Document And Entity Information
Document And Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Jul. 31, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Bank of Marin Bancorp | |
Entity Central Index Key | 1,403,475 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 6,993,452 |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 83,855 | $ 203,545 |
Investment securities | ||
Held-to-maturity, at amortized cost | 170,652 | 151,032 |
Available-for-sale, at fair value | 388,137 | 332,467 |
Total investment securities | 558,789 | 483,499 |
Loans, net of allowance for loan losses of $15,813 and $15,767 at June 30, 2018 and December 31, 2017, respectively | 1,701,798 | 1,663,246 |
Bank premises and equipment, net | 7,965 | 8,612 |
Goodwill | 30,140 | 30,140 |
Core deposit intangible | 6,032 | 6,492 |
Interest receivable and other assets | 76,463 | 72,620 |
Total assets | 2,465,042 | 2,468,154 |
Deposits | ||
Non-interest bearing | 1,057,745 | 1,014,103 |
Interest bearing | ||
Transaction accounts | 132,272 | 169,195 |
Savings accounts | 179,187 | 178,473 |
Money market accounts | 631,479 | 626,783 |
Time accounts | 137,040 | 160,116 |
Total deposits | 2,137,723 | 2,148,670 |
Subordinated debentures | 5,802 | 5,739 |
Interest payable and other liabilities | 17,319 | 16,720 |
Total liabilities | 2,160,844 | 2,171,129 |
Stockholders' Equity | ||
Preferred stock, no par value, Authorized - 5,000,000 shares, none issued | 0 | 0 |
Common stock, no par value, Authorized - 15,000,000 shares; Issued and outstanding - 6,991,821 and 6,921,542 at June 30, 2018 and December 31, 2017, respectively | 146,195 | 143,967 |
Retained earnings | 166,281 | 155,544 |
Accumulated other comprehensive loss, net of taxes | (8,278) | (2,486) |
Total stockholders' equity | 304,198 | 297,025 |
Total liabilities and stockholders' equity | $ 2,465,042 | $ 2,468,154 |
CONSOLIDATED STATEMENTS OF CON3
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Loans and Leases Receivable, Net Amount | ||
Loans, allowance for loan losses | $ 15,813 | $ 15,767 |
Stockholders' Equity | ||
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, authorized (in shares) | 15,000,000 | 15,000,000 |
Common stock, issued (in shares) | 6,991,821 | 6,921,542 |
Common stock, outstanding (in shares) | 6,991,821 | 6,921,542 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Interest income | ||||
Interest and fees on loans | $ 19,624 | $ 16,423 | $ 38,511 | $ 32,272 |
Interest on investment securities | ||||
Securities of U.S. government agencies | 2,860 | 1,534 | 5,335 | 3,052 |
Obligations of state and political subdivisions | 604 | 553 | 1,242 | 1,121 |
Corporate debt securities and other | 35 | 36 | 79 | 73 |
Interest on Federal funds sold and due from banks | 285 | 157 | 688 | 217 |
Total interest income | 23,408 | 18,703 | 45,855 | 36,735 |
Interest expense | ||||
Interest on interest-bearing transaction accounts | 48 | 21 | 100 | 50 |
Interest on savings accounts | 18 | 16 | 36 | 31 |
Interest on money market accounts | 236 | 114 | 452 | 227 |
Interest on time accounts | 140 | 139 | 296 | 285 |
Interest on Federal Home Loan Bank (FHLB) and other borrowings | 1 | 0 | 1 | 0 |
Interest on subordinated debentures | 123 | 109 | 237 | 217 |
Total interest expense | 566 | 399 | 1,122 | 810 |
Net interest income | 22,842 | 18,304 | 44,733 | 35,925 |
Provision for loan losses | 0 | 0 | 0 | 0 |
Net interest income after provision for loan losses | 22,842 | 18,304 | 44,733 | 35,925 |
Non-interest income | ||||
Merchant interchange fees | 118 | 112 | 198 | 208 |
Earnings on bank-owned life insurance | 230 | 210 | 458 | 419 |
Dividends on FHLB stock | 192 | 176 | 388 | 408 |
Gains on investment securities, net | 11 | 10 | 11 | 10 |
Other income | 384 | 253 | 734 | 504 |
Total non-interest income | 2,238 | 2,096 | 4,480 | 4,211 |
Non-interest expense | ||||
Salaries and related benefits | 8,316 | 7,287 | 17,333 | 14,762 |
Occupancy and equipment | 1,511 | 1,380 | 3,018 | 2,699 |
Depreciation and amortization | 546 | 463 | 1,093 | 944 |
Federal Deposit Insurance Corporation insurance | 191 | 162 | 382 | 323 |
Data processing | 1,023 | 963 | 2,404 | 1,902 |
Professional services | 810 | 522 | 2,109 | 1,044 |
Directors' expense | 183 | 224 | 357 | 382 |
Information technology | 264 | 186 | 533 | 384 |
Provision for losses on off-balance sheet commitments | 0 | (208) | 0 | (43) |
Other expense | 1,665 | 1,652 | 3,361 | 3,245 |
Total non-interest expense | 14,509 | 12,631 | 30,590 | 25,642 |
Income before provision for income taxes | 10,571 | 7,769 | 18,623 | 14,494 |
Provision for income taxes | 2,680 | 2,583 | 4,343 | 4,760 |
Net income | $ 7,891 | $ 5,186 | $ 14,280 | $ 9,734 |
Net income per common share: | ||||
Basic (usd per share) | $ 1.14 | $ 0.85 | $ 2.06 | $ 1.60 |
Diluted (usd per share) | $ 1.12 | $ 0.84 | $ 2.03 | $ 1.58 |
Weighted average shares: | ||||
Basic (shares) | 6,944 | 6,110 | 6,929 | 6,101 |
Diluted (shares) | 7,033 | 6,174 | 7,019 | 6,173 |
Dividends declared per common share (usd per share) | $ 0.31 | $ 0.27 | $ 0.60 | $ 0.54 |
Comprehensive income: | ||||
Net income | $ 7,891 | $ 5,186 | $ 14,280 | $ 9,734 |
Other comprehensive (loss) income | ||||
Change in net unrealized gain or loss on available-for-sale securities | (1,131) | 1,961 | (7,301) | 3,635 |
Reclassification adjustment for gains on available-for-sale securities in net income | (11) | (10) | (11) | (10) |
Net unrealized loss on securities transferred from available-for-sale to held-to-maturity | (278) | 0 | (278) | 0 |
Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity | 132 | 124 | 268 | 165 |
Subtotal | (1,288) | 2,075 | (7,322) | 3,790 |
Deferred tax (benefit) expense | (384) | 892 | (2,168) | 1,596 |
Other comprehensive (loss) income, net of tax | (904) | 1,183 | (5,154) | 2,194 |
Comprehensive income | 6,987 | 6,369 | 9,126 | 11,928 |
Deposit Account | ||||
Non-interest income | ||||
Charges and Fees | 455 | 447 | 932 | 899 |
Fiduciary and Trust | ||||
Non-interest income | ||||
Charges and Fees | 488 | 504 | 1,003 | 1,007 |
Debit Card | ||||
Non-interest income | ||||
Charges and Fees | $ 360 | $ 384 | $ 756 | $ 756 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss (AOCI), Net of Taxes |
Balance (in shares) at Dec. 31, 2016 | 6,127,314 | |||
Balance at Dec. 31, 2016 | $ 230,563 | $ 87,392 | $ 146,464 | $ (3,293) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 15,976 | 15,976 | ||
Other comprehensive income (loss) | 807 | 807 | ||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings (in shares) | 9,266 | |||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings | 28 | $ 28 | ||
Stock issued under employee stock purchase plan (in shares) | 512 | |||
Stock issued under employee stock purchase plan | 32 | $ 32 | ||
Stock issued under employee stock ownership plan (ESOP) (in shares) | 29,547 | |||
Stock issued under employee stock ownership plan (ESOP) | 1,850 | $ 1,850 | ||
Restricted stock granted (in shares) | 16,230 | |||
Restricted stock granted | 0 | |||
Stock-based compensation - stock options | 529 | $ 529 | ||
Stock-based compensation - restricted stock | 742 | $ 742 | ||
Cash dividends paid on common stock | (6,896) | (6,896) | ||
Stock purchased by directors under director stock plan (in shares) | 531 | |||
Stock purchased by directors under director stock plan | 35 | $ 35 | ||
Stock issued in payment of director fees (in shares) | 2,878 | |||
Stock issued in payment of director fees | 188 | $ 188 | ||
Stock and stock options issued to Bank of Napa shareholders (net of payment for fractional shares of $14 thousand) (in shares) | 735,264 | |||
Stock and stock options issued to Bank of Napa shareholders (net of payment for fractional shares of $14 thousand) | $ 53,171 | $ 53,171 | ||
Balance (in shares) at Dec. 31, 2017 | 6,921,542 | 6,921,542 | ||
Balance at Dec. 31, 2017 | $ 297,025 | $ 143,967 | 155,544 | (2,486) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 14,280 | 14,280 | ||
Other comprehensive income (loss) | (5,154) | (5,154) | ||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings (in shares) | 50,075 | |||
Stock options exercised, net of shares surrendered for cashless exercises and tax withholdings | 534 | $ 534 | ||
Stock issued under employee stock purchase plan (in shares) | 265 | |||
Stock issued under employee stock purchase plan | 19 | $ 19 | ||
Stock issued under employee stock ownership plan (ESOP) (in shares) | 7,900 | |||
Stock issued under employee stock ownership plan (ESOP) | 601 | $ 601 | ||
Restricted stock granted (in shares) | 18,520 | |||
Restricted stock granted | 0 | |||
Stock-based compensation - stock options | 442 | $ 442 | ||
Stock-based compensation - restricted stock | 672 | $ 672 | ||
Cash dividends paid on common stock | (4,181) | (4,181) | ||
Stock purchased by directors under director stock plan (in shares) | 260 | |||
Stock purchased by directors under director stock plan | 18 | $ 18 | ||
Stock issued in payment of director fees (in shares) | 1,343 | |||
Stock issued in payment of director fees | 91 | $ 91 | ||
Reclassification of stranded tax effects in AOCI | 0 | 638 | (638) | |
Restricted stock surrendered for tax withholdings upon vesting (in shares) | (658) | |||
Restricted stock surrendered for tax withholdings upon vesting | (45) | $ (45) | ||
Restricted stock forfeited / cancelled (in shares) | (6,028) | |||
Restricted stock forfeited / cancelled | 0 | |||
Stock repurchased, net of commissions (in shares) | (1,398) | |||
Stock repurchased, net of commissions | $ (104) | $ (104) | ||
Balance (in shares) at Jun. 30, 2018 | 6,991,821 | 6,991,821 | ||
Balance at Jun. 30, 2018 | $ 304,198 | $ 146,195 | $ 166,281 | $ (8,278) |
CONSOLIDATED STATEMENTS OF CHA6
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Fractional shares issued in acquisition, payment | $ 14 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Cash Flows from Operating Activities: | |||||
Net income | $ 7,891 | $ 5,186 | $ 14,280 | $ 9,734 | $ 15,976 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Reversal of losses on off-balance sheet commitments | 0 | (208) | 0 | (43) | |
Noncash contribution expense to employee stock ownership plan | 601 | 0 | |||
Noncash director compensation expense | 146 | 106 | |||
Stock-based compensation expense | 1,114 | 710 | |||
Amortization of core deposit intangible | 460 | 236 | |||
Amortization of investment security premiums, net of accretion of discounts | 1,496 | 1,496 | |||
Accretion of discount on acquired loans | (428) | (498) | |||
Accretion of discount on subordinated debentures | 63 | 80 | |||
Net change in deferred loan origination costs/fees | 18 | 60 | |||
Gain on sale of investment securities | (11) | (10) | (11) | (10) | |
Depreciation and amortization | 546 | 463 | 1,093 | 944 | |
Gain on sale of repossessed assets | 0 | (1) | |||
Earnings on bank-owned life insurance policies | (230) | (210) | (458) | (419) | |
Net change in operating assets and liabilities: | |||||
Deferred rent and other rent-related expenses | (179) | 114 | |||
Interest receivable and other assets | (971) | 93 | |||
Interest payable and other liabilities | 1,543 | (389) | |||
Total adjustments | 4,487 | 2,479 | |||
Net cash provided by operating activities | 18,767 | 12,213 | |||
Cash Flows from Investing Activities: | |||||
Purchase of held-to-maturity securities | (1,989) | (4,496) | |||
Purchase of available-for-sale securities | (121,269) | (9,377) | |||
Proceeds from sale of available-for-sale securities | 5,006 | 1,321 | 5,006 | 1,321 | |
Proceeds from paydowns/maturities of held-to-maturity securities | 9,615 | 14,601 | |||
Proceeds from paydowns/maturities of available-for-sale securities | 24,540 | 15,385 | |||
Loans originated and principal collected, net | (38,835) | (4,563) | |||
Purchase of premises and equipment | (446) | (814) | |||
Proceeds from sale of other real estate owned or repossessed assets | 0 | 170 | |||
Cash paid for low-income housing tax credit investment | (373) | (628) | |||
Net cash (used in) provided by investing activities | (123,751) | 11,599 | |||
Cash Flows from Financing Activities: | |||||
Net (decrease) increase in deposits | (10,947) | 67,840 | |||
Proceeds from stock options exercised | 585 | 88 | |||
Payment of tax withholdings for stock options exercised and vesting of restricted stock | (96) | (60) | |||
Proceeds from stock issued under employee and director stock purchase plans | 37 | 737 | |||
Stock repurchased, net of commissions | (104) | 0 | |||
Cash dividends paid on common stock | (4,181) | (3,315) | |||
Net cash (used in) provided by financing activities | (14,706) | 65,290 | |||
Net (decrease) increase in cash and cash equivalents | (119,690) | 89,102 | |||
Cash and cash equivalents at beginning of period | 203,545 | 48,804 | 48,804 | ||
Cash and cash equivalents at end of period | 83,855 | 137,906 | 83,855 | 137,906 | 203,545 |
Supplemental disclosure of cash flow information: | |||||
Cash paid in interest | 1,083 | 751 | |||
Cash paid in income taxes | 2,000 | 4,620 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||
Change in net unrealized gain or loss on available-for-sale securities | (7,301) | 3,635 | |||
Securities transferred from available-for-sale to held-to-maturity | 27,422 | 128,965 | 129,000 | ||
Amortization of net unrealized loss on available-for-sale securities transferred to held-to-maturity | $ 132 | $ 124 | 268 | 165 | 165 |
Stock issued under employee stock ownership plan (ESOP) | 601 | 0 | $ 1,850 | ||
Stock issued in payment of director fees | $ 91 | $ 82 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Bank of Marin Bancorp (“Bancorp”), a bank holding company, and its wholly-owned bank subsidiary, Bank of Marin (the “Bank”), a California state-chartered commercial bank. References to “we,” “our,” “us” mean Bancorp and the Bank that are consolidated for financial reporting purposes. The accompanying unaudited consolidated interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations. Although we believe that the disclosures are adequate and the information presented is not misleading, we suggest that these interim financial statements be read in conjunction with the annual financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K. In the opinion of Management, the unaudited consolidated financial statements reflect all adjustments, which are necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in stockholders’ equity, and cash flows for the periods presented. All material intercompany transactions have been eliminated. The results of these interim periods may not be indicative of the results for the full year or for any other period. The NorCal Community Bancorp Trusts I and II, respectively (the "Trusts") were formed for the sole purpose of issuing trust preferred securities. Bancorp is not considered the primary beneficiary of the Trusts (variable interest entities), therefore the Trusts are not consolidated in our consolidated financial statements, but rather the subordinated debentures are shown as a liability on our consolidated statements of condition (See Note 6, Borrowings). Bancorp accounts for its investment in the securities of the Trusts under the equity method, which is included in interest receivable and other assets in the consolidated statements of condition. The following table shows: 1) weighted average basic shares, 2) potentially dilutive weighted average common shares related to stock options and unvested restricted stock awards, and 3) weighted average diluted shares. Basic earnings per share (“EPS”) are calculated by dividing net income by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock awards. Diluted EPS are calculated using the weighted average number of potentially dilutive common shares. The number of potentially dilutive common shares included in the quarterly diluted EPS is computed using the average market prices during the three months included in the reporting period under the treasury stock method. The number of potentially dilutive common shares included in year-to-date diluted EPS is a year-to-date weighted average of potentially dilutive common shares included in each quarterly diluted EPS computation. In computing diluted EPS, we exclude anti-dilutive shares such as options whose exercise prices exceed the current common stock price, as they would not reduce EPS under the treasury method. We have two forms of outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the difference in EPS is nominal for these participating securities. Three months ended Six months ended (in thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Weighted average basic shares outstanding 6,944 6,110 6,929 6,101 Potentially dilutive common shares related to: Stock options 74 52 74 57 Unvested restricted stock awards 15 12 16 15 Weighted average diluted shares outstanding 7,033 6,174 7,019 6,173 Net income $ 7,891 $ 5,186 $ 14,280 $ 9,734 Basic EPS $ 1.14 $ 0.85 $ 2.06 $ 1.60 Diluted EPS $ 1.12 $ 0.84 $ 2.03 $ 1.58 Weighted average anti-dilutive shares not included in the calculation of diluted EPS 30 33 35 23 |
Recently Adopted and Issued Acc
Recently Adopted and Issued Accounting Standards | 6 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Adopted and Issued Accounting Standards | Recently Adopted and Issued Accounting Standards Accounting Standards Adopted in 2018 In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of this ASU (and all subsequent updates) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This ASU establishes a five-step model that must be used to recognize revenue that requires the entity to identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies the performance obligation. The ASU does not apply to the majority of our revenue, including revenue associated with financial instruments, such as loans and investment securities, and certain non-interest income, such as earnings on bank-owned life insurance, dividends on Federal Home Loan Bank ("FHLB") stock, gains or losses on sales of investment securities, and deposit overdraft charges. The standard allowed the use of either the full retrospective or modified retrospective transition method. We elected to apply the modified retrospective transition method to incomplete contracts as of the initial date of application on January 1, 2018. The adoption of the new standards did not have a material impact on our financial condition or results of operations as revenue recognition under the new standards did not change significantly from our current practice of recognizing the in-scope non-interest income. In addition, we did not retroactively revise prior period amounts or record a cumulative adjustment to retained earnings upon adoption. We considered the nature, amount, timing, and uncertainty of revenue from contracts with customers and determined that significant revenue streams are sufficiently disaggregated in the consolidated statements of comprehensive income. Descriptions of our significant revenue-generating transactions that are within the scope of the new revenue recognition standards, which are presented in the consolidated statements of comprehensive income as components of non-interest income, are as follows: • Wealth Management & Trust ("WM&T") fees - WM&T services include, but are not limited to: customized investment advisory and management; administrative services such as bill pay and tax reporting; trust administration, estate settlement, custody and fiduciary services. Performance obligations for investment advisory and management services are generally satisfied over time. Revenue is recognized monthly according to a tiered fee schedule based on the client's month-end market value of assets under our management. WM&T does not earn revenue based on performance or incentives. Costs associated with WM&T revenue-generating activities, such as payments to sub-advisors, are recorded separately as part of professional service expenses when incurred. • Deposit account service charges - Service charges on deposit accounts consist of monthly maintenance fees, business account analysis fees, business online banking fees, check order charges, and other deposit account-related fees. Performance obligations for monthly maintenance fees and account analysis fees are satisfied, and the related revenue recognized, when we complete our performance obligation each month. Performance obligations related to transaction-based services (such as check orders) are satisfied, and the related revenue recognized, at a point in time when completed, except for business accounts subject to analysis where the transaction-based fees are part of the monthly account analysis fees. • Debit card interchange fees - We issue debit cards to our consumer and small business customers that allow them to purchase goods and services from merchants in person, online, or via mobile devices using funds held in their demand deposit accounts held with us. Debit cards issued to our customers are part of global electronic payment networks (such as Visa) who pass a portion of the merchant interchange fees to debit card-issuing member banks like us when our customers make purchases through their networks. Performance obligations for debit card services are satisfied and revenue is recognized daily as the payment networks process transactions. Because we act in an agent capacity, we determined that network costs previously recorded as a component of non-interest expense should be netted with interchange fees recorded in non-interest income. Network costs were immaterial for the six months ended June 30, 2018 and 2017. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this ASU make improvements to accounting standards related to financial instruments, including the following: • Requires equity investments, except for those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. • Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When impairment exists, an entity is required to measure the investment at fair value. • Eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value required under current standards for financial instruments measured at amortized cost on the consolidated balance sheet. • Requires public companies to use the exit price notion when measuring and disclosing the fair value of financial instruments. • Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. • Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. We adopted the requirements of this ASU effective January 1, 2018, which did not have a material impact on our financial condition and results of operations. The fair value of our loans held for investment, which is recorded at amortized cost, now incorporates the exit price notion reflecting factors such as a liquidity premium. See Note 3, Fair Value of Assets and Liabilities. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This ASU provides guidance on how to present and classify eight specific cash flow topics in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented, if practical. We adopted the requirements of this ASU effective January 1, 2018, which did not impact our financial condition, results of operations, or related financial statement disclosures for the periods presented. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The amendments are intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses and provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments should be applied prospectively and are effective for annual periods after December 31, 2017, including interim periods within those periods. We adopted the amendments effective January 1, 2018, which did not impact our financial condition, results of operations, or related financial statement disclosures in the first quarter of 2018. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU applies to entities that change the terms or conditions of a share-based payment award. The FASB adopted this ASU to provide clarity in what constitutes a modification and to reduce diversity in practice in applying Topic 718. In order for a change to a share-based arrangement to not require Topic 718 modification accounting treatment, all of the following must be met: no change in fair value, no change in vesting conditions and no change in the balance sheet classification of the modified award. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including adoption in an interim period. The amendments should be applied prospectively to an award modified on or after the adoption date. We adopted the requirements of this ASU effective January 1, 2018, which did not impact our financial condition, results of operation, or related financial statement disclosures. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This amendment changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. It is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting and increase transparency as to the scope and results of hedging programs. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We early-adopted the amendments of this ASU in the second quarter of 2018, and elected to perform hedge effectiveness assessments using a qualitative approach instead of quantitative regression analysis going forward. The adoption of this ASU had an immaterial impact to our financial results. The amendments also require additional disclosures, which are included in Note 9, Derivative Financial Instruments and Hedging Activities. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This amendment helps organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the enactment of the Tax Cuts and Jobs Act of 2017. The ASU requires financial statement preparers to disclose a description of the accounting policy for releasing income tax effects from AOCI, whether or not they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act of 2017, and information about the other income tax effects that are reclassified. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied in either the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate tax rate in the Tax Cuts and Jobs Act of 2017 is recognized. We early adopted this ASU in the first quarter of 2018. See Note 7, Stockholders' Equity. Accounting Standards Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The amendments in this ASU intend to increase transparency and comparability among organizations by recognizing an asset, which represents the right to use the asset for the lease term, and a lease liability, which is a lessee's obligation to make lease payments measured on a discounted basis. This ASU generally applies to leasing arrangements exceeding a twelve-month term. ASU 2016-02 is effective for annual periods, including interim periods within those annual periods beginning after December 15, 2018 and requires a modified retrospective method of adoption. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which provides various corrections and clarifications to ASU 2016-02. Early application of the amendments is permitted. We intend to adopt this ASU during the first quarter of 2019, as required. We completed an inventory of our lease agreements and continue to evaluate potential accounting software solutions that will aid in the transition to the new leasing guidance. As of June 30, 2018 , our undiscounted operating lease obligations that were off-balance sheet totaled $16.5 million (See Note 8, Commitments and Contingencies). Upon adoption of this ASU, the present values of leases currently classified as operating leases will be recognized as lease assets and liabilities on our consolidated balance sheets. Additional disclosures of key information about our leasing arrangements will also be required. We do not expect that the ASU will have a material impact on our capital ratios or return on average assets when adopted and we are currently evaluating the effect that the ASU will have on other components of our financial condition and results of operations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Under the new guidance, entities will be required to present financial assets at the net amount expected to be collected. The measurement of expected credit losses will be based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of a credit over its remaining life. In addition, the ASU amends the accounting for expected credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have formed an internal Current Expected Credit Loss ("CECL") committee and are working with our third party vendor to determine the appropriate methodologies and resources to utilize in preparation for transition to the new accounting standards. The impact of this ASU on our financial condition and results of operations is not known at this time. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This update simplifies the accounting for share-based payment transactions for acquiring goods and services from nonemployees, applying some of the same requirements as employee share-based payment transactions. The ASU will not affect the accounting for share-based payment awards to nonemployee directors, which will continue to be treated as employee share-based transactions under the current standards. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We do not expect that the ASU will have a material impact on our financial condition or results of operations, as it is not our practice to issue stock-based awards to pay for goods and services from nonemployees, other than nonemployee directors. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Fair Value Hierarchy and Fair Value Measurement We group our assets and liabilities that are measured at fair value in three levels within the fair value hierarchy, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1: Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data. Level 3: Valuations are based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Values are determined using pricing models and discounted cash flow models and may include significant Management judgment and estimation. Transfers between levels of the fair value hierarchy are recognized through our monthly and/or quarterly valuation process in the reporting period during which the event or circumstances that caused the transfer occurred. The following table summarizes our assets and liabilities that were required to be recorded at fair value on a recurring basis. (in thousands) Description of Financial Instruments Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measurement Categories: Changes in Fair Value Recorded In 1 June 30, 2018 Securities available-for-sale: Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies $ 240,794 $ — $ 240,794 $ — OCI SBA-backed securities 23,954 — 23,954 — OCI Debentures of government sponsored agencies 32,139 — 32,139 — OCI Privately-issued collateralized mortgage obligations 435 — 435 — OCI Obligations of state and political subdivisions 87,788 — 87,788 — OCI Corporate bonds 3,027 — 3,027 — OCI Derivative financial assets (interest rate contracts) 327 — 327 — NI Derivative financial liabilities (interest rate contracts) 276 — 276 — NI December 31, 2017 Securities available-for-sale: Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies $ 188,061 $ — $ 188,061 $ — OCI SBA-backed securities 25,982 — 25,817 165 OCI Debentures of government sponsored agencies 12,938 — 12,938 — OCI Privately-issued collateralized mortgage obligations 1,431 — 1,431 — OCI Obligations of state and political subdivisions 97,491 — 97,491 — OCI Corporate bonds 6,564 — 6,564 — OCI Derivative financial assets (interest rate contracts) 74 — 74 — NI Derivative financial liabilities (interest rate contracts) 740 — 740 — NI 1 Other comprehensive income ("OCI") or net income ("NI"). Securities available-for-sale are recorded at fair value on a recurring basis. When available, quoted market prices (Level 1) are used to determine the fair value of securities available-for-sale. If quoted market prices are not available, we obtain pricing information from a reputable third-party service provider, who may utilize valuation techniques that use current market-based or independently sourced parameters, such as bid/ask prices, dealer-quoted prices, interest rates, benchmark yield curves, prepayment speeds, probability of default, loss severity and credit spreads (Level 2). Level 2 securities include obligations of state and political subdivisions, U.S. agencies or government-sponsored agencies' debt securities, mortgage-backed securities, government agency-issued, privately-issued collateralized mortgage obligations, and corporate bonds. As of June 30, 2018 and December 31, 2017 , there were no Level 1 securities. As of December 31, 2017 , we had one Level 3 available-for-sale U.S. government agency obligation, which was paid off during the second quarter of 2018. Securities held-to-maturity may be written down to fair value (determined using the same techniques discussed above for securities available-for-sale) as a result of other-than-temporary impairment, and we did not record any write-downs during the six months ended June 30, 2018 or June 30, 2017 . On a recurring basis, derivative financial instruments are recorded at fair value, which is based on the income approach using observable Level 2 market inputs, reflecting market expectations of future interest rates as of the measurement date. Standard valuation techniques are used to calculate the present value of the future expected cash flows assuming an orderly transaction. Valuation adjustments may be made to reflect both our own credit risk and the counterparties’ credit risk in determining the fair value of the derivatives. Level 2 inputs for the valuations are limited to observable market prices for London Interbank Offered Rate ("LIBOR") and Overnight Index Swap ("OIS") rates (for the very short term), quoted prices for LIBOR futures contracts, observable market prices for LIBOR and OIS swap rates, and one-month and three-month LIBOR basis spreads at commonly quoted intervals. Mid-market pricing of the inputs is used as a practical expedient in the fair value measurements. We project spot rates at reset days specified by each swap contract to determine future cash flows, then discount to present value using either LIBOR or OIS curves depending on whether the swap positions are fully collateralized as of the measurement date. When the value of any collateral placed with counterparties is less than the interest rate derivative liability, a credit valuation adjustment ("CVA") is applied to reflect the credit risk we pose to counterparties. We have used the spread between the Standard & Poor's BBB rated U.S. Bank Composite rate and LIBOR for the closest maturity term corresponding to the duration of the swaps to derive the CVA. A similar credit risk adjustment, correlated to the credit standing of the counterparty, is made when collateral posted by the counterparty does not fully cover their liability to the Bank. For further discussion on our methodology in valuing our derivative financial instruments, refer to Note 9, Derivative Financial Instruments and Hedging Activities. Certain financial assets may be measured at fair value on a non-recurring basis. These assets are subject to fair value adjustments that result from the application of the lower of cost or fair value accounting or write-downs of individual assets, such as impaired loans that are collateral dependent and other real estate owned ("OREO"). As of June 30, 2018 and December 31, 2017 , we did not carry any assets measured at fair value on a non-recurring basis. Disclosures about Fair Value of Financial Instruments The following table summarizes fair value estimates for financial instruments as of June 30, 2018 and December 31, 2017 , excluding financial instruments recorded at fair value on a recurring basis (summarized in the first table in this note). The carrying amounts in the following table are recorded in the consolidated statements of condition under the indicated captions. Further, we have not disclosed the fair value of financial instruments specifically excluded from disclosure requirements such as bank-owned life insurance policies ("BOLI") and non-maturity deposit liabilities. Additionally, we hold shares of FHLB stock and Visa Inc. Class B common stock at cost. These shares are restricted from resale, except among member banks, and their values are discussed in Note 4, Investment Securities. June 30, 2018 December 31, 2017 (in thousands) Carrying Amounts Fair Value Fair Value Hierarchy Carrying Amounts Fair Value Fair Value Hierarchy Financial assets (recorded at amortized cost) Cash and cash equivalents $ 83,855 $ 83,855 Level 1 $ 203,545 $ 203,545 Level 1 Investment securities held-to-maturity 170,652 166,127 Level 2 151,032 151,032 Level 2 Loans, net 1,701,798 1,666,409 Level 3 1,663,246 1,650,198 Level 3 Interest receivable 7,814 7,814 Level 2 7,501 7,501 Level 2 Financial liabilities (recorded at amortized cost) Time deposits 137,040 136,023 Level 2 160,116 159,540 Level 2 Subordinated debentures 5,802 6,988 Level 3 5,739 5,118 Level 3 Interest payable 167 167 Level 2 191 191 Level 2 Commitments - The value of unrecognized financial instruments is estimated based on the fee income associated with the commitments which, in the absence of credit exposure, is considered to approximate their settlement value. The fair value of commitment fees was not material at June 30, 2018 and December 31, 2017 . |
Investment Securities
Investment Securities | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities Our investment securities portfolio consists of obligations of state and political subdivisions, corporate bonds, U.S. government agency securities, including residential and commercial mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMOs”) issued or guaranteed by Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Small Business Administration ("SBA"), or Government National Mortgage Association ("GNMA"), debentures issued by government-sponsored agencies such as FNMA, Federal Farm Credit Bureau, FHLB and FHLMC, and privately issued CMOs, as reflected in the following table. June 30, 2018 December 31, 2017 Amortized Fair Gross Unrealized Amortized Fair Gross Unrealized (in thousands) Cost Value Gains (Losses) Cost Value Gains (Losses) Held-to-maturity: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA $ 94,203 $ 90,824 $ — $ (3,379 ) $ 100,376 $ 100,096 $ 234 $ (514 ) SBA-backed securities 8,882 8,743 — (139 ) — — — — CMOs issued by FNMA 11,881 11,766 — (115 ) — — — — CMOs issued by FHLMC 34,668 33,591 — (1,077 ) 31,010 30,938 2 (74 ) CMOs issued by GNMA 3,730 3,713 — (17 ) — — — — Obligations of state and political subdivisions 17,288 17,490 235 (33 ) 19,646 19,998 383 (31 ) Total held-to-maturity 170,652 166,127 235 (4,760 ) 151,032 151,032 619 (619 ) Available-for-sale: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA 90,082 87,590 17 (2,509 ) 65,559 65,262 126 (423 ) SBA-backed securities 24,620 23,954 — (666 ) 25,979 25,982 58 (55 ) CMOs issued by FNMA 21,026 20,571 7 (462 ) 35,340 35,125 33 (248 ) CMOs issued by FHLMC 123,359 120,411 1 (2,949 ) 70,514 69,889 3 (628 ) CMOs issued by GNMA 12,641 12,222 2 (421 ) 17,953 17,785 26 (194 ) Debentures of government- sponsored agencies 32,395 32,139 — (256 ) 12,940 12,938 3 (5 ) Privately issued CMOs 431 435 4 — 1,432 1,431 1 (2 ) Obligations of state and political subdivisions 89,699 87,788 77 (1,988 ) 98,027 97,491 298 (834 ) Corporate bonds 3,015 3,027 24 (12 ) 6,541 6,564 26 (3 ) Total available-for-sale 397,268 388,137 132 (9,263 ) 334,285 332,467 574 (2,392 ) Total investment securities $ 567,920 $ 554,264 $ 367 $ (14,023 ) $ 485,317 $ 483,499 $ 1,193 $ (3,011 ) The amortized cost a nd fair value of investment debt securities by contractual maturity at June 30, 2018 and December 31, 2017 are shown in the following table. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2018 December 31, 2017 Held-to-Maturity Available-for-Sale Held-to-Maturity Available-for-Sale (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ 2,859 $ 2,882 $ 8,272 $ 8,263 $ 2,151 $ 2,172 $ 10,268 $ 10,272 After one but within five years 13,063 13,147 79,662 78,514 15,577 15,791 71,576 71,237 After five years through ten years 63,321 61,350 216,584 210,650 54,641 54,554 129,723 128,954 After ten years 91,409 88,748 92,750 90,710 78,663 78,515 122,718 122,004 Total $ 170,652 $ 166,127 $ 397,268 $ 388,137 $ 151,032 $ 151,032 $ 334,285 $ 332,467 Sales of investment securities and gross gains and losses are shown in the following table. Three months ended Six months ended (in thousands) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Available-for-sale: Sales proceeds $ 5,006 $ 1,321 $ 5,006 $ 1,321 Gross realized gains 27 13 27 13 Gross realized losses (16 ) (3 ) (16 ) (3 ) Pledged investment securities are shown in the following table. (in thousands) June 30, 2018 December 31, 2017 Pledged to the State of California: Secure public deposits in compliance with the Local Agency Security Program $ 103,097 $ 107,829 Collateral for trust deposits 749 761 Total investment securities pledged to the State of California $ 103,846 $ 108,590 Collateral for Wealth Management and Trust Services checking account $ 2,014 $ 2,026 As part of our ongoing review of our investment securities portfolio, we reassessed the classification of certain securities issued by government sponsored agencies. During 2018 and 2017, we transferred $27.4 million and $129.0 million , respectively, of these securities from available-for-sale to held-to-maturity at fair value. We intend and have the ability to hold these securities to maturity. The net unrealized pre-tax loss of $278 thousand and $3.0 million , at the respective transfer dates, remained in accumulated other comprehensive income and are amortized over the remaining lives of the securities. Amortization of the net unrealized pre-tax losses totaled $268 thousand and $165 thousand for the six months ended June 30, 2018 and 2017, respectively. Other-Than-Temporarily Impaired ("OTTI") Debt Securities We have evaluated the credit of our investment securities and their issuers and/or insurers. Based on our evaluation, Management has determined that no investment security in our investment portfolio is other-than-temporarily impaired as of June 30, 2018 . We do not have the intent and it is more likely than not that we will not have to sell the remaining securities temporarily impaired at June 30, 2018 before recovery of the amortized cost basis. There were 266 and 198 investment securities in unrealized loss positions at June 30, 2018 and December 31, 2017 , respectively. Those securities are summarized and classified according to the duration of the loss period in the following tables: June 30, 2018 < 12 continuous months ≥ 12 continuous months Total securities in a loss position (in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Held-to-maturity: MBS pass-through securities issued by FHLMC and FNMA $ 22,100 $ (830 ) $ 68,724 $ (2,549 ) $ 90,824 $ (3,379 ) SBA-backed securities 8,742 (139 ) — — $ 8,742 $ (139 ) CMOs issued by FNMA 11,766 (115 ) — — 11,766 (115 ) CMOs issued by FHLMC 19,798 (564 ) 13,793 (513 ) 33,591 (1,077 ) CMOs issued by GNMA — — 3,713 (17 ) 3,713 (17 ) Obligations of state and political subdivisions 3,816 (33 ) — — 3,816 (33 ) Total held-to-maturity 66,222 (1,681 ) 86,230 (3,079 ) 152,452 (4,760 ) Available-for-sale: MBS pass-through securities issued by FHLMC and FNMA 68,906 (1,843 ) 17,713 (666 ) 86,619 (2,509 ) SBA-backed securities 23,954 (666 ) — — 23,954 (666 ) CMOs issued by FNMA 15,687 (321 ) 4,642 (141 ) 20,329 (462 ) CMOs issued by FHLMC 115,370 (2,949 ) — — 115,370 (2,949 ) CMOs issued by GNMA 11,297 (419 ) 603 (2 ) 11,900 (421 ) Debentures of government- sponsored agencies 32,139 (256 ) — — 32,139 (256 ) Privately issued CMOs — — — — — — Obligations of state and political subdivisions 57,217 (835 ) 18,832 (1,153 ) 76,049 (1,988 ) Corporate bonds 1,522 (12 ) — — 1,522 (12 ) Total available-for-sale 326,092 (7,301 ) 41,790 (1,962 ) 367,882 (9,263 ) Total temporarily impaired securities $ 392,314 $ (8,982 ) $ 128,020 $ (5,041 ) $ 520,334 $ (14,023 ) December 31, 2017 < 12 continuous months ≥ 12 continuous months Total securities in a loss position (in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Held-to-maturity: Obligations of state and political subdivisions $ 3,648 $ (31 ) $ — $ — $ 3,648 $ (31 ) MBS pass-through securities issued by FHLMC and FNMA 16,337 (143 ) 46,845 (371 ) 63,182 (514 ) CMOs issued by FHLMC 11,066 (31 ) 13,824 (43 ) 24,890 (74 ) Total held-to-maturity 31,051 (205 ) 60,669 (414 ) 91,720 (619 ) Available-for-sale: MBS pass-through securities issued by FHLMC and FNMA 32,189 (121 ) 15,325 (302 ) 47,514 (423 ) SBA-backed securities 11,028 (53 ) 165 (2 ) 11,193 (55 ) CMOs issued by FNMA 26,401 (171 ) 5,440 (77 ) 31,841 (248 ) CMOs issued by FHLMC 69,276 (628 ) — — 69,276 (628 ) CMOs issued by GNMA 14,230 (194 ) — — 14,230 (194 ) Debentures of government- sponsored agencies 2,984 (5 ) — — 2,984 (5 ) Privately issued CMO's 1,310 (2 ) — — 1,310 (2 ) Obligations of state and political subdivisions 52,197 (288 ) 19,548 (546 ) 71,745 (834 ) Corporate bonds 3,060 (3 ) — — 3,060 (3 ) Total available-for-sale 212,675 (1,465 ) 40,478 (927 ) 253,153 (2,392 ) Total temporarily impaired securities $ 243,726 $ (1,670 ) $ 101,147 $ (1,341 ) $ 344,873 $ (3,011 ) As of June 30, 2018 , sixty-four investment securities in our portfolio had been in a continuous loss position for twelve months or more. They consisted of five CMOs issued by FHLMC, three CMOs issued by FNMA, two CMOs issued by GNMA, twenty-two agency MBS securities and thirty-two obligations of U.S. state and political subdivisions securities. We have evaluated the securities and believe that the decline in fair value is primarily driven by factors other than credit. It is probable that we will be able to collect all amounts due according to the contractual terms and no other-than-temporary impairment exists on these securities. The debenture of government-sponsored agency security is supported by the U.S. Federal Government, which protects us from credit losses. Based upon our assessment of the credit fundamentals, we concluded that these securities were not other-than-temporarily impaired at June 30, 2018 . There were two hundred one investment securities in our portfolio that had been in temporary loss positions for less than twelve months as of June 30, 2018 , and their temporary loss positions mainly arose from changes in interest rates since purchase. They consisted of eleven SBA-backed securities, eight debentures of a U.S. government-sponsored agency, ninety-eight obligations of U.S. state and political subdivisions, thirty-six MBS securities, forty-six CMOs issued by government-sponsored agencies, and three corporate bonds. Securities of government-sponsored agencies are supported by the U.S. Federal Government, which protects us from credit losses. Other temporarily impaired securities are deemed creditworthy after internal analysis of the issuers' latest financial information and credit enhancement. Additionally, all are rated as investment grade by at least one major rating agency. As a result of this impairment analysis, we concluded that these securities were not other-than-temporarily impaired at June 30, 2018 . Non-Marketable Securities As a member of the FHLB, we are required to maintain a minimum investment in FHLB capital stock determined by the Board of Directors of the FHLB. The minimum investment requirements can increase in the event we increase our total asset size or borrowings with the FHLB. Shares cannot be purchased or sold except between the FHLB and its members at the $100 per share par value. We held $11.1 million of FHLB stock recorded at cost in other assets in the consolidated statements of condition at both June 30, 2018 and December 31, 2017 . The carrying amounts of these investments are reasonable estimates of fair value because the securities are restricted to member banks and they do not have a readily determinable market value. Management does not believe that the FHLB stock is other-than-temporarily-impaired, due to FHLB's current financial condition. On July 26, 2018, FHLB announced a cash dividend to be distributed in mid-August 2018 at an annualized dividend rate of 7.00% . Cash dividends paid on FHLB capital stock are recorded as non-interest income. As a member bank of Visa U.S.A., we hold 16,939 shares of Visa Inc. Class B common stock with a carrying value of zero , which is equal to our cost basis. These shares are restricted from resale until their conversion into Class A (voting) shares upon the termination of Visa Inc.'s Covered Litigation escrow account. Because of the restriction, these shares are not considered available-for-sale and are not carried at fair value. When converting this Class B common stock to Class A common stock based on the conversion rate of 1.6298 as of June 30, 2018 and 1.6483 as of December 31, 2017, and the closing stock price of Class A shares, the value of our shares of Class B common stock would have been $3.7 million and $3.2 million at June 30, 2018 and December 31, 2017 , respectively. The conversion rate is subject to further reduction upon the final settlement of the covered litigation against Visa Inc. and its member banks. As such, the fair value of these Class B shares can differ significantly from their if-converted values. For further information, refer to Note 8, Commitments and Contingencies. We invest in low-income housing tax credit funds as a limited partner, which totaled $4.9 million and $2.1 million recorded in other assets as of June 30, 2018 and December 31, 2017 , respectively. In the first six months of 2018, we recognized $282 thousand of low-income housing tax credits and other tax benefits, net of $237 thousand of amortization expense of low-income housing tax credit investment, as a component of income tax expense. As of June 30, 2018 , our unfunded commitments for these low-income housing tax credit funds totaled $3.2 million . We did not recognize any impairment losses on these low-income housing tax credit investments during the six months ended June 30, 2018 or 2017, as the value of the future tax benefits exceeds the carrying value of the investments. |
Loans and Allowance for Loan Lo
Loans and Allowance for Loan Losses | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Loans and Allowance for Loan Losses | Loans and Allowance for Loan Losses Credit Quality of Loans The following table shows outstanding loans by class and payment aging as of June 30, 2018 and December 31, 2017 . Loan Aging Analysis by Loan Class (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential 1 Installment and other consumer Total June 30, 2018 30-59 days past due $ — $ — $ — $ — $ 77 $ — $ 11 $ 88 60-89 days past due — — — — — — — — 90 days or more past due — — — — — — — — Total past due — — — — 77 — 11 88 Current 241,994 317,587 839,667 57,015 125,954 108,829 26,477 1,717,523 Total loans 3 $ 241,994 $ 317,587 $ 839,667 $ 57,015 $ 126,031 $ 108,829 $ 26,488 $ 1,717,611 Non-accrual loans 2 $ — $ — $ — $ — $ 385 $ — $ — $ 385 December 31, 2017 30-59 days past due $ — $ — $ — $ — $ 99 $ 255 $ 330 $ 684 60-89 days past due 1,340 — — — — — — 1,340 90 days or more past due — — — — 307 — — 307 Total past due 1,340 — — — 406 255 330 2,331 Current 234,495 300,963 822,984 63,828 132,061 95,271 27,080 1,676,682 Total loans 3 $ 235,835 $ 300,963 $ 822,984 $ 63,828 $ 132,467 $ 95,526 $ 27,410 $ 1,679,013 Non-accrual loans 2 $ — $ — $ — $ — $ 406 $ — $ — $ 406 1 Our residential loan portfolio does not include sub-prime loans, nor is it our practice to underwrite loans commonly referred to as "Alt-A mortgages", the characteristics of which are loans lacking full documentation, borrowers having low FICO scores or higher loan-to-value ratios. 2 One purchased credit impaired ("PCI") loan with an unpaid balance of $6 thousand and no carrying value was not accreting interest at June 30, 2018 . Three PCI loans with unpaid balances totaling $131 thousand and no carrying values were not accreting interest at December 31, 2017 . Amounts exclude accreting PCI loans totaling $2.1 million at both June 30, 2018 and December 31, 2017 as we have a reasonable expectation about future cash flows to be collected and we continue to recognize accretable yield on these loans in interest income. There were no accruing loans past due more than ninety days at June 30, 2018 or December 31, 2017 . 3 Amounts include net deferred loan origination costs of $800 thousand and $818 thousand at June 30, 2018 and December 31, 2017 , respectively. Amounts are also net of unaccreted purchase discounts on non-PCI loans of $956 thousand and $1.2 million at June 30, 2018 and December 31, 2017 , respectively. We generally make commercial loans to established small and mid-sized businesses to provide financing for their growth and working capital needs, equipment purchases and acquisitions. Management examines historical, current, and projected cash flows to determine the ability of the borrower to repay obligations as agreed. Commercial loans are made based primarily on the identified cash flows of the borrower and secondarily on the underlying collateral and guarantor support. The cash flows of borrowers, however, may not occur as expected, and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed, such as accounts receivable and inventory, and typically include personal guarantees. We target stable businesses with guarantors who provide additional sources of repayment and have proven to be resilient in periods of economic stress. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans discussed above. We underwrite these loans to be repaid from cash flow and to be supported by real property collateral. Underwriting standards for commercial real estate loans include, but are not limited to, debt coverage and loan-to-value ratios. Furthermore, the owners of the properties guarantee substantially all of our commercial real estate loans. Conditions in the real estate markets or in the general economy may adversely affect our commercial real estate loans. In the event of a vacancy, we expect guarantors to carry the loans until they find a replacement tenant. The owner's substantial equity investment provides a strong economic incentive to continue to support the commercial real estate projects. As such, we have generally experienced a relatively low level of loss and delinquencies in this portfolio. We generally make construction loans to developers and builders to finance construction, renovation and occasionally land acquisitions in anticipation of near-term development. These loans are underwritten after evaluation of the borrower's financial strength, reputation, prior track record, and independent appraisals. Significant events can affect the construction industry, including: the inherent volatility of real estate markets and vulnerability to delays due to weather, change orders, inability to obtain construction permits, labor or material shortages, and price changes. Estimates of construction costs and value associated with the completed project may be inaccurate. Repayment of construction loans is largely dependent on the ultimate success of the project. Consumer loans primarily consist of home equity lines of credit, other residential loans and floating homes, along with a small number of installment loans. Our other residential loans include tenancy-in-common fractional interest loans ("TIC") located almost entirely in San Francisco County. We originate consumer loans utilizing credit score information, debt-to-income ratio and loan-to-value ratio analysis. Diversification among consumer loan types, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk. We use a risk rating system to evaluate asset quality, and to identify and monitor credit risk in individual loans, and in the loan portfolio. Our definitions of “Special Mention” risk graded loans, or worse, are consistent with those used by the Federal Deposit Insurance Corporation ("FDIC"). Our internally assigned grades are as follows: Pass and Watch : Loans to borrowers of acceptable or better credit quality. Borrowers in this category demonstrate fundamentally sound financial positions, repayment capacity, credit history, and management expertise. Loans in this category must have an identifiable and stable source of repayment and meet the Bank’s policy regarding debt-service-coverage ratios. These borrowers are capable of sustaining normal economic, market or operational setbacks without significant financial consequences. Negative external industry factors are generally not present. The loan may be secured, unsecured or supported by non-real estate collateral for which the value is more difficult to determine and/or marketability is more uncertain. This category also includes “Watch” loans, where the primary source of repayment has been delayed. “Watch” is intended to be a transitional grade, with either an upgrade or downgrade within a reasonable period. Special Mention : Potential weaknesses that deserve close attention. If left uncorrected, those potential weaknesses may result in deterioration of the payment prospects for the asset. Special Mention assets do not present sufficient risk to warrant adverse classification. Substandard : Inadequately protected by either the current sound worth and paying capacity of the obligor or the collateral pledged, if any. A Substandard asset has a well-defined weakness or weaknesses that jeopardize(s) the liquidation of the debt. Substandard assets are characterized by the distinct possibility that we will sustain some loss if such weaknesses or deficiencies are not corrected. Well-defined weaknesses include adverse trends or developments of the borrower’s financial condition, managerial weaknesses and/or significant collateral deficiencies. Doubtful : Critical weaknesses that make collection or liquidation in full improbable. There may be specific pending events that work to strengthen the asset; however, the amount or timing of the loss may not be determinable. Pending events generally occur within one year of the asset being classified as Doubtful. Examples include: merger, acquisition, or liquidation; capital injection; guarantee; perfecting liens on additional collateral; and refinancing. Such loans are placed on non-accrual status and usually are collateral-dependent. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk and complexity. In addition, investor commercial real estate borrowers are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly and review them on an ongoing basis. We review home equity and other consumer loans based on delinquency status. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. The following table represents an analysis of the carrying amount in loans, net of deferred fees and costs and purchase premiums or discounts, by internally assigned risk grades, including PCI loans, at June 30, 2018 and December 31, 2017 . Credit Risk Profile by Internally Assigned Risk Grade (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Purchased credit-impaired Total June 30, 2018 Pass $ 224,707 $ 299,469 $ 836,634 $ 54,324 $ 124,103 $ 108,829 $ 26,389 $ 2,140 $ 1,676,595 Special Mention 14,842 8,904 2,232 — 1,121 — — — 27,099 Substandard 2,403 8,005 — 2,691 719 — 99 — 13,917 Total loans $ 241,952 $ 316,378 $ 838,866 $ 57,015 $ 125,943 $ 108,829 $ 26,488 $ 2,140 $ 1,717,611 December 31, 2017 Pass $ 214,636 $ 281,104 $ 818,570 $ 60,859 $ 130,558 $ 95,526 $ 27,287 $ 1,325 $ 1,629,865 Special Mention 9,318 9,284 1,850 — — — — 790 21,242 Substandard 11,816 9,409 1,774 2,969 1,815 — 123 — 27,906 Total loans $ 235,770 $ 299,797 $ 822,194 $ 63,828 $ 132,373 $ 95,526 $ 27,410 $ 2,115 $ 1,679,013 Troubled Debt Restructuring Our loan portfolio includes certain loans modified in a troubled debt restructuring (“TDR”), where we have granted economic concessions to borrowers experiencing financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. TDRs on non-accrual status at the time of restructure may be returned to accruing status after Management considers the borrower’s sustained repayment performance for a reasonable period, generally six months, and obtains reasonable assurance of repayment and performance. We may remove a loan from TDR designation if it meets all of the following conditions: • The loan is subsequently refinanced or restructured at current market interest rates and the new terms are consistent with the treatment of creditworthy borrowers under regular underwriting standards; • The borrower is no longer considered to be in financial difficulty; • Performance on the loan is reasonably assured; and; • Existing loan did not have any forgiveness of principal or interest. The same Management level that approved the upgrading of the loan classification must approve the removal of TDR status. During the six months ended June 30, 2018 , one TIC loan with a recorded investment of $150 thousand was removed from TDR designation after meeting all of the conditions noted above. There were no loans removed from TDR designation during 2017. The following table summarizes the carrying amount of TDR loans by loan class as of June 30, 2018 and December 31, 2017 . (in thousands) Recorded investment in Troubled Debt Restructurings 1 June 30, 2018 December 31, 2017 Commercial and industrial $ 1,917 $ 2,165 Commercial real estate, owner-occupied 7,002 6,999 Commercial real estate, investor 1,844 2,171 Construction 2,691 2,969 Home equity 348 347 Other residential 988 1,148 Installment and other consumer 704 721 Total $ 15,494 $ 16,520 1 There were no TDR loans on non-accrual status at June 30, 2018 and December 31, 2017 . The following table presents information for loans modified in a TDR during the presented periods, including the number of modified contracts, the recorded investment in the loans prior to modification, and the recorded investment in the loans at period end after being restructured. The table excludes fully charged-off TDR loans and loans modified in a TDR and subsequently paid-off during the years presented. (dollars in thousands) Number of Contracts Modified Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment at Period End TDRs during the three months ended June 30, 2018: Commercial and industrial 2 $ 254 $ 245 $ 235 TDRs during the three months ended June 30, 2017: None — $ — $ — $ — TDRs during the six months ended June 30, 2018: Commercial and industrial 2 $ 254 $ 245 $ 235 TDRs during the six months ended June 30, 2017: Installment and consumer 1 $ 50 $ 50 $ 49 The two loans that were modified during the six months ended June 30, 2018 were to the same borrower and included loan extensions and other changes in loan terms. The modification during the six months ended June 30, 2017 primarily involved an interest rate concession and other changes to loan terms. During the first six months of 2018 and 2017, there were no defaults on loans that had been modified in a TDR within the prior twelve-month period. We report defaulted TDRs based on a payment default definition of more than ninety days past due. Impaired Loans The following tables summarize information by class on impaired loans and their related allowances. Total impaired loans include non-accrual loans, accruing TDR loans and accreting PCI loans that have experienced post-acquisition declines in cash flows expected to be collected. (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Total June 30, 2018 Recorded investment in impaired loans: With no specific allowance recorded $ 306 $ — $ — $ 2,691 $ 385 $ 989 $ 46 $ 4,417 With a specific allowance recorded 1,611 7,002 1,844 — 347 — 658 11,462 Total recorded investment in impaired loans $ 1,917 $ 7,002 $ 1,844 $ 2,691 $ 732 $ 989 $ 704 $ 15,879 Unpaid principal balance of impaired loans $ 1,905 $ 6,993 $ 1,837 $ 2,688 $ 729 $ 987 $ 703 $ 15,842 Specific allowance 232 126 47 — 6 — 92 503 Average recorded investment in impaired loans during the quarter ended 2,092 7,005 1,849 2,833 736 990 708 16,213 Interest income recognized on impaired loans during the quarter ended 1 28 66 20 37 5 13 8 177 Average recorded investment in impaired loans during the six months ended 2,104 7,003 1,956 2,878 742 1,043 712 16,438 Interest income recognized on impaired loans during the six months ended 1 183 132 42 75 10 26 15 483 Average recorded investment in impaired loans during the quarter ended 2,072 7,000 3,283 3,240 642 1,173 943 18,353 Interest income recognized on impaired loans during the quarter ended 1 25 66 20 37 7 14 10 179 Average recorded investment in impaired loans during the six months ended 2,117 6,998 2,941 3,241 667 1,437 939 18,340 Interest income recognized on impaired loans during the six months ended 1 48 132 43 71 14 34 20 362 1 No interest income on impaired loans was recognized on a cash basis during the three months ended June 30, 2018. Interest income recognized on a cash basis totaled $128 thousand during the six months ended June 30, 2018 and was primarily related to the pay-off of two non-accrual commercial PCI loans. No interest income on impaired loans was recognized on a cash basis during the three and six months ended June 30, 2017. (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Total December 31, 2017 Recorded investment in impaired loans: With no specific allowance recorded $ 309 $ — $ — $ 2,689 $ 406 $ 995 $ 46 $ 4,445 With a specific allowance recorded 1,856 6,999 2,171 280 347 153 675 12,481 Total recorded investment in impaired loans $ 2,165 $ 6,999 $ 2,171 $ 2,969 $ 753 $ 1,148 $ 721 $ 16,926 Unpaid principal balance of impaired loans $ 2,278 $ 6,993 $ 2,168 $ 2,963 $ 750 $ 1,147 $ 720 $ 17,019 Specific allowance $ 50 $ 188 $ 159 $ 7 $ 6 $ 1 $ 102 $ 513 Management monitors delinquent loans continuously and identifies problem loans, generally loans graded Substandard or worse, loans on non-accrual status and loans modified in a TDR, to be evaluated individually for impairment. Generally, the recorded investment in impaired loans is net of any charge-offs from estimated losses related to specifically identified impaired loans when they are deemed uncollectible. There were no charged-off amounts on impaired loans at June 30, 2018 or December 31, 2017 . In addition, the recorded investment in impaired loans is net of purchase discounts or premiums on acquired loans and deferred fees and costs. At June 30, 2018 and December 31, 2017 , unused commitments to extend credit on impaired loans, including performing loans to borrowers whose terms have been modified in TDRs, totaled $850 thousand and $935 thousand , respectively. The following tables disclose activity in the allowance for loan losses ("ALLL") and the recorded investment in loans by class, as well as the related ALLL disaggregated by impairment evaluation method. Allowance for Loan Losses Rollforward for the Period (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total Three months ended June 30, 2018 Beginning balance $ 3,693 $ 2,080 $ 6,455 $ 697 $ 979 $ 543 $ 351 $ 973 $ 15,771 Provision (reversal) (1,098 ) 259 935 (189 ) (27 ) 203 (66 ) (17 ) — Charge-offs (3 ) — — — — — (2 ) — (5 ) Recoveries 5 — — — — — 42 — 47 Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Three months ended June 30, 2017 Beginning balance $ 4,413 $ 1,992 $ 6,133 $ 546 $ 990 $ 444 $ 359 $ 342 $ 15,219 Provision (reversal) (490 ) 90 (68 ) (135 ) (9 ) 65 (23 ) 570 — Charge-offs — — — — — — — — — Recoveries 9 — — — — — 4 — 13 Ending balance $ 3,932 $ 2,082 $ 6,065 $ 411 $ 981 $ 509 $ 340 $ 912 $ 15,232 Allowance for Loan Losses Rollforward for the Period (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total Six months ended June 30, 2018 Allowance for loan losses: Beginning balance $ 3,654 $ 2,294 $ 6,475 $ 681 $ 1,031 $ 536 $ 378 $ 718 $ 15,767 Provision (reversal) (1,063 ) 45 915 (173 ) (79 ) 210 (93 ) 238 — Charge-offs (3 ) — — — — — (2 ) — (5 ) Recoveries 9 — — — — — 42 — 51 Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Six months ended June 30, 2017 Allowance for loan losses: Beginning balance $ 3,248 $ 1,753 $ 6,320 $ 781 $ 973 $ 454 $ 372 $ 1,541 $ 15,442 Provision (reversal) 896 329 (255 ) (370 ) 8 55 (34 ) (629 ) — Charge-offs (284 ) — — — — — (3 ) — (287 ) Recoveries 72 — — — — — 5 — 77 Ending balance $ 3,932 $ 2,082 $ 6,065 $ 411 $ 981 $ 509 $ 340 $ 912 $ 15,232 Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total June 30, 2018 Ending ALLL related to loans collectively evaluated for impairment $ 2,365 $ 2,213 $ 7,343 $ 508 $ 946 $ 746 $ 233 $ 956 $ 15,310 Ending ALLL related to loans individually evaluated for impairment 232 126 47 — 6 — 92 — 503 Ending ALLL related to purchased credit-impaired loans — — — — — — — — — Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Recorded Investment: Collectively evaluated for impairment $ 240,035 $ 309,376 $ 837,022 $ 54,324 $ 125,211 $ 107,840 $ 25,784 $ — $ 1,699,592 Individually evaluated for impairment 1,917 7,002 1,844 2,691 732 989 704 — 15,879 Purchased credit-impaired 42 1,209 801 — 88 — — — 2,140 Total $ 241,994 $ 317,587 $ 839,667 $ 57,015 $ 126,031 $ 108,829 $ 26,488 $ — $ 1,717,611 Ratio of allowance for loan losses to total loans 1.07 % 0.74 % 0.88 % 0.89 % 0.76 % 0.69 % 1.23 % NM 0.92 % Allowance for loan losses to non-accrual loans NM NM NM NM 247 % NM NM NM 4,107 % NM - Not Meaningful Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total December 31, 2017 Ending ALLL related to loans collectively evaluated for impairment $ 3,604 $ 2,106 $ 6,316 $ 674 $ 1,025 $ 535 $ 276 $ 718 $ 15,254 Ending ALLL related to loans individually evaluated for impairment 50 188 159 7 6 1 102 — 513 Ending ALLL related to purchased credit-impaired loans — — — — — — — — — Ending balance $ 3,654 $ 2,294 $ 6,475 $ 681 $ 1,031 $ 536 $ 378 $ 718 $ 15,767 Recorded Investment: Collectively evaluated for impairment $ 233,605 $ 292,798 $ 820,023 $ 60,859 $ 131,620 $ 94,378 $ 26,689 $ — $ 1,659,972 Individually evaluated for impairment 2,165 6,999 2,171 2,969 753 1,148 721 — 16,926 Purchased credit-impaired 65 1,166 790 — 94 — — — 2,115 Total $ 235,835 $ 300,963 $ 822,984 $ 63,828 $ 132,467 $ 95,526 $ 27,410 $ — $ 1,679,013 Ratio of allowance for loan losses to total loans 1.55 % 0.76 % 0.79 % 1.07 % 0.78 % 0.56 % 1.38 % NM 0.94 % Allowance for loan losses to non-accrual loans NM NM NM NM 254 % NM NM NM 3,883 % NM - Not Meaningful Purchased Credit-Impaired Loans Acquired loans are considered credit-impaired if there is evidence of significant deterioration of credit quality since origination and it is probable, at the acquisition date, that we will be unable to collect all contractually required payments receivable. Management has determined certain loans purchased in our three bank acquisitions to be PCI loans based on credit indicators such as nonaccrual status, past due status, loan risk grade, loan-to-value ratio, etc. Revolving credit agreements (e.g., home equity lines of credit and revolving commercial loans) are not considered PCI loans as cash flows cannot be reasonably estimated. The following table reflects the unpaid principal balance and related carrying value of PCI loans. PCI Loans June 30, 2018 December 31, 2017 (in thousands) Unpaid Principal Balance Carrying Value Unpaid Principal Balance Carrying Value Commercial and industrial $ 125 $ 42 $ 276 $ 65 Commercial real estate, owner occupied 1,271 1,209 1,297 1,166 Commercial real estate, investor 1,049 801 1,064 790 Home equity 220 88 231 94 Total purchased credit-impaired loans $ 2,665 $ 2,140 $ 2,868 $ 2,115 The activities in the accretable yield, or income expected to be earned over the remaining lives of the PCI loans were as follows: Accretable Yield Three months ended Six months ended (in thousands) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Balance at beginning of period $ 1,142 $ 1,386 $ 1,254 $ 1,476 Accretion (83 ) (80 ) (195 ) (170 ) Balance at end of period $ 1,059 $ 1,306 $ 1,059 $ 1,306 Pledged Loans Our FHLB line of credit is secured under terms of a blanket collateral agreement by a pledge of certain qualifying loans with unpaid principal balances of $996.9 million and $887.9 million at June 30, 2018 and December 31, 2017 , respectively. In addition, we pledge a certain residential loan portfolio, which totaled $80.0 million and $67.6 million at June 30, 2018 and December 31, 2017 , respectively, to secure our borrowing capacity with the Federal Reserve Bank ("FRB"). Also, see Note 6, Borrowings. Related Party Loans The Bank has, and expects to have in the future, banking transactions in the ordinary course of its business with directors, officers, principal shareholders and their businesses or associates. These transactions, including loans, are granted on substantially the same terms, including interest rates and collateral on loans, as those prevailing at the same time for comparable transactions with persons not related to us. Likewise, these transactions do not involve more than the normal risk of collectability or present other unfavorable features. Related party loans totaled $12.3 million at June 30, 2018 compared to $11.9 million at December 31, 2017 . In addition, undisbursed commitments to related parties totaled $8.6 million and $9.1 million at June 30, 2018 and December 31, 2017 , respectively. |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Federal Funds Purchased – The Bank had unsecured lines of credit with correspondent banks for overnight borrowing totaling $92.0 million at June 30, 2018 and $100.4 million at December 31, 2017 . In general, interest rates on these lines approximate the federal funds target rate. We had no overnight borrowings under these credit facilities at June 30, 2018 or December 31, 2017 . Federal Home Loan Bank Borrowings – As of June 30, 2018 and December 31, 2017 , the Bank had lines of credit with the FHLB totaling $627.4 million and $538.9 million , respectively, based on eligible collateral of certain loans. There were no FHLB overnight borrowings at June 30, 2018 or December 31, 2017 . Federal Reserve Line of Credit – The Bank has a line of credit with the FRBSF secured by certain residential loans. At June 30, 2018 and December 31, 2017 , the Bank had borrowing capacity under this line totaling $59.5 million and $52.1 million , respectively, and had no outstanding borrowings with the FRBSF. As part of an acquisition, Bancorp assumed two subordinated debentures due to NorCal Community Bancorp Trusts I and II (the "Trusts"), established for the sole purpose of issuing trust preferred securities on September 22, 2003 and December 29, 2005, respectively. The subordinated debentures were recorded at fair values totaling $4.95 million at acquisition date with contractual values totaling $8.2 million . The difference between the contractual balance and the fair value at acquisition date is accreted into interest expense over the lives of the debentures. Accretion on the subordinated debentures totaled $63 thousand and $80 thousand in the first six months of 2018 and 2017, respectively. Bancorp has the option to defer payment of the interest on the subordinated debentures for a period of up to five years, as long as there is no default on the subordinated debentures. In the event of interest deferral, dividends to Bancorp common stockholders are prohibited. The trust preferred securities were sold and issued in private transactions pursuant to an exemption from registration under the Securities Act of 1933, as amended. Bancorp has guaranteed, on a subordinated basis, distributions and other payments due on trust preferred securities totaling $8.0 million issued by the Trusts, which have identical maturity, repricing, and payment terms as the subordinated debentures. The following table summarizes the contractual terms of the subordinated debentures due to the Trusts as of June 30, 2018 : (in thousands) Subordinated debentures due to NorCal Community Bancorp Trust I on October 7, 2033 with interest payable quarterly, based on 3-month LIBOR plus 3.05%, repricing quarterly (5.40% as of June 30, 2018), redeemable, in whole or in part, on any interest payment date $ 4,124 Subordinated debentures due to NorCal Community Bancorp Trust II on March 15, 2036 with interest payable quarterly, based on 3-month LIBOR plus 1.40%, repricing quarterly (3.74% as of June 30, 2018), redeemable, in whole or in part, on any interest payment date 4,124 Total $ 8,248 |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Dividends The following table summarizes cash dividends paid to common shareholders, recorded as a reduction of retained earnings. Three months ended Six months ended (in thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Cash dividends to common stockholders $ 2,166 $ 1,660 $ 4,181 $ 3,315 Cash dividends per common share $ 0.31 $ 0.27 $ 0.60 $ 0.54 On July 20, 2018, the Board of Directors declared a $0.32 per share cash dividend, payable on August 10, 2018 to shareholders of record at the close of business on August 3, 2018. Share-Based Payments The fair value of stock options as of the grant date is recorded as stock-based compensation expense in the consolidated statements of comprehensive income over the requisite service period, which is generally the vesting period, with a corresponding increase in common stock. Stock-based compensation also includes compensation expense related to the issuance of restricted stock awards. The fair value of the restricted stock awards on the grant date, which equals the intrinsic value, is recorded as compensation expense over the requisite service period with a corresponding increase in common stock as the shares vest. Stock option and restricted stock awards issued in 2018 include a retirement eligibility clause whereby the requisite service period is satisfied at the retirement eligibility date. For those awards, we accelerate stock-based compensation if the award holder is eligible to retire. However, retirement eligibility does not affect the legal vesting schedule of the awards. Performance-based stock awards (restricted stock awards) are issued to a selected group of employees. Stock award vesting is contingent upon the achievement of pre-established long-term performance goals set by the Compensation Committee of the Board of Directors. Performance is measured over a three -year period and the stock awards cliff vest. These performance-based stock awards were granted at a maximum opportunity level, and based on the achievement of the pre-established goals, the actual payouts can range from 0% to 200% of the target award. For performance-based stock awards, an estimate is made of the number of shares expected to vest based on the probability that the performance criteria will be achieved to determine the amount of compensation expense to be recognized. The estimate is re-evaluated quarterly and total compensation expense is adjusted for any change in the current period. In addition, we record excess tax benefits (deficiencies) resulting from the exercise of non-qualified stock options, the disqualifying disposition of incentive stock options and vesting of restricted stock awards as income tax benefits (expense) in the consolidated statements of comprehensive income with a corresponding decrease (increase) to current taxes payable. The holders of unvested restricted stock awards are entitled to dividends on the same per-share ratio as holders of common stock. Tax benefits on dividends paid on unvested restricted stock awards are recorded as tax benefits in the consolidated statements of comprehensive income with a corresponding decrease to current taxes payable. Under the 2017 Equity Plan, stock options may be net settled by a reduction in the number of shares otherwise deliverable upon exercise in satisfaction of the exercise payment and applicable tax withholding requirements. During the six months ended June 30, 2018 , option holders exchanged 19,863 shares totaling $1.4 million at a weighted-average price of $70.34 for cashless stock option exercises and tax withholdings upon vesting of performance-based stock awards. During the six months ended June 30, 2017 , option holders exchanged 5,651 shares totaling $385 thousand at a weighted-average price of $68.04 for cashless stock option exercises. Shares exchanged under net settlement arrangements are available for future grants under the 2017 Equity Plan. Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income We early adopted ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, in the first quarter of 2018 and reclassified $638 thousand from AOCI to retained earnings. This amount represents the stranded income tax effects related to the unrealized loss on available-for-sale securities in AOCI on the date of the enactment of the Tax Cuts and Jobs Act of 2017. For more information regarding ASU No. 2018-02, refer to Note 2, Accounting Standards Adopted in 2018. Share Repurchase Program On April 23, 2018, Bancorp announced that its Board of Directors approved a Share Repurchase Program under which Bancorp may repurchase up to $25.0 million of its outstanding common stock through May 1, 2019. Under the Share Repurchase Program, Bancorp may purchase shares of its common stock through various means such as open market transactions, including block purchases, and privately negotiated transactions. The number of shares repurchased and the timing, manner, price and amount of any repurchases will be determined at Bancorp's discretion. Factors include, but are not limited to, stock price, trading volume and general market conditions, along with Bancorp’s general business conditions. The program may be suspended or discontinued at any time and does not obligate Bancorp to acquire any specific number of shares of its common stock. As part of the Share Repurchase Program, Bancorp entered into a trading plan adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The 10b5-1 trading plan permits common stock to be repurchased at times that might otherwise be prohibited under insider trading laws or self-imposed trading restrictions. The 10b5-1 trading plan is administered by an independent broker and is subject to price, market volume and timing restrictions. During the quarter ended June 30, 2018, Bancorp purchased 1,398 shares for a total amount of $104 thousand . |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk We make commitments to extend credit in the normal course of business to meet the financing needs of our customers. These financial instruments include commitments to extend credit in the form of loans or through standby letters of credit. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Because various commitments will expire without being fully drawn, the total commitment amount does not necessarily represent future cash requirements. Our credit loss exposure is equal to the contractual amount of the commitment in the event of nonperformance by the borrower. We use the same credit underwriting criteria for all credit exposure. The amount of collateral obtained, if deemed necessary by us, is based on Management's credit evaluation of the borrower. Collateral types pledged may include accounts receivable, inventory, other personal property and real property. The contractual amount of undrawn loan commitments and standby letters of credit not reflected in the consolidated statements of condition are as follows: (in thousands) June 30, 2018 December 31, 2017 Commercial lines of credit $ 222,547 $ 224,370 Revolving home equity lines 186,652 177,678 Undisbursed construction loans 34,336 35,322 Personal and other lines of credit 12,408 11,758 Standby letters of credit 2,207 4,074 Total commitments and standby letters of credit $ 458,150 $ 453,202 We record an allowance for losses on these off-balance sheet commitments based on an estimate of probabilities of the utilization of these commitments according to our historical experience on different types of commitments and expected loss. The allowance for losses on off-balance sheet commitments totaled $958 thousand as of June 30, 2018 and December 31, 2017 , which is recorded in interest payable and other liabilities in the consolidated statements of condition. Operating Leases We rent certain premises under long-term, non-cancelable operating leases expiring at various dates through the year 2032. Most of the leases contain certain renewal options and escalation clauses. At June 30, 2018 , the approximate minimum future commitments payable under non-cancelable contracts for leased premises are as follows: (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Operating leases $ 2,209 $ 4,198 $ 3,758 $ 2,138 $ 1,330 $ 2,904 $ 16,537 Rent expense included in occupancy expense totaled $1.2 million and $1.0 million for the three months ended June 30, 2018 and 2017 , respectively. Rent expense totaled $2.3 million and $2.0 million for the six months ended June 30, 2018 and 2017 , respectively. Litigation Matters We may be party to legal actions that arise from time to time during the normal course of business. We believe, after consultation with legal counsel, that litigation contingent liability, if any, would not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. The Bank is responsible for a proportionate share of certain litigation indemnifications provided to Visa U.S.A. ("Visa") by its member banks in connection with lawsuits related to anti-trust charges and interchange fees ("Covered Litigation"). The outcome of the Covered Litigation affects the conversion rate of Visa Class B common stock held by us to Visa Class A common stock, as discussed in Note 4, Investment Securities. The conversion rate may decrease if Visa makes more Covered Litigation settlement payments in the future, and the full effect on member banks is still uncertain. Presently, we are not aware of any significant future cash settlement payments required by the Bank on the Covered Litigation. In 2012, Visa had reached a $4.0 billion interchange multidistrict litigation class settlement agreement for which it maintains an escrow account to be used for settlements or judgments in the Covered Litigation. Based on progress in recent settlement discussions in the U.S. interchange multi-district litigation, Visa recorded a $600 million litigation provision in the quarter ended June 30, 2018 and on June 28, Visa deposited an additional $600 million into the litigation escrow under the terms of the U.S. retrospective responsibility plan. Funding of the escrow triggers a conversion rate reduction of the Class B common stock to shares of Class A common stock. At June 30, 2018 , according to Visa's Form 10-Q filed on July 27, 2018, the escrow account balance was $1.5 billion . As of the date of Visa's filing, it had reached settlement agreements with individual merchants representing 51% of the Visa-branded payment card sales volume of merchants who opted out of the 2012 settlement agreement. Litigation is ongoing and until the appeal process is complete, Visa is uncertain whether it will resolve the claims as contemplated by the settlement agreement and additional lawsuits may arise. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities We have entered into interest rate swap agreements, primarily as an interest rate risk management strategy, in order to mitigate the changes in the fair value of specified long-term fixed-rate loans (or firm commitments to enter into long-term fixed-rate loans) caused by changes in interest rates. These hedges allow us to offer long-term fixed-rate loans to customers without assuming the interest rate risk of a long-term asset. Converting our fixed-rate interest payments to floating-rate interest payments, generally benchmarked to the one-month U.S. dollar LIBOR index, protects us against changes in the fair value of our loans associated with fluctuating interest rates. Our credit exposure, if any, on interest rate swap asset positions is limited to the fair value (net of any collateral pledged to us) and interest payments of all swaps by each counterparty. Conversely, when an interest rate swap is in a liability position exceeding a certain threshold, we may be required to post collateral to the counterparty in an amount determined by the agreements. Collateral levels are monitored and adjusted on a regular basis for changes in interest rate swap values. As of June 30, 2018 , we had five interest rate swap agreements, which are scheduled to mature in June 2031, October 2031, July 2032, August 2037 and October 2037. All of our derivatives are designated hedging instruments and are accounted for as fair value hedges. The notional amounts of the interest rate contracts are equal to the notional amounts of the hedged loans. Our interest rate swap payments are settled monthly with counterparties. Accrued interest on the swaps totaled $5 thousand and $8 thousand as of June 30, 2018 and December 31, 2017 , respectively. The following tables presents the notional amount and fair value of our derivatives designated as hedging instruments: Derivative Assets Derivative Liabilities (in thousands) June 30, December 31, 2017 June 30, December 31, 2017 Fair value hedges: Interest rate contracts notional amount $ 9,081 $ 4,019 $ 9,293 $ 14,810 Interest rate contracts fair value 1 $ 327 $ 74 $ 276 $ 740 1 See Note 3, Fair Value of Assets and Liabilities, for valuation methodology. The table below presents the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of hedged assets as of June 30, 2018 : (in thousands) Carrying Amounts of Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Loans Loans $ 18,112 $ (262 ) The table below presents the net gains (losses) recognized in interest income on loans on the consolidated statements of comprehensive income related to our derivatives designated as fair value hedges: Three months ended (in thousands) June 30, 2018 June 30, 2017 Increase (decrease) in value of designated interest rate swaps $ 187 $ (129 ) Payment on interest rate swaps $ (40 ) $ (87 ) (Decrease) increase in value of hedged loans $ (116 ) $ 191 Decrease in value of yield maintenance agreement $ (3 ) $ (4 ) Net gain (loss) on fair value hedging relationships recognized in interest income $ 28 $ (29 ) Six months ended (in thousands) June 30, 2018 June 30, 2017 Increase (decrease) in value of designated interest rate swaps $ 716 $ (18 ) Payment on interest rate swaps $ (95 ) $ (185 ) (Decrease) increase in value of hedged loans $ (693 ) $ 78 Decrease in value of yield maintenance agreement $ (7 ) $ (7 ) Net loss on fair value hedging relationships recognized against interest income $ (79 ) $ (132 ) Our derivative transactions with counterparties are under International Swaps and Derivative Association (“ISDA”) master agreements that include “right of set-off” provisions. “Right of set-off” provisions are legally enforceable rights to offset recognized amounts and there may be an intention to settle such amounts on a net basis. We do not offset such financial instruments for financial reporting purposes. The following table shows information on financial instruments that are eligible for offset in the consolidated statements of condition. Offsetting of Financial Assets and Derivative Assets Gross Amounts Net Amounts of Gross Amounts Not Offset in Gross Amounts Offset in the Assets Presented the Statements of Condition of Recognized Statements of in the Statements Financial Cash Collateral ( in thousands) Assets 1 Condition of Condition 1 Instruments Received Net Amount June 30, 2018 Derivatives by Counterparty: Counterparty A $ 327 $ — $ 327 $ (276 ) $ — $ 51 December 31, 2017 Derivatives by Counterparty: Counterparty A $ 74 $ — $ 74 $ (74 ) $ — $ — 1 Amounts exclude accrued interest totaling less than $1 thousand at both June 30, 2018 and December 31, 2017 . Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts Net Amounts of Gross Amounts Not Offset in Gross Amounts Offset in the Liabilities Presented the Statements of Condition of Recognized Statements of in the Statements Financial Cash Collateral (in thousands) Liabilities 2 Condition of Condition 2 Instruments Pledged Net Amount June 30, 2018 Derivatives by Counterparty: Counterparty A $ 276 $ — $ 276 $ (276 ) $ — December 31, 2017 Derivatives by Counterparty: Counterparty A $ 740 $ — $ 740 $ (74 ) $ (666 ) $ — 2 Amounts exclude accrued interest totaling $4 thousand and $8 thousand at June 30, 2018 and December 31, 2017 , respectively. For more information on how we account for our interest rate swaps, refer to Note 1 to the Consolidated Financial Statements included in our 2017 Form 10-K filed with the SEC on March 14, 2018. |
Acquisition
Acquisition | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | Acquisition On November 21, 2017, we completed the merger of Bank of Napa, N.A. (OTCQB: BNNP), to enhance our market presence in Napa, California. Bank of Napa was a national bank with two branch offices serving Napa. The acquisition added $134.7 million in loans, $249.9 million in deposits and $75.5 million in investment securities to Bank of Marin as of the acquisition date. Bank of Napa shareholders received 0.307 shares of Bancorp common stock for each share of Bank of Napa common stock outstanding. We have accounted for the acquisition of Bank of Napa as a business combination under the acquisition method of accounting. The assets acquired and liabilities assumed, both tangible and intangible, were recorded at their fair values as of the acquisition date in accordance with ASC 805, Business Combinations . The acquisition was treated as a "reorganization" within the definition of section 368(a) of the Internal Revenue Code and is generally considered tax-free for U.S. federal income tax purposes. The Bank of Napa acquisition resulted in $23.7 million in goodwill, which represents the excess of the total purchase price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed. Goodwill mainly reflects expected value created through the combined operations of Bank of Napa and Bank of Marin, which we evaluate for impairment annually. We determined that the fair value of our traditional community banking activities (provided through our branch network) exceeded the carrying amount of the bank-level reporting unit. The goodwill is not deductible for tax purposes. The core deposit intangible represents the estimated future benefits of acquired deposits and is booked separately from the related deposits. We recorded a core deposit intangible asset of $4.4 million from the Bank of Napa acquisition on November 21, 2017, of which $56 thousand was amortized in 2017 and $254 thousand was amortized in the first six months of 2018. The core deposit intangible is amortized on an accelerated basis over an estimated ten -year life, and is evaluated periodically for impairment. No impairment loss was recognized as of June 30, 2018 . Acquisition-related expenses are recognized as incurred and continue until all systems have been converted and operational functions become fully integrated. Bank of Marin Bancorp incurred acquisition-related expenses in the consolidated statements of comprehensive income for the three and six months ended June 30, 2018 as follows: (in thousands) Three months ended June 30, 2018 Six months ended June 30, 2018 Data processing 1 $ 163 $ 555 Professional services 31 126 Personnel severance 35 141 Other 21 43 Total $ 250 $ 865 1 Primarily relates to Bank of Napa's core processing system contract termination and deconversion fees. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The consolidated financial statements include the accounts of Bank of Marin Bancorp (“Bancorp”), a bank holding company, and its wholly-owned bank subsidiary, Bank of Marin (the “Bank”), a California state-chartered commercial bank. References to “we,” “our,” “us” mean Bancorp and the Bank that are consolidated for financial reporting purposes. The accompanying unaudited consolidated interim financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP") have been condensed or omitted pursuant to those rules and regulations. Although we believe that the disclosures are adequate and the information presented is not misleading, we suggest that these interim financial statements be read in conjunction with the annual financial statements and the notes thereto included in our 2017 Annual Report on Form 10-K. In the opinion of Management, the unaudited consolidated financial statements reflect all adjustments, which are necessary for a fair presentation of the consolidated financial position, the results of operations, changes in comprehensive income, changes in stockholders’ equity, and cash flows for the periods presented. All material intercompany transactions have been eliminated. The results of these interim periods may not be indicative of the results for the full year or for any other period. The NorCal Community Bancorp Trusts I and II, respectively (the "Trusts") were formed for the sole purpose of issuing trust preferred securities. Bancorp is not considered the primary beneficiary of the Trusts (variable interest entities), therefore the Trusts are not consolidated in our consolidated financial statements, but rather the subordinated debentures are shown as a liability on our consolidated statements of condition (See Note 6, Borrowings). Bancorp accounts for its investment in the securities of the Trusts under the equity method, which is included in interest receivable and other assets in the consolidated statements of condition. |
Earnings Per Share | Basic earnings per share (“EPS”) are calculated by dividing net income by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock awards. Diluted EPS are calculated using the weighted average number of potentially dilutive common shares. The number of potentially dilutive common shares included in the quarterly diluted EPS is computed using the average market prices during the three months included in the reporting period under the treasury stock method. The number of potentially dilutive common shares included in year-to-date diluted EPS is a year-to-date weighted average of potentially dilutive common shares included in each quarterly diluted EPS computation. In computing diluted EPS, we exclude anti-dilutive shares such as options whose exercise prices exceed the current common stock price, as they would not reduce EPS under the treasury method. We have two forms of outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the difference in EPS is nominal for these participating securities. |
Recently Adopted and Issued Accounting Standards | In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of this ASU (and all subsequent updates) is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This ASU establishes a five-step model that must be used to recognize revenue that requires the entity to identify the contract with a customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract, and recognize revenue when (or as) the entity satisfies the performance obligation. The ASU does not apply to the majority of our revenue, including revenue associated with financial instruments, such as loans and investment securities, and certain non-interest income, such as earnings on bank-owned life insurance, dividends on Federal Home Loan Bank ("FHLB") stock, gains or losses on sales of investment securities, and deposit overdraft charges. The standard allowed the use of either the full retrospective or modified retrospective transition method. We elected to apply the modified retrospective transition method to incomplete contracts as of the initial date of application on January 1, 2018. The adoption of the new standards did not have a material impact on our financial condition or results of operations as revenue recognition under the new standards did not change significantly from our current practice of recognizing the in-scope non-interest income. In addition, we did not retroactively revise prior period amounts or record a cumulative adjustment to retained earnings upon adoption. We considered the nature, amount, timing, and uncertainty of revenue from contracts with customers and determined that significant revenue streams are sufficiently disaggregated in the consolidated statements of comprehensive income. Descriptions of our significant revenue-generating transactions that are within the scope of the new revenue recognition standards, which are presented in the consolidated statements of comprehensive income as components of non-interest income, are as follows: • Wealth Management & Trust ("WM&T") fees - WM&T services include, but are not limited to: customized investment advisory and management; administrative services such as bill pay and tax reporting; trust administration, estate settlement, custody and fiduciary services. Performance obligations for investment advisory and management services are generally satisfied over time. Revenue is recognized monthly according to a tiered fee schedule based on the client's month-end market value of assets under our management. WM&T does not earn revenue based on performance or incentives. Costs associated with WM&T revenue-generating activities, such as payments to sub-advisors, are recorded separately as part of professional service expenses when incurred. • Deposit account service charges - Service charges on deposit accounts consist of monthly maintenance fees, business account analysis fees, business online banking fees, check order charges, and other deposit account-related fees. Performance obligations for monthly maintenance fees and account analysis fees are satisfied, and the related revenue recognized, when we complete our performance obligation each month. Performance obligations related to transaction-based services (such as check orders) are satisfied, and the related revenue recognized, at a point in time when completed, except for business accounts subject to analysis where the transaction-based fees are part of the monthly account analysis fees. • Debit card interchange fees - We issue debit cards to our consumer and small business customers that allow them to purchase goods and services from merchants in person, online, or via mobile devices using funds held in their demand deposit accounts held with us. Debit cards issued to our customers are part of global electronic payment networks (such as Visa) who pass a portion of the merchant interchange fees to debit card-issuing member banks like us when our customers make purchases through their networks. Performance obligations for debit card services are satisfied and revenue is recognized daily as the payment networks process transactions. Because we act in an agent capacity, we determined that network costs previously recorded as a component of non-interest expense should be netted with interchange fees recorded in non-interest income. Network costs were immaterial for the six months ended June 30, 2018 and 2017. In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities . The amendments in this ASU make improvements to accounting standards related to financial instruments, including the following: • Requires equity investments, except for those accounted for under the equity method of accounting or those that result in consolidation of the investee, to be measured at fair value with changes in fair value recognized in net income. However, an entity may choose to measure equity investments that do not have readily determinable fair values at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. • Simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. When impairment exists, an entity is required to measure the investment at fair value. • Eliminates the requirement to disclose the method(s) and significant assumptions used to estimate the fair value required under current standards for financial instruments measured at amortized cost on the consolidated balance sheet. • Requires public companies to use the exit price notion when measuring and disclosing the fair value of financial instruments. • Requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (i.e., securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements. • Clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity's other deferred tax assets. We adopted the requirements of this ASU effective January 1, 2018, which did not have a material impact on our financial condition and results of operations. The fair value of our loans held for investment, which is recorded at amortized cost, now incorporates the exit price notion reflecting factors such as a liquidity premium. See Note 3, Fair Value of Assets and Liabilities. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This ASU provides guidance on how to present and classify eight specific cash flow topics in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. The amendments should be applied using a retrospective transition method to each period presented, if practical. We adopted the requirements of this ASU effective January 1, 2018, which did not impact our financial condition, results of operations, or related financial statement disclosures for the periods presented. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business . The amendments are intended to help companies evaluate whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses and provide a more robust framework to use in determining when a set of assets and activities is a business. The amendments should be applied prospectively and are effective for annual periods after December 31, 2017, including interim periods within those periods. We adopted the amendments effective January 1, 2018, which did not impact our financial condition, results of operations, or related financial statement disclosures in the first quarter of 2018. In May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU applies to entities that change the terms or conditions of a share-based payment award. The FASB adopted this ASU to provide clarity in what constitutes a modification and to reduce diversity in practice in applying Topic 718. In order for a change to a share-based arrangement to not require Topic 718 modification accounting treatment, all of the following must be met: no change in fair value, no change in vesting conditions and no change in the balance sheet classification of the modified award. The ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted, including adoption in an interim period. The amendments should be applied prospectively to an award modified on or after the adoption date. We adopted the requirements of this ASU effective January 1, 2018, which did not impact our financial condition, results of operation, or related financial statement disclosures. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities . This amendment changes both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. It is intended to more closely align hedge accounting with companies' risk management strategies, simplify the application of hedge accounting and increase transparency as to the scope and results of hedging programs. The ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. We early-adopted the amendments of this ASU in the second quarter of 2018, and elected to perform hedge effectiveness assessments using a qualitative approach instead of quantitative regression analysis going forward. The adoption of this ASU had an immaterial impact to our financial results. The amendments also require additional disclosures, which are included in Note 9, Derivative Financial Instruments and Hedging Activities. In February 2018, the FASB issued ASU No. 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income . This amendment helps organizations address certain stranded income tax effects in accumulated other comprehensive income (AOCI) resulting from the enactment of the Tax Cuts and Jobs Act of 2017. The ASU requires financial statement preparers to disclose a description of the accounting policy for releasing income tax effects from AOCI, whether or not they elect to reclassify the stranded income tax effects from the Tax Cuts and Jobs Act of 2017, and information about the other income tax effects that are reclassified. The amendments are effective for all organizations for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The amendments in this ASU should be applied in either the period of adoption or retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate tax rate in the Tax Cuts and Jobs Act of 2017 is recognized. We early adopted this ASU in the first quarter of 2018. See Note 7, Stockholders' Equity. Accounting Standards Not Yet Effective In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . The amendments in this ASU intend to increase transparency and comparability among organizations by recognizing an asset, which represents the right to use the asset for the lease term, and a lease liability, which is a lessee's obligation to make lease payments measured on a discounted basis. This ASU generally applies to leasing arrangements exceeding a twelve-month term. ASU 2016-02 is effective for annual periods, including interim periods within those annual periods beginning after December 15, 2018 and requires a modified retrospective method of adoption. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases , which provides various corrections and clarifications to ASU 2016-02. Early application of the amendments is permitted. We intend to adopt this ASU during the first quarter of 2019, as required. We completed an inventory of our lease agreements and continue to evaluate potential accounting software solutions that will aid in the transition to the new leasing guidance. As of June 30, 2018 , our undiscounted operating lease obligations that were off-balance sheet totaled $16.5 million (See Note 8, Commitments and Contingencies). Upon adoption of this ASU, the present values of leases currently classified as operating leases will be recognized as lease assets and liabilities on our consolidated balance sheets. Additional disclosures of key information about our leasing arrangements will also be required. We do not expect that the ASU will have a material impact on our capital ratios or return on average assets when adopted and we are currently evaluating the effect that the ASU will have on other components of our financial condition and results of operations. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . Under the new guidance, entities will be required to present financial assets at the net amount expected to be collected. The measurement of expected credit losses will be based on historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of a credit over its remaining life. In addition, the ASU amends the accounting for expected credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. We have formed an internal Current Expected Credit Loss ("CECL") committee and are working with our third party vendor to determine the appropriate methodologies and resources to utilize in preparation for transition to the new accounting standards. The impact of this ASU on our financial condition and results of operations is not known at this time. In June 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . This update simplifies the accounting for share-based payment transactions for acquiring goods and services from nonemployees, applying some of the same requirements as employee share-based payment transactions. The ASU will not affect the accounting for share-based payment awards to nonemployee directors, which will continue to be treated as employee share-based transactions under the current standards. ASU 2018-07 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. We do not expect that the ASU will have a material impact on our financial condition or results of operations, as it is not our practice to issue stock-based awards to pay for goods and services from nonemployees, other than nonemployee directors. |
