Days 90 Days or Nonaccrual Nonaccrual (dollars in thousands) Current Past Due More Past Due with ACL without ACL Total December 31, 2022 Commercial $ 435,274 $ 70 $ — $ — $ — $ 435,344 Paycheck Protection Program 1,049 — — — — 1,049 Construction and Land Development 295,448 — — — 106 295,554 1-4 Family Construction 70,242 — — — — 70,242 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 36,875 — — — — 36,875 1st REM - 1-4 Family 50,945 — — — — 50,945 LOCs and 2nd REM - Rentals 27,985 — — — — 27,985 1st REM - Rentals 239,553 116 — — — 239,669 Multifamily 1,306,738 — — — — 1,306,738 CRE Owner Occupied 149,372 — — — 533 149,905 CRE Nonowner Occupied 947,008 — — — — 947,008 Consumer and Other 8,132 — — — — 8,132 Totals $ 3,568,621 $ 186 $ — $ — $ 639 $ 3,569,446 |
Summary of loan balances classified by credit quality indicators by year of origination | The following table presents loan balances classified by credit quality indicators by year of origination as of September 30, 2023: September 30, 2023 (dollars in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Commercial Pass $ 47,507 $ 141,694 $ 39,407 $ 25,556 $ 19,018 $ 4,735 $ 160,955 $ 438,872 Watch 7 332 38 — 3 1,796 2,184 4,360 Substandard 76 11,462 11 — — 62 4,220 15,831 Total Commercial 47,590 153,488 39,456 25,556 19,021 6,593 167,359 459,063 Current Period Gross Write-offs 96 — — — — — — 96 Paycheck Protection Program Pass — — 791 — — — — 791 Total Paycheck Protection Program — — 791 — — — — 791 Current Period Gross Write-offs — — — — — — — — Construction and Land Development Pass 37,814 194,143 48,288 5,021 — 91 9,375 294,732 Substandard — 86 — — — — — 86 Total Construction and Land Development 37,814 194,229 48,288 5,021 — 91 9,375 294,818 Current Period Gross Write-offs — — — — — — — — 1-4 Family Construction Pass 33,966 13,594 935 358 — — 15,610 64,463 Total 1-4 Family Construction 33,966 13,594 935 358 — — 15,610 64,463 Current Period Gross Write-offs — — — — — — — — Real Estate Mortgage: — 1-4 Family Mortgage Pass 61,412 109,495 87,381 55,250 19,059 4,880 66,575 404,052 Watch — — — — — 1 — 1 Substandard — — — — — 663 — 663 Total 1-4 Family Mortgage 61,412 109,495 87,381 55,250 19,059 5,544 66,575 404,716 Current Period Gross Write-offs — — — — — — — — Multifamily Pass 136,071 437,174 473,938 230,980 42,344 46,635 8,598 1,375,740 Watch 2,929 — — — — — — 2,929 Total Multifamily 139,000 437,174 473,938 230,980 42,344 46,635 8,598 1,378,669 Current Period Gross Write-offs — — — — — — — — CRE Owner Occupied Pass 31,090 48,727 41,274 20,827 5,076 9,728 1,194 157,916 Substandard 200 — 494 — — 875 — 1,569 Total CRE Owner Occupied 31,290 48,727 41,768 20,827 5,076 10,603 1,194 159,485 Current Period Gross Write-offs — — — — — — — — CRE Nonowner Occupied Pass 123,283 297,158 256,990 84,384 78,708 68,128 5,553 914,204 Watch 6,176 10,173 3,238 — — — — 19,587 Substandard 9,780 4,408 — — 3,284 — — 17,472 Total CRE Nonowner Occupied 139,239 311,739 260,228 84,384 81,992 68,128 5,553 951,263 Current Period Gross Write-offs — — — — — — — — Total Real Estate Mortgage Loans 370,941 907,135 863,315 391,441 148,471 130,910 81,920 2,894,133 Consumer and Other Pass 2,744 290 10 1,501 11 — 4,447 9,003 Total Consumer and Other 2,744 290 10 1,501 11 — 4,447 9,003 Current Period Gross Write-offs 2 — — — — — 31 33 Total Period Gross Write-offs 98 — — — — — 31 129 Total Loans $ 493,055 $ 1,268,736 $ 952,795 $ 423,877 $ 167,503 $ 137,594 $ 278,711 $ 3,722,271 The following table presents the risk category of loans by loan segment as of December 31, 2022: December 31, 2022 (dollars in thousands) Pass Watch Substandard Total Commercial $ 406,192 $ 9,477 $ 19,675 $ 435,344 Paycheck Protection Program 1,049 — — 1,049 Construction and Land Development 294,736 712 106 295,554 1-4 Family Construction 70,242 — — 70,242 Real Estate Mortgage: HELOC and 1-4 Family Junior Mortgage 36,875 — — 36,875 1st REM - 1-4 Family 50,271 674 — 50,945 LOCs and 2nd REM - Rentals 27,978 7 — 27,985 1st REM - Rentals 239,277 — 392 239,669 Multifamily 1,303,468 3,270 — 1,306,738 CRE Owner Occupied 148,268 — 1,637 149,905 CRE Nonowner Occupied 922,657 18,112 6,239 947,008 Consumer and Other 8,132 — — 8,132 Totals $ 3,509,145 $ 32,252 $ 28,049 $ 3,569,446 |
Summary of the activity in the allowance for loan losses by segment | The following table presents the activity in the allowance for credit losses, by segment, for the three and nine months ended September 30, 2023. On January 1, 2023, the Company adopted CECL, which added $650,000 to the total ACL. Under CECL, the Company recorded a $0 and $2.1 million provision for credit losses on loans during the three and nine months ended September 30, 2023, respectively, compared to a $1.5 million and $6.2 million provision for loan losses in the three and nine months ended September 30, 2022, respectively, under the incurred loss method. Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total Three Months Ended September 30, 2023 Allowance for Credit Losses for Loans: Beginning Balance $ 5,439 $ — $ 3,476 $ 654 $ 2,836 $ 21,164 $ 1,086 $ 15,976 $ 70 $ — $ 50,701 Provision for Credit Losses for Loans 151 — (704) (80) 22 1,052 3 (464) 20 — — Loans Charged-off (96) — — — — — — — (26) — (122) Recoveries of Loans 2 — — — 2 — — — 2 — 6 Total Ending Allowance Balance $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 Nine Months Ended September 30, 2023 Allowance for Credit Losses for Loans: Beginning Balance, Prior to Adoption of CECL $ 6,500 $ 1 $ 3,911 $ 845 $ 4,325 $ 17,459 $ 1,965 $ 12,576 $ 151 $ 263 $ 47,996 Impact of Adopting CECL (1,157) (1) (1,070) (235) (1,778) 3,318 (943) 2,869 (90) (263) 650 Provision for Credit Losses for Loans 242 — (69) (36) 309 1,439 67 67 31 — 2,050 Loans Charged-off (96) — — — — — — — (33) — (129) Recoveries of Loans 7 — — — 4 — — — 7 — 18 Total Ending Allowance Balance $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 The following table presents the activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2022, prepared using the previous GAAP incurred loss method prior to the adoption of CECL: Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total Three Months Ended September 30, 2022 Allowance for Loan Losses: Beginning Balance $ 6,275 $ 2 $ 4,134 $ 638 $ 4,206 $ 14,977 $ 1,920 $ 12,235 $ 154 $ 170 $ 44,711 Provision for Loan Losses 70 (1) (363) 60 (257) 1,845 107 47 13 (21) 1,500 Loans Charged-off — — — — — — — — (5) — (5) Recoveries of Loans 3 — — — 281 — — — 1 — 285 Total Ending Allowance Balance $ 6,348 $ 1 $ 3,771 $ 698 $ 4,230 $ 16,822 $ 2,027 $ 12,282 $ 163 $ 149 $ 46,491 Nine Months Ended September 30, 2022 Allowance for Loan Losses: Beginning Balance $ 6,256 $ 13 $ 3,139 $ 618 $ 3,757 $ 12,610 $ 1,495 $ 11,335 $ 147 $ 650 $ 40,020 Provision for Loan Losses 98 (12) 632 80 187 4,212 532 947 25 (501) 6,200 Loans Charged-off (13) — — — — — — — (21) — (34) Recoveries of Loans 7 — — — 286 — — — 12 — 305 Total Ending Allowance Balance $ 6,348 $ 1 $ 3,771 $ 698 $ 4,230 $ 16,822 $ 2,027 $ 12,282 $ 163 $ 149 $ 46,491 The following tables present the balance in the allowance for credit losses and the recorded investment in loans, by segment, based on impairment method as of September 30, 2023 and December 31, 2022: Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamil y Occupied Occupied and Other Unallocated Total ACL at September 30, 2023 Individually Evaluated for Impairment $ 84 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 84 Collectively Evaluated for Impairment 5,412 — 2,772 574 2,860 22,216 1,089 15,512 66 — 50,501 Totals $ 5,496 $ — $ 2,772 $ 574 $ 2,860 $ 22,216 $ 1,089 $ 15,512 $ 66 $ — $ 50,585 ALL at December 31, 2022 Individually Evaluated for Impairment $ 71 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 71 Collectively Evaluated for Impairment 6,429 1 3,911 845 4,325 17,459 1,965 12,576 151 263 47,925 Totals $ 6,500 $ 1 $ 3,911 $ 845 $ 4,325 $ 17,459 $ 1,965 $ 12,576 $ 151 $ 263 $ 47,996 Paycheck Construction CRE CRE Protection and Land 1-4 Family 1--4 Family Owner Non-owner Consumer (dollars in thousands) Commercial Program Development Construction Mortgage Multifamily Occupied Occupied and Other Total Loans at September 30, 2023 Individually Evaluated for Impairment $ 15,831 $ — $ 86 $ — $ 663 $ — $ 1,569 $ 17,472 $ — $ 35,621 Collectively Evaluated for Impairment 443,232 791 294,732 64,463 404,053 1,378,669 157,916 933,791 9,003 3,686,650 Totals $ 459,063 $ 791 $ 294,818 $ 64,463 $ 404,716 $ 1,378,669 $ 159,485 $ 951,263 $ 9,003 $ 3,722,271 Loans at December 31, 2022 Individually Evaluated for Impairment $ 19,675 $ — $ 106 $ — $ 392 $ — $ 1,637 $ 6,239 $ — $ 28,049 Collectively Evaluated for Impairment 415,669 1,049 295,448 70,242 355,082 1,306,738 148,268 940,769 8,132 3,541,397 Totals $ 435,344 $ 1,049 $ 295,554 $ 70,242 $ 355,474 $ 1,306,738 $ 149,905 $ 947,008 $ 8,132 $ 3,569,446 |
Summary of amortized cost basis of collateral dependent loans, by the primary collateral type, and the related ACL | The following table presents the amortized cost basis of collateral dependent loans by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related ACL allocated to these loans as of September 30, 2023: Primary Type of Collateral Business ACL (dollars in thousands) Real Estate Assets Other Total Allocation September 30, 2023 Commercial $ — $ 5,459 $ 10,372 $ 15,831 $ 84 Construction and Land Development 86 — — 86 — Real Estate Mortgage: 1-4 Family Mortgage 663 — — 663 — CRE Owner Occupied 1,569 — — 1,569 — CRE Nonowner Occupied 17,472 — — 17,472 — Totals $ 19,790 $ 5,459 $ 10,372 $ 35,621 $ 84 |
Summary of impaired loans by loan segment | The following table presents information regarding total carrying amounts and total unpaid principal balances of impaired loans by loan segment as of December 31, 2022: December 31, 2022 Recorded Principal Related (dollars in thousands) Investment Balance Allowance Loans With No Related Allowance for Loan Losses: Commercial $ 19,508 $ 19,508 $ — Construction and Land Development 106 713 — Real Estate Mortgage: 1-4 Family Mortgage 392 392 — CRE Owner Occupied 1,637 1,726 — CRE Nonowner Occupied 6,239 6,239 — Totals 27,882 28,578 — Loans With An Allowance for Loan Losses: Commercial 167 167 71 Totals 167 167 71 Grand Totals $ 28,049 $ 28,745 $ 71 The following table presents information regarding the average balances and interest income recognized on impaired loans by loan segment for the three and nine months ended September 30, 2022: Three Months Ended Nine Months Ended September 30, 2022 September 30, 2022 Average Interest Average Interest (dollars in thousands) Investment Recognized Investment Recognized Loans With No Related Allowance for Loan Losses: Commercial $ 9,929 $ 187 $ 11,343 $ 519 Construction and Land Development 114 — 120 — Real Estate Mortgage: 1st REM - 1-4 Family 282 4 286 11 CRE Owner Occupied 1,751 17 1,762 49 CRE Nonowner Occupied 6,333 85 6,431 249 Totals 18,409 293 19,942 828 Loans With An Allowance for Loan Losses: Commercial 84 — 86 1 Real Estate Mortgage: CRE Nonowner Occupied 12,135 127 12,135 370 Totals 12,219 127 12,221 371 Grand Totals $ 30,628 $ 420 $ 32,163 $ 1,199 |
Deposits (Tables)
Deposits (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Deposits. | |
Schedule of composition of deposits | The following table presents the composition of deposits at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Transaction Deposits $ 1,535,160 $ 1,336,264 Savings and Money Market Deposits 872,534 1,031,873 Time Deposits 265,737 272,253 Brokered Deposits 1,002,078 776,153 Totals $ 3,675,509 $ 3,416,543 |
Summary of scheduled maturities of brokered and customer time deposits | The following table presents the scheduled maturities of brokered and customer time deposits at September 30, 2023: September 30, (dollars in thousands) 2023 Less than 1 Year $ 397,981 1 to 2 Years 143,267 2 to 3 Years 350,978 3 to 4 Years 63,790 4 to 5 Years 101,357 Greater than 5 Years 32,709 Totals $ 1,090,082 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities | |
