Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | Sterling Bancorp, Inc. | |
Entity Central Index Key | 1,680,379 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 53,002,963 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Assets | ||
Cash and due from banks | $ 37,541 | $ 40,147 |
Investment securities | 124,956 | 126,848 |
Mortgage loans held for sale | 200,467 | 112,866 |
Loans, net of allowance for loan losses of $19,132 and $18,457 | 2,580,560 | 2,594,357 |
Accrued interest receivable | 11,936 | 11,493 |
Mortgage servicing rights, net | 7,780 | 6,496 |
Leasehold improvements and equipment, net | 7,705 | 7,043 |
Federal Home Loan Bank stock, at cost | 22,950 | 22,950 |
Cash surrender value of bank-owned life insurance | 30,837 | 30,680 |
Deferred tax asset, net | 7,234 | 6,847 |
Other assets | 2,366 | 2,231 |
Total assets | 3,034,332 | 2,961,958 |
Liabilities: | ||
Noninterest-bearing deposits | 75,062 | 73,682 |
Interest-bearing deposits | 2,216,103 | 2,171,428 |
Total deposits | 2,291,165 | 2,245,110 |
Federal Home Loan Bank borrowings | 342,937 | 338,000 |
Subordinated notes, net | 64,923 | 64,889 |
Accrued expenses and other liabilities | 46,795 | 40,661 |
Total liabilities | 2,745,820 | 2,688,660 |
Shareholders' equity: | ||
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding | ||
Additional paid-in capital | 12,425 | 12,416 |
Retained earnings | 164,984 | 149,816 |
Accumulated other comprehensive loss | (135) | (172) |
Total shareholders' equity | 288,512 | 273,298 |
Total liabilities and shareholders' equity | 3,034,332 | 2,961,958 |
Common Stock | ||
Shareholders' equity: | ||
Common stock, voting, no par value, authorized 500,000,000 shares; issued and outstanding 53,002,963 and 52,963,308 shares at March 31, 2018 and December 31, 2017, respectively | $ 111,238 | $ 111,238 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Allowance for loan losses | $ 19,132 | $ 18,457 |
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Preferred stock, outstanding (in shares) | 0 | 0 |
Common Stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, issued (in shares) | 53,002,963 | 52,963,308 |
Common stock, outstanding (in shares) | 53,002,963 | 52,963,308 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest income | ||
Interest and fees on loans | $ 35,856 | $ 26,759 |
Interest and dividends on investment securities | 819 | 365 |
Other interest | 114 | 19 |
Total interest income | 36,789 | 27,143 |
Interest expense | ||
Interest on deposits | 6,589 | 3,534 |
Interest on Federal Home Loan Bank borrowings | 833 | 830 |
Interest on subordinated notes and other | 1,172 | 908 |
Total interest expense | 8,594 | 5,272 |
Net interest income | 28,195 | 21,871 |
Provision for loan losses | 641 | 600 |
Net interest income after provision for loan losses | 27,554 | 21,271 |
Non-interest income | ||
Service charges and fees | 618 | 409 |
Investment management and advisory fees | 623 | 552 |
Gain on sale of mortgage loans held for sale | 65 | 187 |
Gain on sale of portfolio loans | 3,941 | 3,865 |
Unrealized losses on equity securities | (64) | |
Income on cash surrender value of bank-owned life insurance | 295 | 291 |
Other income | 559 | 282 |
Total non-interest income | 6,037 | 5,586 |
Non-interest expense | ||
Salaries and employee benefits | 6,649 | 5,410 |
Occupancy and equipment | 1,546 | 1,389 |
Professional fees | 622 | 369 |
Advertising and marketing | 349 | 192 |
FDIC assessments | 543 | 242 |
Data processing | 288 | 207 |
Other | 1,506 | 1,283 |
Total non-interest expense | 11,503 | 9,092 |
Income before income taxes | 22,088 | 17,765 |
Income tax expense | 6,339 | 7,349 |
Net income | $ 15,749 | $ 10,416 |
Income per share, basic and diluted (in dollars per share) | $ 0.30 | $ 0.23 |
Weighted average common shares outstanding, basic and diluted | 52,963,308 | 45,271,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Net income | $ 15,749 | $ 10,416 |
Other comprehensive income (loss), net of tax: | ||
Unrealized losses on investment securities, arising during the year, net of income tax of ($3) and ($16) in 2018 and 2017, respectively | (13) | (29) |
Total other comprehensive loss | (13) | (29) |
Comprehensive income | $ 15,736 | $ 10,387 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) | ||
Unrealized losses on available for sale debt securities, arising during the year, tax effect | $ (3) | $ (16) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - USD ($) $ in Thousands | Common StockCommon stock, voting | Common StockCommon stock, non-voting | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total |
Balance at beginning of the period at Dec. 31, 2016 | $ 22,863 | $ 2,885 | $ 15,118 | $ 121,446 | $ (40) | $ 162,272 |
Increase (Decrease) in Stockholders' Equity | ||||||
Net income | 10,416 | 10,416 | ||||
Capital contributions from controlling member of merged entity (Note 1) | 218 | 218 | ||||
Other comprehensive loss | (29) | (29) | ||||
Dividends distributed ($0.04 and $0.01 per share for the period three months ended March 31, 2017 and 2018) | (1,767) | (1,767) | ||||
Balance at end of the period at Mar. 31, 2017 | 22,863 | $ 2,885 | 15,336 | 130,095 | (69) | 171,110 |
Balance at beginning of the period at Dec. 31, 2017 | 111,238 | 12,416 | 149,816 | (172) | 273,298 | |
Increase (Decrease) in Stockholders' Equity | ||||||
Cumulative effect adjustment, reclassification of unrealized losses on equity securities (Note 3) | (50) | 50 | ||||
Net income | 15,749 | 15,749 | ||||
Stock-based compensation | 9 | 9 | ||||
Other comprehensive loss | (13) | (13) | ||||
Dividends distributed ($0.04 and $0.01 per share for the period three months ended March 31, 2017 and 2018) | (531) | (531) | ||||
Balance at end of the period at Mar. 31, 2018 | $ 111,238 | $ 12,425 | $ 164,984 | $ (135) | $ 288,512 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Condensed Consolidated Statements of Changes in Shareholders' Equity (Unaudited) | ||
Dividends paid per common share (in dollars per share) | $ 0.01 | $ 0.04 |
Condensed Consolidated Stateme9
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash Flows From Operating Activities | ||
Net income | $ 15,749 | $ 10,416 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for loan losses | 641 | 600 |
Deferred income taxes | (387) | 327 |
Unrealized losses on equity securities | 64 | |
Amortization and (accretion), net, debt securities available for sale | (69) | 3 |
Depreciation and amortization of leasehold improvements and equipment | 318 | 268 |
Amortization of intangible asset | 113 | 113 |
Origination, premium paid and purchase of loans, net of principal payments, mortgage loans held for sale | (7,424) | (6,326) |
Proceeds from the sale of mortgage loans held for sale | 6,165 | 9,695 |
Gain on sale of mortgage loans held for sale | (65) | (187) |
Gain on sale of portfolio loans | (3,941) | (3,865) |
Increase in cash surrender value of bank-owned life insurance | (157) | (166) |
Net change in servicing assets | 237 | 250 |
Other | 43 | 33 |
Change in operating assets and liabilities: | ||
Accrued interest receivable | (443) | (261) |
Other assets | (245) | 153 |
Accrued expenses and other liabilities | 6,134 | 8,783 |
Net cash provided by operating activities | 16,733 | 19,836 |
Cash Flows From Investing Activities | ||
Maturities and principal receipts of investment securities | 26,615 | 23,671 |
Purchases of investment securities | (24,734) | (35,234) |
Loans originated, net of repayments | (182,870) | (123,695) |
Proceeds from the sale of portfolio loans | 112,169 | 105,184 |
Purchase of leasehold improvements and equipment | (980) | (659) |
Net cash used in investing activities | (69,800) | (30,733) |
Cash Flows From Financing Activities | ||
Net increase in deposits | 46,055 | 107,003 |
Proceeds from advances from Federal Home Loan Bank | 505,000 | 660,000 |
Repayments of advances from Federal Home Loan Bank | (513,000) | (735,000) |
Net change in line of credit with Federal Home Loan Bank | 12,937 | (11,083) |
Capital contributions from controlling member of merged entity | 218 | |
Dividends paid to shareholders | (531) | (1,767) |
Net cash provided by financing activities | 50,461 | 19,371 |
Net increase (decrease) in cash and due from banks | (2,606) | 8,474 |
Cash and due from banks at beginning of period | 40,147 | 22,124 |
Cash and due from banks at end of period | 37,541 | 30,598 |
Cash paid: | ||
Interest | 6,333 | $ 5,011 |
Noncash investing and financing activities: | ||
Transfers of residential real estate loans to mortgage loans held for sale | 198,184 | |
Transfers of residential real estate loans from mortgage loans held for sale | $ 2,158 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2018 | |
Nature of Operations and Basis of Presentation | |
Nature of Operations and Basis of Presentation | Note 1—Nature of Operations and Basis of Presentation Nature of Operations Sterling Bancorp, Inc. (the “Company”) is a unitary thrift holding company that was incorporated in 1989 and the parent company to its wholly owned subsidiary, Sterling Bank and Trust, F.S.B. (the “Bank”). The Company’s business is conducted through the Bank which was formed in 1984. The Bank originates construction, residential and commercial real estate loans, commercial lines of credit, and other consumer loans and receives deposits from its customers located primarily in California and Michigan. The Bank operates through a network of 28 branches: one branch at its headquarters, 25 branches located in San Francisco and Los Angeles, California and two branches located in New York, New York. Additionally, the Bank’s operations include a registered investment advisory business with assets held under management of $451 million at March 31, 2018. The Company is headquartered in Southfield, Michigan and its operations are in the financial services industry. Management evaluates the performance of its business based on one reportable segment, community banking. The Company is subject to regulation, examination and supervision by the Board of Governors of the Federal Reserve (“Federal Reserve”). The Bank is a federally chartered stock savings bank which is subject to regulation, supervision and examination by the Office of the Comptroller of the Currency (“OCC”) of the U.S. Department of Treasury and the Federal Deposit Insurance Corporation (“FDIC”) and is a member of the Federal Home Loan Bank (“FHLB”) system. Initial Public Offering In November 2017, the Company completed its initial public offering whereby it issued and sold 7,692,308 shares of common stock at a public offering price of $12.00 per share. The Company received net proceeds of $85.5 million after deducting underwriting discounts and commissions of $5.5 million and other offering expenses of $1.3 million. The Company continues to use the proceeds to support the Bank’s growth initiatives. Basis of Presentation The condensed consolidated balance sheet as of March 31, 2018, and the condensed consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the three months ended March 31, 2018 and 2017 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect, in the opinion of management, all adjustments, consisting of a normal and recurring nature that are necessary for a fair presentation of the financial position, results of operations and cash flows for the periods presented. The financial data and other financial information disclosed in these notes to the condensed consolidated financial statements related to these periods are also unaudited. The results of operations for the three months ended March 31, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018 or for any future annual or interim period. The consolidated balance sheet at December 31, 2017 included herein was derived from the audited financial statements as of that date. The accompanying unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Merger of Quantum Fund, LLC On April 24, 2017, the Bank acquired all the outstanding equity interests of Quantum Fund, LLC, an entity controlled by the Company’s principal shareholder who owned, directly and indirectly 80% of the members’ interests with the remaining 20% members’ interest held by a member of the Board of Directors of the Company and Bank, for $2.9 million in cash. The entity operated a registered investment advisory business with assets held under management of approximately $425 million. In 2017, the Bank recorded the assets and liabilities transferred at their carrying amounts, consisting primarily of a customer-related intangible asset, in the accounts of the entity transferred. Prior to 2017, the consolidated financial statements have been retrospectively adjusted to include the results of the Company and its wholly-owned subsidiary, and the entity under common control on a combined basis, since the entities were under common control. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2—Summary of Significant Accounting Policies Principles of Consolidation The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiary, and an entity under common control that was merged with the Company in April 2017 (Note 1). All significant intercompany accounts and transactions have been eliminated in the consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Fair Value Measurements The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Bank uses present value techniques and other valuations methods, as disclosed in Note 11, to estimate the fair value of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Investment securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting. Concentration of Credit Risk The Company’s loan portfolio consists primarily of residential real estate loans which are collateralized by real estate. At March 31, 2018 and December 31, 2017, residential real estate loans accounted for 82%, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At March 31, 2018 and December 31, 2017, approximately 96% and 95% of the loan portfolio was originated in California, respectively. Investment Securities Investment securities includes available for sale debt securities and equity securities. Debt Securities Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the investment securities when they are purchased. Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of income taxes. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of mortgage-backed securities, over the estimated life of the investment security using the effective yield method. Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method. Management evaluates the debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary. If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the condensed consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the condensed consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss). Equity Securities Beginning January 1, 2018, equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in net income. Refer to Note 3, Investment Securities. For periods prior to January 1, 2018, equity securities were classified as available for sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. The Company performs a qualitative assessment each reporting period to identify impairment. When a qualitative assessment indicates that an impairment exists, the Company determines the fair value of the investment and records an impairment loss equal to the difference between the fair value and the carrying amount of the investment in net income. Federal Home Loan Bank Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities in the condensed consolidated statements of income. Cash dividends received amounted $390 and $196 for the three months ended March 31, 2018 and 2017, respectively. Revenue from Contracts with Customers On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606” ) , which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts to provide goods or services to its customers. The core principle of ASC 606 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performed obligations are satisfied. The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of the adoption date. The adoption of ASC 606 did not result in a change in the accounting for any of the in-scope revenue streams; as such no cumulative effect adjustment was recorded. The majority of the Company’s revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, that are not within the scope of ASC 606 and subject to other accounting guidance. The Company’s services that are within the scope of ASC 606 are recorded within non-interest income which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the condensed consolidated statements of income as components of non-interest income, are as follows: Service charges on deposit accounts : The Bank earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Bank satisfies the performance obligations. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Investment management and advisory fees : The Bank enters into a contract with its customer to provide asset management services that will continue indefinitely unless terminated in writing by either party to the other. The Bank receives a quarterly management fee, payable in advance, based on the customer’s assets held under management at the beginning of the period. These fees are earned over time as the Bank provides the contracted services and are assessed based on a tiered rate applied to the market value of assets held under management. The Bank does not earn performance-based incentives. Interchange fees: The Bank earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Such interchange activity is shown on a net basis through other non-interest income. Other service charges and fees: Other charges and fees includes revenue generated from wire transfers, lockboxes, and bank issuance of checks. Such fees are recognized at the point in time the customer requests the service and the service has been rendered. The following table presents the Company’s sources of non-interest income for the three months ended March 31, 2018 and 2017 that are within the scope of ASC 606: Three Months Ended 2018 2017 Non-Interest Income: Service charges on deposit accounts* $ $ Investment management and advisory fees Interchange fees* Other service charges and fees* Not within the scope of ASC 606 Total non-interest income $ $ * Included in service charges and fees in the condensed consolidated statements of income Contract Balances The Bank’s noninterest revenue streams are largely based on transactional activity, or month-end revenue accruals such as investment management and advisory fees based on the customer’s assets held under management at the beginning of the period. Consideration is often received immediately or shortly thereafter, and the Bank satisfies its performance obligation and recognizes revenue over time. At March 31, 2018 and December 31, 2017, the Bank had a contract asset balance of $82 and $91 respectively, which was recorded in other assets in the condensed consolidated balance sheets. Stock-based compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company’s Board of Directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model and the fair value of restricted stock awards is based on the market price of the Company’s common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company’s accounting policy is to record forfeitures in the period that they occur. Income per Share, Basic and Diluted Basic income per share represents net income divided by the weighted average number of common shares outstanding during the period. Diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding dilutive potential common shares. Recently Issued Accounting Guidance In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which is intended to improve financial reporting by requiring recording of credit losses on loans and other financial instruments on a more timely basis. The guidance will replace the current incurred loss accounting model with an expected loss approach and requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. ASU No. 2016-13 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2019. The Company is currently evaluating the impact of ASU No. 2016-13 but expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or the overall impact of ASU No. 2016-13 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which require lessees to recognize the following for all leases, except for short-term leases, at the commencement date: (1) a lease liability which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. ASU No. 2016-02 will also require expanded disclosures. ASU No. 2016-02 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the ASU No. 2016-02 on its financial condition and results of operations. The Company will record a right-of-use asset and a lease liability on its consolidated balance sheet for the leases of its facilities in place at adoption of this ASU. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2018 | |
Investment Securities | |
Investment Securities | Note 3—Investment Securities Debt Securities The following tables summarize the amortized cost and fair value of debt securities available for sale at March 31, 2018 and December 31, 2017 and the corresponding amounts of gross unrealized gains and losses: March 31, 2018 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ $ — $ ) $ Collateralized mortgage obligations — Collateralized debt obligations — ) Total $ $ $ ) $ December 31, 2017 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ $ — $ ) $ Collateralized mortgage obligations — Collateralized debt obligations — ) Total $ $ $ ) $ The Company held no securities of any single issuer, other than debt securities issued by the U.S. government, government agency and government-sponsored enterprises, which were in excess of 10% of shareholders’ equity as of March 31, 2018 and December 31, 2017. There were no sales of debt securities available for sale for the three months ended March 31, 2018 and 2017. The amortized cost and fair value of debt securities available for sale issued by U.S. Treasury at March 31, 2018 are shown by contractual maturity. Mortgage-backed securities and collateralized debt obligations are disclosed separately in the table below as the expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Fair U.S. Treasury securities Due less than one year $ $ Collateralized mortgage obligations Collateralized debt obligations Total $ $ The table summarizes debt securities available for sale, at fair value, with unrealized losses at March 31, 2018 and December 31, 2017 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position, as follows: March 31, 2018 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury securities $ $ ) $ — $ — $ $ ) Collateralized debt obligations — — ) ) Total $ $ ) $ $ ) $ $ ) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury securities $ $ ) $ — $ — $ $ ) Collateralized debt obligations — — ) ) Total $ $ ) $ $ ) $ $ ) At March 31, 2018, the Company’s debt securities portfolio consisted of 9 debt securities, with 7 debt securities in an unrealized loss position. For debt securities in an unrealized loss position, management has both the intent and ability to hold these investments until the recovery of the decline; thus, the impairment was determined to be temporary. All interest and dividends are considered taxable. The Company holds a collateralized debt obligation with a carrying value of $298 and $571 at March 31, 2018 and December 31, 2017, respectively. The security was rated high quality at inception, but it was subsequently rated by Moody’s as B1, which is defined as “extremely speculative.” The issuers of the security are primarily banks. The Company uses in-house and third party other-than-temporary impairment evaluation models to compare the present value of expected cash flows to the previous estimate to ensure there are no adverse changes in cash flows during the period. The other-than-temporary impairment model considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers. Assumptions used in the model include expected future default rates and prepayments. The security remained classified as available for sale and represented $13 and $35 of the unrealized losses reported at March 31, 2018 and December 31, 2017, respectively. Equity Securities Equity securities consist of an investment in a qualified community reinvestment act investment fund, which is a publicly-traded mutual fund and an investment in Pacific Coast Banker’s Bank, a thinly traded, restricted stock. At March 31, 2018 and December 31, 2017, equity securities totaled $4,163 and $4,227, respectively. Prior to January 1, 2018, equity securities were stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. On January 1, 2018, the Company adopted ASU No. 2016-01, Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”) and early adopted ASU No. 2018-03, Technical Corrections and Improvements to Financial Instruments — Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2018-03”). ASU No. 2016-01 requires equity investments, except those investments accounted for under the equity method of accounting, to be measured at fair value with changes in fair value recognized in net income. Also, for equity investments without readily determinable fair values, ASU No. 2016-01 provides a new measurement alternative. ASU No. 2016-01 requires a cumulative-effect adjustment to retained earnings as of the beginning of the reporting period of adoption to reclassify the cumulative change in fair value of equity securities previously recognized in accumulated other comprehensive income. ASU No. 2018-03 clarifies certain aspects of the guidance in ASU No. 2016-01 primarily pertaining to the measurement alternative for equity securities without readily determinable fair values. On January 1, 2018, the Company recorded a cumulative-effect adjustment to decrease retained earnings by $50 with offsetting adjustment to accumulated other comprehensive income. Beginning January 1, 2018, equity securities with readily determinable fair values are stated at fair value with realized and unrealized gains and losses reported in income. At March 31, 2018 and December 31, 2017, equity securities with readily determinable fair values were $3,917 and $3,981, respectively. The following is a summary of unrealized and realized gains and losses recognized in the condensed consolidated statement of income during the three months ended March 31, 2018: Three months ended Net losses recorded during the period on equity securities $ ) Less: Net losses recorded during the period on equity securities sold during the period — Unrealized losses recorded during the period on equity securities held at the reporting date $ ) The Company has elected to account for its investment in a thinly traded, restricted stock reported at $246 at March 31, 2018 and December 31, 2017 using the measurement alternative for equity securities without readily determinable fair values. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2018 | |
Loans | |
Loans | Note 4—Loans Major categories of loans were as follows: March 31, December 31, 2018 2017 Construction loans $ $ Residential real estate loans, mortgage Commercial real estate loans, mortgage Commercial and industrial loans, lines of credit Other consumer loans Total loans Less: allowance for loan losses ) ) Loans, net $ $ Loans with carrying values of $1,038.7 million and $968.4 million were pledged as collateral on FHLB borrowings at March 31, 2018 and December 31, 2017, respectively. The table presents the activity in the allowance for loan losses by portfolio segment for the three months ending March 31, 2018 and 2017: March 31, 2018 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ Provision for loan losses ) — Charge offs — — — — — — — Recoveries — — — Total ending balance $ $ $ $ $ $ $ March 31, 2017 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ Provision for loan losses — — Charge offs — — — — — — — Recoveries — — — Total ending balance $ $ $ $ $ $ $ The following tables present the balance in the allowance for loan losses and the recorded investment by portfolio segment and based on impairment method as of March 31, 2018 and December 31, 2017: March 31, 2018 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ $ $ $ — $ — $ Collectively evaluated for impairment Total ending allowance balance $ $ $ $ $ $ $ Loans: Loans individually evaluated for impairment $ — $ $ $ $ — $ — $ Loans collectively evaluated for impairment — Total ending loans balance $ $ $ $ $ $ — $ December 31, 2017 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ $ $ $ — $ — $ Collectively evaluated for impairment Total ending allowance balance $ $ $ $ $ $ $ Loans: Loans individually evaluated for impairment $ — $ $ $ $ — $ — $ Loans collectively evaluated for impairment — Total ending loans balance $ $ $ $ $ $ — $ The following tables present information related to impaired loans by class of loans as of and for the periods indicated: At March 31, 2018 At December 31, 2017 Unpaid Recorded Allowance Unpaid Recorded Allowance With no related allowance for loan losses recorded: Commercial real estate, retail $ $ $ — $ $ $ — Commercial lines of credit, private banking — — Subtotal — — With an allowance for loan losses recorded: Residential real estate, first mortgage Commercial real estate, offices Commercial lines of credit, private banking Subtotal Total $ $ $ $ $ $ Three Months Ended March 31, 2018 2017 Average Interest Cash Basis Average Interest Cash Basis With no related allowance recorded: Residential real estate, construction $ — $ — $ — $ — $ — $ — Commercial real estate: Retail Gas stations — — — — — Commercial lines of credit, private banking Subtotal With an allowance recorded: Residential real estate, first mortgage Commercial real estate, offices Commercial lines of credit, private banking Subtotal Total $ $ $ $ $ $ The unpaid principal balance is not reduced for partial charge offs. The recorded investment excludes accrued interest receivable on loans which was not significant. Also presented in the above table is the average recorded investment of the impaired loans and the related amount of interest recognized during the time within the period that the impaired loans were impaired. When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method. The average balances are calculated based on the month-end balances of the loans for the period reported. The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2018 and December 31, 2017: March 31, 2018 December 31, 2017 Nonaccrual Loans Past Nonaccrual Loans Past Residential real estate: Residential first mortgage $ $ $ $ Commercial real estate: Retail — — Total $ $ $ $ The following tables present the aging of the recorded investment in past due loans as of March 31, 2018 and December 31, 2017 by class of loans: March 31, 2018 30 - 59 60 - 89 Greater Total Loans Not Total Construction $ — $ — $ — $ — $ $ Residential real estate: Residential first mortgage Residential second mortgage — — Commercial real estate: Retail — — Apartments — — — — Offices — — — — Hotel — — — — Industrial — — — — Gas stations — — — — Other — — — — Commercial lines of credit: Private banking — — — — C&I lending — — — — Other consumer loans — — — — Total $ $ $ $ $ $ December 31, 2017 30 - 59 60 - 89 Greater Total Loans Not Total Construction $ — $ — $ — $ — $ $ Residential real estate: Residential first mortgage Residential second mortgage — — Commercial real estate: Retail — — Apartments — — — — Offices — — — — Hotel — — — — Industrial — — — — Gas stations — — — — Other — — — — Commercial lines of credit: Private banking — — — — C&I lending — — — — Other consumer loans — — — — Total $ $ $ $ $ $ The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which is presented above, and by payment activity. The Company reviews the status of nonperforming loans which include loans 90 days past due and still accruing and nonaccrual loans. Troubled Debt Restructurings At March 31, 2018 and December 31, 2017, the balance of outstanding loans identified as troubled debt restructurings was $3,041 and $3,073, respectively. The Company has an allowance for loan losses of $57 and $56 on these loans at March 31, 2018 and December 31, 2017, respectively. There were no loans identified as troubled debt restructurings that subsequently defaulted. The terms of certain loans have been modified as troubled debt restructurings by the Company. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; extension of the amortization period of the loan; change in loan payments to interest only for a defined period for the loan; or a permanent reduction of the recorded investment in the loan. During the three months ended March 31, 2018 and 2017, the Company did not modify any loans as a troubled debt restructuring. The terms of certain other loans have been modified during the three months ended March 31, 2018 and 2017 that did not meet the definition of a troubled debt restructuring. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment. These other loans that were modified were not considered significant. Credit Quality The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes homogeneous loans such as residential real estate and consumer loans and non-homogeneous loans, such as commercial lines of credit, construction and commercial real estate loans. This analysis is performed monthly. The Company uses the following definitions for risk ratings: Pass: Loans are of satisfactory quality. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable. At March 31, 2018 and December 31, 2017, the risk rating of loans by class of loans was as follows: March 31, 2018 Pass Special Substandard Doubtful Total Construction $ $ $ $ — $ Residential real estate: Residential first mortgage — Residential second mortgage — — — Commercial real estate: Retail — — Apartments — — Offices — — — Hotel — — — Industrial — — — Gas stations — — — Other — Commercial lines of credit: Private banking — — C&I lending — — Other consumer loans — — — Total $ $ $ $ $ December 31, 2017 Pass Special Substandard Doubtful Total Construction $ $ $ $ — $ Residential real estate: Residential first mortgage — Residential second mortgage — — — Commercial real estate: Retail — Apartments — — Offices — — — Hotel — — — Industrial — — — Gas stations — — — Other — Commercial lines of credit: Private banking — — C&I lending — — — Other consumer loans — — — Total $ $ $ $ $ During the three months ended March 31, 2018 and 2017, the Bank sold pools of residential real estate mortgages for $112.2 million and $105.2 million, respectively, to third-party investors. The transactions resulted in full derecognition of the mortgages (i.e. transferred assets) from the consolidated balance sheets and recognition of gain on sale of portfolio loans of $3.9 million for each of the three months ended March 31, 2018 and 2017, respectively. After the sales, the Bank’s only continuing involvement in the transferred assets is to act as servicer of the mortgages. |