Fair Value Hierarchy and Fair Value Measurement | We group our assets and liabilities that are measured at fair value in three levels within the fair value hierarchy, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. These levels are: Level 1: Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities. Level 2: Valuations are based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations for which all significant assumptions are observable or can be corroborated by observable market data. Level 3: Valuations are based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Values are determined using pricing models and discounted cash flow models and may include significant Management judgment and estimation. Transfers between levels of the fair value hierarchy are recognized through our monthly and/or quarterly valuation process in the reporting period during which the event or circumstances that caused the transfer occurred. |
Finance, Loan and Lease Receivables, Held-for-investment, Allowance and Nonperforming Loans | We generally make commercial loans to established small and mid-sized businesses to provide financing for their growth and working capital needs, equipment purchases and acquisitions. Management examines historical, current, and projected cash flows to determine the ability of the borrower to repay obligations as agreed. Commercial loans are made based primarily on the identified cash flows of the borrower and secondarily on the underlying collateral and guarantor support. The cash flows of borrowers, however, may not occur as expected, and the collateral securing these loans may fluctuate in value. Most commercial and industrial loans are secured by the assets being financed, such as accounts receivable and inventory, and typically include personal guarantees. We target stable businesses with guarantors who provide additional sources of repayment and have proven to be resilient in periods of economic stress. Commercial real estate loans are subject to underwriting standards and processes similar to commercial loans discussed above. We underwrite these loans to be repaid from cash flow and to be supported by real property collateral. Underwriting standards for commercial real estate loans include, but are not limited to, debt coverage and loan-to-value ratios. Furthermore, the owners of the properties guarantee substantially all of our commercial real estate loans. Conditions in the real estate markets or in the general economy may adversely affect our commercial real estate loans. In the event of a vacancy, we expect guarantors to carry the loans until they find a replacement tenant. The owner's substantial equity investment provides a strong economic incentive to continue to support the commercial real estate projects. As such, we have generally experienced a relatively low level of loss and delinquencies in this portfolio. We generally make construction loans to developers and builders to finance construction, renovation and occasionally land acquisitions in anticipation of near-term development. These loans are underwritten after evaluation of the borrower's financial strength, reputation, prior track record, and independent appraisals. Significant events can affect the construction industry, including: the inherent volatility of real estate markets and vulnerability to delays due to weather, change orders, inability to obtain construction permits, labor or material shortages, and price changes. Estimates of construction costs and value associated with the completed project may be inaccurate. Repayment of construction loans is largely dependent on the ultimate success of the project. Consumer loans primarily consist of home equity lines of credit, other residential loans and floating homes, along with a small number of installment loans. Our other residential loans include tenancy-in-common fractional interest loans ("TIC") located almost entirely in San Francisco County. We originate consumer loans utilizing credit score information, debt-to-income ratio and loan-to-value ratio analysis. Diversification among consumer loan types, coupled with relatively small loan amounts that are spread across many individual borrowers, mitigates risk. We use a risk rating system to evaluate asset quality, and to identify and monitor credit risk in individual loans, and in the loan portfolio. Our definitions of “Special Mention” risk graded loans, or worse, are consistent with those used by the Federal Deposit Insurance Corporation ("FDIC"). Our internally assigned grades are as follows: Pass and Watch : Loans to borrowers of acceptable or better credit quality. Borrowers in this category demonstrate fundamentally sound financial positions, repayment capacity, credit history, and management expertise. Loans in this category must have an identifiable and stable source of repayment and meet the Bank’s policy regarding debt-service-coverage ratios. These borrowers are capable of sustaining normal economic, market or operational setbacks without significant financial consequences. Negative external industry factors are generally not present. The loan may be secured, unsecured or supported by non-real estate collateral for which the value is more difficult to determine and/or marketability is more uncertain. This category also includes “Watch” loans, where the primary source of repayment has been delayed. “Watch” is intended to be a transitional grade, with either an upgrade or downgrade within a reasonable period. Special Mention : Potential weaknesses that deserve close attention. If left uncorrected, those potential weaknesses may result in deterioration of the payment prospects for the asset. Special Mention assets do not present sufficient risk to warrant adverse classification. Substandard : Inadequately protected by either the current sound worth and paying capacity of the obligor or the collateral pledged, if any. A Substandard asset has a well-defined weakness or weaknesses that jeopardize(s) the liquidation of the debt. Substandard assets are characterized by the distinct possibility that we will sustain some loss if such weaknesses or deficiencies are not corrected. Well-defined weaknesses include adverse trends or developments of the borrower’s financial condition, managerial weaknesses and/or significant collateral deficiencies. Doubtful : Critical weaknesses that make collection or liquidation in full improbable. There may be specific pending events that work to strengthen the asset; however, the amount or timing of the loss may not be determinable. Pending events generally occur within one year of the asset being classified as Doubtful. Examples include: merger, acquisition, or liquidation; capital injection; guarantee; perfecting liens on additional collateral; and refinancing. Such loans are placed on non-accrual status and usually are collateral-dependent. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk and complexity. In addition, investor commercial real estate borrowers are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly and review them on an ongoing basis. We review home equity and other consumer loans based on delinquency status. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. |
Troubled Debt Restructuring | Our loan portfolio includes certain loans modified in a troubled debt restructuring (“TDR”), where we have granted economic concessions to borrowers experiencing financial difficulties. These concessions typically result from our loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. TDRs on non-accrual status at the time of restructure may be returned to accruing status after Management considers the borrower’s sustained repayment performance for a reasonable period, generally six months, and obtains reasonable assurance of repayment and performance. We may remove a loan from TDR designation if it meets all of the following conditions: • The loan is subsequently refinanced or restructured at current market interest rates and the new terms are consistent with the treatment of creditworthy borrowers under regular underwriting standards; • The borrower is no longer considered to be in financial difficulty; • Performance on the loan is reasonably assured; and; • Existing loan did not have any forgiveness of principal or interest. The same Management level that approved the upgrading of the loan classification must approve the removal of TDR status. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following table shows: 1) weighted average basic shares, 2) potentially dilutive weighted average common shares related to stock options and unvested restricted stock awards, and 3) weighted average diluted shares. Basic earnings per share (“EPS”) are calculated by dividing net income by the weighted average number of common shares outstanding during each period, excluding unvested restricted stock awards. Diluted EPS are calculated using the weighted average number of potentially dilutive common shares. The number of potentially dilutive common shares included in the quarterly diluted EPS is computed using the average market prices during the three months included in the reporting period under the treasury stock method. The number of potentially dilutive common shares included in year-to-date diluted EPS is a year-to-date weighted average of potentially dilutive common shares included in each quarterly diluted EPS computation. In computing diluted EPS, we exclude anti-dilutive shares such as options whose exercise prices exceed the current common stock price, as they would not reduce EPS under the treasury method. We have two forms of outstanding common stock: common stock and unvested restricted stock awards. Holders of unvested restricted stock awards receive non-forfeitable dividends at the same rate as common shareholders and they both share equally in undistributed earnings. Under the two-class method, the difference in EPS is nominal for these participating securities. Three months ended Six months ended (in thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Weighted average basic shares outstanding 6,944 6,110 6,929 6,101 Potentially dilutive common shares related to: Stock options 74 52 74 57 Unvested restricted stock awards 15 12 16 15 Weighted average diluted shares outstanding 7,033 6,174 7,019 6,173 Net income $ 7,891 $ 5,186 $ 14,280 $ 9,734 Basic EPS $ 1.14 $ 0.85 $ 2.06 $ 1.60 Diluted EPS $ 1.12 $ 0.84 $ 2.03 $ 1.58 Weighted average anti-dilutive shares not included in the calculation of diluted EPS 30 33 35 23 |
Fair Value of Assets and Liab20
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table summarizes our assets and liabilities that were required to be recorded at fair value on a recurring basis. (in thousands) Description of Financial Instruments Carrying Value Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Measurement Categories: Changes in Fair Value Recorded In 1 June 30, 2018 Securities available-for-sale: Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies $ 240,794 $ — $ 240,794 $ — OCI SBA-backed securities 23,954 — 23,954 — OCI Debentures of government sponsored agencies 32,139 — 32,139 — OCI Privately-issued collateralized mortgage obligations 435 — 435 — OCI Obligations of state and political subdivisions 87,788 — 87,788 — OCI Corporate bonds 3,027 — 3,027 — OCI Derivative financial assets (interest rate contracts) 327 — 327 — NI Derivative financial liabilities (interest rate contracts) 276 — 276 — NI December 31, 2017 Securities available-for-sale: Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies $ 188,061 $ — $ 188,061 $ — OCI SBA-backed securities 25,982 — 25,817 165 OCI Debentures of government sponsored agencies 12,938 — 12,938 — OCI Privately-issued collateralized mortgage obligations 1,431 — 1,431 — OCI Obligations of state and political subdivisions 97,491 — 97,491 — OCI Corporate bonds 6,564 — 6,564 — OCI Derivative financial assets (interest rate contracts) 74 — 74 — NI Derivative financial liabilities (interest rate contracts) 740 — 740 — NI 1 Other comprehensive income ("OCI") or net income ("NI"). |
Schedule of Fair Value by Balance Sheet Grouping | The following table summarizes fair value estimates for financial instruments as of June 30, 2018 and December 31, 2017 , excluding financial instruments recorded at fair value on a recurring basis (summarized in the first table in this note). The carrying amounts in the following table are recorded in the consolidated statements of condition under the indicated captions. Further, we have not disclosed the fair value of financial instruments specifically excluded from disclosure requirements such as bank-owned life insurance policies ("BOLI") and non-maturity deposit liabilities. Additionally, we hold shares of FHLB stock and Visa Inc. Class B common stock at cost. These shares are restricted from resale, except among member banks, and their values are discussed in Note 4, Investment Securities. June 30, 2018 December 31, 2017 (in thousands) Carrying Amounts Fair Value Fair Value Hierarchy Carrying Amounts Fair Value Fair Value Hierarchy Financial assets (recorded at amortized cost) Cash and cash equivalents $ 83,855 $ 83,855 Level 1 $ 203,545 $ 203,545 Level 1 Investment securities held-to-maturity 170,652 166,127 Level 2 151,032 151,032 Level 2 Loans, net 1,701,798 1,666,409 Level 3 1,663,246 1,650,198 Level 3 Interest receivable 7,814 7,814 Level 2 7,501 7,501 Level 2 Financial liabilities (recorded at amortized cost) Time deposits 137,040 136,023 Level 2 160,116 159,540 Level 2 Subordinated debentures 5,802 6,988 Level 3 5,739 5,118 Level 3 Interest payable 167 167 Level 2 191 191 Level 2 |
Investment Securities (Tables)
Investment Securities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities Portfolio | Our investment securities portfolio consists of obligations of state and political subdivisions, corporate bonds, U.S. government agency securities, including residential and commercial mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMOs”) issued or guaranteed by Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Small Business Administration ("SBA"), or Government National Mortgage Association ("GNMA"), debentures issued by government-sponsored agencies such as FNMA, Federal Farm Credit Bureau, FHLB and FHLMC, and privately issued CMOs, as reflected in the following table. June 30, 2018 December 31, 2017 Amortized Fair Gross Unrealized Amortized Fair Gross Unrealized (in thousands) Cost Value Gains (Losses) Cost Value Gains (Losses) Held-to-maturity: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA $ 94,203 $ 90,824 $ — $ (3,379 ) $ 100,376 $ 100,096 $ 234 $ (514 ) SBA-backed securities 8,882 8,743 — (139 ) — — — — CMOs issued by FNMA 11,881 11,766 — (115 ) — — — — CMOs issued by FHLMC 34,668 33,591 — (1,077 ) 31,010 30,938 2 (74 ) CMOs issued by GNMA 3,730 3,713 — (17 ) — — — — Obligations of state and political subdivisions 17,288 17,490 235 (33 ) 19,646 19,998 383 (31 ) Total held-to-maturity 170,652 166,127 235 (4,760 ) 151,032 151,032 619 (619 ) Available-for-sale: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA 90,082 87,590 17 (2,509 ) 65,559 65,262 126 (423 ) SBA-backed securities 24,620 23,954 — (666 ) 25,979 25,982 58 (55 ) CMOs issued by FNMA 21,026 20,571 7 (462 ) 35,340 35,125 33 (248 ) CMOs issued by FHLMC 123,359 120,411 1 (2,949 ) 70,514 69,889 3 (628 ) CMOs issued by GNMA 12,641 12,222 2 (421 ) 17,953 17,785 26 (194 ) Debentures of government- sponsored agencies 32,395 32,139 — (256 ) 12,940 12,938 3 (5 ) Privately issued CMOs 431 435 4 — 1,432 1,431 1 (2 ) Obligations of state and political subdivisions 89,699 87,788 77 (1,988 ) 98,027 97,491 298 (834 ) Corporate bonds 3,015 3,027 24 (12 ) 6,541 6,564 26 (3 ) Total available-for-sale 397,268 388,137 132 (9,263 ) 334,285 332,467 574 (2,392 ) Total investment securities $ 567,920 $ 554,264 $ 367 $ (14,023 ) $ 485,317 $ 483,499 $ 1,193 $ (3,011 ) |
Sales of investment securities and gross gains and losses | Sales of investment securities and gross gains and losses are shown in the following table. Three months ended Six months ended (in thousands) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Available-for-sale: Sales proceeds $ 5,006 $ 1,321 $ 5,006 $ 1,321 Gross realized gains 27 13 27 13 Gross realized losses (16 ) (3 ) (16 ) (3 ) Our investment securities portfolio consists of obligations of state and political subdivisions, corporate bonds, U.S. government agency securities, including residential and commercial mortgage-backed securities (“MBS”) and collateralized mortgage obligations (“CMOs”) issued or guaranteed by Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), Small Business Administration ("SBA"), or Government National Mortgage Association ("GNMA"), debentures issued by government-sponsored agencies such as FNMA, Federal Farm Credit Bureau, FHLB and FHLMC, and privately issued CMOs, as reflected in the following table. June 30, 2018 December 31, 2017 Amortized Fair Gross Unrealized Amortized Fair Gross Unrealized (in thousands) Cost Value Gains (Losses) Cost Value Gains (Losses) Held-to-maturity: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA $ 94,203 $ 90,824 $ — $ (3,379 ) $ 100,376 $ 100,096 $ 234 $ (514 ) SBA-backed securities 8,882 8,743 — (139 ) — — — — CMOs issued by FNMA 11,881 11,766 — (115 ) — — — — CMOs issued by FHLMC 34,668 33,591 — (1,077 ) 31,010 30,938 2 (74 ) CMOs issued by GNMA 3,730 3,713 — (17 ) — — — — Obligations of state and political subdivisions 17,288 17,490 235 (33 ) 19,646 19,998 383 (31 ) Total held-to-maturity 170,652 166,127 235 (4,760 ) 151,032 151,032 619 (619 ) Available-for-sale: Securities of U.S. government agencies: MBS pass-through securities issued by FHLMC and FNMA 90,082 87,590 17 (2,509 ) 65,559 65,262 126 (423 ) SBA-backed securities 24,620 23,954 — (666 ) 25,979 25,982 58 (55 ) CMOs issued by FNMA 21,026 20,571 7 (462 ) 35,340 35,125 33 (248 ) CMOs issued by FHLMC 123,359 120,411 1 (2,949 ) 70,514 69,889 3 (628 ) CMOs issued by GNMA 12,641 12,222 2 (421 ) 17,953 17,785 26 (194 ) Debentures of government- sponsored agencies 32,395 32,139 — (256 ) 12,940 12,938 3 (5 ) Privately issued CMOs 431 435 4 — 1,432 1,431 1 (2 ) Obligations of state and political subdivisions 89,699 87,788 77 (1,988 ) 98,027 97,491 298 (834 ) Corporate bonds 3,015 3,027 24 (12 ) 6,541 6,564 26 (3 ) Total available-for-sale 397,268 388,137 132 (9,263 ) 334,285 332,467 574 (2,392 ) Total investment securities $ 567,920 $ 554,264 $ 367 $ (14,023 ) $ 485,317 $ 483,499 $ 1,193 $ (3,011 ) |
Investments Classified by Contractual Maturity Date | The amortized cost a nd fair value of investment debt securities by contractual maturity at June 30, 2018 and December 31, 2017 are shown in the following table. Expected maturities may differ from contractual maturities if the issuers of the securities have the right to call or prepay obligations with or without call or prepayment penalties. June 30, 2018 December 31, 2017 Held-to-Maturity Available-for-Sale Held-to-Maturity Available-for-Sale (in thousands) Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Within one year $ 2,859 $ 2,882 $ 8,272 $ 8,263 $ 2,151 $ 2,172 $ 10,268 $ 10,272 After one but within five years 13,063 13,147 79,662 78,514 15,577 15,791 71,576 71,237 After five years through ten years 63,321 61,350 216,584 210,650 54,641 54,554 129,723 128,954 After ten years 91,409 88,748 92,750 90,710 78,663 78,515 122,718 122,004 Total $ 170,652 $ 166,127 $ 397,268 $ 388,137 $ 151,032 $ 151,032 $ 334,285 $ 332,467 |
Schedule of Financial Instruments Owned and Pledged as Collateral | Pledged investment securities are shown in the following table. (in thousands) June 30, 2018 December 31, 2017 Pledged to the State of California: Secure public deposits in compliance with the Local Agency Security Program $ 103,097 $ 107,829 Collateral for trust deposits 749 761 Total investment securities pledged to the State of California $ 103,846 $ 108,590 Collateral for Wealth Management and Trust Services checking account $ 2,014 $ 2,026 |
Schedule of Unrealized Loss on Investments | There were 266 and 198 investment securities in unrealized loss positions at June 30, 2018 and December 31, 2017 , respectively. Those securities are summarized and classified according to the duration of the loss period in the following tables: June 30, 2018 < 12 continuous months ≥ 12 continuous months Total securities in a loss position (in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Held-to-maturity: MBS pass-through securities issued by FHLMC and FNMA $ 22,100 $ (830 ) $ 68,724 $ (2,549 ) $ 90,824 $ (3,379 ) SBA-backed securities 8,742 (139 ) — — $ 8,742 $ (139 ) CMOs issued by FNMA 11,766 (115 ) — — 11,766 (115 ) CMOs issued by FHLMC 19,798 (564 ) 13,793 (513 ) 33,591 (1,077 ) CMOs issued by GNMA — — 3,713 (17 ) 3,713 (17 ) Obligations of state and political subdivisions 3,816 (33 ) — — 3,816 (33 ) Total held-to-maturity 66,222 (1,681 ) 86,230 (3,079 ) 152,452 (4,760 ) Available-for-sale: MBS pass-through securities issued by FHLMC and FNMA 68,906 (1,843 ) 17,713 (666 ) 86,619 (2,509 ) SBA-backed securities 23,954 (666 ) — — 23,954 (666 ) CMOs issued by FNMA 15,687 (321 ) 4,642 (141 ) 20,329 (462 ) CMOs issued by FHLMC 115,370 (2,949 ) — — 115,370 (2,949 ) CMOs issued by GNMA 11,297 (419 ) 603 (2 ) 11,900 (421 ) Debentures of government- sponsored agencies 32,139 (256 ) — — 32,139 (256 ) Privately issued CMOs — — — — — — Obligations of state and political subdivisions 57,217 (835 ) 18,832 (1,153 ) 76,049 (1,988 ) Corporate bonds 1,522 (12 ) — — 1,522 (12 ) Total available-for-sale 326,092 (7,301 ) 41,790 (1,962 ) 367,882 (9,263 ) Total temporarily impaired securities $ 392,314 $ (8,982 ) $ 128,020 $ (5,041 ) $ 520,334 $ (14,023 ) December 31, 2017 < 12 continuous months ≥ 12 continuous months Total securities in a loss position (in thousands) Fair value Unrealized loss Fair value Unrealized loss Fair value Unrealized loss Held-to-maturity: Obligations of state and political subdivisions $ 3,648 $ (31 ) $ — $ — $ 3,648 $ (31 ) MBS pass-through securities issued by FHLMC and FNMA 16,337 (143 ) 46,845 (371 ) 63,182 (514 ) CMOs issued by FHLMC 11,066 (31 ) 13,824 (43 ) 24,890 (74 ) Total held-to-maturity 31,051 (205 ) 60,669 (414 ) 91,720 (619 ) Available-for-sale: MBS pass-through securities issued by FHLMC and FNMA 32,189 (121 ) 15,325 (302 ) 47,514 (423 ) SBA-backed securities 11,028 (53 ) 165 (2 ) 11,193 (55 ) CMOs issued by FNMA 26,401 (171 ) 5,440 (77 ) 31,841 (248 ) CMOs issued by FHLMC 69,276 (628 ) — — 69,276 (628 ) CMOs issued by GNMA 14,230 (194 ) — — 14,230 (194 ) Debentures of government- sponsored agencies 2,984 (5 ) — — 2,984 (5 ) Privately issued CMO's 1,310 (2 ) — — 1,310 (2 ) Obligations of state and political subdivisions 52,197 (288 ) 19,548 (546 ) 71,745 (834 ) Corporate bonds 3,060 (3 ) — — 3,060 (3 ) Total available-for-sale 212,675 (1,465 ) 40,478 (927 ) 253,153 (2,392 ) Total temporarily impaired securities $ 243,726 $ (1,670 ) $ 101,147 $ (1,341 ) $ 344,873 $ (3,011 ) |
Loans and Allowance for Loan 22
Loans and Allowance for Loan Losses (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Past Due Financing Receivables | The following table shows outstanding loans by class and payment aging as of June 30, 2018 and December 31, 2017 . Loan Aging Analysis by Loan Class (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential 1 Installment and other consumer Total June 30, 2018 30-59 days past due $ — $ — $ — $ — $ 77 $ — $ 11 $ 88 60-89 days past due — — — — — — — — 90 days or more past due — — — — — — — — Total past due — — — — 77 — 11 88 Current 241,994 317,587 839,667 57,015 125,954 108,829 26,477 1,717,523 Total loans 3 $ 241,994 $ 317,587 $ 839,667 $ 57,015 $ 126,031 $ 108,829 $ 26,488 $ 1,717,611 Non-accrual loans 2 $ — $ — $ — $ — $ 385 $ — $ — $ 385 December 31, 2017 30-59 days past due $ — $ — $ — $ — $ 99 $ 255 $ 330 $ 684 60-89 days past due 1,340 — — — — — — 1,340 90 days or more past due — — — — 307 — — 307 Total past due 1,340 — — — 406 255 330 2,331 Current 234,495 300,963 822,984 63,828 132,061 95,271 27,080 1,676,682 Total loans 3 $ 235,835 $ 300,963 $ 822,984 $ 63,828 $ 132,467 $ 95,526 $ 27,410 $ 1,679,013 Non-accrual loans 2 $ — $ — $ — $ — $ 406 $ — $ — $ 406 1 Our residential loan portfolio does not include sub-prime loans, nor is it our practice to underwrite loans commonly referred to as "Alt-A mortgages", the characteristics of which are loans lacking full documentation, borrowers having low FICO scores or higher loan-to-value ratios. 2 One purchased credit impaired ("PCI") loan with an unpaid balance of $6 thousand and no carrying value was not accreting interest at June 30, 2018 . Three PCI loans with unpaid balances totaling $131 thousand and no carrying values were not accreting interest at December 31, 2017 . Amounts exclude accreting PCI loans totaling $2.1 million at both June 30, 2018 and December 31, 2017 as we have a reasonable expectation about future cash flows to be collected and we continue to recognize accretable yield on these loans in interest income. There were no accruing loans past due more than ninety days at June 30, 2018 or December 31, 2017 . 3 Amounts include net deferred loan origination costs of $800 thousand and $818 thousand at June 30, 2018 and December 31, 2017 , respectively. Amounts are also net of unaccreted purchase discounts on non-PCI loans of $956 thousand and $1.2 million at June 30, 2018 and December 31, 2017 , respectively. |