Schedule of derivative instruments eligible for offset | The following table summarizes gross and net information about derivative instruments that are eligible for offset in the balance sheet at September 30, 2023 and December 31, 2022: Gross Amounts Not Offset in the Balance Sheet Net Amounts of Gross Amounts Gross Amounts Assets (Liabilities) of Recognized Offset in the Presented in the Financial Cash Collateral Net Assets (dollars in thousands) Assets (Liabilities) Balance Sheet Balance Sheet Instruments Received (Paid) (Liabilities) September 30, 2023 Assets $ 44,107 $ — $ 44,107 $ — $ 46,023 $ (1,916) Liabilities (9,962) — (9,962) — — (9,962) December 31, 2022 Assets $ 38,123 $ — $ 38,123 $ — $ 36,353 $ 1,770 Liabilities (9,542) — (9,542) — — (9,542) |
Effect of derivative instruments in cash flow hedging relationships | The following table presents the effect of derivative instruments in cash flow hedging relationships on the consolidated statements of income for the three and nine months ended September 30, 2023 and 2022: Three Months Ended September 30, Nine Months Ended September 30, (dollars in thousands) 2023 2022 2023 2022 Derivatives in Location of Gain (Loss) Gain (Loss) Loss Cash Flow Hedging Reclassified Reclassified from Reclassified from Relationships from AOCI into Income AOCI into Earnings AOCI into Earnings Interest rate swaps Interest expense $ 1,575 $ 288 $ 4,169 $ (24) Interest rate caps Interest expense 48 (169) (159) (539) |
Cash flow hedge | |
Derivative Instruments and Hedging Activities | |
Summary of interest rate derivatives | The following table presents a summary of the Company’s interest rate contracts as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Notional Estimated Notional Estimated (dollars in thousands) Amount Fair Value Amount Fair Value Interest rate swap agreements: Assets $ 183,000 $ 11,139 $ 125,000 $ 10,477 Liabilities — — 38,000 (1,302) Interest rate cap agreements: Assets 125,000 23,006 125,000 19,406 |
Interest Rate Swap | |
Derivative Instruments and Hedging Activities | |
Summary of interest rate derivatives | The following table presents a summary of the Company’s interest rate swaps to facilitate customer transactions as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Notional Estimated Notional Estimated (dollars in thousands) Amount Fair Value Amount Fair Value Interest rate swap agreements: Assets $ 64,241 $ 9,962 $ 65,315 $ 8,240 Liabilities 64,241 (9,962) 65,315 (8,240) Total $ 128,482 $ — $ 130,630 $ — |
Interest Rate Swap | Cash flow hedge | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | The following table presents a summary of the Company’s interest rate swaps designated as cash flow hedges as of September 30, 2023 and December 31, 2022: (dollars in thousands) September 30, 2023 December 31, 2022 Notional Amount $ 183,000 $ 163,000 Weighted Average Pay Rate 2.00 % 1.90 % Weighted Average Receive Rate 5.40 % 3.47 % Weighted Average Maturity (Years) 4.30 5.15 Net Unrealized Gain $ 11,139 $ 9,175 |
Interest Rate Cap | Cash flow hedge | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | The following table presents a summary of the Company’s interest rate caps designated as cash flow hedges as of September 30, 2023 and December 31, 2022: (dollars in thousands) September 30, 2023 December 31, 2022 Notional Amount $ 125,000 $ 125,000 Unamortized Premium Paid 5,279 5,872 Weighted Average Strike Rate 0.96 % 0.96 % Weighted Average Maturity (Years) 6.60 7.35 |
Federal Home Loan Bank Advanc_2
Federal Home Loan Bank Advances and Other Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Federal Home Loan Bank Advances and Other Borrowings | |
Schedule of FHLB advances, by maturity | The following table presents FHLB advances, by maturity, at September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Weighted Weighted Average Total Average Total (dollars in thousands) Rate Outstanding Rate Outstanding Less than 1 Year 5.26 % $ 208,000 4.30 % $ 83,000 1 to 2 Years 4.31 25,000 1.05 5,000 2 to 3 Years 4.06 17,500 1.22 5,000 3 to 4 Years 3.35 21,500 0.78 4,000 4 to 5 Years 4.01 22,500 — — Totals $ 294,500 $ 97,000 |
Subordinated Debentures (Tables
Subordinated Debentures (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Subordinated Debentures | |
Schedule of subordinated debentures | The following table presents a summary of the Company’s subordinated debentures as of September 30, 2023 and December 31, 2022: Total Debt Total Debt Date First Maturity Outstanding Outstanding Interest Name Established Redemption Date Date September 30, 2023 December 31, 2022 Rate Coupon Structure (dollars in thousands) 2030 Notes June 19, 2020 July 1, 2025 July 1, 2030 $ 50,000 $ 50,000 5.25 % Fixed-to-Floating (1) 2031 Notes July 8, 2021 July 15, 2026 July 15, 2031 30,000 30,000 3.25 % Fixed-to-Floating (2) Subordinated Debentures 80,000 80,000 Debt Issuance Costs (808) (1,095) Subordinated Debentures, Net of Issuance Costs $ 79,192 $ 78,905 (1) Migrates to three month term SOFR + 5.13% beginning July 1, 2025 until either the early redemption date or the maturity date. (2) Migrates to three month term SOFR + 2.52% beginning July 15, 2026 until either the early redemption date or the maturity date. |
Commitments, Contingencies an_2
Commitments, Contingencies and Credit Risk (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Commitments, Contingencies and Credit Risk | |
Schedule of commitments outstanding | The following table presents commitments outstanding at September 30, 2023 and December 31, 2022: September 30, December 31, (dollars in thousands) 2023 2022 Unfunded Commitments Under Lines of Credit $ 570,363 $ 848,734 Letters of Credit 107,292 115,769 Totals $ 677,655 $ 964,503 |
Schedule of balance and activity in the allowance for credit losses for off-balance sheet credit exposures | The ACL for off-balance sheet credit exposures was $3.2 million at September 30, 2023 and is separately classified on the balance sheet within other liabilities. Prior to the adoption of CECL, the Company’s ACL for off-balance sheet credit exposures was not material. The following table presents the balance and activity in the allowance for credit losses for off-balance sheet credit exposures for the three and nine months ended September 30, 2023: Three Months Ended Nine Months Ended (dollars in thousands) September 30, 2023 September 30, 2023 Allowance for Credit Losses: Beginning Balance, Prior to Adoption of CECL $ 3,835 $ 360 Impact of Adopting CECL — 4,850 Provision for (Recovery of) Off-Balance Sheet Credit Exposures (600) (1,975) Total Ending Balance $ 3,235 $ 3,235 |
Stock Options and Restricted _2
Stock Options and Restricted Stock (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Stock Options and Restricted Stock | |
Summary of valuation assumptions used to determine the fair value of option award | The weighted average assumptions used in the model of valuing stock option grants for the nine months ended September 30, 2023, are as follows: September 30, 2023 Dividend Yield — % Expected Life 7 Years Expected Volatility 42.25 % Risk-Free Interest Rate 4.15 % |
Summary of the status of the Company's outstanding stock options | The following table presents a summary of the status of the Company’s outstanding stock options for the nine months ended September 30, 2023: September 30, 2023 Weighted Average Shares Exercise Price Outstanding at Beginning of Year 1,913,444 $ 9.35 Granted 239,000 10.65 Exercised (226,000) 3.17 Forfeitures (9,000) 13.04 Outstanding at Period End 1,917,444 $ 10.22 Options Exercisable at Period End 1,378,194 $ 8.88 |
Summary of information pertaining to options outstanding based on range of exercise price | The following table presents information pertaining to options outstanding at September 30, 2023: Options Outstanding Options Exercisable Weighted Average Number of Weighted Average Remaining Contractual Number of Weighted Average Range of Exercise Prices Options Exercise Price Life in Years Options Exercise Price $ 3.00 - 3.99 88,500 $ 3.07 0.4 88,500 $ 3.07 7.00 - 7.99 893,416 7.47 4.0 893,416 7.47 8.00 - 8.99 17,500 8.76 6.5 11,250 8.76 10.00 - 10.99 249,000 10.63 9.7 7,500 10.08 11.00 - 11.99 85,000 11.27 5.6 68,000 11.27 12.00 - 12.99 263,528 12.90 5.9 206,778 12.90 13.00 - 13.99 25,000 13.22 4.6 25,000 13.22 17.00 - 17.99 295,500 17.50 8.3 77,750 17.50 Totals 1,917,444 $ 10.22 5.6 1,378,194 $ 8.88 |
Summary of analysis of nonvested options to purchase shares of the Company's stock issued and outstanding | The following table presents an analysis of nonvested options to purchase shares of the Company’s stock issued and outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Shares Date Fair Value Nonvested Options at December 31, 2022 421,375 $ 4.87 Granted 239,000 5.39 Vested (116,125) 4.78 Forfeited (5,000) 5.74 Nonvested Options at September 30, 2023 539,250 $ 5.11 |
Summary of the status of the Company's outstanding restricted stock awards | The following table presents an analysis of nonvested restricted stock awards outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Shares Date Fair Value Nonvested Awards at December 31, 2022 38,762 $ 12.50 Granted — — Vested (2,785) 10.32 Forfeited (250) 12.92 Nonvested Awards at September 30, 2023 35,727 $ 12.67 |
Summary of the status of the Company's outstanding restricted stock units | The following table presents an analysis of nonvested restricted stock units outstanding for the nine months ended September 30, 2023: Weighted Number of Average Grant Units Date Fair Value Nonvested Units at December 31, 2022 351,310 $ 16.30 Granted 82,969 15.59 Vested (5,225) 16.20 Forfeited (10,253) 17.79 Nonvested Units at September 30, 2023 418,801 $ 16.13 |
Regulatory Capital (Tables)
Regulatory Capital (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Regulatory Capital | |
Summary of company and the Bank's capital amounts and ratios | The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of September 30, 2023 and December 31, 2022: Minimum Required For Capital Adequacy To be Well Capitalized For Capital Adequacy Purposes Plus Capital Under Prompt Corrective Actual Purposes Conservation Buffer Action Regulations (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio September 30, 2023 Company (Consolidated): Total Risk-based Capital $ 567,202 13.88 % $ 326,865 8.00 % $ 429,010 10.50 % N/A N/A Tier 1 Risk-based Capital 436,903 10.69 245,149 6.00 347,294 8.50 N/A N/A Common Equity Tier 1 Capital 370,389 9.07 183,861 4.50 286,007 7.00 N/A N/A Tier 1 Leverage Ratio 436,903 9.62 181,605 4.00 181,605 4.00 N/A N/A Bank: Total Risk-based Capital $ 543,914 13.33 % $ 326,519 8.00 % $ 428,556 10.50 % $ 408,149 10.00 % Tier 1 Risk-based Capital 492,861 12.08 244,889 6.00 346,926 8.50 326,519 8.00 Common Equity Tier 1 Capital 492,861 12.08 183,667 4.50 285,704 7.00 265,297 6.50 Tier 1 Leverage Ratio 492,861 10.88 181,256 4.00 181,256 4.00 226,570 5.00 Minimum Required For Capital Adequacy To be Well Capitalized For Capital Adequacy Purposes Plus Capital Under Prompt Corrective Actual Purposes Conservation Buffer Action Regulations (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Amount Ratio December 31, 2022 Company (Consolidated): Total Risk-based Capital $ 536,352 13.15 % $ 326,190 8.00 % $ 428,125 10.50 % N/A N/A Tier 1 Risk-based Capital 409,092 10.03 244,643 6.00 346,577 8.50 N/A N/A Common Equity Tier 1 Capital 342,578 8.40 183,482 4.50 285,417 7.00 N/A N/A Tier 1 Leverage Ratio 409,092 9.55 171,368 4.00 171,368 4.00 N/A N/A Bank: Total Risk-based Capital $ 508,760 12.47 % $ 326,288 8.00 % $ 428,253 10.50 % $ 407,860 10.00 % Tier 1 Risk-based Capital 460,404 11.29 244,716 6.00 346,681 8.50 326,288 8.00 Common Equity Tier 1 Capital 460,404 11.29 183,537 4.50 285,502 7.00 265,109 6.50 Tier 1 Leverage Ratio 460,404 10.76 171,113 4.00 171,113 4.00 213,891 5.00 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Measurement | |