Mortgage Servicing Rights
Mortgage Servicing Rights | 3 Months Ended |
Mar. 31, 2018 | |
Mortgage Servicing Rights | |
Mortgage Servicing Rights | Note 5—Mortgage Servicing Rights The Bank records servicing assets from the sale of mortgage loans to the secondary market for which servicing has been retained. Residential real estate mortgage loans serviced for others are not included in the consolidated balance sheets. The principal balance of these loans at March 31, 2018 and December 31, 2017 are as follows: March 31, December 31, Residential real estate mortgage loan portfolios serviced for: FNMA $ $ FHLB Private investors Custodial escrow balances maintained with these serviced loans were $15,458 and $11,944 at March 31, 2018 and December 31, 2017, respectively. Activity for mortgage servicing rights and the related valuation allowance are as follows: Three Months Ended 2018 2017 Mortgage servicing rights: Beginning of period $ $ Additions Amortization ) ) End of period Valuation allowance at beginning of period Additions (recoveries) ) ) Valuation allowance at end of period Net carrying amount $ $ Mortgage servicing assets were $7,780 and $6,496 at March 31, 2018 and December 31, 2017, respectively. Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance, was $477 and $169 for the three months ended March 31, 2018 and 2017, respectively, and were included in other non-interest income in the condensed consolidated statements of income. The fair value of mortgage servicing rights was $9,074 and $7,086 at Mach 31, 2018 and December 31, 2017, respectively. The fair value of mortgage servicing rights is highly sensitive to changes in underlying assumptions. Changes in prepayment speed assumptions have the most significant impact on the estimate of the fair value of mortgage servicing rights. The fair value at March 31, 2018 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds ranging from 6.8% to 31.2%, depending on the stratification of the specific right, and a weighted average default rate of 0.2%. The fair value at December 31, 2017 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds ranging from 6.8% to 36.0%, depending on the stratification of the specific right, and a weighted average default rate of 0.2%. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2018 | |
Deposits | |
Deposits | Note 6—Deposits Time deposits, included in interest-bearing deposits, were $679,622 and $663,472 at March 31, 2018 and December 31, 2017, respectively. Time deposits includes brokered deposits of $79,510 and $156,084 at March 31, 2018 and December 31, 2017, respectively. Time deposits that meet or exceed the FDIC insurance limit of $250 were $150,523 and $129,101 at March 31, 2018 and December 31, 2017, respectively. |
Federal Home Loan Bank Borrowin
Federal Home Loan Bank Borrowings | 3 Months Ended |
Mar. 31, 2018 | |
Federal Home Loan Bank Borrowings | |
Federal Home Loan Bank Borrowings | Note 7—Federal Home Loan Bank Borrowings Federal Home Loan Bank borrowings at March 31, 2018 and December 31, 2017 consist of the following: March 31, Interest Rates December 31, Interest Rates Short-term fixed rate advances $ 1.78% $ 1.47% - 1.56% Short-term adjustable rate advances 2.06%* — Total short-term FHLB advances Long-term fixed rate advances 0.98%-1.18% 0.98% - 1.18% Total FHLB advances FHLB overdraft line of credit 2.06%* — Total $ $ * At period end. FHLB Advances At March 31, 2018, fixed rate advances totaled $315,000 with maturity dates ranging from April 2018 to October 2026. Also, at March 31, 2018, the Bank had a variable rate advance of $15,000 (interest rate of 2.06% at March 31, 2018) with a maturity date of September 2018. Interest on advances is payable monthly and each advance is payable at its maturity date, and may contain a prepayment penalty if paid before maturity. At March 31, 2018, advances totaling $157,000 were callable by the FHLB as follows: $67,000 in September 2021; and $90,000 in October 2021. At March 31, 2018, the Bank had additional borrowing capacity of $374 million from the FHLB. FHLB Overdraft Line of Credit The Bank has established an overdraft line of credit agreement with the FHLB providing maximum borrowings of $50,000. The average amount outstanding during the three months ended March 31, 2018 and 2017 was $3,673 and $14,597, respectively. At March 31, 2018, the Bank had $12,937 outstanding under this agreement. Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 2.06% and 1.67% at March 31, 2018 and December 31, 2017, respectively. The agreement has a one-year term and terminates in October 2018. The FHLB advances and the overdraft line of credit are collateralized by pledged loans totaling $1,038.7 million at March 31, 2018. Other Borrowings The Company had available credit lines with other banks totaling $60 million. There were no amounts outstanding under these credit lines at March 31, 2018 and December 31, 2017. |
Subordinated Notes, net
Subordinated Notes, net | 3 Months Ended |
Mar. 31, 2018 | |
Subordinated Notes, net | |
Subordinated Notes, net | Note 8—Subordinated Notes, net The subordinated notes were as follows: March 31, December 31, 7.0% fixed to floating rate subordinated notes $ $ Unamortized note premium Unamortized debt issuance costs ) ) Total $ $ In August 2017, the Company issued an additional $15 million in aggregate principal amount of subordinated notes to accredited investors. The terms of the subordinated note purchase agreements were substantially identical to the subordinated notes that were previously issued in 2016 (collectively, “Notes”), except that the first interest payment on the subordinated notes included accrued interest from April 15, 2017. The Company recorded a premium of $611 and debt issuance costs of $191 upon issuance of the notes. During the period April through September 2016, the Company issued subordinated notes to accredited investors in the aggregate principal amount of $50 million. Issuance costs of $729 were netted against the proceeds. The Notes bear interest at 7% per annum, payable semi-annually on April 15 and October 15 in arrears, through April 2021 after which the Notes will have a variable interest rate of the three-month LIBOR rate plus a margin of 5.82%. Premiums and debt issuance costs are amortized over the contractual term of the Notes into interest expense using the effective interest method. Interest expense on these Notes was $1,172 and $908 for the three months ended March 31, 2018 and 2017, respectively. The Notes mature in April 2026. On or after April 14, 2021, the Company may redeem the Notes, in whole or in part, at an amount equal to 100% of the outstanding principal amount being redeemed plus accrued interest, in a principal amount with integral multiples of $1. The Notes are not redeemable by the Company prior to April 14, 2021 except in the event of (i) the Notes no longer qualify as Tier 2 Capital, (ii) the interest on the Notes is determined by law to be not deductible for Federal Income Tax reporting or (iii) the Company is considered an investment company pursuant to the Investment Company Act of 1940. The Notes are not subject to redemption by the noteholder. The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of the Company’s current and future subsidiaries, including the Bank’s deposits as well as the Company’s subsidiaries liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 1 capital of the Bank and Tier 2 capital for the Company under current regulatory guidelines and interpretations. As long as the Notes are outstanding, the Company is permitted to pay dividends if prior to such dividends, the Bank is considered well capitalized, as defined below. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based Compensation | |
Stock-based Compensation | Note 9—Stock-based Compensation The Board of Directors established a 2017 Omnibus Equity Incentive Plan (“The Plan”) which was approved by the shareholders in October 2017. The Plan provides for the grant of up to 4,237,100 shares of common stock for stock options, stock appreciation rights, restricted stock, restricted stock units and other stock-based awards for issuance to employees, consultants and Board of Directors of the Company. The stock-based awards are issued at no less than the market price on the date the awards are granted. Stock Options Stock option awards are granted with an exercise price equal to the market price of the Company’s common stock on the date of grant. The stock option awards generally vest in installments of 50% in each of the third and fourth year after the date of grant and have a maximum term of ten years. The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model that uses the assumptions noted below. Estimating the grant date fair values for employee stock options requires management to make assumptions regarding expected volatility of the value of those underlying shares, the risk-free rate over the expected life of the stock options and the date on which share-based payments will be settled. Expected volatilities are based on a weighted average of the Company’s historic volatility and an implied volatility for a group of industry-relevant bank holding companies as of the measurement date. The expected term of options granted is calculated using the simplified method (the midpoint between the end of the vesting period and the end of the maximum term). The risk-free rate for the expected term of the option is based upon U.S. Treasury yield curve in effect at the time of grant. Expected dividend yield represents what the Company anticipates will be declared during the expected term of the options. On March 21, 2018, the Board of Directors approved the issuance of options to purchase 92,625 shares of common stock with an exercise price of $13.73 to certain key employees which are accounted for as equity awards. These options to purchase shares of common stock had a weighted average grant-date fair value of $4.56 per option. The grant-date fair value of each stock option award for the three months ended March 31, 2018 is estimated using the Black-Scholes option pricing model that uses the assumptions set forth in the following table: Exercise price of options $ Risk-free interest rate % Expected term (in years) Expected stock price volatility % Dividend yield .29 % A summary of the Company’s stock option activity as of and for the three months ended March 31, 2018 is as follows: Number Weighted Weighted Aggregate (Years) Outstanding at January 1, 2018 — $ — — $ — Granted Exercised — — Forfeited/expired — — Outstanding at March 31, 2018 $ $ — The Company recorded share-based compensation expense associated with stock options of $3 for the three months ended March 31, 2018. At March 31, 2018, there was $419 of total unrecognized compensation cost related to nonvested stock options granted under the Plan. The cost is expected to be recognized over a weighted-average period of 3.75 years. No options are exercisable at March 31, 2018. Restricted Stock Awards The value of a restricted stock award is based on the market value of the Company’s common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. On March 21, 2018, the Board of Directors approved the issuance of 39,655 restricted stock awards to certain key employees and non-employee directors. The restricted stock awards of 33,100 issued to key employees vest in installments of 50% in each of the third and fourth year after the date of grant. The 6,555 restricted stock awards issued to non-employee directors vest on the first anniversary of the grant date. The restricted stock awards were issued with a weighted average grant-date fair value of $13.60. Upon a change in control, as defined in the Plan, the outstanding restricted stock awards will immediately vest. The fair value of the award is recorded as compensation expense on a straight-line basis over the vesting period. The Company recorded share-based compensation expense associated with restricted stock awards of $6 for the three months ended March 31, 2018. At March 31, 2018, there was $534 of total unrecognized compensation cost related to the nonvested stock granted under the Plan. The cost is expected to be recognized over a weighted-average period of 3.48 years. |
Income Per Share
Income Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Income Per Share | |
Income Per Share | Note 10— Income Per Share Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted income per common share further includes any common shares available to be issued upon the exercise of outstanding stock options and restricted stock awards if such inclusions would be dilutive. The Company determines the potentially dilutive common shares using the treasury stock method. For the three months ended March 31, 2018 basic income per share and diluted income per share were the same since the effect of the potential dilutive securities were considered antidilutive. Potentially dilutive securities, consisting of 39,655 nonvested restricted shares of common stock and 92,625 options to purchase shares of common stock, were excluded from the diluted per share calculation. There were no dilutive securities outstanding for the three months ended March 31, 2017. In September 2017, the Board of Directors approved a 1,000 for one stock split to be effected as a stock dividend on the Company’s common stock. The stock split was effected on September 11, 2017. All share and per share amounts have been retroactively adjusted to reflect the stock split for the three months ended March 31, 2017. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 3 Months Ended |
Mar. 31, 2018 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 11—Fair Values of Financial Instruments The Company’s financial instruments include assets carried at fair value, as well as assets carried at cost or amortized cost but disclosed at fair value in these consolidated financial statements. Fair value is defined as the exit price, the price that would be received for an asset or paid to transfer a liability in the principal most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date under current market conditions. The inputs to valuation techniques used to measure fair value are prioritized into a three-level hierarchy. The hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs. The fair value hierarchy is as follows: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The Company used the following methods and significant assumptions to estimate the fair value of investment securities available for sale: Investment Securities The fair values for investment securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar investment securities (Level 2). For investment securities where quoted prices or market prices of similar investment securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). Discounted cash flows are calculated using spread to LIBOR curves that are updated to incorporate loss severities, volatility, credit spread and optionality. During times when trading is more liquid, broker quotes are used (if available) to validate the model. Rating agency and industry research reports as well as defaults and deferrals on individual investment securities are reviewed and incorporated into the calculations. Assets Measured at Fair Value on a Recurring Basis The table below presents the assets measured at fair value on a recurring basis categorized by the level of inputs used in the valuation of each asset at March 31, 2018 and December 31, 2017: Fair Value Measurements at Total Quoted Prices Significant Significant Financial Assets Available for sale debt securities: U.S. Treasury securities $ $ $ — $ — Collateralized mortgage obligations — — Collateralized debt obligations — — Equity securities — — Fair Value Measurements at Total Quoted Prices Significant Significant Financial Assets Available for sale debt securities: U.S. Treasury securities $ $ $ — $ — Collateralized mortgage obligations — — Collateralized debt obligations — — Equity securities — * * The Company has elected to account for its investment in a thinly traded, restricted stock with a carrying value of $246 using the measurement alternative for equity securities without a readily determinable fair value therefore, the investment is excluded from the fair value measurement disclosures at March 31, 2018. There were no transfers between Level 1 and Level 2 during 2018 and 2017. The table below presents a reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at March 31, 2018 and December 31, 2017: Fair Value Measurements Using Significant Investment Securities March 31, 2018 December 31, 2017 Collateralized Equity Collateralized Equity Balance of recurring Level 3 assets at beginning of period $ $ — $ $ Total gains or losses (realized/unrealized): Included in income-realized — — — — Included in other comprehensive income (loss) — ) — Principal maturities/settlements ) — ) ) Sales — — — — Transfers in and/or out of Level 3 — — — — Balance at end of period $ $ — $ $ Unrealized losses on Level 3 investments for collateralized debt obligations at March 31, 2018 was $13. In addition to the amounts included in income for the three months ended March 31, 2018 as presented in the table above, the Company also recorded interest income on collateralized debt obligations of $5. Unrealized losses on Level 3 investments for collateralized debt obligations and equity securities at December 31, 2017 were $35 and $0, respectively. In addition