Financing Receivable Credit Quality Indicators | The following table represents an analysis of the carrying amount in loans, net of deferred fees and costs and purchase premiums or discounts, by internally assigned risk grades, including PCI loans, at June 30, 2018 and December 31, 2017 . Credit Risk Profile by Internally Assigned Risk Grade (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Purchased credit-impaired Total June 30, 2018 Pass $ 224,707 $ 299,469 $ 836,634 $ 54,324 $ 124,103 $ 108,829 $ 26,389 $ 2,140 $ 1,676,595 Special Mention 14,842 8,904 2,232 — 1,121 — — — 27,099 Substandard 2,403 8,005 — 2,691 719 — 99 — 13,917 Total loans $ 241,952 $ 316,378 $ 838,866 $ 57,015 $ 125,943 $ 108,829 $ 26,488 $ 2,140 $ 1,717,611 December 31, 2017 Pass $ 214,636 $ 281,104 $ 818,570 $ 60,859 $ 130,558 $ 95,526 $ 27,287 $ 1,325 $ 1,629,865 Special Mention 9,318 9,284 1,850 — — — — 790 21,242 Substandard 11,816 9,409 1,774 2,969 1,815 — 123 — 27,906 Total loans $ 235,770 $ 299,797 $ 822,194 $ 63,828 $ 132,373 $ 95,526 $ 27,410 $ 2,115 $ 1,679,013 |
Troubled Debt Restructurings on Financing Receivables | The following table summarizes the carrying amount of TDR loans by loan class as of June 30, 2018 and December 31, 2017 . (in thousands) Recorded investment in Troubled Debt Restructurings 1 June 30, 2018 December 31, 2017 Commercial and industrial $ 1,917 $ 2,165 Commercial real estate, owner-occupied 7,002 6,999 Commercial real estate, investor 1,844 2,171 Construction 2,691 2,969 Home equity 348 347 Other residential 988 1,148 Installment and other consumer 704 721 Total $ 15,494 $ 16,520 1 There were no TDR loans on non-accrual status at June 30, 2018 and December 31, 2017 . The following table presents information for loans modified in a TDR during the presented periods, including the number of modified contracts, the recorded investment in the loans prior to modification, and the recorded investment in the loans at period end after being restructured. The table excludes fully charged-off TDR loans and loans modified in a TDR and subsequently paid-off during the years presented. (dollars in thousands) Number of Contracts Modified Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment at Period End TDRs during the three months ended June 30, 2018: Commercial and industrial 2 $ 254 $ 245 $ 235 TDRs during the three months ended June 30, 2017: None — $ — $ — $ — TDRs during the six months ended June 30, 2018: Commercial and industrial 2 $ 254 $ 245 $ 235 TDRs during the six months ended June 30, 2017: Installment and consumer 1 $ 50 $ 50 $ 49 |
Impaired Financing Receivables | The following tables summarize information by class on impaired loans and their related allowances. Total impaired loans include non-accrual loans, accruing TDR loans and accreting PCI loans that have experienced post-acquisition declines in cash flows expected to be collected. (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Total June 30, 2018 Recorded investment in impaired loans: With no specific allowance recorded $ 306 $ — $ — $ 2,691 $ 385 $ 989 $ 46 $ 4,417 With a specific allowance recorded 1,611 7,002 1,844 — 347 — 658 11,462 Total recorded investment in impaired loans $ 1,917 $ 7,002 $ 1,844 $ 2,691 $ 732 $ 989 $ 704 $ 15,879 Unpaid principal balance of impaired loans $ 1,905 $ 6,993 $ 1,837 $ 2,688 $ 729 $ 987 $ 703 $ 15,842 Specific allowance 232 126 47 — 6 — 92 503 Average recorded investment in impaired loans during the quarter ended 2,092 7,005 1,849 2,833 736 990 708 16,213 Interest income recognized on impaired loans during the quarter ended 1 28 66 20 37 5 13 8 177 Average recorded investment in impaired loans during the six months ended 2,104 7,003 1,956 2,878 742 1,043 712 16,438 Interest income recognized on impaired loans during the six months ended 1 183 132 42 75 10 26 15 483 Average recorded investment in impaired loans during the quarter ended 2,072 7,000 3,283 3,240 642 1,173 943 18,353 Interest income recognized on impaired loans during the quarter ended 1 25 66 20 37 7 14 10 179 Average recorded investment in impaired loans during the six months ended 2,117 6,998 2,941 3,241 667 1,437 939 18,340 Interest income recognized on impaired loans during the six months ended 1 48 132 43 71 14 34 20 362 1 No interest income on impaired loans was recognized on a cash basis during the three months ended June 30, 2018. Interest income recognized on a cash basis totaled $128 thousand during the six months ended June 30, 2018 and was primarily related to the pay-off of two non-accrual commercial PCI loans. No interest income on impaired loans was recognized on a cash basis during the three and six months ended June 30, 2017. (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Total December 31, 2017 Recorded investment in impaired loans: With no specific allowance recorded $ 309 $ — $ — $ 2,689 $ 406 $ 995 $ 46 $ 4,445 With a specific allowance recorded 1,856 6,999 2,171 280 347 153 675 12,481 Total recorded investment in impaired loans $ 2,165 $ 6,999 $ 2,171 $ 2,969 $ 753 $ 1,148 $ 721 $ 16,926 Unpaid principal balance of impaired loans $ 2,278 $ 6,993 $ 2,168 $ 2,963 $ 750 $ 1,147 $ 720 $ 17,019 Specific allowance $ 50 $ 188 $ 159 $ 7 $ 6 $ 1 $ 102 $ 513 |
Allowance for Credit Losses on Financing Receivables | The following tables disclose activity in the allowance for loan losses ("ALLL") and the recorded investment in loans by class, as well as the related ALLL disaggregated by impairment evaluation method. Allowance for Loan Losses Rollforward for the Period (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total Three months ended June 30, 2018 Beginning balance $ 3,693 $ 2,080 $ 6,455 $ 697 $ 979 $ 543 $ 351 $ 973 $ 15,771 Provision (reversal) (1,098 ) 259 935 (189 ) (27 ) 203 (66 ) (17 ) — Charge-offs (3 ) — — — — — (2 ) — (5 ) Recoveries 5 — — — — — 42 — 47 Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Three months ended June 30, 2017 Beginning balance $ 4,413 $ 1,992 $ 6,133 $ 546 $ 990 $ 444 $ 359 $ 342 $ 15,219 Provision (reversal) (490 ) 90 (68 ) (135 ) (9 ) 65 (23 ) 570 — Charge-offs — — — — — — — — — Recoveries 9 — — — — — 4 — 13 Ending balance $ 3,932 $ 2,082 $ 6,065 $ 411 $ 981 $ 509 $ 340 $ 912 $ 15,232 Allowance for Loan Losses Rollforward for the Period (in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total Six months ended June 30, 2018 Allowance for loan losses: Beginning balance $ 3,654 $ 2,294 $ 6,475 $ 681 $ 1,031 $ 536 $ 378 $ 718 $ 15,767 Provision (reversal) (1,063 ) 45 915 (173 ) (79 ) 210 (93 ) 238 — Charge-offs (3 ) — — — — — (2 ) — (5 ) Recoveries 9 — — — — — 42 — 51 Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Six months ended June 30, 2017 Allowance for loan losses: Beginning balance $ 3,248 $ 1,753 $ 6,320 $ 781 $ 973 $ 454 $ 372 $ 1,541 $ 15,442 Provision (reversal) 896 329 (255 ) (370 ) 8 55 (34 ) (629 ) — Charge-offs (284 ) — — — — — (3 ) — (287 ) Recoveries 72 — — — — — 5 — 77 Ending balance $ 3,932 $ 2,082 $ 6,065 $ 411 $ 981 $ 509 $ 340 $ 912 $ 15,232 Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total June 30, 2018 Ending ALLL related to loans collectively evaluated for impairment $ 2,365 $ 2,213 $ 7,343 $ 508 $ 946 $ 746 $ 233 $ 956 $ 15,310 Ending ALLL related to loans individually evaluated for impairment 232 126 47 — 6 — 92 — 503 Ending ALLL related to purchased credit-impaired loans — — — — — — — — — Ending balance $ 2,597 $ 2,339 $ 7,390 $ 508 $ 952 $ 746 $ 325 $ 956 $ 15,813 Recorded Investment: Collectively evaluated for impairment $ 240,035 $ 309,376 $ 837,022 $ 54,324 $ 125,211 $ 107,840 $ 25,784 $ — $ 1,699,592 Individually evaluated for impairment 1,917 7,002 1,844 2,691 732 989 704 — 15,879 Purchased credit-impaired 42 1,209 801 — 88 — — — 2,140 Total $ 241,994 $ 317,587 $ 839,667 $ 57,015 $ 126,031 $ 108,829 $ 26,488 $ — $ 1,717,611 Ratio of allowance for loan losses to total loans 1.07 % 0.74 % 0.88 % 0.89 % 0.76 % 0.69 % 1.23 % NM 0.92 % Allowance for loan losses to non-accrual loans NM NM NM NM 247 % NM NM NM 4,107 % NM - Not Meaningful Allowance for Loan Losses and Recorded Investment in Loans (dollars in thousands) Commercial and industrial Commercial real estate, owner-occupied Commercial real estate, investor Construction Home equity Other residential Installment and other consumer Unallocated Total December 31, 2017 Ending ALLL related to loans collectively evaluated for impairment $ 3,604 $ 2,106 $ 6,316 $ 674 $ 1,025 $ 535 $ 276 $ 718 $ 15,254 Ending ALLL related to loans individually evaluated for impairment 50 188 159 7 6 1 102 — 513 Ending ALLL related to purchased credit-impaired loans — — — — — — — — — Ending balance $ 3,654 $ 2,294 $ 6,475 $ 681 $ 1,031 $ 536 $ 378 $ 718 $ 15,767 Recorded Investment: Collectively evaluated for impairment $ 233,605 $ 292,798 $ 820,023 $ 60,859 $ 131,620 $ 94,378 $ 26,689 $ — $ 1,659,972 Individually evaluated for impairment 2,165 6,999 2,171 2,969 753 1,148 721 — 16,926 Purchased credit-impaired 65 1,166 790 — 94 — — — 2,115 Total $ 235,835 $ 300,963 $ 822,984 $ 63,828 $ 132,467 $ 95,526 $ 27,410 $ — $ 1,679,013 Ratio of allowance for loan losses to total loans 1.55 % 0.76 % 0.79 % 1.07 % 0.78 % 0.56 % 1.38 % NM 0.94 % Allowance for loan losses to non-accrual loans NM NM NM NM 254 % NM NM NM 3,883 % NM - Not Meaningful |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities Acquired During Period | The following table reflects the unpaid principal balance and related carrying value of PCI loans. PCI Loans June 30, 2018 December 31, 2017 (in thousands) Unpaid Principal Balance Carrying Value Unpaid Principal Balance Carrying Value Commercial and industrial $ 125 $ 42 $ 276 $ 65 Commercial real estate, owner occupied 1,271 1,209 1,297 1,166 Commercial real estate, investor 1,049 801 1,064 790 Home equity 220 88 231 94 Total purchased credit-impaired loans $ 2,665 $ 2,140 $ 2,868 $ 2,115 |
Accretable Yield Activity | The activities in the accretable yield, or income expected to be earned over the remaining lives of the PCI loans were as follows: Accretable Yield Three months ended Six months ended (in thousands) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Balance at beginning of period $ 1,142 $ 1,386 $ 1,254 $ 1,476 Accretion (83 ) (80 ) (195 ) (170 ) Balance at end of period $ 1,059 $ 1,306 $ 1,059 $ 1,306 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The following table summarizes the contractual terms of the subordinated debentures due to the Trusts as of June 30, 2018 : (in thousands) Subordinated debentures due to NorCal Community Bancorp Trust I on October 7, 2033 with interest payable quarterly, based on 3-month LIBOR plus 3.05%, repricing quarterly (5.40% as of June 30, 2018), redeemable, in whole or in part, on any interest payment date $ 4,124 Subordinated debentures due to NorCal Community Bancorp Trust II on March 15, 2036 with interest payable quarterly, based on 3-month LIBOR plus 1.40%, repricing quarterly (3.74% as of June 30, 2018), redeemable, in whole or in part, on any interest payment date 4,124 Total $ 8,248 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Dividends Declared | The following table summarizes cash dividends paid to common shareholders, recorded as a reduction of retained earnings. Three months ended Six months ended (in thousands, except per share data) June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 Cash dividends to common stockholders $ 2,166 $ 1,660 $ 4,181 $ 3,315 Cash dividends per common share $ 0.31 $ 0.27 $ 0.60 $ 0.54 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Undrawn Loan Commitments and Standby Letters of Credit | The contractual amount of undrawn loan commitments and standby letters of credit not reflected in the consolidated statements of condition are as follows: (in thousands) June 30, 2018 December 31, 2017 Commercial lines of credit $ 222,547 $ 224,370 Revolving home equity lines 186,652 177,678 Undisbursed construction loans 34,336 35,322 Personal and other lines of credit 12,408 11,758 Standby letters of credit 2,207 4,074 Total commitments and standby letters of credit $ 458,150 $ 453,202 |
Schedule of Future Minimum Rental Payments for Operating Leases | At June 30, 2018 , the approximate minimum future commitments payable under non-cancelable contracts for leased premises are as follows: (in thousands) 2018 2019 2020 2021 2022 Thereafter Total Operating leases $ 2,209 $ 4,198 $ 3,758 $ 2,138 $ 1,330 $ 2,904 $ 16,537 |
Derivative Financial Instrume26
Derivative Financial Instruments and Hedging Activities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value | The following tables presents the notional amount and fair value of our derivatives designated as hedging instruments: Derivative Assets Derivative Liabilities (in thousands) June 30, December 31, 2017 June 30, December 31, 2017 Fair value hedges: Interest rate contracts notional amount $ 9,081 $ 4,019 $ 9,293 $ 14,810 Interest rate contracts fair value 1 $ 327 $ 74 $ 276 $ 740 1 See Note 3, Fair Value of Assets and Liabilities, for valuation methodology. The table below presents the carrying amount and associated cumulative basis adjustment related to the application of fair value hedge accounting that is included in the carrying amount of hedged assets as of June 30, 2018 : (in thousands) Carrying Amounts of Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Loans Loans $ 18,112 $ (262 ) |
Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance | The table below presents the net gains (losses) recognized in interest income on loans on the consolidated statements of comprehensive income related to our derivatives designated as fair value hedges: Three months ended (in thousands) June 30, 2018 June 30, 2017 Increase (decrease) in value of designated interest rate swaps $ 187 $ (129 ) Payment on interest rate swaps $ (40 ) $ (87 ) (Decrease) increase in value of hedged loans $ (116 ) $ 191 Decrease in value of yield maintenance agreement $ (3 ) $ (4 ) Net gain (loss) on fair value hedging relationships recognized in interest income $ 28 $ (29 ) Six months ended (in thousands) June 30, 2018 June 30, 2017 Increase (decrease) in value of designated interest rate swaps $ 716 $ (18 ) Payment on interest rate swaps $ (95 ) $ (185 ) (Decrease) increase in value of hedged loans $ (693 ) $ 78 Decrease in value of yield maintenance agreement $ (7 ) $ (7 ) Net loss on fair value hedging relationships recognized against interest income $ (79 ) $ (132 ) |
Offsetting Assets | The following table shows information on financial instruments that are eligible for offset in the consolidated statements of condition. Offsetting of Financial Assets and Derivative Assets Gross Amounts Net Amounts of Gross Amounts Not Offset in Gross Amounts Offset in the Assets Presented the Statements of Condition of Recognized Statements of in the Statements Financial Cash Collateral ( in thousands) Assets 1 Condition of Condition 1 Instruments Received Net Amount June 30, 2018 Derivatives by Counterparty: Counterparty A $ 327 $ — $ 327 $ (276 ) $ — $ 51 December 31, 2017 Derivatives by Counterparty: Counterparty A $ 74 $ — $ 74 $ (74 ) $ — $ — 1 Amounts exclude accrued interest totaling less than $1 thousand at both June 30, 2018 and December 31, 2017 . Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts Net Amounts of Gross Amounts Not Offset in Gross Amounts Offset in the Liabilities Presented the Statements of Condition of Recognized Statements of in the Statements Financial Cash Collateral (in thousands) Liabilities 2 Condition of Condition 2 Instruments Pledged Net Amount June 30, 2018 Derivatives by Counterparty: Counterparty A $ 276 $ — $ 276 $ (276 ) $ — December 31, 2017 Derivatives by Counterparty: Counterparty A $ 740 $ — $ 740 $ (74 ) $ (666 ) $ — |
Offsetting Liabilities | Offsetting of Financial Liabilities and Derivative Liabilities Gross Amounts Net Amounts of Gross Amounts Not Offset in Gross Amounts Offset in the Liabilities Presented the Statements of Condition of Recognized Statements of in the Statements Financial Cash Collateral (in thousands) Liabilities 2 Condition of Condition 2 Instruments Pledged Net Amount June 30, 2018 Derivatives by Counterparty: Counterparty A $ 276 $ — $ 276 $ (276 ) $ — December 31, 2017 Derivatives by Counterparty: Counterparty A $ 740 $ — $ 740 $ (74 ) $ (666 ) $ — 2 Amounts exclude accrued interest totaling $4 thousand and $8 thousand at June 30, 2018 and December 31, 2017 , respectively. |
Acquisition (Tables)
Acquisition (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
Schedule Of Acquisition-Related Expenses | Bank of Marin Bancorp incurred acquisition-related expenses in the consolidated statements of comprehensive income for the three and six months ended June 30, 2018 as follows: (in thousands) Three months ended June 30, 2018 Six months ended June 30, 2018 Data processing 1 $ 163 $ 555 Professional services 31 126 Personnel severance 35 141 Other 21 43 Total $ 250 $ 865 1 Primarily relates to Bank of Napa's core processing system contract termination and deconversion fees. |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Weighted average basic shares outstanding (shares) | 6,944 | 6,110 | 6,929 | 6,101 | |
Potentially dilutive common shares related to: | |||||
Stock options (shares) | 74 | 52 | 74 | 57 | |
Unvested restricted stock awards (shares) | 15 | 12 | 16 | 15 | |
Weighted average diluted shares outstanding (shares) | 7,033 | 6,174 | 7,019 | 6,173 | |
Net income | $ 7,891 | $ 5,186 | $ 14,280 | $ 9,734 | $ 15,976 |
Basic EPS (usd per share) | $ 1.14 | $ 0.85 | $ 2.06 | $ 1.60 | |
Diluted EPS (usd per share) | $ 1.12 | $ 0.84 | $ 2.03 | $ 1.58 | |
Weighted average anti-dilutive shares not included in the calculation of diluted EPS (shares) | 30 | 33 | 35 | 23 |
Recently Adopted and Issued A29
Recently Adopted and Issued Accounting Standards (Details) $ in Millions | Jun. 30, 2018USD ($) |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Undiscounted operating lease obligations, off-balance sheet | $ 16.5 |
Fair Value of Assets and Liab30
Fair Value of Assets and Liabilities - Recorded on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 388,137 | $ 332,467 |
SBA-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,954 | 25,982 |
Debentures of government- sponsored agencies | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 32,139 | 12,938 |
Privately-issued collateralized mortgage obligations | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 435 | 1,431 |
Obligations of state and political subdivisions | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 87,788 | 97,491 |
Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,027 | 6,564 |
Assets and liabilities at fair value measured on a recurring basis | Carrying Value | Interest rate contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial assets (interest rate contracts) | 327 | 74 |
Derivative financial liabilities (interest rate contracts) | 276 | 740 |
Assets and liabilities at fair value measured on a recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | Interest rate contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial assets (interest rate contracts) | 0 | 0 |
Derivative financial liabilities (interest rate contracts) | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Significant Other Observable Inputs (Level 2) | Interest rate contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial assets (interest rate contracts) | 327 | 74 |
Derivative financial liabilities (interest rate contracts) | 276 | 740 |
Assets and liabilities at fair value measured on a recurring basis | Significant Unobservable Inputs (Level 3) | Interest rate contract | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative financial assets (interest rate contracts) | 0 | 0 |
Derivative financial liabilities (interest rate contracts) | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 240,794 | 188,061 |
Assets and liabilities at fair value measured on a recurring basis | Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 240,794 | 188,061 |
Assets and liabilities at fair value measured on a recurring basis | Mortgage-backed securities and collateralized mortgage obligations issued by U.S. government agencies | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | SBA-backed securities | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,954 | 25,982 |
Assets and liabilities at fair value measured on a recurring basis | SBA-backed securities | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | SBA-backed securities | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 23,954 | 25,817 |
Assets and liabilities at fair value measured on a recurring basis | SBA-backed securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 165 |
Assets and liabilities at fair value measured on a recurring basis | Debentures of government- sponsored agencies | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 32,139 | 12,938 |
Assets and liabilities at fair value measured on a recurring basis | Debentures of government- sponsored agencies | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Debentures of government- sponsored agencies | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 32,139 | 12,938 |
Assets and liabilities at fair value measured on a recurring basis | Debentures of government- sponsored agencies | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Privately-issued collateralized mortgage obligations | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 435 | 1,431 |
Assets and liabilities at fair value measured on a recurring basis | Privately-issued collateralized mortgage obligations | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Privately-issued collateralized mortgage obligations | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 435 | 1,431 |
Assets and liabilities at fair value measured on a recurring basis | Privately-issued collateralized mortgage obligations | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Obligations of state and political subdivisions | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 87,788 | 97,491 |
Assets and liabilities at fair value measured on a recurring basis | Obligations of state and political subdivisions | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Obligations of state and political subdivisions | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 87,788 | 97,491 |
Assets and liabilities at fair value measured on a recurring basis | Obligations of state and political subdivisions | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Corporate bonds | Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,027 | 6,564 |
Assets and liabilities at fair value measured on a recurring basis | Corporate bonds | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 0 | 0 |
Assets and liabilities at fair value measured on a recurring basis | Corporate bonds | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | 3,027 | 6,564 |
Assets and liabilities at fair value measured on a recurring basis | Corporate bonds | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Available-for-sale securities | $ 0 | $ 0 |
Fair Value of Assets and Liab31
Fair Value of Assets and Liabilities - Narrative (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)security | Dec. 31, 2017USD ($)security | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Write down of held to maturity securities | $ | $ 0 | $ 0 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Assets measured at fair value | $ | $ 0 | $ 0 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of securities | security | 0 | 0 |
U.S. government agency obligation collateralized by loans guaranteed by SBA program | Available-for-sale Securities | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Number of securities | security | 1 |
Fair Value of Assets and Liab32
Fair Value of Assets and Liabilities - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financial assets (recorded at amortized cost) | ||
Investment securities held-to-maturity | $ 166,127 | $ 151,032 |
Carrying Amounts | Level 1 | ||
Financial assets (recorded at amortized cost) | ||
Cash and cash equivalents | 83,855 | 203,545 |
Carrying Amounts | Level 2 | ||
Financial assets (recorded at amortized cost) | ||
Investment securities held-to-maturity | 170,652 | 151,032 |
Interest receivable | 7,814 | 7,501 |
Financial liabilities (recorded at amortized cost) | ||
Time deposits | 137,040 | 160,116 |
Interest payable | 167 | 191 |
Carrying Amounts | Level 3 | ||
Financial assets (recorded at amortized cost) | ||
Loans, net | 1,701,798 | 1,663,246 |
Financial liabilities (recorded at amortized cost) | ||
Subordinated debentures | 5,802 | 5,739 |
Fair Value | Level 1 | ||
Financial assets (recorded at amortized cost) | ||
Cash and cash equivalents | 83,855 | 203,545 |
Fair Value | Level 2 | ||
Financial assets (recorded at amortized cost) | ||
Investment securities held-to-maturity | 166,127 | 151,032 |
Interest receivable | 7,814 | 7,501 |
Financial liabilities (recorded at amortized cost) | ||
Time deposits | 136,023 | 159,540 |
Interest payable | 167 | 191 |
Fair Value | Level 3 | ||
Financial assets (recorded at amortized cost) | ||
Loans, net | 1,666,409 | 1,650,198 |
Financial liabilities (recorded at amortized cost) | ||
Subordinated debentures | $ 6,988 | $ 5,118 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | $ 170,652 | $ 151,032 |
Held to maturity, Fair Value | 166,127 | 151,032 |
Held-to-maturity, Gross Unrealized Gains | 235 | 619 |
Held-to-maturity, Gross Unrealized Losses | (4,760) | (619) |
Total | 397,268 | 334,285 |
Available-for-sale, at fair value | 388,137 | 332,467 |
Available-for-sale, Gross Unrealized Gains | 132 | 574 |
Available-for-sale, Gross Unrealized Losses | (9,263) | (2,392) |
Total investment securities, Amortized Cost | 567,920 | 485,317 |
Total investment securities, Fair Value | 554,264 | 483,499 |
Total investment securities, Gross Unrealized Gains | 367 | 1,193 |
Total investment securities, Gross Unrealized Losses | (14,023) | (3,011) |
MBS pass-through securities issued by FHLMC and FNMA | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 94,203 | 100,376 |
Held to maturity, Fair Value | 90,824 | 100,096 |
Held-to-maturity, Gross Unrealized Gains | 0 | 234 |
Held-to-maturity, Gross Unrealized Losses | (3,379) | (514) |
Total | 90,082 | 65,559 |
Available-for-sale, at fair value | 87,590 | 65,262 |
Available-for-sale, Gross Unrealized Gains | 17 | 126 |
Available-for-sale, Gross Unrealized Losses | (2,509) | (423) |
SBA-backed securities | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 8,882 | 0 |
Held to maturity, Fair Value | 8,743 | 0 |
Held-to-maturity, Gross Unrealized Gains | 0 | 0 |
Held-to-maturity, Gross Unrealized Losses | (139) | 0 |
Total | 24,620 | 25,979 |
Available-for-sale, at fair value | 23,954 | 25,982 |
Available-for-sale, Gross Unrealized Gains | 0 | 58 |
Available-for-sale, Gross Unrealized Losses | (666) | (55) |
CMOs issued by FNMA | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 11,881 | 0 |
Held to maturity, Fair Value | 11,766 | 0 |
Held-to-maturity, Gross Unrealized Gains | 0 | 0 |
Held-to-maturity, Gross Unrealized Losses | (115) | 0 |
Total | 21,026 | 35,340 |
Available-for-sale, at fair value | 20,571 | 35,125 |
Available-for-sale, Gross Unrealized Gains | 7 | 33 |
Available-for-sale, Gross Unrealized Losses | (462) | (248) |
CMOs issued by FHLMC | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 34,668 | 31,010 |
Held to maturity, Fair Value | 33,591 | 30,938 |
Held-to-maturity, Gross Unrealized Gains | 0 | 2 |
Held-to-maturity, Gross Unrealized Losses | (1,077) | (74) |