Summary of balances of the assets and liabilities measured at fair value on a recurring basis | The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The following tables present the balances of assets and liabilities measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value of Financial Assets: Securities Available for Sale: U.S. Treasury Securities $ 2,864 $ — $ — $ 2,864 Municipal Bonds — 122,497 — 122,497 Mortgage-Backed Securities — 210,375 — 210,375 Corporate Securities — 121,717 — 121,717 SBA Securities — 19,966 — 19,966 Asset-Backed Securities — 75,657 — 75,657 Interest Rate Caps — 23,006 — 23,006 Interest Rate Swaps — 21,101 — 21,101 Total Fair Value of Financial Assets $ 2,864 $ 594,319 $ — $ 597,183 Fair Value of Financial Liabilities: Interest Rate Swaps $ — $ 9,962 $ — $ 9,962 Total Fair Value of Financial Liabilities $ — $ 9,962 $ — $ 9,962 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Total Fair Value of Financial Assets: Securities Available for Sale: U.S. Treasury Securities $ 2,580 $ — $ — $ 2,580 Municipal Bonds — 131,354 — 131,354 Mortgage-Backed Securities — 237,784 — 237,784 Corporate Securities — 109,827 — 109,827 SBA Securities — 20,877 — 20,877 Asset-Backed Securities — 46,191 — 46,191 Interest Rate Caps — 19,406 — 19,406 Interest Rate Swaps — 18,717 — 18,717 Total Fair Value of Financial Assets $ 2,580 $ 584,156 $ — $ 586,736 Fair Value of Financial Liabilities: Interest Rate Swaps $ — $ 9,542 $ — $ 9,542 Total Fair Value of Financial Liabilities $ — $ 9,542 $ — $ 9,542 |
Summary of net impairment losses related to nonrecurring fair value measurements of certain asset | The following tables present net impairment losses related to nonrecurring fair value measurements of certain assets at September 30, 2023 and December 31, 2022: September 30, 2023 (dollars in thousands) Level 1 Level 2 Level 3 Loss Individually Evaluated Loans $ — $ 175 $ — $ 179 Totals $ — $ 175 $ — $ 179 December 31, 2022 (dollars in thousands) Level 1 Level 2 Level 3 Loss Impaired Loans $ — $ 96 $ — $ 71 Totals $ — $ 96 $ — $ 71 |
Summary of carrying amount and estimated fair values of financial instruments | The following tables present the carrying amounts and estimated fair values of financial instruments at September 30, 2023 and December 31, 2022: September 30, 2023 Fair Value Hierarchy Carrying Estimated (dollars in thousands) Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 124,358 $ 124,358 $ — $ — $ 124,358 Bank-Owned Certificates of Deposit 1,225 — 1,210 — 1,210 Securities Available for Sale 553,076 2,864 550,212 — 553,076 FHLB Stock, at Cost 17,056 — 17,056 — 17,056 Loans, Net 3,664,464 — 3,522,379 — 3,522,379 Accrued Interest Receivable 15,182 — 15,182 — 15,182 Interest Rate Caps 23,006 — 23,006 — 23,006 Interest Rate Swaps 21,101 — 21,101 — 21,101 Financial Liabilities: Deposits $ 3,675,509 $ — $ 3,653,876 $ — $ 3,653,876 Notes Payable 13,750 — 13,771 — 13,771 FHLB Advances 294,500 — 292,436 — 292,436 Subordinated Debentures 79,192 — 71,794 — 71,794 Accrued Interest Payable 3,816 — 3,816 — 3,816 Interest Rate Swaps 9,962 — 9,962 — 9,962 December 31, 2022 Fair Value Hierarchy Carrying Estimated (dollars in thousands) Amount Level 1 Level 2 Level 3 Fair Value Financial Assets: Cash and Due From Banks $ 87,043 $ 87,043 $ — $ — $ 87,043 Bank-Owned Certificates of Deposit 1,181 — 1,173 — 1,173 Securities Available for Sale 548,613 2,580 546,033 — 548,613 FHLB Stock, at Cost 19,606 — 19,606 — 19,606 Loans, Net 3,512,157 — 3,314,190 — 3,314,190 Accrued Interest Receivable 13,479 — 13,479 — 13,479 Interest Rate Caps 19,406 — 19,406 — 19,406 Interest Rate Swaps 18,717 — 18,717 — 18,717 Financial Liabilities: Deposits $ 3,416,543 $ — $ 3,390,416 $ — $ 3,390,416 Federal Funds Purchased 287,000 — 287,000 — 287,000 Notes Payable 13,750 — 13,473 — 13,473 FHLB Advances 97,000 — 96,061 — 96,061 Subordinated Debentures 78,905 — 70,931 — 70,931 Accrued Interest Payable 2,831 — 2,831 — 2,831 Interest Rate Swaps 9,542 — 9,542 — 9,542 |
Description of the Business a_4
Description of the Business and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Impact of Recently Adopted Accounting Guidance | |||||||
Retained Earnings | $ 272,812 | $ 248,685 | |||||
Allowance of loan loss | 50,585 | $ 50,701 | $ 48,646 | 47,996 | $ 46,491 | $ 44,711 | $ 40,020 |
Allowance for off-balance sheet credit exposure | $ 3,235 | $ 3,835 | 5,210 | 360 | |||
Cumulative Effect of Change | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 650 | 650 | |||||
Allowance for off-balance sheet credit exposure | $ 4,850 | ||||||
Accounting Standards Update 2016-13 | Cumulative Effect of Change | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Retained Earnings | (3,900) | ||||||
Allowance of loan loss | 650 | ||||||
Allowance for off-balance sheet credit exposure | 4,800 | ||||||
Deferred taxes | $ (1,600) |
Description of the Business a_5
Description of the Business and Summary of Significant Accounting Policies - Impact of Adoption of CECL (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | $ 50,585 | $ 50,701 | $ 48,646 | $ 47,996 | $ 46,491 | $ 44,711 | $ 40,020 |
Allowance for Credit Losses on Off-balance Sheet Credit Exposures | 3,235 | 3,835 | 5,210 | 360 | |||
Commercial | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 5,496 | 5,439 | 5,343 | 6,500 | 6,348 | 6,275 | 6,256 |
Paycheck Protection Program (PPP), CARES Act | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 1 | 1 | 2 | 13 | |||
Construction and Land Development | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 2,772 | 3,476 | 2,841 | 3,911 | 3,771 | 4,134 | 3,139 |
1-4 Family Construction | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 574 | 654 | 610 | 845 | 698 | 638 | 618 |
1-4 Family Mortgage | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 2,860 | 2,836 | 2,547 | 4,325 | 4,230 | 4,206 | 3,757 |
Multifamily | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 22,216 | 21,164 | 20,777 | 17,459 | 16,822 | 14,977 | 12,610 |
CRE Owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 1,089 | 1,086 | 1,022 | 1,965 | 2,027 | 1,920 | 1,495 |
CRE Non-owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 15,512 | 15,976 | 15,445 | 12,576 | 12,282 | 12,235 | 11,335 |
Consumer and other | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | $ 66 | $ 70 | 61 | 151 | 163 | 154 | 147 |
Unallocated | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | $ 263 | $ 149 | $ 170 | $ 650 | |||
Before Adoption | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 47,996 | ||||||
Allowance for Credit Losses on Off-balance Sheet Credit Exposures | 360 | ||||||
Before Adoption | Commercial | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 6,500 | ||||||
Before Adoption | Paycheck Protection Program (PPP), CARES Act | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 1 | ||||||
Before Adoption | Construction and Land Development | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 3,911 | ||||||
Before Adoption | 1-4 Family Construction | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 845 | ||||||
Before Adoption | 1-4 Family Mortgage | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 4,325 | ||||||
Before Adoption | Multifamily | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 17,459 | ||||||
Before Adoption | CRE Owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 1,965 | ||||||
Before Adoption | CRE Non-owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 12,576 | ||||||
Before Adoption | Consumer and other | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 151 | ||||||
Before Adoption | Unallocated | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 263 | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 650 | ||||||
Allowance for Credit Losses on Off-balance Sheet Credit Exposures | 4,850 | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Commercial | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (1,157) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Paycheck Protection Program (PPP), CARES Act | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (1) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Construction and Land Development | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (1,070) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | 1-4 Family Construction | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (235) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | 1-4 Family Mortgage | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (1,778) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Multifamily | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 3,318 | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | CRE Owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (943) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | CRE Non-owner Occupied | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | 2,869 | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Consumer and other | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | (90) | ||||||
Accounting Standards Update 2016-13 | Impact of Adoption | Unallocated | |||||||
Impact of Recently Adopted Accounting Guidance | |||||||
Allowance of loan loss | $ (263) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share | ||||
Anti dilutive securities excluded from the calculation of EPS | 1,152,100 | 300,500 | 1,042,500 | 300,500 |
Net Income Available to Common Shareholders | $ 8,616 | $ 13,500 | $ 28,047 | $ 36,617 |
Weighted Average Common Stock Outstanding: | ||||
Weighted Average Common Stock Outstanding (Basic) | 27,943,409 | 27,520,117 | 27,853,036 | 27,825,517 |
Dilutive Effect of Stock Compensation | 368,369 | 1,072,737 | 486,816 | 1,057,184 |
Weighted Average Common Stock Outstanding (Dilutive) | 28,311,778 | 28,592,854 | 28,339,852 | 28,882,701 |
Basic Earnings per Common Share (in dollars per share) | $ 0.31 | $ 0.49 | $ 1.01 | $ 1.32 |
Diluted Earnings per Common Share (in dollars per share) | $ 0.30 | $ 0.47 | $ 0.99 | $ 1.27 |
Securities - Securities Availab
Securities - Securities Available for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | $ 615,292 | $ 596,497 |
Gross Unrealized Gains | 1,105 | 2,839 |
Gross Unrealized Losses | (63,321) | (50,723) |
Fair value | 553,076 | 548,613 |
Asset Pledged as Collateral | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Fair value | 164,300 | |
U.S. Treasury Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 2,883 | 2,621 |
Gross Unrealized Losses | (19) | (41) |
Fair value | 2,864 | 2,580 |
Municipal Bonds | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 148,725 | 156,506 |
Gross Unrealized Gains | 62 | |
Gross Unrealized Losses | (26,228) | (25,214) |
Fair value | 122,497 | 131,354 |
Mortgage-Backed Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 233,920 | 252,919 |
Gross Unrealized Gains | 137 | 2,465 |
Gross Unrealized Losses | (23,682) | (17,600) |
Fair value | 210,375 | 237,784 |
Corporate Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 134,369 | 116,871 |
Gross Unrealized Gains | 268 | 45 |
Gross Unrealized Losses | (12,920) | (7,089) |
Fair value | 121,717 | 109,827 |
SBA Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 19,779 | 20,957 |
Gross Unrealized Gains | 312 | 79 |
Gross Unrealized Losses | (125) | (159) |
Fair value | 19,966 | 20,877 |
Asset-Backed Securities | ||
The amortized cost and estimated fair value of securities with gross unrealized gains and losses | ||
Amortized cost | 75,616 | 46,623 |
Gross Unrealized Gains | 388 | 188 |
Gross Unrealized Losses | (347) | (620) |
Fair value | $ 75,657 | $ 46,191 |
Securities - Continuous Unreali
Securities - Continuous Unrealized Loss Position (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) security | Dec. 31, 2022 USD ($) security | |
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 535 | 530 |
Less Than 12 Months, Fair Value | $ 116,615 | $ 298,369 |
Less Than 12 Months, Unrealized Losses | (3,602) | (16,312) |
12 Months or Greater, Fair Value | 366,142 | 165,296 |