to the amounts included in income for the year ended December 31, 2017 as presented in the table above, the Company also recorded interest income on collateralized debt obligations of $21 and dividend income on equity securities of $15. The fair value of collateralized debt obligations is determined by calculating discounted cash flows using LIBOR curves plus spreads that adjust for loss severities, volatility, credit risk and optionality. When available, broker quotes are used to validate the internal model. Rating agency and industry research reports as well as assumptions about specific-issuer defaults and deferrals are reviewed and incorporated into the calculations. Assumptions are reviewed on a quarterly basis as specific-issuer deferral and defaults that occurred are compared to those that were projected and ongoing assumptions are adjusted in accordance with the level of unexpected deferrals and defaults that occurred. The following table presents quantitative information about recurring Level 3 fair value measurements at March 31, 2018 and December 31, 2017: Fair Value Valuation Unobservable Inputs March 31, 2018 Collateralized debt obligations $ Discounted cash flow Collateral default rate Recovery probability December 31, 2017 Collateralized debt obligations $ Discounted cash flow Collateral default rate Recovery probability The significant unobservable inputs used on the fair value measurement of the Company’s collateralized debt obligations are probabilities of specific-issuer defaults and specific-issuer recovery assumptions. Significant increases in specific-issuer default assumptions or decreases in specific-issuer recovery assumptions would result in a significantly lower fair value measurement. Conversely, decreases in specific-issuer default assumptions or increases in specific-issuer recovery assumptions would result in a significantly higher fair value measurement. Assets Measured at Fair Value on a Non-Recurring Basis From time to time, the Bank may be required to measure certain other assets at fair value on a nonrecurring basis in accordance with U.S. GAAP. These adjustments to fair value usually result from the application of lower of cost or fair value accounting or write-downs of individual assets. There were no assets held at fair value on a non-recurring basis at March 31, 2018 and December 31, 2017. Fair Value of Financial Instruments With the adoption of ASU No. 2016-01, the Company is required to calculate fair value of its financial instruments for disclosure purposes based on an exit price notion. The Company is not required to revise its prior-period disclosures of fair value for those financial instruments that may have been calculated using the entry price notion, which was acceptable prior to January 1, 2018. Therefore, the prior-period fair values disclosed may not be determined in a manner consistent with the current-period fair values disclosed because of a change in methodology. The carrying amounts and estimated fair values of financial instruments not carried at fair value at March 31, 2018 and December 31, 2017, are as follows: Fair Value Measurements at March 31, 2018 Carrying Fair Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ $ $ $ — $ — Mortgage loans held for sale — — Loans, net — — Financial Liabilities Time deposits — — Federal Home Loan Bank borrowings — — Subordinated notes, net — — Fair Value Measurements at December 31, 2017 Carrying Fair Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ $ $ $ — $ — Mortgage loans held for sale — — Loans, net — — Financial Liabilities Time deposits — — Federal Home Loan Bank borrowings — — Subordinated notes, net — — |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Income Taxes | Note 12—Income Taxes The Tax Cut and Jobs Act (the “Tax Act”) enacted in December 2017 reduced the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Due to the change in tax rate, the Company was required to remeasure its deferred tax assets and liabilities, including the deferred tax balance attributable to items of pretax comprehensive income (loss), based on the rates at which they are expected to reverse in the future. The effect of the Tax Act of $3.3 million was recorded in deferred income tax expense in the fourth quarter and year ended December 31, 2017 which related entirely to the remeasurement of the net deferred tax asset. The Company has implemented the new corporate tax rate in the three months ended March 31, 2018. The reconciliation of the U.S. federal statutory tax rate to the Company’s effective tax rate is as follows: Three Months Ended 2018 2017 U.S. federal statutory rate % % Effect of: State taxes, net of federal benefit % % Loss incurred by pass-through entity — % % Income on cash surrender value of bank-owned life insurance )% )% Effective tax rate % % |
Regulatory Capital Requirements
Regulatory Capital Requirements | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 13—Regulatory Capital Requirements The Bank is subject to the capital adequacy requirements of the OCC. The Company, as a thrift holding company, is subject to the capital adequacy requirements of the Federal Reserve. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Prompt corrective action provisions are not applicable to thrift holding companies. Failure to meet minimum capital requirements can initiate regulatory action that could have a direct material effect on the consolidated financial statements. The final rules implementing Basel III became effective on January 1, 2015 with full compliance with all requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. Under the Basel III rules, the Company must hold a capital conservation buffer over the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from 0.0% for 2015 to 2.50% by 2019. The capital conservation buffer is 1.875% for 2018. The net unrealized gain or loss on investment securities is not included in regulatory capital. Management believes that as of March 31, 2018, the Company and the Bank meet all regulatory capital requirements to which they are subject. Prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. The minimum requirements, excluding significantly undercapitalized and critically undercapitalized categories, are as follows: Capital Tier 1 Common Total Tier 1 Assets (CET1) Well Capitalized % % % % Adequately Capitalized % % % % Undercapitalized % % % % At March 31, 2018, the most recent regulatory notifications categorized the Bank as well capitalized. There have been no conditions or events since these notifications that management believes would have changed the Bank’s category. At March 31, 2018 and December 31, 2017, the Bank exceeded all capital requirements to be categorized as well-capitalized and the Company exceeded the Capital Adequacy requirements as presented below. The Company and the Bank’s actual and minimum required capital amounts and ratios, not including the capital conservation buffer, at March 31, 2018 and December 31, 2017 are as follows: Actual For Capital To be Well Amount Ratio Amount Ratio Amount Ratio March 31, 2018 Total adjusted capital to risk weighted assets Consolidated $ % $ % N/A N/A Bank $ % Tier 1 (core) capital to risk weighted assets Consolidated N/A N/A Bank Common Tier 1 (CET1) Consolidated N/A N/A Bank Tier 1 (core) capital to adjusted tangible assets Consolidated N/A N/A Bank Actual For Capital To be Well Amount Ratio Amount Ratio Amount Ratio December 31, 2017 Total adjusted capital to risk weighted assets Consolidated $ % $ % N/A N/A Bank $ % Tier 1 (core) capital to risk weighted assets Consolidated N/A N/A Bank Common Tier 1 (CET1) Consolidated N/A N/A Bank Tier 1 (core) capital to adjusted tangible assets Consolidated N/A N/A Bank Dividend Restrictions As noted above, banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the bank to the holding company or by the holding company to its shareholders. The Company’s principal source of funds for dividend payments is dividends received from the Bank and banking regulations limit the dividends that may be paid. Also, pursuant to the terms of the subordinated note agreements, the Company may pay dividends if it is “well capitalized” as defined by regulatory guidelines. At March 31, 2018, $139.9 million of consolidated retained earnings were available to pay dividends to the Company’s shareholders. The Qualified Thrift Lender (“QTL”) test requires that a minimum of 65% of assets be maintained in housing-related finance and other specified areas. If the QTL test is not met, limits are placed on growth, branching, new investments, FHLB Advances and dividends, or the Bank must convert to a commercial bank charter. Management believes that the QTL test has been met. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | Note 14—Related Party Transactions As disclosed in Note 1, the Company purchased an entity owned 80% by its principal shareholder and 20% by a member of the Board of Directors of the Company and Bank. At the time of the purchase in April 2017, the Director was and will continue as the Chief Executive Officer (“CEO”) of the purchased entity. For the three months ended March 31, 2017, the consolidated statements of income include compensation-related expenses of $125 for the Director’s services as CEO of this purchased entity. From time to time, the Company makes charitable contributions to a foundation which certain members of the Board of Directors of the Company and Bank, and whom are also related to the Company’s principal shareholder, serve as trustees of the foundation. The Company paid $225 to the foundation during each of the three months ended March 31, 2018 and 2017. The Bank leases certain storage and office space from entities owned by the Company’s principal shareholders. Amounts paid under such leases totaled $17 and $9 during the three months ended March 31, 2018 and 2017, respectively. The Bank provides monthly data processing and programming services to entities controlled by the Company’s principal shareholders. Aggregate fees paid amounted to $25 and $27 during the three months ended March 31, 2018 and 2017, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 15—Commitments and Contingencies Legal Proceedings The Company and its subsidiaries may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity. Lease Commitments The Company leases its corporate headquarters and branch offices through noncancelable operating leases with terms that range from years 2009 to 2029, with renewal options thereafter. Rent expense was $921 and $825 for the three months ended March 31, 2018 and 2017, respectively. Financial Instruments with Off-Balance Sheet Risk The Bank is a party to financial instruments with off-balance risk in the normal course of business to meet the financial needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit which are not reflected in the consolidated financial statements. Unfunded Commitments to Extend Credit A commitment to extend credit, such as a loan commitment, credit line and overdraft protection, is a legally binding agreement to lend funds to a customer, usually at a stated interest rate and for a specific purpose. Such commitments have fixed expiration dates and generally require a fee. The extension of a commitment gives rise to credit risk. The actual liquidity requirements or credit risk that the Bank will experience is expected to be lower than the contractual amount of commitments to extend credit because a significant portion of those commitments are expected to expire without being drawn upon. Certain commitments are subject to loan agreements containing covenants regarding the financial performance of the customer that must be met before the Bank is required to fund the commitment. The Bank uses the same credit policies in making commitments to extend credit as it does in making loans. The commitments outstanding to make loans include primarily residential real estate loans that are made for a period of 90 days or less. At March 31, 2018, outstanding commitments to make loans consisted of fixed rate loans of $6,072 with interest rates ranging from 3.75% to 7.00% and maturities ranging from ten years to thirty years and variable rate loans of $258,464 with varying interest rates (ranging from 3.75% to 7.125% at March 31, 2018) and maturities of 25 and 30 years. Standby Letters of Credit Standby letters of credit are issued on behalf of customers in connection with construction contracts between the customers and third parties. Under standby letters of credit, the Bank assures that the third parties will receive specified funds if customers fail to meet their contractual obligations. The credit risk to the Bank arises from its obligation to make payment in the event of a customer’s contractual default. The maximum amount of potential future payments guaranteed by the Bank is limited to the contractual amount of these letters. Collateral made be obtained at exercise of the commitment. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers. The following is a summary of the total amount of unfunded commitments to extend credit and standby letters of credit outstanding at March 31, 2018 and December 31, 2017: March 31, December 31, Commitments to make loans $ $ Unused lines of credit Standby letters of credit |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events | |
Subsequent Events | Note 16—Subsequent Events In March 2018, the Company committed to sell a portfolio of residential real estate loans to third-party investors. In April 2018, the Company received net proceeds of $88.0 million and recorded a gain of $3.2 million on the sale of residential real estate loans. Servicing of the loan portfolio sold was retained by the Company. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements have been prepared using accounting principles generally accepted in the United States of America (“U.S. GAAP”). The consolidated financial statements include the results of the Company and its wholly-owned subsidiary, and an entity under common control that was merged with the Company in April 2017 (Note 1). All significant intercompany accounts and transactions have been eliminated in the consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Bank utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. The determination of fair values of financial instruments often requires the use of estimates. In cases where quoted market values in an active market are not available, the Bank uses present value techniques and other valuations methods, as disclosed in Note 11, to estimate the fair value of its financial instruments. These valuation methods require considerable judgment and the resulting estimates of fair value can be significantly affected by the assumptions made and methods used. Investment securities available for sale are recorded at fair value on a recurring basis. Additionally, from time to time, the Bank may be required to record other assets and liabilities on a nonrecurring basis, such as impaired loans, other real estate owned, nonmarketable equity securities and certain other assets and liabilities. These nonrecurring fair value adjustments generally involve write-downs of individual assets or application of lower of amortized cost or fair value accounting. |
Concentration of Credit Risk | Concentration of Credit Risk The Company’s loan portfolio consists primarily of residential real estate loans which are collateralized by real estate. At March 31, 2018 and December 31, 2017, residential real estate loans accounted for 82%, of the loan portfolio. In addition, most of these residential loans and other commercial loans have been made to individuals and businesses in the state of California which are dependent on the area economy for their livelihoods and servicing of their loan obligation. At March 31, 2018 and December 31, 2017, approximately 96% and 95% of the loan portfolio was originated in California, respectively. |