Total | 123,359 | 70,514 |
Available-for-sale, at fair value | 120,411 | 69,889 |
Available-for-sale, Gross Unrealized Gains | 1 | 3 |
Available-for-sale, Gross Unrealized Losses | (2,949) | (628) |
CMOs issued by GNMA | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 3,730 | 0 |
Held to maturity, Fair Value | 3,713 | 0 |
Held-to-maturity, Gross Unrealized Gains | 0 | 0 |
Held-to-maturity, Gross Unrealized Losses | (17) | 0 |
Total | 12,641 | 17,953 |
Available-for-sale, at fair value | 12,222 | 17,785 |
Available-for-sale, Gross Unrealized Gains | 2 | 26 |
Available-for-sale, Gross Unrealized Losses | (421) | (194) |
Debentures of government- sponsored agencies | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Total | 32,395 | 12,940 |
Available-for-sale, at fair value | 32,139 | 12,938 |
Available-for-sale, Gross Unrealized Gains | 0 | 3 |
Available-for-sale, Gross Unrealized Losses | (256) | (5) |
Privately issued CMOs | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Total | 431 | 1,432 |
Available-for-sale, at fair value | 435 | 1,431 |
Available-for-sale, Gross Unrealized Gains | 4 | 1 |
Available-for-sale, Gross Unrealized Losses | 0 | (2) |
Obligations of state and political subdivisions | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Held to maturity, Amortized Cost | 17,288 | 19,646 |
Held to maturity, Fair Value | 17,490 | 19,998 |
Held-to-maturity, Gross Unrealized Gains | 235 | 383 |
Held-to-maturity, Gross Unrealized Losses | (33) | (31) |
Total | 89,699 | 98,027 |
Available-for-sale, at fair value | 87,788 | 97,491 |
Available-for-sale, Gross Unrealized Gains | 77 | 298 |
Available-for-sale, Gross Unrealized Losses | (1,988) | (834) |
Corporate bonds | ||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | ||
Total | 3,015 | 6,541 |
Available-for-sale, at fair value | 3,027 | 6,564 |
Available-for-sale, Gross Unrealized Gains | 24 | 26 |
Available-for-sale, Gross Unrealized Losses | $ (12) | $ (3) |
Investment Securities - Maturit
Investment Securities - Maturities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Held-to-maturity Securities, Amortized Cost | ||
Within one year | $ 2,859 | $ 2,151 |
After one but within five years | 13,063 | 15,577 |
After five years through ten years | 63,321 | 54,641 |
After ten years | 91,409 | 78,663 |
Total | 170,652 | 151,032 |
Held-to-maturity Securities, Fair Value | ||
Within one year | 2,882 | 2,172 |
After one but within five years | 13,147 | 15,791 |
After five years through ten years | 61,350 | 54,554 |
After ten years | 88,748 | 78,515 |
Total | 166,127 | 151,032 |
Available-for-sale Securities, Amortized Cost | ||
Within one year | 8,272 | 10,268 |
After one but within five years | 79,662 | 71,576 |
After five years through ten years | 216,584 | 129,723 |
After ten years | 92,750 | 122,718 |
Total | 397,268 | 334,285 |
Available-for-sale Securities, Fair Value | ||
Within one year | 8,263 | 10,272 |
After one but within five years | 78,514 | 71,237 |
After five years through ten years | 210,650 | 128,954 |
After ten years | 90,710 | 122,004 |
Total | $ 388,137 | $ 332,467 |
Investment Securities - Sales o
Investment Securities - Sales of investment securities and gross gains and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Available-for-sale: | ||||
Sales proceeds | $ 5,006 | $ 1,321 | $ 5,006 | $ 1,321 |
Gross realized gains | 27 | 13 | 27 | 13 |
Gross realized losses | $ 16 | $ 3 | $ 16 | $ 3 |
Investment Securities - Pledged
Investment Securities - Pledged and Transferred Securities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Public Deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | $ 103,097 | $ 107,829 |
Trust Deposits | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | 749 | 761 |
State of California | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | 103,846 | 108,590 |
Internal checking account | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Available-for-sale securities pledged as collateral | $ 2,014 | $ 2,026 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)security | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($)security | |
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Securities transferred from available-for-sale to held-to-maturity | $ | $ 27,422 | $ 128,965 | $ 129,000 | ||
Unrealized pre-tax loss from transfer of available-for-sale securities to held-to-maturity | $ | 278 | 3,000 | |||
Amortization of net unrealized losses on securities transferred from available-for-sale to held-to-maturity | $ | $ 132 | $ 124 | $ 268 | $ 165 | $ 165 |
Number of investment securities other-than-temporarily impaired | 0 | 0 | |||
Number of investment securities in unrealized loss position | 266 | 266 | 198 | ||
Number of investment securities in unrealized loss position longer than 12 months | 64 | 64 | |||
Number of investment securities in unrealized loss position less than 12 months | 201 | 201 | |||
CMOs issued by FHLMC | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position longer than 12 months | 5 | 5 | |||
CMOs issued by FNMA | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position longer than 12 months | 3 | 3 | |||
CMOs issued by GNMA | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position longer than 12 months | 2 | 2 | |||
MBS pass-through securities issued by FHLMC and FNMA | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position longer than 12 months | 22 | 22 | |||
Number of investment securities in unrealized loss position less than 12 months | 36 | 36 | |||
Obligations of state and political subdivisions | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position longer than 12 months | 32 | 32 | |||
Number of investment securities in unrealized loss position less than 12 months | 98 | 98 | |||
SBA-backed securities | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position less than 12 months | 11 | 11 | |||
Debentures of government- sponsored agencies | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position less than 12 months | 8 | 8 | |||
Collateralized Mortgage Obligations | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position less than 12 months | 46 | 46 | |||
Corporate bonds | |||||
Schedule of Available-for-sale Securities and Held-to-maturity Securities [Line Items] | |||||
Number of investment securities in unrealized loss position less than 12 months | 3 | 3 |
Investment Securities - Unreali
Investment Securities - Unrealized Loss Positions (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | $ 66,222 | $ 31,051 |
Greater than or equal to 12 continuous months | 86,230 | 60,669 |
Total Securities in a loss position | 152,452 | 91,720 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (1,681) | (205) |
Greater than or equal to 12 continuous months | (3,079) | (414) |
Held-to-maturity, Gross Unrealized Losses | (4,760) | (619) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 326,092 | 212,675 |
Available-for-sale, greater than 12 continuous months, Fair value | 41,790 | 40,478 |
Available-for-sale, Total Securities in a loss position, Fair Value | 367,882 | 253,153 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (7,301) | (1,465) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | (1,962) | (927) |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (9,263) | (2,392) |
Marketable Securities, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Marketable securities, less than 12 continuous months, Fair value | 392,314 | 243,726 |
Marketable securities, greater than 12 continuous months, Fair value | 128,020 | 101,147 |
Marketable securities, Total Securities in a loss position, Fair value | 520,334 | 344,873 |
Marketable Securities, Continuous Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Marketable securities, less than 12 continuous months, Unrealized loss | (8,982) | (1,670) |
Marketable securities, greater than 12 continuous months, Unrealized loss | (5,041) | (1,341) |
Marketable securities, Total Securities in a loss position, Unrealized loss | (14,023) | (3,011) |
MBS pass-through securities issued by FHLMC and FNMA | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 22,100 | 16,337 |
Greater than or equal to 12 continuous months | 68,724 | 46,845 |
Total Securities in a loss position | 90,824 | 63,182 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (830) | (143) |
Greater than or equal to 12 continuous months | (2,549) | (371) |
Held-to-maturity, Gross Unrealized Losses | (3,379) | (514) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 68,906 | 32,189 |
Available-for-sale, greater than 12 continuous months, Fair value | 17,713 | 15,325 |
Available-for-sale, Total Securities in a loss position, Fair Value | 86,619 | 47,514 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (1,843) | (121) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | (666) | (302) |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (2,509) | (423) |
SBA-backed securities | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 8,742 | |
Greater than or equal to 12 continuous months | 0 | |
Total Securities in a loss position | 8,742 | |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (139) | |
Greater than or equal to 12 continuous months | 0 | |
Held-to-maturity, Gross Unrealized Losses | (139) | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 23,954 | 11,028 |
Available-for-sale, greater than 12 continuous months, Fair value | 0 | 165 |
Available-for-sale, Total Securities in a loss position, Fair Value | 23,954 | 11,193 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (666) | (53) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | 0 | (2) |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (666) | (55) |
CMOs issued by FNMA | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 11,766 | |
Greater than or equal to 12 continuous months | 0 | |
Total Securities in a loss position | 11,766 | |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (115) | |
Greater than or equal to 12 continuous months | 0 | |
Held-to-maturity, Gross Unrealized Losses | (115) | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 15,687 | 26,401 |
Available-for-sale, greater than 12 continuous months, Fair value | 4,642 | 5,440 |
Available-for-sale, Total Securities in a loss position, Fair Value | 20,329 | 31,841 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (321) | (171) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | (141) | (77) |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (462) | (248) |
CMOs issued by FHLMC | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 19,798 | 11,066 |
Greater than or equal to 12 continuous months | 13,793 | 13,824 |
Total Securities in a loss position | 33,591 | 24,890 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (564) | (31) |
Greater than or equal to 12 continuous months | (513) | (43) |
Held-to-maturity, Gross Unrealized Losses | (1,077) | (74) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 115,370 | 69,276 |
Available-for-sale, greater than 12 continuous months, Fair value | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Fair Value | 115,370 | 69,276 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (2,949) | (628) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (2,949) | (628) |
CMOs issued by GNMA | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 0 | |
Greater than or equal to 12 continuous months | 3,713 | |
Total Securities in a loss position | 3,713 | |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | 0 | |
Greater than or equal to 12 continuous months | (17) | |
Held-to-maturity, Gross Unrealized Losses | (17) | |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 11,297 | 14,230 |
Available-for-sale, greater than 12 continuous months, Fair value | 603 | 0 |
Available-for-sale, Total Securities in a loss position, Fair Value | 11,900 | 14,230 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (419) | (194) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | (2) | 0 |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (421) | (194) |
Debentures of government- sponsored agencies | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 32,139 | 2,984 |
Available-for-sale, greater than 12 continuous months, Fair value | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Fair Value | 32,139 | 2,984 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (256) | (5) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (256) | (5) |
Privately issued CMOs | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 0 | 1,310 |
Available-for-sale, greater than 12 continuous months, Fair value | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Fair Value | 0 | 1,310 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | 0 | (2) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Unrealized loss | 0 | (2) |
Obligations of state and political subdivisions | ||
Debt Securities, Held-to-maturity, Continuous Unrealized Loss Position, Fair Value [Abstract] | ||
Less than 12 continuous months | 3,816 | 3,648 |
Greater than or equal to 12 continuous months | 0 | 0 |
Total Securities in a loss position | 3,816 | 3,648 |
Debt Securities, Held-to-maturity, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Less than 12 continuous months | (33) | (31) |
Greater than or equal to 12 continuous months | 0 | 0 |
Held-to-maturity, Gross Unrealized Losses | (33) | (31) |
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 57,217 | 52,197 |
Available-for-sale, greater than 12 continuous months, Fair value | 18,832 | 19,548 |
Available-for-sale, Total Securities in a loss position, Fair Value | 76,049 | 71,745 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (835) | (288) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | (1,153) | (546) |
Available-for-sale, Total Securities in a loss position, Unrealized loss | (1,988) | (834) |
Corporate bonds | ||
Debt Securities, Available-for-sale, Unrealized Loss Position [Abstract] | ||
Available-for-sale, less than 12 continuous months, Fair value | 1,522 | 3,060 |
Available-for-sale, greater than 12 continuous months, Fair value | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Fair Value | 1,522 | 3,060 |
Debt Securities, Available-for-sale, Unrealized Loss Position, Accumulated Loss [Abstract] | ||
Available-for-sale, less than 12 continuous months, Unrealized loss | (12) | (3) |
Available-for-sale, greater than 12 continuous months, Unrealized loss | 0 | 0 |
Available-for-sale, Total Securities in a loss position, Unrealized loss | $ (12) | $ (3) |
Investment Securities - Non-Mar
Investment Securities - Non-Marketable Securities (Details) | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | Jul. 26, 2018 | |
Schedule of Equity Method Investments [Line Items] | |||
Federal Home Loan Bank stock, par value (usd per share) | $ / shares | $ 100 | ||
Investments in low income housing tax credit funds | $ 4,900,000 | $ 2,100,000 | |
Low income housing tax credits and other tax benefits | 282,000 | ||
Low income housing amortization expense | 237,000 | ||
Unfunded commitments for low income housing tax credit funds | $ 3,200,000 | ||
Visa Inc. Class B common stock | |||
Schedule of Equity Method Investments [Line Items] | |||
Number of shares of securities carried at cost | shares | 16,939 | ||
Carrying value of securities carried at cost | $ 0 | ||
Fair value of Class B common stock | $ 3,700,000 | $ 3,200,000 | |
Visa Inc. | Visa Inc. Class B common stock | |||
Schedule of Equity Method Investments [Line Items] | |||
Conversion rate on common stock | 1.6298 | 1.6483 | |
Other assets | |||
Schedule of Equity Method Investments [Line Items] | |||
Federal Home Loan Bank stock | $ 11,100,000 | $ 11,100,000 | |
Subsequent Event | |||
Schedule of Equity Method Investments [Line Items] | |||
Federal Home Loan Bank, dividend rate percentage | 7.00% |
Loans and Allowance for Loan 40
Loans and Allowance for Loan Losses - Outstanding and Aging Analysis (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | $ 88,000 | $ 2,331,000 |
Current | 1,717,523,000 | 1,676,682,000 |
Total loans | 1,717,611,000 | 1,679,013,000 |
Non-accrual | $ 385,000 | $ 406,000 |
Number of purchase credit impaired (PCI) loans with unpaid balances | loan | 1 | 3 |
Unpaid balances on purchase credit impaired (PCI) loans | $ 6,000 | $ 131,000 |
Purchased Credit Impaired (PCI) loans no longer accreting interest | 0 | 0 |
Purchased Credit-impaired (PCI) loans accreting interest | 2,100,000 | 2,100,000 |
Loans past due more than 90 days still accruing | 0 | 0 |
Deferred loan fees | 800,000 | 818,000 |
Unaccreted purchase discounts on non-PCI loans | 956,000 | 1,200,000 |
30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 88,000 | 684,000 |
60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 1,340,000 |
90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 307,000 |
Commercial loans | Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 1,340,000 |
Current | 241,994,000 | 234,495,000 |
Total loans | 241,994,000 | 235,835,000 |
Non-accrual | 0 | 0 |
Commercial loans | Commercial and industrial | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial loans | Commercial and industrial | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 1,340,000 |
Commercial loans | Commercial and industrial | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, owner-occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Current | 317,587,000 | 300,963,000 |
Total loans | 317,587,000 | 300,963,000 |
Non-accrual | 0 | 0 |
Commercial real estate loans | Commercial real estate, owner-occupied | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, owner-occupied | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, owner-occupied | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, investor | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Current | 839,667,000 | 822,984,000 |
Total loans | 839,667,000 | 822,984,000 |
Non-accrual | 0 | 0 |
Commercial real estate loans | Commercial real estate, investor | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, investor | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Commercial real estate, investor | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Current | 57,015,000 | 63,828,000 |
Total loans | 57,015,000 | 63,828,000 |
Non-accrual | 0 | 0 |
Commercial real estate loans | Construction | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Construction | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Commercial real estate loans | Construction | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Residential loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 77,000 | 406,000 |
Current | 125,954,000 | 132,061,000 |
Total loans | 126,031,000 | 132,467,000 |
Non-accrual | 385,000 | 406,000 |
Residential loans | Home equity | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 77,000 | 99,000 |
Residential loans | Home equity | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Residential loans | Home equity | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 307,000 |
Residential loans | Other residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 255,000 |
Current | 108,829,000 | 95,271,000 |
Total loans | 108,829,000 | 95,526,000 |
Non-accrual | 0 | 0 |
Residential loans | Other residential | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 255,000 |
Residential loans | Other residential | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Residential loans | Other residential | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Consumer loans | Installment and other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 11,000 | 330,000 |
Current | 26,477,000 | 27,080,000 |
Total loans | 26,488,000 | 27,410,000 |
Non-accrual | 0 | 0 |
Consumer loans | Installment and other consumer | 30-59 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 11,000 | 330,000 |
Consumer loans | Installment and other consumer | 60-89 days past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | 0 | 0 |
Consumer loans | Installment and other consumer | 90 days or more past due | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loans past due | $ 0 | $ 0 |
Loans and Allowance for Loan 41
Loans and Allowance for Loan Losses - Credit Quality (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 1,717,611 | $ 1,679,013 |
Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 2,140 | 2,115 |
Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 1,676,595 | 1,629,865 |
Pass | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 2,140 | 1,325 |
Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 27,099 | 21,242 |
Special Mention | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 0 | 790 |
Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 13,917 | 27,906 |
Substandard | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 0 | 0 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 241,952 | 235,770 |
Total loans | 241,994 | 235,835 |
Commercial loans | Commercial and industrial | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 42 | 65 |
Commercial loans | Commercial and industrial | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 224,707 | 214,636 |
Commercial loans | Commercial and industrial | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 14,842 | 9,318 |
Commercial loans | Commercial and industrial | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 2,403 | 11,816 |
Commercial real estate loans | Commercial real estate, owner-occupied | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 316,378 | 299,797 |
Total loans | 317,587 | 300,963 |
Commercial real estate loans | Commercial real estate, owner-occupied | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 1,209 | 1,166 |
Commercial real estate loans | Commercial real estate, owner-occupied | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 299,469 | 281,104 |
Commercial real estate loans | Commercial real estate, owner-occupied | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 8,904 | 9,284 |
Commercial real estate loans | Commercial real estate, owner-occupied | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 8,005 | 9,409 |
Commercial real estate loans | Commercial real estate, investor | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 838,866 | 822,194 |
Total loans | 839,667 | 822,984 |
Commercial real estate loans | Commercial real estate, investor | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 801 | 790 |
Commercial real estate loans | Commercial real estate, investor | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 836,634 | 818,570 |
Commercial real estate loans | Commercial real estate, investor | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 2,232 | 1,850 |
Commercial real estate loans | Commercial real estate, investor | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 0 | 1,774 |
Commercial real estate loans | Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 57,015 | 63,828 |
Total loans | 57,015 | 63,828 |
Commercial real estate loans | Construction | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 0 | 0 |
Commercial real estate loans | Construction | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 54,324 | 60,859 |
Commercial real estate loans | Construction | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 0 | 0 |
Commercial real estate loans | Construction | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 2,691 | 2,969 |
Residential loans | Home equity | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 125,943 | 132,373 |
Total loans | 126,031 | 132,467 |
Residential loans | Home equity | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 88 | 94 |
Residential loans | Home equity | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 124,103 | 130,558 |
Residential loans | Home equity | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 1,121 | 0 |
Residential loans | Home equity | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Loans excluding purchased credit-impaired loans | 719 | 1,815 |
Residential loans | Other residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 108,829 | 95,526 |
Residential loans | Other residential | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 0 | 0 |
Residential loans | Other residential | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 108,829 | 95,526 |
Residential loans | Other residential | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Residential loans | Other residential | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans | Installment and other consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 26,488 | 27,410 |
Consumer loans | Installment and other consumer | Purchased credit-impaired | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Purchased credit-impaired | 0 | 0 |
Consumer loans | Installment and other consumer | Pass | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 26,389 | 27,287 |
Consumer loans | Installment and other consumer | Special Mention | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | 0 | 0 |
Consumer loans | Installment and other consumer | Substandard | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Total loans | $ 99 | $ 123 |
Loans and Allowance for Loan 42
Loans and Allowance for Loan Losses - Troubled Debt Restructuring by Class (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018USD ($)loan | Dec. 31, 2017USD ($)loan | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of loans removed from TDR designation | loan | 1 | 0 |
Recorded investment of loans removed from TDR resignation | $ 150,000 | |
Recorded investment in Troubled Debt Restructurings | 15,494,000 | $ 16,520,000 |
TDR loans on non-accrual status | 0 | |
Commercial loans | Commercial and industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 1,917,000 | 2,165,000 |
Commercial real estate loans | Commercial real estate, owner-occupied | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 7,002,000 | 6,999,000 |
Commercial real estate loans | Commercial real estate, investor | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 1,844,000 | 2,171,000 |
Commercial real estate loans | Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 2,691,000 | 2,969,000 |
Residential loans | Home equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 348,000 | 347,000 |
Residential loans | Other residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | 988,000 | 1,148,000 |
Consumer loans | Installment and other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Recorded investment in Troubled Debt Restructurings | $ 704,000 | $ 721,000 |
Loans and Allowance for Loan 43
Loans and Allowance for Loan Losses - Troubled Debt Restructuring Modifications (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)contract | Jun. 30, 2017USD ($)contract | Jun. 30, 2018USD ($)contractloan | Jun. 30, 2017USD ($)contractloan | Dec. 31, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of Contracts Modified | contract | 0 | ||||
Pre-Modification Outstanding Recorded Investment | $ 0 | ||||
Post-Modification Outstanding Recorded Investment | 0 | ||||
Post-Modification Outstanding Recorded Investment at Period End | $ 0 | ||||
Number of modified TDR loans that defaulted | loan | 0 | 0 | |||
Purchased Credit-impaired (PCI) loans accreting interest | $ 2,100 | $ 2,100 | $ 2,100 | ||
Commercial loans | Commercial and industrial | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of Contracts Modified | contract | 2 | 2 | |||
Pre-Modification Outstanding Recorded Investment | $ 254 | $ 254 | |||
Post-Modification Outstanding Recorded Investment | 245 | 245 | |||