12 Months or Greater, Unrealized Losses | (59,719) | (34,411) |
Fair Value | 482,757 | 463,665 |
Unrealized Losses | $ (63,321) | $ (50,723) |
Percentage debt securities with aggregate depreciation from amortized cost basis | 11.60% | 9.90% |
Allowance for available for sale securities | $ 0 | |
Accrued interest receivable on securities | $ 4,300 | |
U.S. Treasury Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 5 | 6 |
Less Than 12 Months, Fair Value | $ 886 | $ 2,330 |
Less Than 12 Months, Unrealized Losses | (5) | (41) |
12 Months or Greater, Fair Value | 880 | |
12 Months or Greater, Unrealized Losses | (14) | |
Fair Value | 1,766 | 2,330 |
Unrealized Losses | $ (19) | $ (41) |
Municipal Bonds | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 218 | 225 |
Less Than 12 Months, Fair Value | $ 8,358 | $ 59,912 |
Less Than 12 Months, Unrealized Losses | (232) | (5,321) |
12 Months or Greater, Fair Value | 114,139 | 69,424 |
12 Months or Greater, Unrealized Losses | (25,996) | (19,893) |
Fair Value | 122,497 | 129,336 |
Unrealized Losses | $ (26,228) | $ (25,214) |
Mortgage-Backed Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 140 | 130 |
Less Than 12 Months, Fair Value | $ 68,938 | $ 123,224 |
Less Than 12 Months, Unrealized Losses | (2,205) | (5,427) |
12 Months or Greater, Fair Value | 135,408 | 62,882 |
12 Months or Greater, Unrealized Losses | (21,477) | (12,173) |
Fair Value | 204,346 | 186,106 |
Unrealized Losses | $ (23,682) | $ (17,600) |
Corporate Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 109 | 100 |
Less Than 12 Months, Fair Value | $ 18,899 | $ 88,486 |
Less Than 12 Months, Unrealized Losses | (1,024) | (5,121) |
12 Months or Greater, Fair Value | 94,731 | 17,054 |
12 Months or Greater, Unrealized Losses | (11,896) | (1,968) |
Fair Value | 113,630 | 105,540 |
Unrealized Losses | $ (12,920) | $ (7,089) |
SBA Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 47 | 49 |
Less Than 12 Months, Fair Value | $ 2,319 | $ 2,498 |
Less Than 12 Months, Unrealized Losses | (6) | (6) |
12 Months or Greater, Fair Value | 6,811 | 9,750 |
12 Months or Greater, Unrealized Losses | (119) | (153) |
Fair Value | 9,130 | 12,248 |
Unrealized Losses | $ (125) | $ (159) |
Asset-Backed Securities | ||
Fair value and gross unrealized losses of securities with unrealized losses, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position | ||
Number of Holdings with unrealized losses | security | 16 | 20 |
Less Than 12 Months, Fair Value | $ 17,215 | $ 21,919 |
Less Than 12 Months, Unrealized Losses | (130) | (396) |
12 Months or Greater, Fair Value | 14,173 | 6,186 |
12 Months or Greater, Unrealized Losses | (217) | (224) |
Fair Value | 31,388 | 28,105 |
Unrealized Losses | $ (347) | $ (620) |
Securities - Contractual Maturi
Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Contractual maturities, amortized cost | ||
Due in One Year or Less | $ 9,779 | |
Due After One Year Through Five Years | 44,811 | |
Due After Five Years Through 10 Years | 179,590 | |
Due After 10 Years | 51,797 | |
Subtotal | 285,977 | |
Totals | 615,292 | $ 596,497 |
Contractual maturities, fair value | ||
Due in One Year or Less | 9,833 | |
Due After One Year Through Five Years | 42,665 | |
Due After Five Years Through 10 Years | 155,444 | |
Due After 10 Years | 39,136 | |
Subtotal | 247,078 | |
Totals | 553,076 | 548,613 |
Mortgage-Backed Securities | ||
Contractual maturities, amortized cost | ||
Contractual securities | 233,920 | |
Totals | 233,920 | 252,919 |
Contractual maturities, fair value | ||
Contractual securities | 210,375 | |
Totals | 210,375 | 237,784 |
SBA Securities | ||
Contractual maturities, amortized cost | ||
Contractual securities | 19,779 | |
Totals | 19,779 | 20,957 |
Contractual maturities, fair value | ||
Contractual securities | 19,966 | |
Totals | 19,966 | 20,877 |
Asset-Backed Securities | ||
Contractual maturities, amortized cost | ||
Contractual securities | 75,616 | |
Totals | 75,616 | 46,623 |
Contractual maturities, fair value | ||
Contractual securities | 75,657 | |
Totals | $ 75,657 | $ 46,191 |
Securities - Available for Sale
Securities - Available for Sale Securities Gross Realized Gain Loss (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Summary of the proceeds from sales of securities available for sale, as well as gross gains and losses | ||
Proceeds From Sales of Securities | $ 26,976 | $ 25,066 |
Gross Gains on Sales | 247 | 234 |
Gross Losses on Sales | $ (253) | $ (182) |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses - Components of loans (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Jan. 01, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Components of loans | |||||||
Total Loans, Gross | $ 3,722,271 | $ 3,569,446 | |||||
Allowance for Credit Losses | (50,585) | $ (50,701) | $ (48,646) | (47,996) | $ (46,491) | $ (44,711) | $ (40,020) |
Net Deferred Loan Fees | (7,222) | (9,293) | |||||
Total Loans, Net | 3,664,464 | 3,512,157 | |||||
Commercial | |||||||
Components of loans | |||||||
Total Loans, Gross | 459,063 | 435,344 | |||||
Allowance for Credit Losses | (5,496) | (5,439) | (5,343) | (6,500) | (6,348) | (6,275) | (6,256) |
Paycheck Protection Program (PPP), CARES Act | |||||||
Components of loans | |||||||
Total Loans, Gross | 791 | 1,049 | |||||
Allowance for Credit Losses | (1) | (1) | (2) | (13) | |||
Construction and Land Development | |||||||
Components of loans | |||||||
Total Loans, Gross | 294,818 | 295,554 | |||||
Allowance for Credit Losses | (2,772) | (3,476) | (2,841) | (3,911) | (3,771) | (4,134) | (3,139) |
1-4 Family Construction | |||||||
Components of loans | |||||||
Total Loans, Gross | 64,463 | 70,242 | |||||
Allowance for Credit Losses | (574) | (654) | (610) | (845) | (698) | (638) | (618) |
Real Estate Mortgage | |||||||
Components of loans | |||||||
Total Loans, Gross | 2,894,133 | 2,759,125 | |||||
1-4 Family Mortgage | |||||||
Components of loans | |||||||
Total Loans, Gross | 404,716 | 355,474 | |||||
Allowance for Credit Losses | (2,860) | (2,836) | (2,547) | (4,325) | (4,230) | (4,206) | (3,757) |
Multifamily | |||||||
Components of loans | |||||||
Total Loans, Gross | 1,378,669 | 1,306,738 | |||||
Allowance for Credit Losses | (22,216) | (21,164) | (20,777) | (17,459) | (16,822) | (14,977) | (12,610) |
CRE Owner Occupied | |||||||
Components of loans | |||||||
Total Loans, Gross | 159,485 | 149,905 | |||||
Allowance for Credit Losses | (1,089) | (1,086) | (1,022) | (1,965) | (2,027) | (1,920) | (1,495) |
CRE Non-owner Occupied | |||||||
Components of loans | |||||||
Total Loans, Gross | 951,263 | 947,008 | |||||
Allowance for Credit Losses | (15,512) | (15,976) | (15,445) | (12,576) | (12,282) | (12,235) | (11,335) |
Consumer and other | |||||||
Components of loans | |||||||
Total Loans, Gross | 9,003 | 8,132 | |||||
Allowance for Credit Losses | $ (66) | $ (70) | $ (61) | $ (151) | $ (163) | $ (154) | $ (147) |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses - Aging in past due loans and nonaccrual status, with and without an ACL, by loan segment (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Aging of the recorded investment in past due loans by loan segment | ||
Nonaccrual with ACL | $ 74 | |
Nonaccrual without ACL | 675 | $ 639 |
Totals | 3,722,271 | 3,569,446 |
Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 3,721,511 | 3,568,621 |
30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 11 | 186 |
Commercial | ||
Aging of the recorded investment in past due loans by loan segment | ||
Nonaccrual with ACL | 74 | |
Nonaccrual without ACL | 95 | |
Totals | 459,063 | 435,344 |
Commercial | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 458,883 | 435,274 |
Commercial | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 11 | 70 |
Paycheck Protection Program (PPP), CARES Act | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 791 | 1,049 |
Paycheck Protection Program (PPP), CARES Act | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 791 | 1,049 |
Construction and Land Development | ||
Aging of the recorded investment in past due loans by loan segment | ||
Nonaccrual without ACL | 86 | 106 |
Totals | 294,818 | 295,554 |
Construction and Land Development | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 294,732 | 295,448 |
1-4 Family Construction | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 64,463 | 70,242 |
1-4 Family Construction | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 64,463 | 70,242 |
HELOC and 1-4 Family Junior Mortgage | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 36,875 | |
HELOC and 1-4 Family Junior Mortgage | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 36,875 | |
1st REM - 1-4 Family | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 50,945 | |
1st REM - 1-4 Family | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 50,945 | |
LOCs and 2nd REM - Rentals | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 27,985 | |
LOCs and 2nd REM - Rentals | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 27,985 | |
1st REM - Rentals | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 239,669 | |
1st REM - Rentals | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 239,553 | |
1st REM - Rentals | 30-89 Days Past Due | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 116 | |
1-4 Family Mortgage | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 404,716 | 355,474 |
1-4 Family Mortgage | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 404,716 | |
Multifamily | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 1,378,669 | 1,306,738 |
Multifamily | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 1,378,669 | 1,306,738 |
CRE Owner Occupied | ||
Aging of the recorded investment in past due loans by loan segment | ||
Nonaccrual without ACL | 494 | 533 |
Totals | 159,485 | 149,905 |
CRE Owner Occupied | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 158,991 | 149,372 |
CRE Non-owner Occupied | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 951,263 | 947,008 |
CRE Non-owner Occupied | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 951,263 | 947,008 |
Consumer and other | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | 9,003 | 8,132 |
Consumer and other | Current | ||
Aging of the recorded investment in past due loans by loan segment | ||
Totals | $ 9,003 | $ 8,132 |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses - Risk category of loans by loan segment (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2022 | |
Loan Balances | ||
2023 | $ 493,055 | |
2022 | 1,268,736 | |
2021 | 952,795 | |
2020 | 423,877 | |
2019 | 167,503 | |
Prior | 137,594 | |
Revolving | 278,711 | |
Totals | 3,722,271 | $ 3,569,446 |
Write-offs | ||
2023 | 98 | |
Revolving | 31 | |
Total | 129 | |
Pass | ||
Loan Balances | ||
Totals | 3,509,145 | |
Watch | ||
Loan Balances | ||
Totals | 32,252 | |
Substandard | ||
Loan Balances | ||
Totals | 28,049 | |
Commercial | ||
Loan Balances | ||
2023 | 47,590 | |
2022 | 153,488 | |
2021 | 39,456 | |
2020 | 25,556 | |
2019 | 19,021 | |
Prior | 6,593 | |
Revolving | 167,359 | |
Totals | 459,063 | 435,344 |
Write-offs | ||
2023 | 96 | |
Total | 96 | |
Commercial | Pass | ||
Loan Balances | ||
2023 | 47,507 | |
2022 | 141,694 | |
2021 | 39,407 | |
2020 | 25,556 | |
2019 | 19,018 | |
Prior | 4,735 | |
Revolving | 160,955 | |
Totals | 438,872 | 406,192 |
Commercial | Watch | ||
Loan Balances | ||
2023 | 7 | |
2022 | 332 | |
2021 | 38 | |
2019 | 3 | |
Prior | 1,796 | |
Revolving | 2,184 | |
Totals | 4,360 | 9,477 |
Commercial | Substandard | ||
Loan Balances | ||
2023 | 76 | |
2022 | 11,462 | |
2021 | 11 | |
Prior | 62 | |
Revolving | 4,220 | |
Totals | 15,831 | 19,675 |
Paycheck Protection Program (PPP), CARES Act | ||
Loan Balances | ||
2021 | 791 | |
Totals | 791 | 1,049 |
Paycheck Protection Program (PPP), CARES Act | Pass | ||
Loan Balances | ||
2021 | 791 | |
Totals | 791 | 1,049 |
Construction and Land Development | ||
Loan Balances | ||