Investment Securities | Investment Securities Investment securities includes available for sale debt securities and equity securities. Debt Securities Debt securities are classified as either available for sale or held to maturity. Management determines the classification of the investment securities when they are purchased. Debt securities available for sale are stated at fair value, with unrealized gains and losses excluded from income and shown as a separate component of shareholders’ equity in accumulated other comprehensive income (loss), net of income taxes. Held to maturity securities are carried at amortized cost when management has the positive intent and ability to hold them to maturity. The amortized cost of debt securities classified as held to maturity or available for sale is adjusted for amortization of premiums and accretion of discounts over the contractual life of the investment security using the effective interest method or, in the case of mortgage-backed securities, over the estimated life of the investment security using the effective yield method. Interest income includes amortization or accretion of purchase premium or discount. Gains and losses on sales are recorded on the settlement date and determined using the specific identification method. Management evaluates the debt securities for other-than-temporary impairment at least on a quarterly basis and more frequently when economic or market conditions warrant such an evaluation. In determining other-than-temporary impairment for debt securities, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the Company has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery. The assessment of whether a decline is other-than-temporary involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time. A charge is recognized against income for all or a portion of the impairment if the loss is determined to be other than temporary. If the Bank intends to sell the debt security or it is more likely than not that the Bank will be required to sell the debt security prior to the recovery of its amortized cost basis, the debt security is written down to fair value, and the full amount of any impairment charge is recorded as a loss in the condensed consolidated statements of income. If the Bank does not intend to sell the debt security and it is more likely than not that the Bank will not be required to sell the debt security prior to recovery of its amortized cost basis, only the current period credit loss of any impairment of a debt security is recognized in the condensed consolidated statements of income, with the remaining impairment recorded in other comprehensive income (loss). Equity Securities Beginning January 1, 2018, equity securities with readily determinable fair values are stated at fair value with unrealized and realized gains and losses reported in income. Those equity securities without readily determinable fair values are recorded at cost less any impairments, adjusted for subsequent observable price changes in orderly transactions for an identical or similar investment of the same issuer. Any changes in the carrying value of the equity investments are recognized in net income. Refer to Note 3, Investment Securities. For periods prior to January 1, 2018, equity securities were classified as available for sale and stated at fair value with unrealized gains and losses reported as a separate component of accumulated other comprehensive income, net of tax. The Company performs a qualitative assessment each reporting period to identify impairment. When a qualitative assessment indicates that an impairment exists, the Company determines the fair value of the investment and records an impairment loss equal to the difference between the fair value and the carrying amount of the investment in net income. |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest additional amounts. The FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. The FHLB stock does not have a readily determinable fair value and no quoted market value as the ownership is restricted to member institutions. Also, the FHLB stock is pledged as collateral on FHLB borrowings. Cash and stock dividends are reported as income in interest and dividends on investment securities in the condensed consolidated statements of income. Cash dividends received amounted $390 and $196 for the three months ended March 31, 2018 and 2017, respectively. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers On January 1, 2018, the Company adopted Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers and all subsequent amendments to the ASU (collectively, “ASC 606” ) , which establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts to provide goods or services to its customers. The core principle of ASC 606 requires an entity to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration that it expects to be entitled to receive in exchange for those goods or services recognized as performed obligations are satisfied. The Company adopted ASC 606 using the modified retrospective method applied to all contracts not completed as of the adoption date. The adoption of ASC 606 did not result in a change in the accounting for any of the in-scope revenue streams; as such no cumulative effect adjustment was recorded. The majority of the Company’s revenues are from interest income and other sources, including loans and investment securities, as well as fees related to mortgage servicing activities, that are not within the scope of ASC 606 and subject to other accounting guidance. The Company’s services that are within the scope of ASC 606 are recorded within non-interest income which includes investment management and advisory fees, service charges on deposit accounts, interchange income and other service charges and fees. Descriptions of these activities that are within the scope of ASC 606, which are presented in the condensed consolidated statements of income as components of non-interest income, are as follows: Service charges on deposit accounts : The Bank earns fees from its deposit customers for transaction-based, account maintenance and overdraft services. Transaction-based fees, which include services such as ATM use fees, stop payment charges, statement rendering, and ACH fees, are recognized at the time the transaction is executed as that is the point in time the Bank fulfills the customer’s request. Account maintenance fees, which relate primarily to monthly maintenance, are earned over the course of a month, representing the period over which the Bank satisfies the performance obligations. Overdraft fees are recognized at the point in time that the overdraft occurs. Service charges on deposits are withdrawn from the customer’s account balance. Investment management and advisory fees : The Bank enters into a contract with its customer to provide asset management services that will continue indefinitely unless terminated in writing by either party to the other. The Bank receives a quarterly management fee, payable in advance, based on the customer’s assets held under management at the beginning of the period. These fees are earned over time as the Bank provides the contracted services and are assessed based on a tiered rate applied to the market value of assets held under management. The Bank does not earn performance-based incentives. Interchange fees: The Bank earns interchange fees from debit cardholder transactions conducted through the MasterCard payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. Such interchange activity is shown on a net basis through other non-interest income. Other service charges and fees: Other charges and fees includes revenue generated from wire transfers, lockboxes, and bank issuance of checks. Such fees are recognized at the point in time the customer requests the service and the service has been rendered. The following table presents the Company’s sources of non-interest income for the three months ended March 31, 2018 and 2017 that are within the scope of ASC 606: Three Months Ended 2018 2017 Non-Interest Income: Service charges on deposit accounts* $ $ Investment management and advisory fees Interchange fees* Other service charges and fees* Not within the scope of ASC 606 Total non-interest income $ $ * Included in service charges and fees in the condensed consolidated statements of income Contract Balances The Bank’s noninterest revenue streams are largely based on transactional activity, or month-end revenue accruals such as investment management and advisory fees based on the customer’s assets held under management at the beginning of the period. Consideration is often received immediately or shortly thereafter, and the Bank satisfies its performance obligation and recognizes revenue over time. At March 31, 2018 and December 31, 2017, the Bank had a contract asset balance of $82 and $91 respectively, which was recorded in other assets in the condensed consolidated balance sheets. |
Stock-based compensation | Stock-based compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and non-employee members of the Company’s Board of Directors, based on the fair value of these awards at the date of grant. The fair value of stock options is estimated using a Black-Scholes option pricing model and the fair value of restricted stock awards is based on the market price of the Company’s common stock at the date of grant reduced by the present value of dividends per share expected to be paid during the period the shares are not vested. Compensation cost is recorded over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recorded on a straight-line basis over the requisite service period of the entire award. The Company’s accounting policy is to record forfeitures in the period that they occur. |
Income per Share, Basic and Diluted | Income per Share, Basic and Diluted Basic income per share represents net income divided by the weighted average number of common shares outstanding during the period. Diluted income per share represents net income divided by the weighted average number of common shares outstanding during the period, plus the effect of outstanding dilutive potential common shares. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance In June 2016, the Financial Accounting Standards Board (FASB) issued ASU No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which is intended to improve financial reporting by requiring recording of credit losses on loans and other financial instruments on a more timely basis. The guidance will replace the current incurred loss accounting model with an expected loss approach and requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The guidance requires enhanced disclosures to help investors and other financial statement users better understand significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. ASU No. 2016-13 is effective for annual periods and interim periods within those annual periods, beginning after December 15, 2019. The Company is currently evaluating the impact of ASU No. 2016-13 but expects to recognize a one-time cumulative effect adjustment to the allowance for loan losses as of the beginning of the first reporting period in which ASU No. 2016-13 is effective. The Company has not yet determined the magnitude of any such one-time adjustment or the overall impact of ASU No. 2016-13 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) which require lessees to recognize the following for all leases, except for short-term leases, at the commencement date: (1) a lease liability which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. ASU No. 2016-02 will also require expanded disclosures. ASU No. 2016-02 is effective for annual periods and interim periods within those annual periods beginning after December 15, 2018. The Company is currently evaluating the impact of the ASU No. 2016-02 on its financial condition and results of operations. The Company will record a right-of-use asset and a lease liability on its consolidated balance sheet for the leases of its facilities in place at adoption of this ASU. |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Summary of Significant Accounting Policies | |
Schedule of non-interest income within the scope of ASC 606 | Three Months Ended 2018 2017 Non-Interest Income: Service charges on deposit accounts* $ $ Investment management and advisory fees Interchange fees* Other service charges and fees* Not within the scope of ASC 606 Total non-interest income $ $ * Included in service charges and fees in the condensed consolidated statements of income |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Investment Securities | |
Schedule of amortized cost and fair value of debt securities available for sale | March 31, 2018 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ $ — $ ) $ Collateralized mortgage obligations — Collateralized debt obligations — ) Total $ $ $ ) $ December 31, 2017 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ $ — $ ) $ Collateralized mortgage obligations — Collateralized debt obligations — ) Total $ $ $ ) $ |
Schedule of amortized cost and fair value of the debt securities available for sale, shown by contractual maturity | The amortized cost and fair value of debt securities available for sale issued by U.S. Treasury at March 31, 2018 are shown by contractual maturity. Amortized Fair U.S. Treasury securities Due less than one year $ $ Collateralized mortgage obligations Collateralized debt obligations Total $ $ |
Schedule of debt securities available for sale, at fair value, continuous unrealized loss position | March 31, 2018 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury securities $ $ ) $ — $ — $ $ ) Collateralized debt obligations — — ) ) Total $ $ ) $ $ ) $ $ ) December 31, 2017 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized U.S. Treasury securities $ $ ) $ — $ — $ $ ) Collateralized debt obligations — — ) ) Total $ $ ) $ $ ) $ $ ) |
Schedule of equity securities with readily determinable fair values | Three months ended Net losses recorded during the period on equity securities $ ) Less: Net losses recorded during the period on equity securities sold during the period — Unrealized losses recorded during the period on equity securities held at the reporting date $ ) |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Loans | |
Schedule of major categories of loans | March 31, December 31, 2018 2017 Construction loans $ $ Residential real estate loans, mortgage Commercial real estate loans, mortgage Commercial and industrial loans, lines of credit Other consumer loans Total loans Less: allowance for loan losses ) ) Loans, net $ $ |
Summary of activity in allowance for loan losses and recorded investment by portfolio segment | March 31, 2018 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ Provision for loan losses ) — Charge offs — — — — — — — Recoveries — — — Total ending balance $ $ $ $ $ $ $ March 31, 2017 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Beginning balance $ $ $ $ $ $ $ Provision for loan losses — — Charge offs — — — — — — — Recoveries — — — Total ending balance $ $ $ $ $ $ $ March 31, 2018 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ $ $ $ — $ — $ Collectively evaluated for impairment Total ending allowance balance $ $ $ $ $ $ $ Loans: Loans individually evaluated for impairment $ — $ $ $ $ — $ — $ Loans collectively evaluated for impairment — Total ending loans balance $ $ $ $ $ $ — $ December 31, 2017 Construction Residential Commercial Commercial Other Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ — $ $ $ $ — $ — $ Collectively evaluated for impairment Total ending allowance balance $ $ $ $ $ $ $ Loans: Loans individually evaluated for impairment $ — $ $ $ $ — $ — $ Loans collectively evaluated for impairment — Total ending loans balance $ $ $ $ $ $ — $ |
Summary of information related to impaired loans by class of loans | At March 31, 2018 At December 31, 2017 Unpaid Recorded Allowance Unpaid Recorded Allowance With no related allowance for loan losses recorded: Commercial real estate, retail $ $ $ — $ $ $ — Commercial lines of credit, private banking — — Subtotal — — With an allowance for loan losses recorded: Residential real estate, first mortgage Commercial real estate, offices Commercial lines of credit, private banking Subtotal Total $ $ $ $ $ $ Three Months Ended March 31, 2018 2017 Average Interest Cash Basis Average Interest Cash Basis With no related allowance recorded: Residential real estate, construction $ — $ — $ — $ — $ — $ — Commercial real estate: Retail Gas stations — — — — — Commercial lines of credit, private banking Subtotal With an allowance recorded: Residential real estate, first mortgage Commercial real estate, offices Commercial lines of credit, private banking Subtotal Total $ $ $ $ $ $ |
Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans and aging of the recorded investment in past due loans | March 31, 2018 December 31, 2017 Nonaccrual Loans Past Nonaccrual Loans Past Residential real estate: Residential first mortgage $ $ $ $ Commercial real estate: Retail — — Total $ $ $ $ March 31, 2018 30 - 59 60 - 89 Greater Total Loans Not Total Construction $ — $ — $ — $ — $ $ Residential real estate: Residential first mortgage Residential second mortgage — — Commercial real estate: Retail — — Apartments — — — — Offices — — — — Hotel — — — — Industrial — — — — Gas stations — — — — Other — — — — Commercial lines of credit: Private banking — — — — C&I lending — — — — Other consumer loans — — — — Total $ $ $ $ $ $ December 31, 2017 30 - 59 60 - 89 Greater Total Loans Not Total Construction $ — $ — $ — $ — $ $ Residential real estate: Residential first mortgage Residential second mortgage — — Commercial real estate: Retail — — Apartments — — — — Offices — — — — Hotel — — — — Industrial — — — — Gas stations — — — — Other — — — — Commercial lines of credit: Private banking — — — — C&I lending — — — — Other consumer loans — — — — Total $ $ $ $ $ $ |
Schedule of risk rating of loans by class of loans | March 31, 2018 Pass Special Substandard Doubtful Total Construction $ $ $ $ — $ Residential real estate: Residential first mortgage — Residential second mortgage — — — Commercial real estate: Retail — — Apartments — — Offices — — — Hotel — — — Industrial — — — Gas stations — — — Other — Commercial lines of credit: Private banking — — C&I lending — — Other consumer loans — — — Total $ $ $ $ $ December 31, 2017 Pass Special Substandard Doubtful Total Construction $ $ $ $ — $ Residential real estate: Residential first mortgage — Residential second mortgage — — — Commercial real estate: Retail — Apartments — — Offices — — — Hotel — — — Industrial — — — Gas stations — — — Other — Commercial lines of credit: Private banking — — C&I lending — — — Other consumer loans — — — Total $ $ $ $ $ |
Mortgage Servicing Rights (Tabl
Mortgage Servicing Rights (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Mortgage Servicing Rights | |
Schedule of principal balance of mortgage loans serviced for others | March 31, December 31, Residential real estate mortgage loan portfolios serviced for: FNMA $ $ FHLB Private investors |