Post-Modification Outstanding Recorded Investment at Period End | $ 235 | $ 235 | |||
Consumer loans | Installment and other consumer | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Number of Contracts Modified | contract | 1 | ||||
Pre-Modification Outstanding Recorded Investment | $ 50 | ||||
Post-Modification Outstanding Recorded Investment | 50 | ||||
Post-Modification Outstanding Recorded Investment at Period End | $ 49 |
Loans and Allowance for Loan 44
Loans and Allowance for Loan Losses - Impaired and Related Allowance (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | $ 4,417,000 | $ 4,417,000 | $ 4,445,000 | ||
With a specific allowance recorded | 11,462,000 | 11,462,000 | 12,481,000 | ||
Total recorded investment in impaired loans | 15,879,000 | 15,879,000 | 16,926,000 | ||
Unpaid principal balance of impaired loans | 15,842,000 | 15,842,000 | 17,019,000 | ||
Specific allowance | 503,000 | 503,000 | 513,000 | ||
Average recorded investment in impaired loans during the period | 16,213,000 | $ 18,353,000 | 16,438,000 | $ 18,340,000 | |
Interest income recognized on impaired loans during the period ended | 177,000 | 179,000 | 483,000 | 362,000 | |
Interest income recognized on impaired loans during the period ended, cash basis | 128,000 | 0 | |||
Outstanding commitments to extend credit on impaired loans | 850,000 | 850,000 | 935,000 | ||
Commercial loans | Commercial and industrial | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 306,000 | 306,000 | 309,000 | ||
With a specific allowance recorded | 1,611,000 | 1,611,000 | 1,856,000 | ||
Total recorded investment in impaired loans | 1,917,000 | 1,917,000 | 2,165,000 | ||
Unpaid principal balance of impaired loans | 1,905,000 | 1,905,000 | 2,278,000 | ||
Specific allowance | 232,000 | 232,000 | 50,000 | ||
Average recorded investment in impaired loans during the period | 2,092,000 | 2,072,000 | 2,104,000 | 2,117,000 | |
Interest income recognized on impaired loans during the period ended | 28,000 | 25,000 | 183,000 | 48,000 | |
Commercial real estate loans | Commercial real estate, owner-occupied | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 0 | 0 | 0 | ||
With a specific allowance recorded | 7,002,000 | 7,002,000 | 6,999,000 | ||
Total recorded investment in impaired loans | 7,002,000 | 7,002,000 | 6,999,000 | ||
Unpaid principal balance of impaired loans | 6,993,000 | 6,993,000 | 6,993,000 | ||
Specific allowance | 126,000 | 126,000 | 188,000 | ||
Average recorded investment in impaired loans during the period | 7,005,000 | 7,000,000 | 7,003,000 | 6,998,000 | |
Interest income recognized on impaired loans during the period ended | 66,000 | 66,000 | 132,000 | 132,000 | |
Commercial real estate loans | Commercial real estate, investor | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 0 | 0 | 0 | ||
With a specific allowance recorded | 1,844,000 | 1,844,000 | 2,171,000 | ||
Total recorded investment in impaired loans | 1,844,000 | 1,844,000 | 2,171,000 | ||
Unpaid principal balance of impaired loans | 1,837,000 | 1,837,000 | 2,168,000 | ||
Specific allowance | 47,000 | 47,000 | 159,000 | ||
Average recorded investment in impaired loans during the period | 1,849,000 | 3,283,000 | 1,956,000 | 2,941,000 | |
Interest income recognized on impaired loans during the period ended | 20,000 | 20,000 | 42,000 | 43,000 | |
Commercial real estate loans | Construction | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 2,691,000 | 2,691,000 | 2,689,000 | ||
With a specific allowance recorded | 0 | 0 | 280,000 | ||
Total recorded investment in impaired loans | 2,691,000 | 2,691,000 | 2,969,000 | ||
Unpaid principal balance of impaired loans | 2,688,000 | 2,688,000 | 2,963,000 | ||
Specific allowance | 0 | 0 | 7,000 | ||
Average recorded investment in impaired loans during the period | 2,833,000 | 3,240,000 | 2,878,000 | 3,241,000 | |
Interest income recognized on impaired loans during the period ended | 37,000 | 37,000 | 75,000 | 71,000 | |
Residential loans | Home equity | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 385,000 | 385,000 | 406,000 | ||
With a specific allowance recorded | 347,000 | 347,000 | 347,000 | ||
Total recorded investment in impaired loans | 732,000 | 732,000 | 753,000 | ||
Unpaid principal balance of impaired loans | 729,000 | 729,000 | 750,000 | ||
Specific allowance | 6,000 | 6,000 | 6,000 | ||
Average recorded investment in impaired loans during the period | 736,000 | 642,000 | 742,000 | 667,000 | |
Interest income recognized on impaired loans during the period ended | 5,000 | 7,000 | 10,000 | 14,000 | |
Residential loans | Other residential | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 989,000 | 989,000 | 995,000 | ||
With a specific allowance recorded | 0 | 0 | 153,000 | ||
Total recorded investment in impaired loans | 989,000 | 989,000 | 1,148,000 | ||
Unpaid principal balance of impaired loans | 987,000 | 987,000 | 1,147,000 | ||
Specific allowance | 0 | 0 | 1,000 | ||
Average recorded investment in impaired loans during the period | 990,000 | 1,173,000 | 1,043,000 | 1,437,000 | |
Interest income recognized on impaired loans during the period ended | 13,000 | 14,000 | 26,000 | 34,000 | |
Consumer loans | Installment and other consumer | |||||
Recorded investment in impaired loans: | |||||
With no specific allowance recorded | 46,000 | 46,000 | 46,000 | ||
With a specific allowance recorded | 658,000 | 658,000 | 675,000 | ||
Total recorded investment in impaired loans | 704,000 | 704,000 | 721,000 | ||
Unpaid principal balance of impaired loans | 703,000 | 703,000 | 720,000 | ||
Specific allowance | 92,000 | 92,000 | $ 102,000 | ||
Average recorded investment in impaired loans during the period | 708,000 | 943,000 | 712,000 | 939,000 | |
Interest income recognized on impaired loans during the period ended | $ 8,000 | $ 10,000 | $ 15,000 | $ 20,000 |
Loans and Allowance for Loan 45
Loans and Allowance for Loan Losses - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Allowance for loan losses: | |||||
Beginning balance | $ 15,771 | $ 15,219 | $ 15,767 | $ 15,442 | |
Provision for loan losses | 0 | 0 | 0 | 0 | |
Charge-offs | (5) | 0 | (5) | (287) | |
Recoveries | 47 | 13 | 51 | 77 | |
Ending balance | 15,813 | 15,232 | 15,813 | 15,232 | |
Ending ALLL related to loans collectively evaluated for impairment | 15,310 | 15,310 | $ 15,254 | ||
Ending ALLL related to loans individually evaluated for impairment | 503 | 503 | 513 | ||
Ending ALLL | 15,813 | 15,813 | 15,767 | ||
Collectively evaluated for impairment | 1,699,592 | 1,699,592 | 1,659,972 | ||
Individually evaluated for impairment | 15,879 | 15,879 | 16,926 | ||
Total loans | $ 1,717,611 | $ 1,717,611 | $ 1,679,013 | ||
Ratio of allowance for loan losses to total loans | 0.92% | 0.92% | 0.94% | ||
Allowance for loan losses to non-accrual loans | 4107.00% | 4107.00% | 3883.00% | ||
Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 2,140 | 2,140 | 2,115 | ||
Commercial loans | Commercial and industrial | |||||
Allowance for loan losses: | |||||
Beginning balance | 3,693 | 4,413 | 3,654 | 3,248 | |
Provision for loan losses | (1,098) | (490) | (1,063) | 896 | |
Charge-offs | (3) | 0 | (3) | (284) | |
Recoveries | 5 | 9 | 9 | 72 | |
Ending balance | 2,597 | 3,932 | 2,597 | 3,932 | |
Ending ALLL related to loans collectively evaluated for impairment | 2,365 | 2,365 | 3,604 | ||
Ending ALLL related to loans individually evaluated for impairment | 232 | 232 | 50 | ||
Ending ALLL | 2,597 | 2,597 | 3,654 | ||
Collectively evaluated for impairment | 240,035 | 240,035 | 233,605 | ||
Individually evaluated for impairment | 1,917 | 1,917 | 2,165 | ||
Total loans | $ 241,994 | $ 241,994 | $ 235,835 | ||
Ratio of allowance for loan losses to total loans | 1.07% | 1.07% | 1.55% | ||
Commercial loans | Commercial and industrial | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 42 | 42 | 65 | ||
Commercial real estate loans | Commercial real estate, owner-occupied | |||||
Allowance for loan losses: | |||||
Beginning balance | 2,080 | 1,992 | 2,294 | 1,753 | |
Provision for loan losses | 259 | 90 | 45 | 329 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 2,339 | 2,082 | 2,339 | 2,082 | |
Ending ALLL related to loans collectively evaluated for impairment | 2,213 | 2,213 | 2,106 | ||
Ending ALLL related to loans individually evaluated for impairment | 126 | 126 | 188 | ||
Ending ALLL | 2,339 | 2,339 | 2,294 | ||
Collectively evaluated for impairment | 309,376 | 309,376 | 292,798 | ||
Individually evaluated for impairment | 7,002 | 7,002 | 6,999 | ||
Total loans | $ 317,587 | $ 317,587 | $ 300,963 | ||
Ratio of allowance for loan losses to total loans | 0.74% | 0.74% | 0.76% | ||
Commercial real estate loans | Commercial real estate, owner-occupied | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 1,209 | 1,209 | 1,166 | ||
Commercial real estate loans | Commercial real estate, investor | |||||
Allowance for loan losses: | |||||
Beginning balance | 6,455 | 6,133 | 6,475 | 6,320 | |
Provision for loan losses | 935 | (68) | 915 | (255) | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 7,390 | 6,065 | 7,390 | 6,065 | |
Ending ALLL related to loans collectively evaluated for impairment | 7,343 | 7,343 | 6,316 | ||
Ending ALLL related to loans individually evaluated for impairment | 47 | 47 | 159 | ||
Ending ALLL | 7,390 | 7,390 | 6,475 | ||
Collectively evaluated for impairment | 837,022 | 837,022 | 820,023 | ||
Individually evaluated for impairment | 1,844 | 1,844 | 2,171 | ||
Total loans | $ 839,667 | $ 839,667 | $ 822,984 | ||
Ratio of allowance for loan losses to total loans | 0.88% | 0.88% | 0.79% | ||
Commercial real estate loans | Commercial real estate, investor | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 801 | 801 | 790 | ||
Commercial real estate loans | Construction | |||||
Allowance for loan losses: | |||||
Beginning balance | 697 | 546 | 681 | 781 | |
Provision for loan losses | (189) | (135) | (173) | (370) | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 508 | 411 | 508 | 411 | |
Ending ALLL related to loans collectively evaluated for impairment | 508 | 508 | 674 | ||
Ending ALLL related to loans individually evaluated for impairment | 0 | 0 | 7 | ||
Ending ALLL | 508 | 508 | 681 | ||
Collectively evaluated for impairment | 54,324 | 54,324 | 60,859 | ||
Individually evaluated for impairment | 2,691 | 2,691 | 2,969 | ||
Total loans | $ 57,015 | $ 57,015 | $ 63,828 | ||
Ratio of allowance for loan losses to total loans | 0.89% | 0.89% | 1.07% | ||
Commercial real estate loans | Construction | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 0 | 0 | 0 | ||
Residential loans | Home equity | |||||
Allowance for loan losses: | |||||
Beginning balance | 979 | 990 | 1,031 | 973 | |
Provision for loan losses | (27) | (9) | (79) | 8 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 952 | 981 | 952 | 981 | |
Ending ALLL related to loans collectively evaluated for impairment | 946 | 946 | 1,025 | ||
Ending ALLL related to loans individually evaluated for impairment | 6 | 6 | 6 | ||
Ending ALLL | 952 | 952 | 1,031 | ||
Collectively evaluated for impairment | 125,211 | 125,211 | 131,620 | ||
Individually evaluated for impairment | 732 | 732 | 753 | ||
Total loans | $ 126,031 | $ 126,031 | $ 132,467 | ||
Ratio of allowance for loan losses to total loans | 0.76% | 0.76% | 0.78% | ||
Allowance for loan losses to non-accrual loans | 247.00% | 247.00% | 254.00% | ||
Residential loans | Home equity | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 88 | 88 | 94 | ||
Residential loans | Other residential | |||||
Allowance for loan losses: | |||||
Beginning balance | 543 | 444 | 536 | 454 | |
Provision for loan losses | 203 | 65 | 210 | 55 | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 746 | 509 | 746 | 509 | |
Ending ALLL related to loans collectively evaluated for impairment | 746 | 746 | 535 | ||
Ending ALLL related to loans individually evaluated for impairment | 0 | 0 | 1 | ||
Ending ALLL | 746 | 746 | 536 | ||
Collectively evaluated for impairment | 107,840 | 107,840 | 94,378 | ||
Individually evaluated for impairment | 989 | 989 | 1,148 | ||
Total loans | $ 108,829 | $ 108,829 | $ 95,526 | ||
Ratio of allowance for loan losses to total loans | 0.69% | 0.69% | 0.56% | ||
Residential loans | Other residential | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 0 | 0 | 0 | ||
Consumer loans | Installment and other consumer | |||||
Allowance for loan losses: | |||||
Beginning balance | 351 | 359 | 378 | 372 | |
Provision for loan losses | (66) | (23) | (93) | (34) | |
Charge-offs | (2) | 0 | (2) | (3) | |
Recoveries | 42 | 4 | 42 | 5 | |
Ending balance | 325 | 340 | 325 | 340 | |
Ending ALLL related to loans collectively evaluated for impairment | 233 | 233 | 276 | ||
Ending ALLL related to loans individually evaluated for impairment | 92 | 92 | 102 | ||
Ending ALLL | 325 | 325 | 378 | ||
Collectively evaluated for impairment | 25,784 | 25,784 | 26,689 | ||
Individually evaluated for impairment | 704 | 704 | 721 | ||
Total loans | $ 26,488 | $ 26,488 | $ 27,410 | ||
Ratio of allowance for loan losses to total loans | 1.23% | 1.23% | 1.38% | ||
Consumer loans | Installment and other consumer | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | $ 0 | $ 0 | $ 0 | ||
Purchased credit-impaired | 0 | 0 | 0 | ||
Unallocated | |||||
Allowance for loan losses: | |||||
Beginning balance | 973 | 342 | 718 | 1,541 | |
Provision for loan losses | (17) | 570 | 238 | (629) | |
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending balance | 956 | $ 912 | 956 | $ 912 | |
Ending ALLL related to loans collectively evaluated for impairment | 956 | 956 | 718 | ||
Ending ALLL related to loans individually evaluated for impairment | 0 | 0 | 0 | ||
Ending ALLL | 956 | 956 | 718 | ||
Collectively evaluated for impairment | 0 | 0 | 0 | ||
Individually evaluated for impairment | 0 | 0 | 0 | ||
Total loans | 0 | 0 | 0 | ||
Unallocated | Purchased credit-impaired | |||||
Allowance for loan losses: | |||||
Ending ALLL | 0 | 0 | 0 | ||
Purchased credit-impaired | $ 0 | $ 0 | $ 0 |
Loans and Allowance for Loan 46
Loans and Allowance for Loan Losses - Purchased Credit-Impaired (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
PCI Loans, Carrying Value [Abstract] | |||||
Unpaid Principal Balance | $ 2,665 | $ 2,665 | $ 2,868 | ||
Carrying Value | 2,140 | 2,140 | 2,115 | ||
Accretable Yield [Roll Forward] | |||||
Balance at beginning of period | 1,142 | $ 1,386 | 1,254 | $ 1,476 | |
Accretion | (83) | (80) | (195) | (170) | |
Balance at end of period | 1,059 | $ 1,306 | 1,059 | $ 1,306 | |
Commercial loans | Commercial and industrial | |||||
PCI Loans, Carrying Value [Abstract] | |||||
Unpaid Principal Balance | 125 | 125 | 276 | ||
Carrying Value | 42 | 42 | 65 | ||
Commercial real estate loans | Commercial real estate, owner-occupied | |||||
PCI Loans, Carrying Value [Abstract] | |||||
Unpaid Principal Balance | 1,271 | 1,271 | 1,297 | ||
Carrying Value | 1,209 | 1,209 | 1,166 | ||
Commercial real estate loans | Commercial real estate, investor | |||||
PCI Loans, Carrying Value [Abstract] | |||||
Unpaid Principal Balance | 1,049 | 1,049 | 1,064 | ||
Carrying Value | 801 | 801 | 790 | ||
Residential loans | Home equity | |||||
PCI Loans, Carrying Value [Abstract] | |||||
Unpaid Principal Balance | 220 | 220 | 231 | ||
Carrying Value | $ 88 | $ 88 | $ 94 |
Loans and Allowance for Loan 47
Loans and Allowance for Loan Losses - Pledged Loans (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Residential loans pledged for FRB borrowings | $ 996.9 | $ 887.9 |
Other residential | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Pledged residential loan portfolio to secure borrowing with FRB | $ 80 | $ 67.6 |
Loans and Allowance for Loan 48
Loans and Allowance for Loan Losses - Related Party (Details) - USD ($) $ in Millions | Jun. 30, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | ||
Related party loans | $ 12.3 | $ 11.9 |
Directors, Officers, Principal Shareholders and Associates | ||
Related Party Transaction [Line Items] | ||
Undisbursed commitment to related parties | $ 8.6 | $ 9.1 |
Borrowings - Lines of Credit (D
Borrowings - Lines of Credit (Details) - Line of credit - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Federal Funds Purchased | ||
Line of Credit Facility [Line Items] | ||
Amount of borrowings outstanding | $ 0 | $ 0 |
Federal Home Loan Bank Borrowings | ||
Line of Credit Facility [Line Items] | ||
Lines of credit | 627,400,000 | 538,900,000 |
Federal Home Loan Bank Overnight Borrowings | ||
Line of Credit Facility [Line Items] | ||
Amount of borrowings outstanding | 0 | 0 |
Federal Reserve Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Lines of credit | 59,500,000 | 52,100,000 |
Amount of borrowings outstanding | 0 | 52,100 |
Unsecured Debt | Federal Funds Purchased | ||
Line of Credit Facility [Line Items] | ||
Lines of credit | $ 92,000,000 | $ 100,400,000 |
Borrowings - Subordinated Debt
Borrowings - Subordinated Debt (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2018USD ($)debenture | Jun. 30, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Accretion of discount on subordinated debentures | $ 63 | $ 80 |
Amount guaranteed, on subordinated basis, distributions and other payments on trust preferred securities | $ 8,000 | |
Subordinated debenture | ||
Debt Instrument [Line Items] | ||
Number of subordinated debentures acquired | debenture | 2 | |
Subordinated debentures | $ 4,950 | |
Contractual value of subordinated debt | 8,248 | |
Accretion of discount on subordinated debentures | $ 63 | $ 80 |
Debenture distribution deferral period (up to number of years) | 5 years | |
Subordinated debenture | NorCal Community Bancorp Trust I | ||
Debt Instrument [Line Items] | ||
Contractual value of subordinated debt | $ 4,124 | |
Effective interest rate | 5.40% | |
Subordinated debenture | NorCal Community Bancorp Trust II | ||
Debt Instrument [Line Items] | ||
Contractual value of subordinated debt | $ 4,124 | |
Effective interest rate | 3.74% | |
LIBOR | Subordinated debenture | NorCal Community Bancorp Trust I | ||
Debt Instrument [Line Items] | ||
Basis spread on subordinated debentures | 3.05% | |
LIBOR | Subordinated debenture | NorCal Community Bancorp Trust II | ||
Debt Instrument [Line Items] | ||
Basis spread on subordinated debentures | 1.40% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jul. 20, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Apr. 20, 2018 |
Class of Stock [Line Items] | ||||||||
Cash dividends to common stockholders | $ 2,166,000 | $ 1,660,000 | $ 4,181,000 | $ 3,315,000 | $ 6,896,000 | |||
Cash dividends per common share (usd per share) | $ 0.31 | $ 0.27 | $ 0.60 | $ 0.54 | ||||
Shares withheld for tax withholding and exercise of options | 19,863 | 5,651 | ||||||
Amount of shares withheld for tax withholding and exercise of options | $ 1,400,000 | $ 385,000 | ||||||
Shares withheld for tax withholding and exercise of options, weighted average price (usd per share) | $ 70.34 | $ 68.04 | ||||||
Reclassification from AOCI to retained earnings for stranded income tax effects | $ 0 | |||||||
Share Repurchase Program, amount approved to repurchase | $ 25,000,000 | |||||||
Stock repurchased, net of commissions | $ 104,000 | $ 104,000 | ||||||
Performance-based stock awards | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting period of performance-based stock awards | 3 years | |||||||
Performance-based stock awards | Minimum | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting percentage of performance-based awards | 0.00% | |||||||
Performance-based stock awards | Maximum | ||||||||
Class of Stock [Line Items] | ||||||||
Vesting percentage of performance-based awards | 200.00% | |||||||
Retained Earnings | ||||||||
Class of Stock [Line Items] | ||||||||
Cash dividends to common stockholders | $ 4,181,000 | $ 6,896,000 | ||||||
Reclassification from AOCI to retained earnings for stranded income tax effects | $ 638,000 | $ 638,000 | ||||||
Common Stock | ||||||||
Class of Stock [Line Items] | ||||||||
Stock repurchased, net of commissions (in shares) | 1,398 | 1,398 | ||||||
Stock repurchased, net of commissions | $ 104,000 | |||||||
Subsequent Event | ||||||||
Class of Stock [Line Items] | ||||||||
Dividends declared per common share (usd per share) | $ 0.32 |
Commitments and Contingencies52
Commitments and Contingencies (Details) - USD ($) $ in Thousands | Jun. 28, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2012 | Dec. 31, 2017 |
Operating Leases | |||||||
2,018 | $ 2,209 | $ 2,209 | |||||
2,019 | 4,198 | 4,198 | |||||
2,020 | 3,758 | 3,758 | |||||
2,021 | 2,138 | 2,138 | |||||
2,022 | 1,330 | 1,330 | |||||
Thereafter | 2,904 | 2,904 | |||||
Total | 16,500 | 16,500 | |||||
Rent expense | 1,200 | $ 1,000 | 2,300 | $ 2,000 | |||
Visa Inc. | |||||||
Litigation Matters | |||||||
Settlement agreement amount | $ 4,000,000 | ||||||
Litigation provision | 600,000 | ||||||
Litigation escrow deposit | $ 600,000 | ||||||
Balance of escrow account for legal settlements | 1,500,000 | 1,500,000 | |||||
Visa Inc. | Pending due to reversal | |||||||
Litigation Matters | |||||||
Settlements reached by percentage of sales volume of merchants who opted out in Visa litigation, percent | 51.00% | ||||||
Loan commitments and standby letters of credit, unused | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | 458,150 | 458,150 | $ 453,202 | ||||
Loan commitments and standby letters of credit, unused | Interest payable and other liabilities | |||||||
Loss Contingencies [Line Items] | |||||||
Allowance for off balance sheet commitments | 958 | 958 | 958 | ||||
Commercial lines of credit | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | 222,547 | 222,547 | 224,370 | ||||
Revolving home equity lines | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | 186,652 | 186,652 | 177,678 | ||||
Undisbursed construction loans | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | 34,336 | 34,336 | 35,322 | ||||
Personal and other lines of credit | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | 12,408 | 12,408 | 11,758 | ||||
Standby letters of credit | |||||||
Loss Contingencies [Line Items] | |||||||
Loan commitments and standby letters of credit, off-balance sheet | $ 2,207 | $ 2,207 | $ 4,074 |
Derivative Financial Instrume53
Derivative Financial Instruments and Hedging Activities - Information on Derivatives (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018USD ($)derivative | Jun. 30, 2017USD ($) | Jun. 30, 2018USD ($)derivative | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Derivatives, Fair Value [Line Items] | |||||
Carrying Amounts of Hedged Assets | $ 18,112 | $ 18,112 | |||
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Loans | (262) | (262) | |||
Fair value hedge | Interest income | |||||
Derivatives, Fair Value [Line Items] | |||||
Increase (decrease) in value of designated interest rate swaps | 187 | $ (129) | 716 | $ (18) | |
Payment on interest rate swaps | (40) | (87) | (95) | (185) | |
(Decrease) increase in value of hedged loans | (116) | 191 | (693) | 78 | |
Decrease in value of yield maintenance agreement | (3) | (4) | (7) | (7) | |
Net loss on derivatives recognized against interest income | 28 | $ (29) | (79) | $ (132) | |
Fair value hedge | Designated as hedging instrument | |||||
Derivatives, Fair Value [Line Items] | |||||
Accrued interest on swaps | $ 5 | $ 5 | $ 8 | ||
Fair value hedge | Designated as hedging instrument | Interest rate swap | |||||
Derivatives, Fair Value [Line Items] | |||||
Number of derivative instruments | derivative | 5 | 5 | |||
Fair value hedge | Designated as hedging instrument | Interest rate swap | Other assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate contracts notional amount, Asset derivatives | $ 9,081 | $ 9,081 | 4,019 | ||
Fair value hedge | Designated as hedging instrument | Interest rate swap | Other liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate contracts notional amount, Liability derivatives | 9,293 | 9,293 | 14,810 | ||
Fair value hedge | Designated as hedging instrument | Interest rate contract | Other assets | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate contracts fair value, Asset derivatives | 327 | 327 | 74 | ||
Fair value hedge | Designated as hedging instrument | Interest rate contract | Other liabilities | |||||
Derivatives, Fair Value [Line Items] | |||||
Interest rate contracts fair value, Liability derivatives | $ 276 | $ 276 | $ 740 |
Derivative Financial Instrume54
Derivative Financial Instruments and Hedging Activities - Offsetting of Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Interest rate swap | Other assets | ||
Offsetting Assets [Line Items] | ||
Accrued interest on derivative asset interest rate swaps | $ 1 | $ 1 |
Counterparty A | ||
Offsetting Assets [Line Items] | ||
Gross Amounts of Recognized Assets | 327 | 74 |
Gross Amounts Offset in the Statements of Condition | 0 | 0 |
Net Amounts of Assets Presented in the Statements of Condition | 327 | 74 |
Gross Amounts Not Offset in the Statements of Condition, Financial Instruments | (276) | (74) |
Gross Amounts Not Offset in the Statements of Condition, Cash Collateral Received | 0 | 0 |
Net Amount | $ 51 | $ 0 |
Derivative Financial Instrume55
Derivative Financial Instruments and Hedging Activities - Offsetting of Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Dec. 31, 2017 |
Interest rate swap | Other liabilities | ||
Offsetting Liabilities [Line Items] | ||
Accrued interest on derivative liability interest swaps | $ 4 | $ 8 |
Counterparty A | ||
Offsetting Liabilities [Line Items] | ||
Gross Amounts of Recognized Liabilities | 276 | 740 |
Gross Amounts Offset in the Statements of Condition | 0 | 0 |
Net Amounts of Liabilities Presented in the Statements of Condition | 276 | 740 |
Gross Amounts Not Offset in the Statements of Condition, Financial Instruments | (276) | (74) |
Gross Amounts Not Offset in the Statements of Condition, Cash Collateral Pledged | (666) | |
Net Amount | $ 0 | $ 0 |
Acquisition - Narrative (Detail
Acquisition - Narrative (Details) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Nov. 21, 2017USD ($)branch | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 30,140,000 | $ 30,140,000 | ||
Amortization of core deposit intangible | 460,000 | $ 236,000 | ||
Bank of Napa, N.A. (Napa) | ||||
Business Acquisition [Line Items] | ||||
Number of branch offices | branch | 2 | |||
Loans acquired | $ 134,700,000 | |||
Deposits assumed | 249,900,000 | |||
Investment securities acquired | $ 75,500,000 | |||
Shares received by Napa shareholders in acquisition per acquiree share | 0.307 | |||
Goodwill | $ 23,700,000 | |||
Goodwill impairment | 0 | |||
Core deposits | Bank of Napa, N.A. (Napa) | ||||
Business Acquisition [Line Items] | ||||
Core deposit intangible asset | $ 4,400,000 | |||
Amortization of core deposit intangible | $ 254,000 | $ 56,000 | ||
Useful life of core deposit intangible asset | 10 years |
Acquisition - Acquisition Relat
Acquisition - Acquisition Related Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Business Acquisition [Line Items] | ||||
Data processing | $ 1,023 | $ 963 | $ 2,404 | $ 1,902 |
Professional services | 810 | 522 | 2,109 | 1,044 |
Other | 1,665 | $ 1,652 | 3,361 | $ 3,245 |
Bank of Napa, N.A. (Napa) | ||||
Business Acquisition [Line Items] | ||||
Data processing | 163 | 555 | ||
Professional services | 31 | 126 | ||
Personnel severance | 35 | 141 | ||
Other | 21 | 43 | ||
Total | $ 250 | $ 865 |