2023 | 37,814 | |
2022 | 194,229 | |
2021 | 48,288 | |
2020 | 5,021 | |
Prior | 91 | |
Revolving | 9,375 | |
Totals | 294,818 | 295,554 |
Construction and Land Development | Pass | ||
Loan Balances | ||
2023 | 37,814 | |
2022 | 194,143 | |
2021 | 48,288 | |
2020 | 5,021 | |
Prior | 91 | |
Revolving | 9,375 | |
Totals | 294,732 | 294,736 |
Construction and Land Development | Watch | ||
Loan Balances | ||
Totals | 712 | |
Construction and Land Development | Substandard | ||
Loan Balances | ||
2022 | 86 | |
Totals | 86 | 106 |
1-4 Family Construction | ||
Loan Balances | ||
2023 | 33,966 | |
2022 | 13,594 | |
2021 | 935 | |
2020 | 358 | |
Revolving | 15,610 | |
Totals | 64,463 | 70,242 |
1-4 Family Construction | Pass | ||
Loan Balances | ||
2023 | 33,966 | |
2022 | 13,594 | |
2021 | 935 | |
2020 | 358 | |
Revolving | 15,610 | |
Totals | 64,463 | 70,242 |
Real Estate Mortgage | ||
Loan Balances | ||
2023 | 370,941 | |
2022 | 907,135 | |
2021 | 863,315 | |
2020 | 391,441 | |
2019 | 148,471 | |
Prior | 130,910 | |
Revolving | 81,920 | |
Totals | 2,894,133 | 2,759,125 |
1-4 Family Mortgage | ||
Loan Balances | ||
2023 | 61,412 | |
2022 | 109,495 | |
2021 | 87,381 | |
2020 | 55,250 | |
2019 | 19,059 | |
Prior | 5,544 | |
Revolving | 66,575 | |
Totals | 404,716 | 355,474 |
1-4 Family Mortgage | Pass | ||
Loan Balances | ||
2023 | 61,412 | |
2022 | 109,495 | |
2021 | 87,381 | |
2020 | 55,250 | |
2019 | 19,059 | |
Prior | 4,880 | |
Revolving | 66,575 | |
Totals | 404,052 | |
1-4 Family Mortgage | Watch | ||
Loan Balances | ||
Prior | 1 | |
Totals | 1 | |
1-4 Family Mortgage | Substandard | ||
Loan Balances | ||
Prior | 663 | |
Totals | 663 | |
HELOC and 1-4 Family Junior Mortgage | ||
Loan Balances | ||
Totals | 36,875 | |
HELOC and 1-4 Family Junior Mortgage | Pass | ||
Loan Balances | ||
Totals | 36,875 | |
1st REM - 1-4 Family | ||
Loan Balances | ||
Totals | 50,945 | |
1st REM - 1-4 Family | Pass | ||
Loan Balances | ||
Totals | 50,271 | |
1st REM - 1-4 Family | Watch | ||
Loan Balances | ||
Totals | 674 | |
LOCs and 2nd REM - Rentals | ||
Loan Balances | ||
Totals | 27,985 | |
LOCs and 2nd REM - Rentals | Pass | ||
Loan Balances | ||
Totals | 27,978 | |
LOCs and 2nd REM - Rentals | Watch | ||
Loan Balances | ||
Totals | 7 | |
1st REM - Rentals | ||
Loan Balances | ||
Totals | 239,669 | |
1st REM - Rentals | Pass | ||
Loan Balances | ||
Totals | 239,277 | |
1st REM - Rentals | Substandard | ||
Loan Balances | ||
Totals | 392 | |
Multifamily | ||
Loan Balances | ||
2023 | 139,000 | |
2022 | 437,174 | |
2021 | 473,938 | |
2020 | 230,980 | |
2019 | 42,344 | |
Prior | 46,635 | |
Revolving | 8,598 | |
Totals | 1,378,669 | 1,306,738 |
Multifamily | Pass | ||
Loan Balances | ||
2023 | 136,071 | |
2022 | 437,174 | |
2021 | 473,938 | |
2020 | 230,980 | |
2019 | 42,344 | |
Prior | 46,635 | |
Revolving | 8,598 | |
Totals | 1,375,740 | 1,303,468 |
Multifamily | Watch | ||
Loan Balances | ||
2023 | 2,929 | |
Totals | 2,929 | 3,270 |
CRE Owner Occupied | ||
Loan Balances | ||
2023 | 31,290 | |
2022 | 48,727 | |
2021 | 41,768 | |
2020 | 20,827 | |
2019 | 5,076 | |
Prior | 10,603 | |
Revolving | 1,194 | |
Totals | 159,485 | 149,905 |
CRE Owner Occupied | Pass | ||
Loan Balances | ||
2023 | 31,090 | |
2022 | 48,727 | |
2021 | 41,274 | |
2020 | 20,827 | |
2019 | 5,076 | |
Prior | 9,728 | |
Revolving | 1,194 | |
Totals | 157,916 | 148,268 |
CRE Owner Occupied | Substandard | ||
Loan Balances | ||
2023 | 200 | |
2021 | 494 | |
Prior | 875 | |
Totals | 1,569 | 1,637 |
CRE Non-owner Occupied | ||
Loan Balances | ||
2023 | 139,239 | |
2022 | 311,739 | |
2021 | 260,228 | |
2020 | 84,384 | |
2019 | 81,992 | |
Prior | 68,128 | |
Revolving | 5,553 | |
Totals | 951,263 | 947,008 |
CRE Non-owner Occupied | Pass | ||
Loan Balances | ||
2023 | 123,283 | |
2022 | 297,158 | |
2021 | 256,990 | |
2020 | 84,384 | |
2019 | 78,708 | |
Prior | 68,128 | |
Revolving | 5,553 | |
Totals | 914,204 | 922,657 |
CRE Non-owner Occupied | Watch | ||
Loan Balances | ||
2023 | 6,176 | |
2022 | 10,173 | |
2021 | 3,238 | |
Totals | 19,587 | 18,112 |
CRE Non-owner Occupied | Substandard | ||
Loan Balances | ||
2023 | 9,780 | |
2022 | 4,408 | |
2019 | 3,284 | |
Totals | 17,472 | 6,239 |
Consumer and other | ||
Loan Balances | ||
2023 | 2,744 | |
2022 | 290 | |
2021 | 10 | |
2020 | 1,501 | |
2019 | 11 | |
Revolving | 4,447 | |
Totals | 9,003 | 8,132 |
Write-offs | ||
2023 | 2 | |
Revolving | 31 | |
Total | 33 | |
Consumer and other | Pass | ||
Loan Balances | ||
2023 | 2,744 | |
2022 | 290 | |
2021 | 10 | |
2020 | 1,501 | |
2019 | 11 | |
Revolving | 4,447 | |
Totals | $ 9,003 | $ 8,132 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses - Allowance for loan losses by segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Jan. 01, 2023 | |
Allowance for Loan Losses: | ||||||
Beginning Balance | $ 50,701 | $ 44,711 | $ 47,996 | $ 40,020 | $ 40,020 | |
Provision for Credit Losses on Loans | 0 | 1,500 | 2,050 | 6,200 | ||
Loans Charged-off | (122) | (5) | (129) | (34) | ||
Recoveries of Loans | 6 | 285 | 18 | 305 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 84 | 84 | 71 | |||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 50,501 | 50,501 | 47,925 | |||
Loans and Leases Receivable, Allowance, Total | 50,585 | 46,491 | 50,585 | 46,491 | 47,996 | $ 48,646 |
Loans, Individually Evaluated for Impairment | 35,621 | 35,621 | 28,049 | |||
Loans, Collectively Evaluated for Impairment | 3,686,650 | 3,686,650 | 3,541,397 | |||
Totals | 3,722,271 | 3,722,271 | 3,569,446 | |||
Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 650 | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | 650 | 650 | ||||
Commercial | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 5,439 | 6,275 | 6,500 | 6,256 | 6,256 | |
Provision for Credit Losses on Loans | 151 | 70 | 242 | 98 | ||
Loans Charged-off | (96) | (96) | (13) | |||
Recoveries of Loans | 2 | 3 | 7 | 7 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Individually Evaluated for Impairment | 84 | 84 | 71 | |||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 5,412 | 5,412 | 6,429 | |||
Loans and Leases Receivable, Allowance, Total | 5,496 | 6,348 | 5,496 | 6,348 | 6,500 | 5,343 |
Loans, Individually Evaluated for Impairment | 15,831 | 15,831 | 19,675 | |||
Loans, Collectively Evaluated for Impairment | 443,232 | 443,232 | 415,669 | |||
Totals | 459,063 | 459,063 | 435,344 | |||
Commercial | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (1,157) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (1,157) | |||||
Paycheck Protection Program (PPP), CARES Act | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 2 | 1 | 13 | 13 | ||
Provision for Credit Losses on Loans | (1) | (12) | ||||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 1 | |||||
Loans and Leases Receivable, Allowance, Total | 1 | 1 | 1 | |||
Loans, Collectively Evaluated for Impairment | 791 | 791 | 1,049 | |||
Totals | 791 | 791 | 1,049 | |||
Paycheck Protection Program (PPP), CARES Act | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (1) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (1) | |||||
Construction and Land Development | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 3,476 | 4,134 | 3,911 | 3,139 | 3,139 | |
Provision for Credit Losses on Loans | (704) | (363) | (69) | 632 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 2,772 | 2,772 | 3,911 | |||
Loans and Leases Receivable, Allowance, Total | 2,772 | 3,771 | 2,772 | 3,771 | 3,911 | 2,841 |
Loans, Individually Evaluated for Impairment | 86 | 86 | 106 | |||
Loans, Collectively Evaluated for Impairment | 294,732 | 294,732 | 295,448 | |||
Totals | 294,818 | 294,818 | 295,554 | |||
Construction and Land Development | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (1,070) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (1,070) | |||||
1-4 Family Construction | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 654 | 638 | 845 | 618 | 618 | |
Provision for Credit Losses on Loans | (80) | 60 | (36) | 80 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 574 | 574 | 845 | |||
Loans and Leases Receivable, Allowance, Total | 574 | 698 | 574 | 698 | 845 | 610 |
Loans, Collectively Evaluated for Impairment | 64,463 | 64,463 | 70,242 | |||
Totals | 64,463 | 64,463 | 70,242 | |||
1-4 Family Construction | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (235) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (235) | |||||
1-4 Family Mortgage | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 2,836 | 4,206 | 4,325 | 3,757 | 3,757 | |
Provision for Credit Losses on Loans | 22 | (257) | 309 | 187 | ||
Recoveries of Loans | 2 | 281 | 4 | 286 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 2,860 | 2,860 | 4,325 | |||
Loans and Leases Receivable, Allowance, Total | 2,860 | 4,230 | 2,860 | 4,230 | 4,325 | 2,547 |
Loans, Individually Evaluated for Impairment | 663 | 663 | 392 | |||
Loans, Collectively Evaluated for Impairment | 404,053 | 404,053 | 355,082 | |||
Totals | 404,716 | 404,716 | 355,474 | |||
1-4 Family Mortgage | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (1,778) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (1,778) | |||||
Multifamily | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 21,164 | 14,977 | 17,459 | 12,610 | 12,610 | |
Provision for Credit Losses on Loans | 1,052 | 1,845 | 1,439 | 4,212 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 22,216 | 22,216 | 17,459 | |||
Loans and Leases Receivable, Allowance, Total | 22,216 | 16,822 | 22,216 | 16,822 | 17,459 | 20,777 |
Loans, Collectively Evaluated for Impairment | 1,378,669 | 1,378,669 | 1,306,738 | |||
Totals | 1,378,669 | 1,378,669 | 1,306,738 | |||
Multifamily | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 3,318 | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | 3,318 | |||||
CRE Owner Occupied | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 1,086 | 1,920 | 1,965 | 1,495 | 1,495 | |
Provision for Credit Losses on Loans | 3 | 107 | 67 | 532 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 1,089 | 1,089 | 1,965 | |||
Loans and Leases Receivable, Allowance, Total | 1,089 | 2,027 | 1,089 | 2,027 | 1,965 | 1,022 |
Loans, Individually Evaluated for Impairment | 1,569 | 1,569 | 1,637 | |||
Loans, Collectively Evaluated for Impairment | 157,916 | 157,916 | 148,268 | |||
Totals | 159,485 | 159,485 | 149,905 | |||
CRE Owner Occupied | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (943) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (943) | |||||
CRE Non-owner Occupied | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 15,976 | 12,235 | 12,576 | 11,335 | 11,335 | |
Provision for Credit Losses on Loans | (464) | 47 | 67 | 947 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 15,512 | 15,512 | 12,576 | |||
Loans and Leases Receivable, Allowance, Total | 15,512 | 12,282 | 15,512 | 12,282 | 12,576 | 15,445 |
Loans, Individually Evaluated for Impairment | 17,472 | 17,472 | 6,239 | |||
Loans, Collectively Evaluated for Impairment | 933,791 | 933,791 | 940,769 | |||
Totals | 951,263 | 951,263 | 947,008 | |||
CRE Non-owner Occupied | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 2,869 | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | 2,869 | |||||
Consumer and other | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 70 | 154 | 151 | 147 | 147 | |
Provision for Credit Losses on Loans | 20 | 13 | 31 | 25 | ||
Loans Charged-off | (26) | (5) | (33) | (21) | ||
Recoveries of Loans | 2 | 1 | 7 | 12 | ||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 66 | 66 | 151 | |||
Loans and Leases Receivable, Allowance, Total | 66 | 163 | 66 | 163 | 151 | $ 61 |
Loans, Collectively Evaluated for Impairment | 9,003 | 9,003 | 8,132 | |||
Totals | $ 9,003 | 9,003 | 8,132 | |||
Consumer and other | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | (90) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | (90) | |||||
Unallocated | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | 170 | 263 | 650 | 650 | ||