Schedule of activity for mortgage servicing rights and related valuation allowance | Three Months Ended 2018 2017 Mortgage servicing rights: Beginning of period $ $ Additions Amortization ) ) End of period Valuation allowance at beginning of period Additions (recoveries) ) ) Valuation allowance at end of period Net carrying amount $ $ |
Federal Home Loan Bank Borrow31
Federal Home Loan Bank Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Federal Home Loan Bank Borrowings | |
Schedule of Federal Home Loan Bank (FHLB) borrowings | March 31, Interest Rates December 31, Interest Rates Short-term fixed rate advances $ 1.78% $ 1.47% - 1.56% Short-term adjustable rate advances 2.06%* — Total short-term FHLB advances Long-term fixed rate advances 0.98%-1.18% 0.98% - 1.18% Total FHLB advances FHLB overdraft line of credit 2.06%* — Total $ $ * At period end. |
Subordinated Notes, net (Tables
Subordinated Notes, net (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Subordinated Notes, net | |
Schedule of subordinated notes, net | March 31, December 31, 7.0% fixed to floating rate subordinated notes $ $ Unamortized note premium Unamortized debt issuance costs ) ) Total $ $ |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based Compensation | |
Schedule of assumptions used to estimate grant date fair value of stock option awards using Black Scholes option pricing model | The grant-date fair value of each stock option award for the three months ended March 31, 2018 is estimated using the Black-Scholes option pricing model that uses the assumptions set forth in the following table: Exercise price of options $ Risk-free interest rate % Expected term (in years) Expected stock price volatility % Dividend yield .29 % |
Summary of the company's stock option activity | Number Weighted Weighted Aggregate (Years) Outstanding at January 1, 2018 — $ — — $ — Granted Exercised — — Forfeited/expired — — Outstanding at March 31, 2018 $ $ — |
Fair Values of Financial Inst34
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Fair Values of Financial Instruments | |
Schedule of assets measured at fair value on a recurring basis categorized by level of inputs | Fair Value Measurements at Total Quoted Prices Significant Significant Financial Assets Available for sale debt securities: U.S. Treasury securities $ $ $ — $ — Collateralized mortgage obligations — — Collateralized debt obligations — — Equity securities — — Fair Value Measurements at Total Quoted Prices Significant Significant Financial Assets Available for sale debt securities: U.S. Treasury securities $ $ $ — $ — Collateralized mortgage obligations — — Collateralized debt obligations — — Equity securities — * * The Company has elected to account for its investment in a thinly traded, restricted stock with a carrying value of $246 using the measurement alternative for equity securities without a readily determinable fair value therefore, the investment is excluded from the fair value measurement disclosures at March 31, 2018. |
Summary of reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs | Fair Value Measurements Using Significant Investment Securities March 31, 2018 December 31, 2017 Collateralized Equity Collateralized Equity Balance of recurring Level 3 assets at beginning of period $ $ — $ $ Total gains or losses (realized/unrealized): Included in income-realized — — — — Included in other comprehensive income (loss) — ) — Principal maturities/settlements ) — ) ) Sales — — — — Transfers in and/or out of Level 3 — — — — Balance at end of period $ $ — $ $ |
Schedule of quantitative information about recurring Level 3 fair value measurements | Fair Value Valuation Unobservable Inputs March 31, 2018 Collateralized debt obligations $ Discounted cash flow Collateral default rate Recovery probability December 31, 2017 Collateralized debt obligations $ Discounted cash flow Collateral default rate Recovery probability |
Schedule of carrying amounts and estimated fair values of financial instruments not carried at fair value | Fair Value Measurements at March 31, 2018 Carrying Fair Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ $ $ $ — $ — Mortgage loans held for sale — — Loans, net — — Financial Liabilities Time deposits — — Federal Home Loan Bank borrowings — — Subordinated notes, net — — Fair Value Measurements at December 31, 2017 Carrying Fair Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ $ $ $ — $ — Mortgage loans held for sale — — Loans, net — — Financial Liabilities Time deposits — — Federal Home Loan Bank borrowings — — Subordinated notes, net — — |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Income Taxes | |
Schedule of reconciliation of the U.S. federal statutory tax rate to effective tax rate | Three Months Ended 2018 2017 U.S. federal statutory rate % % Effect of: State taxes, net of federal benefit % % Loss incurred by pass-through entity — % % Income on cash surrender value of bank-owned life insurance )% )% Effective tax rate % % |
Regulatory Capital Requiremen36
Regulatory Capital Requirements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Regulatory Capital Requirements | |
Schedule of minimum requirements under prompt corrective action regulations classifications | Capital Tier 1 Common Total Tier 1 Assets (CET1) Well Capitalized % % % % Adequately Capitalized % % % % Undercapitalized % % % % |
Schedule of actual and minimum required capital amounts and ratios | Actual For Capital To be Well Amount Ratio Amount Ratio Amount Ratio March 31, 2018 Total adjusted capital to risk weighted assets Consolidated $ % $ % N/A N/A Bank $ % Tier 1 (core) capital to risk weighted assets Consolidated N/A N/A Bank Common Tier 1 (CET1) Consolidated N/A N/A Bank Tier 1 (core) capital to adjusted tangible assets Consolidated N/A N/A Bank Actual For Capital To be Well Amount Ratio Amount Ratio Amount Ratio December 31, 2017 Total adjusted capital to risk weighted assets Consolidated $ % $ % N/A N/A Bank $ % Tier 1 (core) capital to risk weighted assets Consolidated N/A N/A Bank Common Tier 1 (CET1) Consolidated N/A N/A Bank Tier 1 (core) capital to adjusted tangible assets Consolidated N/A N/A Bank |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies | |
Summary of total amount of unfunded commitments to extend credit and standby letters of credit outstanding | March 31, December 31, Commitments to make loans $ $ Unused lines of credit Standby letters of credit |
Nature of Operations and Basi38
Nature of Operations and Basis of Presentation (Details) $ / shares in Units, $ in Millions | Apr. 24, 2017USD ($) | Nov. 30, 2017USD ($)$ / sharesshares | Mar. 31, 2018USD ($)segmentitem |
Nature of Operations and Basis of Presentation | |||
Number of branches | item | 28 | ||
Number of reportable segments | segment | 1 | ||
Merger | |||
Assets held under management | $ 451 | ||
Quantum Fund, LLC | |||
Merger | |||
Cash consideration | $ 2.9 | ||
Assets held under management | $ 425 | ||
Southfield, Michigan | |||
Nature of Operations and Basis of Presentation | |||
Number of branches | item | 1 | ||
San Francisco and Los Angeles, California | |||
Nature of Operations and Basis of Presentation | |||
Number of branches | item | 25 | ||
New York, New York | |||
Nature of Operations and Basis of Presentation | |||
Number of branches | item | 2 | ||
Common Stock | IPO | |||
Initial Public Offering | |||
Number of shares of stock issued and sold | shares | 7,692,308 | ||
Offering price (in dollars per share) | $ / shares | $ 12 | ||
Net proceeds from IPO | $ 85.5 | ||
Underwriting discounts and commissions | 5.5 | ||
Offering expenses | $ 1.3 | ||
Principal Shareholder | Quantum Fund, LLC | |||
Merger | |||
Equity interest of acquired entity that is owned by the principal shareholder of the Company and Bank (as a percent) | 80.00% | ||
Member of the Board of Directors | Quantum Fund, LLC | |||
Merger | |||
Equity interest of acquired entity that is owned by a member of the Board of Directors of the Company and Bank (as a percent) | 20.00% |
Summary of Significant Accoun39
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - Loans receivables | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Residential real estate loans | ||
Concentration of Credit Risk | ||
Concentration of Credit Risk | 82.00% | 82.00% |
California | ||
Concentration of Credit Risk | ||
Concentration of Credit Risk | 96.00% | 95.00% |
Summary of Significant Accoun40
Summary of Significant Accounting Policies - Federal Home Loan Bank Stock (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Summary of Significant Accounting Policies | ||
Cash dividends received on investment securities | $ 390 | $ 196 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Non-Interest Income: | |||
Non - interest income not with in the scope of ASC 606 | $ 5,330 | $ 4,965 | |
Total non-interest income | 6,037 | 5,586 | |
Contract Balances | |||
Contract asset balance | 82 | $ 91 | |
Service charges on deposit accounts | |||
Non-Interest Income: | |||
Non - interest income with in the scope of ASC 606 | 52 | 40 | |
Investment management and advisory fees | |||
Non-Interest Income: | |||
Non - interest income with in the scope of ASC 606 | 623 | 552 | |
Interchange fees | |||
Non-Interest Income: | |||
Non - interest income with in the scope of ASC 606 | 25 | 26 | |
Other service charges and fees | |||
Non-Interest Income: | |||
Non - interest income with in the scope of ASC 606 | $ 7 | $ 3 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Fair Value Corresponding Gross Unrealized Gains and Losses (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Available for sale: | |||
Available for sale, Amortized Cost | $ 120,963,000 | $ 122,775,000 | |
Available for sale, Gross Unrealized Gain | 67,000 | 55,000 | |
Available for sale, Gross Unrealized Loss | (237,000) | (209,000) | |
Available for sale, Fair Value | 120,793,000 | 122,621,000 | |
Carrying value of debt securities held of any single issuer in excess of 10% of shareholders' equity | $ 0 | $ 0 | |
Threshold percentage of shareholders' equity above which securities of any single issuer exceed | 10.00% | 10.00% | |
Sales of debt securities available for sale | $ 0 | $ 0 | |
U.S. Treasury securities | |||
Available for sale: | |||
Available for sale, Amortized Cost | 118,764,000 | $ 120,216,000 | |
Available for sale, Gross Unrealized Loss | (224,000) | (174,000) | |
Available for sale, Fair Value | 118,540,000 | 120,042,000 | |
Collateralized mortgage obligations | |||
Available for sale: | |||
Available for sale, Amortized Cost | 1,888,000 | 1,953,000 | |
Available for sale, Gross Unrealized Gain | 67,000 | 55,000 | |
Available for sale, Fair Value | 1,955,000 | 2,008,000 | |
Collateralized debt obligations | |||
Available for sale: | |||
Available for sale, Amortized Cost | 311,000 | 606,000 | |
Available for sale, Gross Unrealized Loss | (13,000) | (35,000) | |
Available for sale, Fair Value | $ 298,000 | $ 571,000 |
Investment Securities - Amort43
Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | $ 120,963 | $ 122,775 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 120,793 | 122,621 |
U.S. Treasury securities | ||
Available for sale, Amortized Cost | ||
Due less than one year | 118,764 | |
Available for sale, Amortized Cost | 118,764 | 120,216 |
Available for sale, Fair Value | ||
Due less than one year | 118,540 | |
Available for sale, Fair Value | 118,540 | 120,042 |
Collateralized mortgage obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 1,888 | 1,953 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 1,955 | 2,008 |
Collateralized debt obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 311 | 606 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | $ 298 | $ 571 |
Investment Securities - Aggrega
Investment Securities - Aggregated by Major Security Type and Length of Time in a Continuous Unrealized Loss Position (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)security | Dec. 31, 2017USD ($) | |
Fair Value | ||
Less than 12 Months, Fair value | $ 118,540 | $ 120,042 |
12 Months or More, Fair Value | 298 | 571 |
Available for sale, Continuous unrealized loss position, Fair Value | 118,838 | 120,613 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (224) | (174) |
12 Months or More, Unrealized Losses | (13) | (35) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (237) | (209) |
Number of debt securities in portfolio | security | 9 | |
Number of debt securities in an unrealized loss position | security | 7 | |
U.S. Treasury securities | ||
Fair Value | ||
Less than 12 Months, Fair value | $ 118,540 | 120,042 |
Available for sale, Continuous unrealized loss position, Fair Value | 118,540 | 120,042 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (224) | (174) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (224) | (174) |
Collateralized debt obligations | ||
Fair Value | ||
12 Months or More, Fair Value | 298 | 571 |
Available for sale, Continuous unrealized loss position, Fair Value | 298 | 571 |
Unrealized Losses | ||
12 Months or More, Unrealized Losses | (13) | (35) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (13) | $ (35) |
Investment Securities - Equity
Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Equity Securities | |||
Fair value of equity securities | $ 4,163 | $ 4,227 | |
Retained earnings | 164,984 | 149,816 | |
Equity securities with readily determinable fair values | 3,917 | 3,981 | |
Equity securities with readily determinable fair values | |||
Net losses recorded during the period on equity securities | (64) | ||
Unrealized losses recorded during the period on equity securities held at the reporting date | (64) | ||
ASU 2016-01 | |||
Equity Securities | |||
Retained earnings | $ (50) | ||
Deferred taxes and accumulated other comprehensive income | $ 50 | ||
Level 3 | |||
Equity Securities | |||
Investment in equity securities without readily determinable fair value | $ 246 | $ 246 |
Loans - Major Categories of Loa
Loans - Major Categories of Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Major categories of loans | ||||
Total Loans | $ 2,599,692 | $ 2,612,814 | ||
Less: allowance for loan losses | (19,132) | (18,457) | $ (15,567) | $ (14,822) |
Loans, net | 2,580,560 | 2,594,357 | ||
Carrying value of loans pledged as collateral on FHLB borrowings | 1,038,700 | 968,400 | ||
Construction loans | ||||
Major categories of loans | ||||
Total Loans | 179,846 | 192,319 | ||
Less: allowance for loan losses | (2,979) | (2,218) | (959) | (679) |
Real Estate loans | Residential | ||||
Major categories of loans | ||||
Total Loans | 2,134,447 | 2,132,641 | ||
Less: allowance for loan losses | (11,499) | (12,279) | (11,873) | (11,863) |
Real Estate loans | Commercial | ||||
Major categories of loans | ||||
Total Loans | 239,204 | 247,076 | ||
Less: allowance for loan losses | (2,572) | (2,040) | (1,102) | (915) |
Commercial and industrial loans, lines of credit | ||||
Major categories of loans | ||||
Total Loans | 46,166 | 40,749 | ||
Less: allowance for loan losses | (616) | (469) | (376) | (373) |
Other consumer loans | Consumer | ||||
Major categories of loans | ||||
Total Loans | 29 | 29 | ||
Less: allowance for loan losses | $ (1) | $ (1) | $ (2) | $ (2) |
Loans - Activity in the Allowan
Loans - Activity in the Allowance For Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Allowance for loan losses | ||
Beginning balance | $ 18,457 | $ 14,822 |
Provision for loan losses | 641 | 600 |
Recoveries | 34 | 145 |
Total ending balance | 19,132 | 15,567 |
Construction loans | ||
Allowance for loan losses | ||
Beginning balance | 2,218 | 679 |
Provision for loan losses | 760 | 185 |
Recoveries | 1 | 95 |
Total ending balance | 2,979 | 959 |
Real Estate loans | Residential | ||
Allowance for loan losses | ||
Beginning balance | 12,279 | 11,863 |
Provision for loan losses | (782) | |
Recoveries | 2 | 10 |
Total ending balance | 11,499 | 11,873 |
Real Estate loans | Commercial | ||
Allowance for loan losses | ||
Beginning balance | 2,040 | 915 |
Provision for loan losses | 501 | 147 |
Recoveries | 31 | 40 |
Total ending balance | 2,572 | 1,102 |
Commercial and industrial loans, lines of credit | ||
Allowance for loan losses | ||
Beginning balance | 469 | 373 |
Provision for loan losses | 147 | 3 |
Total ending balance | 616 | 376 |
Other consumer loans | Consumer | ||
Allowance for loan losses | ||
Beginning balance | 1 | 2 |
Total ending balance | 1 | 2 |
Unallocated | ||
Allowance for loan losses | ||
Beginning balance | 1,450 | 990 |
Provision for loan losses | 15 | 265 |
Total ending balance | $ 1,465 | $ 1,255 |
Loans - Activity in the Allow48
Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Method (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 152 | $ 154 | ||
Collectively evaluated for impairment | 18,980 | 18,303 | ||
Total ending allowance balance | 19,132 | 18,457 | $ 15,567 | $ 14,822 |
Loans: | ||||
Loans individually evaluated for impairment | 3,231 | 3,269 | ||
Loans collectively evaluated for impairment | 2,596,461 | 2,609,545 | ||
Total Loans | 2,599,692 | 2,612,814 | ||
Construction loans | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 2,979 | 2,218 | ||
Total ending allowance balance | 2,979 | 2,218 | 959 | 679 |
Loans: | ||||
Loans collectively evaluated for impairment | 179,846 | 192,319 | ||
Total Loans | 179,846 | 192,319 | ||
Real Estate loans | Residential | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 46 | 37 | ||