Provision for Credit Losses on Loans | (21) | (501) | ||||
Allowance for loan losses and the recorded investment | ||||||
Allowance for Loan Losses and Loans, Collectively Evaluated for Impairment | 263 | |||||
Loans and Leases Receivable, Allowance, Total | $ 149 | $ 149 | 263 | |||
Unallocated | Cumulative Effect of Change | ||||||
Allowance for Loan Losses: | ||||||
Beginning Balance | $ (263) | |||||
Allowance for loan losses and the recorded investment | ||||||
Loans and Leases Receivable, Allowance, Total | $ (263) |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses - Amortized cost basis of collateral dependent loans (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | $ 35,621 |
ACL Allocation | 84 |
Real Estate | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 19,790 |
Business Assets | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 5,459 |
Other | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 10,372 |
Commercial | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 15,831 |
ACL Allocation | 84 |
Commercial | Business Assets | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 5,459 |
Commercial | Other | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 10,372 |
Construction and Land Development | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 86 |
Construction and Land Development | Real Estate | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 86 |
1-4 Family Mortgage | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 663 |
1-4 Family Mortgage | Real Estate | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 663 |
CRE Owner Occupied | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 1,569 |
CRE Owner Occupied | Real Estate | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 1,569 |
CRE Non-owner Occupied | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | 17,472 |
CRE Non-owner Occupied | Real Estate | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |
Total | $ 17,472 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses - Additional information (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 USD ($) loan | Sep. 30, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | |
Loans and Allowance for Credit Losses | |||
Accrued interest receivable on loans | $ 10,800,000 | $ 10,800,000 | |
Number of loans modified | loan | 0 | 1 | 2 |
Aggregate outstanding balances of troubled debt restructurings | $ 9,600,000 | $ 9,600,000 | $ 188,000 |
Forgiveness of principal | $ 0 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses - Impaired loans by loan segment (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | $ 27,882 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 28,578 |
Loans With An Allowance for Loan Losses, Recorded Investment | 167 |
Loans With An Allowance for Loan Losses, Principal Balance | 167 |
Total Recorded Investment | 28,049 |
Total Principal Balance | 28,745 |
Related Allowance | 71 |
Commercial | |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | 19,508 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 19,508 |
Loans With An Allowance for Loan Losses, Recorded Investment | 167 |
Loans With An Allowance for Loan Losses, Principal Balance | 167 |
Related Allowance | 71 |
Construction and Land Development | |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | 106 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 713 |
1-4 Family Mortgage | |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | 392 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 392 |
CRE Owner Occupied | |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | 1,637 |
Loans With No Related Allowance for Loan Losses, Principal Balance | 1,726 |
CRE Non-owner Occupied | |
Impaired loans by segment | |
Loans With No Related Allowance for Loan Losses, Recorded Investment | 6,239 |
Loans With No Related Allowance for Loan Losses, Principal Balance | $ 6,239 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses - Average balances and interest income recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | $ 18,409 | $ 19,942 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 293 | 828 |
Loans with An Allowance for Loan Losses, Average Investment | 12,219 | 12,221 |
Loans With An Allowance for Loan Losses, Interest Recognized | 127 | 371 |
Total Average Investment | 30,628 | 32,163 |
Total Interest Recognized | 420 | 1,199 |
Commercial | ||
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | 9,929 | 11,343 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 187 | 519 |
Loans with An Allowance for Loan Losses, Average Investment | 84 | 86 |
Loans With An Allowance for Loan Losses, Interest Recognized | 1 | |
Construction and Land Development | ||
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | 114 | 120 |
1st REM - 1-4 Family | ||
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | 282 | 286 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 4 | 11 |
CRE Owner Occupied | ||
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | 1,751 | 1,762 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 17 | 49 |
CRE Non-owner Occupied | ||
Impaired loans by segment | ||
Loans With No Related Allowance for Loan Losses, Average Investment | 6,333 | 6,431 |
Loans With No Related Allowance for Loan Losses, Interest Recognized | 85 | 249 |
Loans with An Allowance for Loan Losses, Average Investment | 12,135 | 12,135 |
Loans With An Allowance for Loan Losses, Interest Recognized | $ 127 | $ 370 |
Deposits - Composition of depos
Deposits - Composition of deposits (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Deposits, by Type [Abstract] | ||
Transaction Deposits | $ 1,535,160 | $ 1,336,264 |
Savings and Money Market Deposits | 872,534 | 1,031,873 |
Time Deposits | 265,737 | 272,253 |
Brokered Deposits | 1,002,078 | 776,153 |
Total Deposits | 3,675,509 | 3,416,543 |
Brokered money market accounts | $ 177,700 | $ 184,300 |
Deposits - Maturities (Details)
Deposits - Maturities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Scheduled Maturities of Time Deposits | ||
Less than 1 Year | $ 397,981 | |
1 to 2 Years | 143,267 | |
2 to 3 Years | 350,978 | |
3 to 4 Years | 63,790 | |
4 to 5 Years | 101,357 | |
Greater than 5 years | 32,709 | |
Totals | 1,090,082 | |
Aggregate time deposits greater | $ 88,500 | $ 92,300 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Non-hedge Derivatives (Details) - Interest Rate Swap - Derivatives not designated as hedging instruments - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Asset | $ 64,241 | $ 65,315 |
Notional Amount, Liability | 64,241 | 65,315 |
Notional Amount | 128,482 | 130,630 |
Estimated Fair Value, Asset | 9,962 | 8,240 |
Estimated Fair Value, Liability | $ (9,962) | $ (8,240) |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Cash Flow Derivatives (Details) - Cash flow hedge - Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Cash Flow Hedging Derivatives | |||||
Amount expected to be reclassified from AOCI into earnings | $ 8,600 | ||||
Interest Rate Swap | |||||
Cash Flow Hedging Derivatives | |||||
Notional Amount | $ 183,000 | $ 183,000 | $ 163,000 | ||
Weighted Average Pay Rate | 2% | 2% | 1.90% | ||
Weighted Average Receive Rate | 5.40% | 5.40% | 3.47% | ||
Weighted average maturity | 4 years 3 months 18 days | 5 years 1 month 24 days | |||
Net Unrealized Gain | $ 11,139 | $ 9,175 | |||
Interest Rate Cap | |||||
Cash Flow Hedging Derivatives | |||||
Notional Amount | $ 125,000 | $ 125,000 | $ 125,000 | ||
Weighted average maturity | 6 years 7 months 6 days | 7 years 4 months 6 days | |||
Unamortized Premium Paid | $ 5,279 | $ 5,279 | $ 5,872 | ||
Weighted Average Strike Rate | 0.96% | 0.96% | 0.96% | ||
Amortization of interest rate cap premiums | $ 198 | $ 204 | $ 593 | $ 574 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Cash Flow Hedging Reclassification (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Derivatives, Fair Value [Line Items] | ||
Cash collateral posted | $ 0 | $ 0 |
Collateral received | 46,023 | 36,353 |
Cash flow hedge | Interest Rate Swap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Asset | 183,000 | 125,000 |
Notional Amount, Liability | 38,000 | |
Estimated Fair Value, Asset | 11,139 | 10,477 |
Estimated Fair Value, Liability | (1,302) | |
Cash flow hedge | Interest Rate Cap | Designated as Hedging Instrument | ||
Derivatives, Fair Value [Line Items] | ||
Notional Amount, Asset | 125,000 | 125,000 |
Estimated Fair Value, Asset | $ 23,006 | $ 19,406 |
Derivative Instruments and He_6
Derivative Instruments and Hedging Activities - Derivative instruments eligible for offset (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Asset Derivatives | ||
Gross Amounts of Recognized Assets | $ 44,107 | $ 38,123 |
Net Amounts of Assets Presented in the Balance Sheet | 44,107 | 38,123 |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral Received (Paid) | 46,023 | 36,353 |
Net Assets | (1,916) | 1,770 |
Liability Derivatives | ||
Gross Amounts of Recognized Liabilities | (9,962) | (9,542) |
Net Amounts of Liabilities Presented in the Balance Sheet | (9,962) | (9,542) |
Gross Amounts Not Offset in the Balance Sheet, Cash Collateral Received (Paid) | 0 | 0 |
Net Liabilities | $ (9,962) | $ (9,542) |
Derivative Instruments and He_7
Derivative Instruments and Hedging Activities - Derivative Instruments in Cash Flow Hedging Relationships (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Loss Reclassified from AOCI into earnings | $ 1,623 | $ 119 | $ 4,004 | $ (511) |
Amounts reclassified from AOCI into earnings related to hedge ineffectiveness | 0 | 0 | ||
Amount expected to be reclassified from AOCI into earnings related to hedge ineffectiveness | 0 | 0 | 0 | 0 |
Interest Rate Swap | Interest expense | Cash flow hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Loss Reclassified from AOCI into earnings | 1,575 | 288 | 4,169 | (24) |
Interest Rate Cap | Interest expense | Cash flow hedge | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Loss Reclassified from AOCI into earnings | $ 48 | $ (169) | $ (159) | $ (539) |
Federal Home Loan Bank Advanc_3
Federal Home Loan Bank Advances and Other Borrowings (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 | Sep. 01, 2022 | Aug. 31, 2022 | Dec. 31, 2021 |
Loan and Security Agreement | Revolving Line of Credit | |||||
Federal Home Loan Bank Advances and Other Borrowings | |||||
Bank stock (as a percent) | 100% | ||||
Borrowing capacity | $ 40 | $ 25 | |||
Outstanding balance under the revolving line of credit | $ 13.8 | $ 13.8 | |||
Federal Home Loan Bank Advances | |||||
Federal Home Loan Bank Advances and Other Borrowings | |||||
Principal balances | 1,370 | 1,200 | |||
Remaining available borrowings | $ 516.5 | $ 390.9 |
Federal Home Loan Bank Advanc_4
Federal Home Loan Bank Advances and Other Borrowings - Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Weighted Average Rate | ||
Less than 1 Year | 5.26% | 4.30% |
1 to 2 Years | 4.31% | 1.05% |
2 to 3 Years | 4.06% | 1.22% |
3 to 4 Years | 3.35% | 0.78% |
4 to 5 Years | 4.01% | |
Total Outstanding | ||
Less than 1 Year | $ 208,000 | $ 83,000 |
1 to 2 Years | 25,000 | 5,000 |
2 to 3 Years | 17,500 | 5,000 |
3 to 4 Years | 21,500 | 4,000 |
4 to 5 Years | 22,500 | |
Advances from Federal Home Loan Banks, Total | $ 294,500 | $ 97,000 |
Subordinated Debentures (Detail
Subordinated Debentures (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Subordinated Debentures | |||
Total amortization expense | $ 287 | $ 320 | |
Subordinated Note Purchase Agreement | |||
Subordinated Debentures | |||
Subordinated Debentures | 80,000 | $ 80,000 | |
Debt Issuance Costs | (808) | (1,095) | |
Subordinated Debentures, Net of Issuance Costs | 79,192 | 78,905 | |
Subordinated Note Purchase Agreement | 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 | |||
Subordinated Debentures | |||
Subordinated Debentures | $ 50,000 | $ 50,000 | |
Interest rate (as a percent) | 5.25% | 5.25% | |