Collectively evaluated for impairment | 11,453 | 12,242 | ||
Total ending allowance balance | 11,499 | 12,279 | 11,873 | 11,863 |
Loans: | ||||
Loans individually evaluated for impairment | 122 | 122 | ||
Loans collectively evaluated for impairment | 2,134,325 | 2,132,519 | ||
Total Loans | 2,134,447 | 2,132,641 | ||
Real Estate loans | Commercial | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 11 | 19 | ||
Collectively evaluated for impairment | 2,561 | 2,021 | ||
Total ending allowance balance | 2,572 | 2,040 | 1,102 | 915 |
Loans: | ||||
Loans individually evaluated for impairment | 2,774 | 2,804 | ||
Loans collectively evaluated for impairment | 236,430 | 244,272 | ||
Total Loans | 239,204 | 247,076 | ||
Commercial and industrial loans, lines of credit | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 95 | 98 | ||
Collectively evaluated for impairment | 521 | 371 | ||
Total ending allowance balance | 616 | 469 | 376 | 373 |
Loans: | ||||
Loans individually evaluated for impairment | 335 | 343 | ||
Loans collectively evaluated for impairment | 45,831 | 40,406 | ||
Total Loans | 46,166 | 40,749 | ||
Other consumer loans | Consumer | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 1 | 1 | ||
Total ending allowance balance | 1 | 1 | 2 | 2 |
Loans: | ||||
Loans collectively evaluated for impairment | 29 | 29 | ||
Total Loans | 29 | 29 | ||
Unallocated | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 1,465 | 1,450 | ||
Total ending allowance balance | $ 1,465 | $ 1,450 | $ 1,255 | $ 990 |
Loans - Impaired Loans by Class
Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance | $ 1,560 | $ 1,578 | |
Unpaid principal balance, with a related allowance | 1,870 | 1,885 | |
Total Unpaid Principal Balance | 3,430 | 3,463 | |
Recorded investment, with no related allowance | 1,373 | 1,394 | |
Recorded investment, with a related allowance | 1,858 | 1,875 | |
Total Recorded Investment | 3,231 | 3,269 | |
Allowance for Loan Losses | 152 | 154 | |
Average recorded investment, with no related allowance | 1,384 | $ 1,492 | |
Average recorded investment, with a related allowance | 1,865 | 1,922 | |
Total Average Recorded Investment | 3,249 | 3,414 | |
Interest Income Recognized, with no related allowance | 18 | 19 | |
Interest Income Recognized, with a related allowance | 25 | 23 | |
Total Interest Income Recognized | 43 | 42 | |
Cash Basis Interest Recognized, with no related allowance | 12 | 19 | |
Cash Basis Interest Recognized, with a related allowance | 17 | 26 | |
Total Cash Basis Interest Recognized | 29 | 45 | |
Real estate loan, First mortgage | Residential | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with a related allowance | 122 | 122 | |
Recorded investment, with a related allowance | 122 | 122 | |
Allowance for Loan Losses | 46 | 37 | |
Average recorded investment, with a related allowance | 122 | 122 | |
Interest Income Recognized, with a related allowance | 1 | 1 | |
Cash Basis Interest Recognized, with a related allowance | 1 | 4 | |
Real estate loan, Retail | Commercial | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance | 1,415 | 1,431 | |
Recorded investment, with no related allowance | 1,228 | 1,247 | |
Average recorded investment, with no related allowance | 1,238 | 1,308 | |
Interest Income Recognized, with no related allowance | 16 | 17 | |
Cash Basis Interest Recognized, with no related allowance | 10 | 17 | |
Real estate loan, Offices | Commercial | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with a related allowance | 1,558 | 1,567 | |
Recorded investment, with a related allowance | 1,546 | 1,557 | |
Allowance for Loan Losses | 11 | 19 | |
Average recorded investment, with a related allowance | 1,550 | 1,587 | |
Interest Income Recognized, with a related allowance | 21 | 19 | |
Cash Basis Interest Recognized, with a related allowance | 14 | 19 | |
Real estate loan, Gas stations | Commercial | |||
Impaired loans by class of loans | |||
Average recorded investment, with no related allowance | 31 | ||
Private banking | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance | 145 | 147 | |
Unpaid principal balance, with a related allowance | 190 | 196 | |
Recorded investment, with no related allowance | 145 | 147 | |
Recorded investment, with a related allowance | 190 | 196 | |
Allowance for Loan Losses | 95 | $ 98 | |
Average recorded investment, with no related allowance | 146 | 153 | |
Average recorded investment, with a related allowance | 193 | 213 | |
Interest Income Recognized, with no related allowance | 2 | 2 | |
Interest Income Recognized, with a related allowance | 3 | 3 | |
Cash Basis Interest Recognized, with no related allowance | 2 | 2 | |
Cash Basis Interest Recognized, with a related allowance | $ 2 | $ 3 |
Loans - Investment in Nonaccrua
Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | $ 4,986 | $ 652 |
Loans Past Due Over 90 Days Still Accruing | 129 | 131 |
Total Past Due | 6,189 | 10,184 |
Loans Not Past Due | 2,593,503 | 2,602,630 |
Total Loans | 2,599,692 | 2,612,814 |
30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,026 | 9,009 |
60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 48 | 392 |
Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 5,115 | 783 |
Construction loans | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 179,846 | 192,319 |
Total Loans | 179,846 | 192,319 |
Real Estate loans | Residential | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 2,134,447 | 2,132,641 |
Real Estate loans | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 239,204 | 247,076 |
Real estate loan, First mortgage | Residential | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 4,912 | 573 |
Loans Past Due Over 90 Days Still Accruing | 129 | 131 |
Total Past Due | 5,820 | 9,998 |
Loans Not Past Due | 2,109,748 | 2,105,142 |
Total Loans | 2,115,568 | 2,115,140 |
Real estate loan, First mortgage | Residential | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 731 | 8,902 |
Real estate loan, First mortgage | Residential | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 48 | 392 |
Real estate loan, First mortgage | Residential | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 5,041 | 704 |
Real estate loan, Second mortgage | Residential | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 295 | 107 |
Loans Not Past Due | 18,584 | 17,394 |
Total Loans | 18,879 | 17,501 |
Real estate loan, Second mortgage | Residential | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 295 | 107 |
Real estate loan, Retail | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 74 | 79 |
Total Past Due | 74 | 79 |
Loans Not Past Due | 10,423 | 10,530 |
Total Loans | 10,497 | 10,609 |
Real estate loan, Retail | Commercial | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 74 | 79 |
Real estate loan, Apartments | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 61,388 | 59,582 |
Total Loans | 61,388 | 59,582 |
Real estate loan, Offices | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 25,592 | 26,571 |
Total Loans | 25,592 | 26,571 |
Real estate loan, Hotel | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 103,653 | 103,195 |
Total Loans | 103,653 | 103,195 |
Real estate loan, Industrial | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 11,317 | 15,907 |
Total Loans | 11,317 | 15,907 |
Real estate loan, Gas stations | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 1,036 | 1,067 |
Total Loans | 1,036 | 1,067 |
Real estate loan, Other | Commercial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 25,721 | 30,145 |
Total Loans | 25,721 | 30,145 |
Commercial and industrial loans, lines of credit | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 46,166 | 40,749 |
Private banking | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 26,587 | 22,898 |
Total Loans | 26,587 | 22,898 |
C&I lending | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 19,579 | 17,851 |
Total Loans | 19,579 | 17,851 |
Other consumer loans | Consumer | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 29 | 29 |
Total Loans | $ 29 | $ 29 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)loan | Dec. 31, 2017USD ($) | |
Troubled Debt Restructurings | ||
Loans classified as troubled debt restructurings | $ 3,041 | $ 3,073 |
Allowance for outstanding loan losses classified as troubled debt restructurings | $ 57 | $ 56 |
Number of TDRs subsequently defaulted | loan | 0 |
Loans - Risk Rating of Loans by
Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Recorded investment in loans | |||
Total | $ 2,599,692 | $ 2,612,814 | |
Portfolio loans sold during the period | 112,169 | $ 105,184 | |
Gain on sale of portfolio loans | 3,941 | 3,865 | |
Pass | |||
Recorded investment in loans | |||
Total | 2,565,997 | 2,589,151 | |
Special Mention | |||
Recorded investment in loans | |||
Total | 23,216 | 18,680 | |
Substandard | |||
Recorded investment in loans | |||
Total | 9,850 | 4,463 | |
Doubtful | |||
Recorded investment in loans | |||
Total | 629 | 520 | |
Construction loans | |||
Recorded investment in loans | |||
Total | 179,846 | 192,319 | |
Construction loans | Pass | |||
Recorded investment in loans | |||
Total | 160,343 | 177,241 | |
Construction loans | Special Mention | |||
Recorded investment in loans | |||
Total | 16,049 | 11,670 | |
Construction loans | Substandard | |||
Recorded investment in loans | |||
Total | 3,454 | 3,408 | |
Real Estate loans | Residential | |||
Recorded investment in loans | |||
Total | 2,134,447 | 2,132,641 | |
Real Estate loans | Commercial | |||
Recorded investment in loans | |||
Total | 239,204 | 247,076 | |
Real estate loan, First mortgage | Residential | |||
Recorded investment in loans | |||
Total | 2,115,568 | 2,115,140 | |
Real estate loan, First mortgage | Pass | Residential | |||
Recorded investment in loans | |||
Total | 2,110,600 | 2,114,511 | |
Real estate loan, First mortgage | Substandard | Residential | |||
Recorded investment in loans | |||
Total | 4,339 | 109 | |
Real estate loan, First mortgage | Doubtful | Residential | |||
Recorded investment in loans | |||
Total | 629 | 520 | |
Real estate loan, Second mortgage | Residential | |||
Recorded investment in loans | |||
Total | 18,879 | 17,501 | |
Real estate loan, Second mortgage | Pass | Residential | |||
Recorded investment in loans | |||
Total | 18,879 | 17,501 | |
Real estate loan, Retail | Commercial | |||
Recorded investment in loans | |||
Total | 10,497 | 10,609 | |
Real estate loan, Retail | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 9,268 | 9,363 | |
Real estate loan, Retail | Special Mention | Commercial | |||
Recorded investment in loans | |||
Total | 1,167 | ||
Real estate loan, Retail | Substandard | Commercial | |||
Recorded investment in loans | |||
Total | 1,229 | 79 | |
Real estate loan, Apartments | Commercial | |||
Recorded investment in loans | |||
Total | 61,388 | 59,582 | |
Real estate loan, Apartments | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 59,798 | 58,472 | |
Real estate loan, Apartments | Special Mention | Commercial | |||
Recorded investment in loans | |||
Total | 1,590 | 1,110 | |
Real estate loan, Offices | Commercial | |||
Recorded investment in loans | |||
Total | 25,592 | 26,571 | |
Real estate loan, Offices | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 25,592 | 26,571 | |
Real estate loan, Hotel | Commercial | |||
Recorded investment in loans | |||
Total | 103,653 | 103,195 | |
Real estate loan, Hotel | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 103,653 | 103,195 | |
Real estate loan, Industrial | Commercial | |||
Recorded investment in loans | |||
Total | 11,317 | 15,907 | |
Real estate loan, Industrial | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 11,317 | 15,907 | |
Real estate loan, Gas stations | Commercial | |||
Recorded investment in loans | |||
Total | 1,036 | 1,067 | |
Real estate loan, Gas stations | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 1,036 | 1,067 | |
Real estate loan, Other | Commercial | |||
Recorded investment in loans | |||
Total | 25,721 | 30,145 | |
Real estate loan, Other | Pass | Commercial | |||
Recorded investment in loans | |||
Total | 20,379 | 24,741 | |
Real estate loan, Other | Special Mention | Commercial | |||
Recorded investment in loans | |||
Total | 4,704 | 4,733 | |
Real estate loan, Other | Substandard | Commercial | |||
Recorded investment in loans | |||
Total | 638 | 671 | |
Commercial and industrial loans, lines of credit | |||
Recorded investment in loans | |||
Total | 46,166 | 40,749 | |
Private banking | |||
Recorded investment in loans | |||
Total | 26,587 | 22,898 | |
Private banking | Pass | |||
Recorded investment in loans | |||
Total | 26,397 | 22,702 | |
Private banking | Substandard | |||
Recorded investment in loans | |||
Total | 190 | 196 | |
C&I lending | |||
Recorded investment in loans | |||
Total | 19,579 | 17,851 | |
C&I lending | Pass | |||
Recorded investment in loans | |||
Total | 18,706 | 17,851 | |
C&I lending | Special Mention | |||
Recorded investment in loans | |||
Total | 873 | ||
Other consumer loans | Consumer | |||
Recorded investment in loans | |||
Total | 29 | 29 | |
Other consumer loans | Pass | Consumer | |||
Recorded investment in loans | |||
Total | 29 | $ 29 | |
Residential real estate mortgage loans | |||
Recorded investment in loans | |||
Portfolio loans sold during the period | $ 112,200 | $ 105,200 |
Mortgage Servicing Rights - Pri
Mortgage Servicing Rights - Principle Balance by Category (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Mortgage Servicing Rights | ||
Custodial escrow balances maintained on serviced loans | $ 15,458 | $ 11,944 |
FNMA | ||
Mortgage Servicing Rights | ||
Principal balance of mortgage loan portfolios | 72,707 | 73,039 |
FHLB | ||
Mortgage Servicing Rights | ||
Principal balance of mortgage loan portfolios | 93,402 | 92,697 |
Private investors | ||
Mortgage Servicing Rights | ||
Principal balance of mortgage loan portfolios | $ 518,557 | $ 442,984 |
Mortgage Servicing Rights - Act
Mortgage Servicing Rights - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Mortgage servicing rights activity | |||
Mortgage servicing rights Beginning of period | $ 6,706 | $ 4,454 | |
Additions | 1,521 | 1,260 | |
Amortization | (426) | (260) | |
Mortgage servicing rights End of period | 7,801 | 5,454 | |
Valuation allowance at beginning of period | 210 | 40 | |
Additions (recoveries) | (189) | (10) | |
Valuation allowance at end of period | 21 | 30 | |
Net carrying amount | 7,780 | 5,424 | $ 6,496 |
Servicing fee income (expense), net of amortization of servicing rights and changes in the valuation allowance | $ 477 | $ 169 |
Mortgage Servicing Rights - Val
Mortgage Servicing Rights - Valuation techniques (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Mortgage Servicing Rights | ||
Fair value of mortgage servicing rights | $ 9,074 | $ 7,086 |
Weighted average default rate | 0.20% | 0.20% |
Minimum | ||
Mortgage Servicing Rights | ||
Discount rate range | 9.50% | 9.50% |
Prepayment speed range | 6.80% | 6.80% |
Maximum | ||
Mortgage Servicing Rights | ||
Discount rate range | 12.00% | 12.00% |
Prepayment speed range | 31.20% | 36.00% |
Deposits (Details)
Deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Deposits | ||
Interest-bearing time deposits | $ 679,622 | $ 663,472 |
Brokered time deposits | 79,510 | 156,084 |
Time deposits of $250,000 and over | $ 150,523 | $ 129,101 |
Federal Home Loan Bank Borrow57
Federal Home Loan Bank Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Federal Home Loan Bank Borrowings | ||
Short-term fixed rate advances | $ 125,000 | $ 148,000 |
Short-term adjustable rate advances | 15,000 | |
Total short-term FHLB advances | 140,000 | 148,000 |
Long-term fixed rate advances | 190,000 | 190,000 |
Total FHLB advances | 330,000 | 338,000 |
FHLB overdraft line of credit | 12,937 | |
Total | $ 342,937 | $ 338,000 |
FHLB overdraft line of credit (as percent) | 2.06% | 1.67% |
Short term | ||
Federal Home Loan Bank Borrowings | ||
Short-term adjustable rate(as percent) | 2.06% | |
FHLB interest rates (as percent) | 1.78% | |
Minimum | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as percent) | 0.98% | 0.98% |
Minimum | Short term | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as percent) | 1.47% | |
Maximum | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as percent) | 1.18% | 1.18% |
Maximum | Short term | ||
Federal Home Loan Bank Borrowings | ||
FHLB interest rates (as percent) | 1.56% |
Federal Home Loan Bank Borrow58
Federal Home Loan Bank Borrowings - FHLB Advances (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Federal Home Loan Bank Borrowings | ||
Total FHLB advances | $ 330,000 | $ 338,000 |
Additional borrowing capacity | 374,000 | |
Callable Option | ||
Federal Home Loan Bank Borrowings | ||
Total FHLB advances | 157,000 | |
Callable Option September, 2021 | ||
Federal Home Loan Bank Borrowings | ||
Total FHLB advances | 67,000 | |
Callable Option October, 2021 | ||
Federal Home Loan Bank Borrowings | ||
Total FHLB advances | $ 90,000 |
Federal Home Loan Bank Borrow59
Federal Home Loan Bank Borrowings - FHLB Overdraft Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Federal Home Loan Bank Borrowings | |||
FHLB line of credit agreement maximum borrowing limit | $ 50,000 | ||
FHLB overdraft line of credit average borrowings outstanding | 3,673 | $ 14,597 | |
FHLB overdraft line of credit | $ 12,937 | ||
FHLB overdraft line of credit (as percent) | 2.06% | 1.67% | |
FHLB, agreement term | 1 year | ||
Carrying value of loans pledged as collateral on FHLB borrowings | $ 1,038,700 | $ 968,400 |
Federal Home Loan Bank Borrow60
Federal Home Loan Bank Borrowings - Other Borrowings (Details) - Other Banks - USD ($) $ in Millions | Mar. 31, 2018 | Dec. 31, 2017 |
Other Borrowings | ||
Maximum borrowing capacity | $ 60 | |
Outstanding balance | $ 0 | $ 0 |
Subordinated Notes, net (Detail
Subordinated Notes, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Aug. 31, 2017 | Sep. 30, 2016 | |
Subordinated Notes, net | |||||
Total | $ 64,923 | $ 64,889 | |||
Interest expense | 1,172 | $ 908 | |||
Subordinated notes | |||||
Subordinated Notes, net | |||||
7.0% fixed to floating rate subordinated notes | 65,000 | 65,000 | |||
Unamortized note premium | 575 | 588 | |||
Unamortized debt issuance costs | (652) | (699) | |||
Total | $ 64,923 | $ 64,889 | |||
Interest rate (as a percent) | 7.00% | ||||
Interest expense | $ 1,172 | $ 908 | |||
Redemption price percentage of outstanding principal amount | 100.00% | ||||
Subordinated notes issued April through September, 2016 | Subordinated notes | |||||
Subordinated Notes, net | |||||
7.0% fixed to floating rate subordinated notes | $ 50,000 | ||||
Unamortized debt issuance costs | $ (729) | ||||
Subordinated notes issued in August, 2017 | Subordinated notes | |||||
Subordinated Notes, net | |||||
7.0% fixed to floating rate subordinated notes | $ 15,000 | ||||
Unamortized note premium | 611 | ||||
Unamortized debt issuance costs | $ (191) | ||||
LIBOR | Subordinated notes | |||||
Subordinated Notes, net | |||||
Variable interest rate on subordinate notes (in percent) | 5.82% |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - 2017 Omnibus Equity Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | Mar. 21, 2018 | Mar. 31, 2018 |
Stock-based Compensation | ||
Number of shares authorized | 4,237,100 | |
Stock Options | ||
Stock-based Compensation | ||
Percentage of awards vested in each of third and fourth year | 50.00% | |
Maximum term of stock awards granted | 10 years | |
Number of share instruments issued | 92,625 | |
Weighted average grant-date fair value | $ 4.56 | |
Fair value assumptions used in Black-Scholes option pricing model | ||
Exercise price of options | $ 13.73 | $ 13.73 |
Risk-free interest rate | 2.80% | |
Expected term (in years) | 6 years 9 months | |
Expected stock price volatility | 23.70% | |
Dividend yield | 0.29% | |
Number of Shares | ||
Granted | 92,625 | |
Outstanding at March 31, 2018 | 92,625 | |
Weighted Average Exercise Price | ||
Granted | $ 13.73 | |
Outstanding at March 31, 2018 | $ 13.73 | |
Outstanding share options | ||
Weighted Average Remaining Contractual Term (Years) | 9 years 11 months 19 days | |
Share-based compensation costs recognized | $ 3 | |
Total unrecognized compensation cost - stock options | $ 419 | |
Unrecognized cost expected to be recognized over a weighted-average period | 3 years 9 months | |
Number of options exercisable | 0 | |
Restricted Stock Awards | ||
Stock-based Compensation | ||
Number of share instruments issued | 39,655 | |
Outstanding share options | ||
Weighted average grant-date fair value | $ 13.60 | |
Share-based compensation costs recognized | $ 6 | |
Total unrecognized compensation cost - restricted stock awards | $ 534 | |
Unrecognized cost expected to be recognized over a weighted-average period | 3 years 5 months 23 days | |
Key employees Restricted Stock Awards | ||
Stock-based Compensation | ||
Percentage of awards vested in each of third and fourth year | 50.00% | |
Number of share instruments issued | 33,100 | |
Non-employee directors Restricted Stock Awards | ||
Stock-based Compensation | ||
Number of share instruments issued | 6,555 |
Income Per Share (Details)
Income Per Share (Details) | 1 Months Ended | 3 Months Ended | |
Sep. 30, 2017 | Mar. 31, 2018shares | Mar. 31, 2017shares | |
Income per share | |||
Number of dilutive securities outstanding (in shares) | 0 | ||
Common Stock | |||
Income per share | |||
Stock split ratio | 1,000 | ||
Common Stock | Restricted Stock Awards | |||
Income per share | |||
Potentially dilutive securities excluded from diluted per share calculation | 39,655 | ||
Common Stock | Stock Options | |||
Income per share | |||
Potentially dilutive securities excluded from diluted per share calculation | 92,625 |
Fair Values of Financial Inst64
Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | $ 120,793 | $ 122,621 |
Fair value of transfers between Levels | ||
Transfers between Level 1 to Level 2 of fair value hierarchy, assets | 0 | 0 |
Transfers between Level 2 to Level 1 of fair value hierarchy, assets | 0 | 0 |
U.S. Treasury securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 118,540 | 120,042 |
U.S. Treasury securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 118,540 | 120,042 |
U.S. Treasury securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 118,540 | 120,042 |
Collateralized mortgage obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 1,955 | 2,008 |
Collateralized mortgage obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 1,955 | 2,008 |
Collateralized mortgage obligations | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 1,955 | 2,008 |
Collateralized debt obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 298 | 571 |
Collateralized debt obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 298 | 571 |
Collateralized debt obligations | Level 3 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 298 | 571 |
Equity securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 3,917 | 4,227 |
Equity securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | $ 3,917 | 3,981 |
Equity securities | Level 3 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | $ 246 |
Fair Values of Financial Inst65
Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - Recurring - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Collateralized debt obligations | ||
Reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||
Balance of recurring Level 3 assets at beginning of period | $ 571 | $ 585 |
Included in other comprehensive income (loss) | 22 | (10) |
Principal maturities/settlements | (295) | (4) |
Balance at end of period | 298 | 571 |
Investment income | ||
Unrealized losses on investments | 13 | 35 |
Interest income | 5 | 21 |
Equity securities | ||
Reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) | ||
Balance of recurring Level 3 assets at beginning of period | $ 246 | 529 |
Principal maturities/settlements | (283) | |
Balance at end of period | 246 | |
Investment income | ||
Unrealized losses on investments | 0 | |
Dividend income | $ 15 |
Fair Values of Financial Inst66
Fair Values of Financial Instruments - Quantitative information about recurring Level 3 fair value measurements (Details) - Level 3 - Recurring - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Collateralized debt obligations | |||
Unobservable inputs | |||
Investment securities available for sale, at fair value | $ 298 | $ 571 | $ 585 |
Collateralized debt obligations | Discounted cash flow | |||
Unobservable inputs | |||
Investment securities available for sale, at fair value | $ 298 | $ 571 | |
Collateral default rate | 0.00% | 0.00% | |
Recovery probability | 15.00% | 15.00% | |
Equity securities | |||
Unobservable inputs | |||
Investment securities available for sale, at fair value | $ 246 | $ 529 |
Fair Values of Financial Inst67
Fair Values of Financial Instruments - Carrying amounts and estimated fair values of financial instruments not carried at fair value (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Assets held at fair value on a non recurring basis | $ 0 | $ 0 | |
Carrying Amount | |||
Financial Assets | |||
Cash and due from banks | $ 37,541 | 40,147 | |
Mortgage loans held for sale | 200,467 | 112,866 | |
Loans, net | 2,580,560 | 2,594,357 | |
Financial Liabilities | |||
Time deposits | 679,622 | 663,472 | |
Federal Home Loan Bank borrowings | 342,937 | 338,000 | |
Subordinated notes, net | 64,923 | 64,889 | |
Fair Value | |||
Financial Assets | |||
Cash and due from banks | 37,541 | 40,147 | |
Mortgage loans held for sale | 204,205 | 115,619 | |
Loans, net | 2,628,979 | 2,635,986 | |
Financial Liabilities | |||
Time deposits | 675,620 | 660,380 | |
Federal Home Loan Bank borrowings | 332,507 | 330,004 | |
Subordinated notes, net | 66,950 | 67,485 | |
Level 1 | Fair Value | |||
Financial Assets | |||
Cash and due from banks | 37,541 | 40,147 | |
Level 2 | Fair Value | |||
Financial Assets | |||
Mortgage loans held for sale | 204,205 | 115,619 | |
Financial Liabilities | |||
Time deposits | 675,620 | 660,380 | |
Federal Home Loan Bank borrowings | 332,507 | 330,004 | |
Subordinated notes, net | 66,950 | 67,485 | |
Level 3 | Fair Value | |||
Financial Assets | |||
Loans, net | $ 2,628,979 | $ 2,635,986 |
Income Taxes - Tax Cut and Jobs
Income Taxes - Tax Cut and Jobs Act (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Income Taxes | ||||
Federal statutory tax rate (as a percentage) | 21.00% | 21.00% | 35.00% | 35.00% |
Deferred income tax expense due to effect of the Tax Act | $ 3.3 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax rate (Details) | Jan. 01, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 |
Reconciliation of U.S. federal statutory tax rate and effective income tax rate | ||||
U.S. federal statutory rate (as a percentage) | 21.00% | 21.00% | 35.00% | 35.00% |
Effect of: | ||||
State taxes, net of federal benefit (as a percentage) | 7.90% | 6.00% | ||
Loss incurred by pass-through entity (as a percentage) | 0.70% | |||
Income on cash surrender value of bank-owned life insurance (as a percentage) | (0.20%) | (0.30%) | ||
Effective tax rate (as a percentage) | 28.70% | 41.40% |
Regulatory Capital Requiremen70
Regulatory Capital Requirements - Capital adequacy requirements (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2015 | Dec. 31, 2017 | |
Regulatory Capital Requirements | ||||
Capital conservation buffer (as a percent) | 1.875% | 0.00% | ||
Total Capital Weighted Assets | ||||
Well Capitalized (as a percent) | 10.00% | |||
Adequately Capitalized (as a percent) | 8.00% | 8.00% | ||
Undercapitalized (as a percent) | 6.00% | |||
Tier 1 Capital Weighted Assets | ||||
Well Capitalized (as a percent) | 8.00% | |||
Adequately Capitalized (as a percent) | 6.00% | 6.00% | ||
Undercapitalized (as a percent) | 4.00% | |||
Tier 1 Capital to Average Assets | ||||
Well Capitalized (as a percent) | 5.00% | |||
Adequately Capitalized (as a percent) | 4.00% | 4.00% | ||
Undercapitalized (as a percent) | 3.00% | |||
Common Tier 1 (CET1) | ||||
Well Capitalized (as a percent) | 6.50% | |||
Adequately Capitalized (as a percent) | 4.50% | 4.50% | ||
Undercapitalized (as a percent) | 3.00% | |||
Forecast | ||||
Regulatory Capital Requirements | ||||
Capital conservation buffer (as a percent) | 2.50% |
Regulatory Capital Requiremen71
Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and Dividend Restrictions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Total adjusted capital to risk weighted assets, Amount | ||
Actual | $ 371,915 | $ 365,078 |
For Capital Adequacy Purposes | $ 146,022 | $ 140,447 |
Total adjusted capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 20.38% | 20.28% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
To be Well Capitalized (as a percent) | 10.00% | |
Tier 1 (core) capital to risk weighted assets, Amount | ||
Actual | $ 287,860 | $ 272,732 |
For Capital Adequacy Purposes | $ 109,517 | $ 105,336 |
Tier 1 (core) capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 15.77% | 15.53% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
To be Well Capitalized (as a percent) | 8.00% | |
Common Tier 1 (CET1), Amount | ||
Actual | $ 287,860 | $ 272,732 |
For Capital Adequacy Purposes | $ 82,138 | $ 79,002 |
Common Tier 1 (CET1), Ratio | ||
Actual (as a percent) | 15.77% | 15.53% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
To be Well Capitalized (as a percent) | 6.50% | |
Tier 1 (core) capital to adjusted tangible assets, Amount | ||
Actual | $ 287,860 | $ 272,732 |
For Capital Adequacy Purposes | $ 118,383 | $ 110,949 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual (as a percent) | 9.73% | 9.83% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
To be Well Capitalized (as a percent) | 5.00% | |
Dividend Restrictions | ||
Consolidated retained earnings available to pay dividends | $ 139,900 | |
Minimum percentage of assets be maintained as per Qualified Thrift Lender ("QTL") test | 65.00% | |
Bank | ||
Total adjusted capital to risk weighted assets, Amount | ||
Actual | $ 275,118 | $ 259,165 |
For Capital Adequacy Purposes | 146,019 | 140,447 |
To be Well Capitalized | $ 182,524 | $ 175,559 |
Total adjusted capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 15.07% | 14.76% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
To be Well Capitalized (as a percent) | 10.00% | 10.00% |
Tier 1 (core) capital to risk weighted assets, Amount | ||
Actual | $ 255,986 | $ 240,708 |
For Capital Adequacy Purposes | 109,515 | 105,336 |
To be Well Capitalized | $ 146,019 | $ 140,447 |
Tier 1 (core) capital to risk weighted assets, Ratio | ||
Actual (as a percent) | 14.02% | 13.71% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
To be Well Capitalized (as a percent) | 8.00% | 8.00% |
Common Tier 1 (CET1), Amount | ||
Actual | $ 255,986 | $ 240,708 |
For Capital Adequacy Purposes | 82,136 | 79,002 |
To be Well Capitalized | $ 118,641 | $ 114,114 |
Common Tier 1 (CET1), Ratio | ||
Actual (as a percent) | 14.02% | 13.71% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
To be Well Capitalized (as a percent) | 6.50% | 6.50% |
Tier 1 (core) capital to adjusted tangible assets, Amount | ||
Actual | $ 255,986 | $ 240,708 |
For Capital Adequacy Purposes | 118,383 | 110,949 |
To be Well Capitalized | $ 147,978 | $ 138,687 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual (as a percent) | 8.65% | 8.68% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
To be Well Capitalized (as a percent) | 5.00% | 5.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | Apr. 24, 2017 | Mar. 31, 2018 | Mar. 31, 2017 |
Charitable donation to foundation | Member of the Board of Directors | |||
Related party transactions | |||
Amount of related party transaction | $ 225 | $ 225 | |
Lease of storage and office space | Principal Shareholder | |||
Related party transactions | |||
Amount of related party transaction | 17 | 9 | |
Data processing and programming services provided | Principal Shareholder | |||
Related party transactions | |||
Amount of related party transaction | $ 25 | 27 | |
Quantum Fund, LLC | Member of the Board of Directors | |||
Related party transactions | |||
Equity interest of acquired entity that is owned by a member of the Board of Directors of the Company and Bank (as a percent) | 20.00% | ||
Quantum Fund, LLC | Principal Shareholder | |||
Related party transactions | |||
Equity interest of acquired entity that is owned by the principal shareholder of the Company and Bank (as a percent) | 80.00% | ||
Quantum Fund, LLC | Business acquired, owned by principal shareholder and board member | Member of the Board of Directors | |||
Related party transactions | |||
Equity interest of acquired entity that is owned by a member of the Board of Directors of the Company and Bank (as a percent) | 20.00% | ||
Compensation related expenses to related party | $ 125 | ||
Quantum Fund, LLC | Business acquired, owned by principal shareholder and board member | Principal Shareholder | |||
Related party transactions | |||
Equity interest of acquired entity that is owned by the principal shareholder of the Company and Bank (as a percent) | 80.00% |
Commitments and Contingencies73
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Commitments and Contingencies | |||
Rent expense | $ 921 | $ 825 | |
Commitment to make loans | |||
Commitments and Contingencies | |||
Face amount | 264,536 | $ 268,401 | |
Unused lines of credit | |||
Commitments and Contingencies | |||
Face amount | 160,177 | 157,234 | |
Standby letters of credit | |||
Commitments and Contingencies | |||
Face amount | 70 | $ 70 | |
Real Estate loans | Residential | Unfunded Commitments to Extend Credit | |||
Commitments and Contingencies | |||
Outstanding commitments regarding fixed rate loans | 6,072 | ||
Outstanding commitments with varying interest rates | $ 258,464 | ||
Real Estate loans | Residential | Minimum | Unfunded Commitments to Extend Credit | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 3.75% | ||
Variable interest rate (as a percentage) | 3.75% | ||
Maturity period | 10 years | ||
Maturity period for variable interest loans | 25 years | ||
Real Estate loans | Residential | Maximum | Unfunded Commitments to Extend Credit | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 7.00% | ||
Variable interest rate (as a percentage) | 7.125% | ||
Maturity period | 30 years | ||
Maturity period for variable interest loans | 30 years |
Subsequent Events - (Details)
Subsequent Events - (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2017 | |
Subsequent events | |||
Proceeds from the sale of portfolio loans | $ 112,169 | $ 105,184 | |
Gain on sale of portfolio loans | 3,941 | 3,865 | |
Residential real estate mortgage loans | |||
Subsequent events | |||
Proceeds from the sale of portfolio loans | $ 112,200 | $ 105,200 | |
Residential real estate mortgage loans | Subsequent Event | |||
Subsequent events | |||
Proceeds from the sale of portfolio loans | $ 88,000 | ||
Gain on sale of portfolio loans | $ 3,200 |