Subordinated Note Purchase Agreement | 5.25% Fixed-to-Floating Rate Subordinated Notes due 2030 | SOFR | |||
Subordinated Debentures | |||
Variable spread on debt (as a percent) | 5.13% | ||
Subordinated Note Purchase Agreement | 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 | |||
Subordinated Debentures | |||
Subordinated Debentures | $ 30,000 | $ 30,000 | |
Interest rate (as a percent) | 3.25% | 3.25% | |
Subordinated Note Purchase Agreement | 3.25% Fixed-to-Floating Rate Subordinated Notes due 2031 | SOFR | |||
Subordinated Debentures | |||
Variable spread on debt (as a percent) | 2.52% |
Commitments, Contingencies an_3
Commitments, Contingencies and Credit Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Commitments Outstanding | ||
Unfunded Commitments Under Lines of Credit | $ 570,363 | $ 848,734 |
Letters of Credit | 107,292 | 115,769 |
Totals | 677,655 | 964,503 |
Federal Home Loan Bank Advances | ||
Commitments Outstanding | ||
Outstanding letters of credit | $ 66,800 | $ 78,400 |
Commitments, Contingencies an_4
Commitments, Contingencies and Credit Risk - Allowance for credit losses for off-balance sheet (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2023 | Jan. 01, 2023 | |
Commitments Outstanding | |||
Allowance for off-balance sheet credit exposure | $ 3,235 | $ 3,235 | $ 5,210 |
Off-balance sheet credit exposure | |||
Beginning Balance | 3,835 | 360 | |
Provision for (Recovery of) Off-Balance Sheet Credit Exposures | (600) | (1,975) | |
Total Ending Allowance Balance | $ 3,235 | 3,235 | |
Cumulative Effect of Change | |||
Commitments Outstanding | |||
Allowance for off-balance sheet credit exposure | |||
Off-balance sheet credit exposure | |||
Beginning Balance | $ 4,850 |
Stock Options and Restricted _3
Stock Options and Restricted Stock - Narrative (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2023 USD ($) item shares | Dec. 31, 2022 shares | |
Stock Options and Restricted Stock Awards | ||
Granted | 239,000 | |
Number of banks in the index | item | 51 | |
Minimum | ||
Stock Options and Restricted Stock Awards | ||
Market capitalization | $ | $ 500 | |
Maximum | ||
Stock Options and Restricted Stock Awards | ||
Market capitalization | $ | $ 4,000 | |
2012 Plan | ||
Stock Options and Restricted Stock Awards | ||
Number of shares authorized for grant options to its directors, officers, and employees | 750,000 | |
Term of award | 10 years | |
2012 Plan | Minimum | ||
Stock Options and Restricted Stock Awards | ||
Vesting period | 4 years | |
2012 Plan | Maximum | ||
Stock Options and Restricted Stock Awards | ||
Vesting period | 5 years | |
2017 Plan | ||
Stock Options and Restricted Stock Awards | ||
Number of shares authorized for grant options to its directors, officers, and employees | 1,500,000 | |
Term of award | 10 years | |
Number of unissued shares of the Company's common stock authorized for option grants | 0 | 44,700 |
2017 Plan | Minimum | ||
Stock Options and Restricted Stock Awards | ||
Vesting period | 4 years | |
2017 Plan | Maximum | ||
Stock Options and Restricted Stock Awards | ||
Vesting period | 5 years | |
2019 EIP | ||
Stock Options and Restricted Stock Awards | ||
Number of shares authorized for grant options to its directors, officers, and employees | 1,000,000 | |
Term of award | 10 years | |
Vesting period | 4 years | |
Number of unissued shares of the Company's common stock authorized for option grants | 0 | 231,363 |
2023 EIP | ||
Stock Options and Restricted Stock Awards | ||
Number of shares authorized for grant options to its directors, officers, and employees | 1,500,000 | |
Term of award | 10 years | |
Vesting period | 4 years | |
Number of unissued shares of the Company's common stock authorized for option grants | 1,438,137 |
Stock Options and Restricted _4
Stock Options and Restricted Stock - Black-Scholes Assumptions (Details) | 9 Months Ended |
Sep. 30, 2023 | |
Black-Scholes Assumptions | |
Expected Life | 7 years |
Expected Volatility | 42.25% |
Risk-Free Interest Rate | 4.15% |
Stock Options and Restricted _5
Stock Options and Restricted Stock - Stock Option Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Stock Option Plans | ||||
Outstanding at Beginning of Year | 1,913,444 | |||
Granted | 239,000 | |||
Exercised | (226,000) | |||
Forfeitures | (9,000) | |||
Outstanding at Period End | 1,917,444 | 1,917,444 | ||
Options Exercisable at Period End | 1,378,194 | 1,378,194 | ||
Weighted Average Exercise Price | ||||
Outstanding at Beginning of Year | $ 9.35 | |||
Granted | 10.65 | |||
Exercised | 3.17 | |||
Forfeitures | 13.04 | |||
Outstanding at Period End | $ 10.22 | 10.22 | ||
Options Exercisable at Period End | $ 8.88 | $ 8.88 | ||
Employee Stock Option [Member] | ||||
Weighted Average Exercise Price | ||||
Compensation expense for stock options | $ 230 | $ 326 | $ 601 | $ 926 |
Stock Options and Restricted _6
Stock Options and Restricted Stock - Exercise Price (Details) $ / shares in Units, $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) $ / shares shares | |
Exercise Price | |
Options Outstanding, Number Outstanding | shares | 1,917,444 |
Options Outstanding, Weighted Average Exercise Price | $ 10.22 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 7 months 6 days |
Options Exercisable, Number Outstanding | shares | 1,378,194 |
Options Exercisable, Weighted Average Exercise Price | $ 8.88 |
Total unrecognized compensation cost | $ | $ 2.2 |
Weighted-average period over which total unrecognized compensation cost is expected to be recognized (in years) | 2 years 8 months 12 days |
3.00 - 3.99 | |
Exercise Price | |
Exercise Price, lower range | $ 3 |
Exercise Price, upper range | $ 3.99 |
Options Outstanding, Number Outstanding | shares | 88,500 |
Options Outstanding, Weighted Average Exercise Price | $ 3.07 |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 months 24 days |
Options Exercisable, Number Outstanding | shares | 88,500 |
Options Exercisable, Weighted Average Exercise Price | $ 3.07 |
7.00 - 7.99 | |
Exercise Price | |
Exercise Price, lower range | 7 |
Exercise Price, upper range | $ 7.99 |
Options Outstanding, Number Outstanding | shares | 893,416 |
Options Outstanding, Weighted Average Exercise Price | $ 7.47 |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years |
Options Exercisable, Number Outstanding | shares | 893,416 |
Options Exercisable, Weighted Average Exercise Price | $ 7.47 |
8.00 - 8.99 | |
Exercise Price | |
Exercise Price, lower range | 8 |
Exercise Price, upper range | $ 8.99 |
Options Outstanding, Number Outstanding | shares | 17,500 |
Options Outstanding, Weighted Average Exercise Price | $ 8.76 |
Options Outstanding, Weighted Average Remaining Contractual Life | 6 years 6 months |
Options Exercisable, Number Outstanding | shares | 11,250 |
Options Exercisable, Weighted Average Exercise Price | $ 8.76 |
10.00 - 10.99 | |
Exercise Price | |
Exercise Price, lower range | 10 |
Exercise Price, upper range | $ 10.99 |
Options Outstanding, Number Outstanding | shares | 249,000 |
Options Outstanding, Weighted Average Exercise Price | $ 10.63 |
Options Outstanding, Weighted Average Remaining Contractual Life | 9 years 8 months 12 days |
Options Exercisable, Number Outstanding | shares | 7,500 |
Options Exercisable, Weighted Average Exercise Price | $ 10.08 |
11.00 - 11.99 | |
Exercise Price | |
Exercise Price, lower range | 11 |
Exercise Price, upper range | $ 11.99 |
Options Outstanding, Number Outstanding | shares | 85,000 |
Options Outstanding, Weighted Average Exercise Price | $ 11.27 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 7 months 6 days |
Options Exercisable, Number Outstanding | shares | 68,000 |
Options Exercisable, Weighted Average Exercise Price | $ 11.27 |
12.00 - 12.99 | |
Exercise Price | |
Exercise Price, lower range | 12 |
Exercise Price, upper range | $ 12.99 |
Options Outstanding, Number Outstanding | shares | 263,528 |
Options Outstanding, Weighted Average Exercise Price | $ 12.90 |
Options Outstanding, Weighted Average Remaining Contractual Life | 5 years 10 months 24 days |
Options Exercisable, Number Outstanding | shares | 206,778 |
Options Exercisable, Weighted Average Exercise Price | $ 12.90 |
13.00 - 13.99 | |
Exercise Price | |
Exercise Price, lower range | 13 |
Exercise Price, upper range | $ 13.99 |
Options Outstanding, Number Outstanding | shares | 25,000 |
Options Outstanding, Weighted Average Exercise Price | $ 13.22 |
Options Outstanding, Weighted Average Remaining Contractual Life | 4 years 7 months 6 days |
Options Exercisable, Number Outstanding | shares | 25,000 |
Options Exercisable, Weighted Average Exercise Price | $ 13.22 |
17.00 - 17.99 | |
Exercise Price | |
Exercise Price, lower range | 17 |
Exercise Price, upper range | $ 17.99 |
Options Outstanding, Number Outstanding | shares | 295,500 |
Options Outstanding, Weighted Average Exercise Price | $ 17.50 |
Options Outstanding, Weighted Average Remaining Contractual Life | 8 years 3 months 18 days |
Options Exercisable, Number Outstanding | shares | 77,750 |
Options Exercisable, Weighted Average Exercise Price | $ 17.50 |
Stock Options and Restricted _7
Stock Options and Restricted Stock - Non-Vested Options (Details) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Number of Shares | |
Nonvested Options at beginning of period | shares | 421,375 |
Granted | shares | 239,000 |
Vested | shares | (116,125) |
Forfeited | shares | (5,000) |
Nonvested Options at end of period | shares | 539,250 |
Weighted Average Grant Date Fair Value | |
Nonvested Options at beginning of period | $ / shares | $ 4.87 |
Granted | $ / shares | 5.39 |
Vested | $ / shares | 4.78 |
Forfeited | $ / shares | 5.74 |
Nonvested Options at end of period | $ / shares | $ 5.11 |
Stock Options and Restricted _8
Stock Options and Restricted Stock - Restricted Stock Awards (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Compensation expense | ||||
Weighted-average period for non vested restricted stock awards | 2 years 8 months 12 days | |||
Restricted Stock Awards | ||||
Number of Shares | ||||
Vesting period | 4 years | |||
Nonvested Awards at beginning of period | 38,762 | |||
Vested | (2,785) | |||
Forfeited | (250) | |||
Nonvested Awards at end of period | 35,727 | 35,727 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested Awards at beginning of period | $ 12.50 | |||
Vested | 10.32 | |||
Forfeited | 12.92 | |||
Nonvested Awards at end of period | $ 12.67 | $ 12.67 | ||
Compensation expense | ||||
Compensation expense recognized | $ 112 | $ 113 | $ 333 | $ 335 |
Unrecognized compensation cost | $ 97 | $ 97 | ||
Weighted-average period for non vested restricted stock awards | 2 months 12 days | |||
Shares issued for services on board of directors | 35,460 | |||
Value of shares issued for services on board of directors | $ 355 |
Stock Options and Restricted _9
Stock Options and Restricted Stock - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Compensation expense | ||||
Weighted-average period for non vested restricted stock awards | 2 years 8 months 12 days | |||
Restricted Stock Units | ||||
Number of Shares | ||||
Number of shares of common stock on which each RSU is entitled to to receive upon vesting | 1 | 1 | ||
Vesting period | 4 years | |||
Nonvested Awards at beginning of period | 351,310 | |||
Granted | 82,969 | |||
Vested | (5,225) | |||
Forfeited | (10,253) | |||
Nonvested Awards at end of period | 418,801 | 418,801 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested Awards at beginning of period | $ 16.30 | |||
Granted | 15.59 | |||
Vested | 16.20 | |||
Forfeited | 17.79 | |||
Nonvested Awards at end of period | $ 16.13 | $ 16.13 | ||
Compensation expense | ||||
Compensation expense recognized | $ 535 | $ 358 | $ 1,600 | $ 1,100 |
Unrecognized compensation cost | $ 5,000 | $ 5,000 | ||
Weighted-average period for non vested restricted stock awards | 2 years 4 months 24 days |
Regulatory Capital - Capital Am
Regulatory Capital - Capital Amounts and Ratios (Details) $ in Thousands | Sep. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) |
Total Risk-Based Capital | ||
Total Risk-Based Capital, Actual amount | $ 567,202 | $ 536,352 |
Total Risk-Based Capital, For Capital Adequacy Purposes, amount | 326,865 | 326,190 |
Total Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conversion Buffer, amount | $ 429,010 | $ 428,125 |
Total Risk-Based Capital, Actual ratio | 0.1388 | 0.1315 |
Total Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 0.0800 | 0.0800 |
Total Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.1050 | 0.1050 |
Tier 1 Risk-Based Capital | ||
Banking Regulation, Tier One Risk-Based Capital, Actual | $ 436,903 | $ 409,092 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, amount | 245,149 | 244,643 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | $ 347,294 | $ 346,577 |
Tier 1 Risk-Based Capital, Actual ratio | 0.1069 | 0.1003 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 0.0600 | 0.0600 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.0850 | 0.0850 |
Common Equity Tier 1 Capital | ||
Common Equity Tier 1 Capital, Actual amount | $ 370,389 | $ 342,578 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, amount | 183,861 | 183,482 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | $ 286,007 | $ 285,417 |
Common Equity Tier 1 Capital, Actual ratio | 0.0907 | 0.0840 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 7% | 7% |
Leverage Ratio | ||
Tier 1 Leverage Ratio, Actual amount | $ 436,903 | $ 409,092 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes, amount | 181,605 | 171,368 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | $ 181,605 | $ 171,368 |
Tier 1 Leverage Ratio, Actual ratio | 0.0962 | 0.0955 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes, Ratio | 0.0400 | 0.0400 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.0400 | 0.0400 |
Bank | ||
Total Risk-Based Capital | ||
Total Risk-Based Capital, Actual amount | $ 543,914 | $ 508,760 |
Total Risk-Based Capital, For Capital Adequacy Purposes, amount | 326,519 | 326,288 |
Total Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conversion Buffer, amount | 428,556 | 428,253 |
Total Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 408,149 | $ 407,860 |
Total Risk-Based Capital, Actual ratio | 0.1333 | 0.1247 |
Total Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 0.0800 | 0.0800 |
Total Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.1050 | 0.1050 |
Total Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.1000 | 0.1000 |
Tier 1 Risk-Based Capital | ||
Banking Regulation, Tier One Risk-Based Capital, Actual | $ 492,861 | $ 460,404 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, amount | 244,889 | 244,716 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | 346,926 | 346,681 |
Tier 1 Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 326,519 | $ 326,288 |
Tier 1 Risk-Based Capital, Actual ratio | 0.1208 | 0.1129 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes, Ratio | 0.0600 | 0.0600 |
Tier 1 Risk-Based Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.0850 | 0.0850 |
Tier 1 Risk-Based Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0800 | 0.0800 |
Common Equity Tier 1 Capital | ||
Common Equity Tier 1 Capital, Actual amount | $ 492,861 | $ 460,404 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, amount | 183,667 | 183,537 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | 285,704 | 285,502 |
Common Equity Tier 1 Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 265,297 | $ 265,109 |
Common Equity Tier 1 Capital, Actual ratio | 0.1208 | 0.1129 |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes, Ratio | 4.50% | 4.50% |
Common Equity Tier 1 Capital, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 7% | 7% |
Common Equity Tier 1 Capital, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 6.50% | 6.50% |
Leverage Ratio | ||
Tier 1 Leverage Ratio, Actual amount | $ 492,861 | $ 460,404 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes, amount | 181,256 | 171,113 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes Plus Capital Conservation Buffer, amount | 181,256 | 171,113 |
Tier 1 Leverage Ratio, To be Well Capitalized Under Prompt Corrective Action Regulations, amount | $ 226,570 | $ 213,891 |
Tier 1 Leverage Ratio, Actual ratio | 0.1088 | 0.1076 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes, Ratio | 0.0400 | 0.0400 |
Tier 1 Leverage Ratio, For Capital Adequacy Purposes Plus Capital Conservation Buffer, Ratio | 0.0400 | 0.0400 |
Tier 1 Leverage Ratio, To be Well Capitalized Under Prompt Corrective Action Regulations, Ratio | 0.0500 | 0.0500 |
Fair Value Measurement - Recurr
Fair Value Measurement - Recurring (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | $ 553,076 | $ 548,613 |
Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Total Fair Value of Financial Assets | 597,183 | 586,736 |
Total Fair Value of Financial Liabilities | 9,962 | 9,542 |
U.S. Treasury Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 2,864 | 2,580 |
U.S. Treasury Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 2,864 | 2,580 |
Municipal Bonds | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 122,497 | 131,354 |
Municipal Bonds | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 122,497 | 131,354 |
Mortgage-Backed Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 210,375 | 237,784 |
Mortgage-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 210,375 | 237,784 |
Corporate Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 121,717 | 109,827 |
Corporate Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 121,717 | 109,827 |
SBA Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 19,966 | 20,877 |
SBA Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 19,966 | 20,877 |
Asset-Backed Securities | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 75,657 | 46,191 |
Asset-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 75,657 | 46,191 |
Interest Rate Cap | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Interest Rate Swap | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Interest Rate Swaps | 9,962 | 9,542 |
Level 1 | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 2,864 | 2,580 |
Level 1 | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Total Fair Value of Financial Assets | 2,864 | 2,580 |
Level 1 | U.S. Treasury Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 2,864 | 2,580 |
Level 2 | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 550,212 | 546,033 |
Level 2 | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Total Fair Value of Financial Assets | 594,319 | 584,156 |
Total Fair Value of Financial Liabilities | 9,962 | 9,542 |
Level 2 | Municipal Bonds | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 122,497 | 131,354 |
Level 2 | Mortgage-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 210,375 | 237,784 |
Level 2 | Corporate Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 121,717 | 109,827 |
Level 2 | SBA Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 19,966 | 20,877 |
Level 2 | Asset-Backed Securities | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Securities Available for Sale, at Fair Value | 75,657 | 46,191 |
Level 2 | Interest Rate Cap | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Level 2 | Interest Rate Cap | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Level 2 | Interest Rate Swap | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Interest Rate Swaps | 9,962 | 9,542 |
Level 2 | Interest Rate Swap | Recurring | ||
Balances of the assets and liabilities measured at fair value on a recurring basis | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Interest Rate Swaps | $ 9,962 | $ 9,542 |
Fair Value Measurement - Nonrec
Fair Value Measurement - Nonrecurring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | $ 0 | $ 1,500 | $ 2,050 | $ 6,200 | |
Nonrecurring | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | 179 | $ 71 | |||
Nonrecurring | Individually Evaluated Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | 179 | ||||
Nonrecurring | Impaired Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Loss | 71 | ||||
Level 2 | Nonrecurring | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | 175 | 175 | 96 | ||
Level 2 | Nonrecurring | Individually Evaluated Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | $ 175 | $ 175 | |||
Level 2 | Nonrecurring | Impaired Loans | |||||
Balances of the assets and liabilities measured at fair value on a nonrecurring basis | |||||
Assets measured at fair value | $ 96 |
Fair Value Measurement - Estima
Fair Value Measurement - Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Financial Assets: | ||
Bank-Owned Certificates of Deposit | $ 1,225 | $ 1,181 |
Securities Available for Sale, at Fair Value | 553,076 | 548,613 |
Level 1 | ||
Financial Assets: | ||
Cash and Due From Banks | 124,358 | 87,043 |
Securities Available for Sale, at Fair Value | 2,864 | 2,580 |
Level 2 | ||
Financial Assets: | ||
Bank-Owned Certificates of Deposit | 1,210 | 1,173 |
Securities Available for Sale, at Fair Value | 550,212 | 546,033 |
FHLB Stock, at Cost | 17,056 | 19,606 |
Loans, Net | 3,522,379 | 3,314,190 |
Accrued Interest Receivable | 15,182 | 13,479 |
Financial Liabilities: | ||
Deposits | 3,653,876 | 3,390,416 |
Federal Funds Purchased | 287,000 | |
Notes Payable | 13,771 | 13,473 |
FHLB Advances | 292,436 | 96,061 |
Subordinated Debentures | 71,794 | 70,931 |
Accrued Interest Payable | 3,816 | 2,831 |
Level 2 | Interest Rate Cap | ||
Financial Assets: | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Level 2 | Interest Rate Swap | ||
Financial Assets: | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Financial Liabilities: | ||
Interest Rate Swaps | 9,962 | 9,542 |
Carrying Amount | ||
Financial Assets: | ||
Cash and Due From Banks | 124,358 | 87,043 |
Bank-Owned Certificates of Deposit | 1,225 | 1,181 |
Securities Available for Sale, at Fair Value | 553,076 | 548,613 |
FHLB Stock, at Cost | 17,056 | 19,606 |
Loans, Net | 3,664,464 | 3,512,157 |
Accrued Interest Receivable | 15,182 | 13,479 |
Financial Liabilities: | ||
Deposits | 3,675,509 | 3,416,543 |
Federal Funds Purchased | 287,000 | |
Notes Payable | 13,750 | 13,750 |
FHLB Advances | 294,500 | 97,000 |
Subordinated Debentures | 79,192 | 78,905 |
Accrued Interest Payable | 3,816 | 2,831 |
Carrying Amount | Interest Rate Cap | ||
Financial Assets: | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Carrying Amount | Interest Rate Swap | ||
Financial Assets: | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Financial Liabilities: | ||
Interest Rate Swaps | 9,962 | 9,542 |
Estimated Fair Value | ||
Financial Assets: | ||
Cash and Due From Banks | 124,358 | 87,043 |
Bank-Owned Certificates of Deposit | 1,210 | 1,173 |
Securities Available for Sale, at Fair Value | 553,076 | 548,613 |
FHLB Stock, at Cost | 17,056 | 19,606 |
Loans, Net | 3,522,379 | 3,314,190 |
Accrued Interest Receivable | 15,182 | 13,479 |
Financial Liabilities: | ||
Deposits | 3,653,876 | 3,390,416 |
Federal Funds Purchased | 287,000 | |
Notes Payable | 13,771 | 13,473 |
FHLB Advances | 292,436 | 96,061 |
Subordinated Debentures | 71,794 | 70,931 |
Accrued Interest Payable | 3,816 | 2,831 |
Estimated Fair Value | Interest Rate Cap | ||
Financial Assets: | ||
Interest Rate Derivatives | 23,006 | 19,406 |
Estimated Fair Value | Interest Rate Swap | ||
Financial Assets: | ||
Interest Rate Derivatives | 21,101 | 18,717 |
Financial Liabilities: | ||
Interest Rate Swaps | $ 9,962 | $ 9,542 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event | Oct. 25, 2023 $ / shares |
Series A Preferred Stock | |
Subsequent Events | |
Dividend per share | $ 36.72 |
Preferred Stock, dividend rate (as a percent) | 5.875% |
Depositary Shares | |
Subsequent Events | |
Dividend per share | $ 0.3672 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ 9,629 | $ 14,513 | $ 31,087 | $ 39,657 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |