Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Sep. 30, 2020 | |
Document and Entity Information | ||
Entity Registrant Name | Sterling Bancorp, Inc. | |
Entity Central Index Key | 0001680379 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | No | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 49,977,209 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | true | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 389,984 | $ 77,819 |
Interest-bearing time deposits with other banks | 1,025 | 1,025 |
Investment securities | 159,168 | 152,544 |
Mortgage loans held for sale | 3,776 | 1,337 |
Loans, net of allowance for loan losses of $42,613 and $21,730 | 2,799,645 | 2,891,530 |
Accrued interest receivable | 13,221 | 13,718 |
Mortgage servicing rights, net | 7,976 | 9,765 |
Leasehold improvements and equipment, net | 9,081 | 9,198 |
Operating lease right-of-use assets | 17,802 | 18,715 |
Federal Home Loan Bank stock, at cost | 22,950 | 22,950 |
Cash surrender value of bank-owned life insurance | 32,070 | 31,917 |
Deferred tax asset, net | 18,113 | 12,095 |
Other assets | 2,564 | 2,271 |
Total assets | 3,477,375 | 3,244,884 |
Liabilities: | ||
Noninterest-bearing deposits | 68,650 | 77,563 |
Interest-bearing deposits | 2,576,643 | 2,417,877 |
Total deposits | 2,645,293 | 2,495,440 |
Federal Home Loan Bank borrowings | 329,000 | 229,000 |
Subordinated notes, net | 65,218 | 65,179 |
Operating lease liabilities | 18,959 | 19,868 |
Accrued expenses and other liabilities | 90,230 | 102,783 |
Total liabilities | 3,148,700 | 2,912,270 |
Shareholders' equity: | ||
Preferred stock, authorized 10,000,000 shares; no shares issued and outstanding | ||
Additional paid-in capital | 13,319 | 13,210 |
Retained earnings | 233,790 | 238,319 |
Accumulated other comprehensive income | 759 | 196 |
Total shareholders' equity | 328,675 | 332,614 |
Total liabilities and shareholders' equity | 3,477,375 | 3,244,884 |
Common stock | ||
Shareholders' equity: | ||
Common stock, no par value, authorized 500,000,000 shares; issued and outstanding 50,067,738 shares at March 31, 2020 and 49,944,473 shares at December 31, 2019, respectively | 80,807 | 80,889 |
Total shareholders' equity | $ 80,807 | $ 80,889 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Allowance for loan losses | $ 42,613 | $ 21,730 |
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) | 50,067,738 | 49,944,473 |
Common stock, outstanding (in shares) | 50,067,738 | 49,944,473 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Interest income | ||
Interest and fees on loans | $ 39,525 | $ 41,722 |
Interest and dividends on investment securities and restricted stock | 1,034 | 1,227 |
Other interest | 434 | 236 |
Total interest income | 40,993 | 43,185 |
Interest expense | ||
Interest on deposits | 10,364 | 10,656 |
Interest on Federal Home Loan Bank borrowings | 810 | 1,055 |
Interest on subordinated notes | 1,177 | 1,174 |
Total interest expense | 12,351 | 12,885 |
Net interest income | 28,642 | 30,300 |
Provision (recovery) for loan losses | 20,853 | (1,014) |
Net interest income after provision (recovery) for loan losses | 7,789 | 31,314 |
Non-interest income | ||
Gain on sale of investment securities | 233 | |
Gain on sale of mortgage loans held for sale | 269 | 38 |
Gain on sale of portfolio loans | 2,442 | |
Unrealized gains on equity securities | 80 | 49 |
Net servicing income (loss) | (911) | 325 |
Income on cash surrender value of bank-owned life insurance | 328 | 310 |
Other | 100 | 220 |
Total non-interest income | 529 | 3,828 |
Non-interest expense | ||
Salaries and employee benefits | 6,753 | 7,267 |
Occupancy and equipment | 2,118 | 2,237 |
Professional fees | 3,312 | 962 |
Advertising and marketing | 273 | 439 |
FDIC assessments | 19 | 255 |
Data processing | 335 | 308 |
Other | 1,425 | 1,654 |
Total non-interest expense | 14,235 | 13,122 |
Income (loss) before income taxes | (5,917) | 22,020 |
Income tax expense (benefit) | (1,887) | 6,337 |
Net income (loss) | $ (4,030) | $ 15,683 |
Income (loss) per share, basic and diluted (in dollars per share) | $ (0.08) | $ 0.30 |
Weighted average common shares outstanding: | ||
Basic (in shares) | 49,837,662 | 52,554,446 |
Diluted (in shares) | 49,837,662 | 52,562,820 |
Service charges and fees | ||
Non-interest income | ||
Non-interest income | $ 117 | $ 104 |
Investment management and advisory fees | ||
Non-interest income | ||
Non-interest income | $ 313 | $ 340 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Net income (loss) | $ (4,030) | $ 15,683 |
Other comprehensive income, net of tax: | ||
Unrealized gains on investment securities, arising during the period, net of tax effect of $284 and $41, respectively | 731 | 106 |
Reclassification adjustment for gains included in net income of $233 and $-, respectively, included in gain on sale of investment securities, net of tax effect of $65 and $-, respectively | (168) | |
Total other comprehensive income | 563 | 106 |
Comprehensive income (loss) | $ (3,467) | $ 15,789 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Comprehensive Income | ||
Unrealized gains (losses) on investment securities, arising during the period, tax effect | $ 284 | $ 41 |
Reclassification adjustment for gains included in net income on sale of investment securities, before tax | 233 | 0 |
Reclassification adjustment for gains included in net income on sale of investment securities, tax effect | $ 65 | $ 0 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Total |
Balance at beginning of the period at Dec. 31, 2018 | $ 111,238 | $ 12,713 | $ 211,115 | $ (9) | $ 335,057 |
Balance at beginning of the period (in shares) at Dec. 31, 2018 | 53,012,283 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | 15,683 | 15,683 | |||
Repurchases of shares of common stock (Note 10) | $ (11,544) | (11,544) | |||
Repurchases of shares of common stock (Note 10) (in shares) | (1,212,574) | ||||
Stock-based compensation | 126 | 126 | |||
Stock-based compensation (in shares) | 71,144 | ||||
Other comprehensive loss | 106 | 106 | |||
Dividends distributed | (526) | (526) | |||
Balance at end of the period at Mar. 31, 2019 | $ 99,694 | 12,839 | 226,272 | 97 | 338,902 |
Balance at end of the period (in shares) at Mar. 31, 2019 | 51,870,853 | ||||
Balance at beginning of the period at Dec. 31, 2019 | $ 80,889 | 13,210 | 238,319 | 196 | 332,614 |
Balance at beginning of the period (in shares) at Dec. 31, 2019 | 49,944,473 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income (loss) | (4,030) | (4,030) | |||
Repurchases of shares of common stock (Note 10) | $ (82) | (82) | |||
Repurchases of shares of common stock (Note 10) (in shares) | (10,912) | ||||
Stock-based compensation | 109 | 109 | |||
Stock-based compensation (in shares) | 134,177 | ||||
Other comprehensive loss | 563 | 563 | |||
Dividends distributed | (499) | (499) | |||
Balance at end of the period at Mar. 31, 2020 | $ 80,807 | $ 13,319 | $ 233,790 | $ 759 | $ 328,675 |
Balance at end of the period (in shares) at Mar. 31, 2020 | 50,067,738 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Condensed Consolidated Statements of Changes in Shareholders' Equity | ||
Dividends paid per common share (in dollars per share) | $ 0.01 | $ 0.01 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities | ||
Net income (loss) | $ (4,030) | $ 15,683 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision (recovery) for loan losses | 20,853 | (1,014) |
Deferred income taxes | (6,237) | 143 |
Gain on sale of investment securities | (233) | |
Unrealized gains on equity securities | (80) | (49) |
Accretion on investment securities, net | (128) | (441) |
Depreciation and amortization on leasehold improvements and equipment | 398 | 391 |
Amortization of intangible asset | 113 | |
Origination, net of principal payments, mortgage loans held for sale | (16,855) | (3,166) |
Proceeds from sale of mortgage loans held for sale | 14,578 | 4,152 |
Gain on sale of mortgage loans held for sale | (269) | (38) |
Gain on sale of portfolio loans | (2,442) | |
Increase in cash surrender value of bank-owned life insurance, net of premiums | (153) | (152) |
Valuation allowance adjustments and amortization of mortgage servicing rights | 1,896 | 721 |
Stock-based compensation | 109 | 126 |
Other | 39 | 36 |
Change in operating assets and liabilities: | ||
Accrued interest receivable | 497 | (217) |
Other assets | 662 | 1,432 |
Accrued expenses and other liabilities | (13,504) | 5,336 |
Net cash provided by (used in) operating activities | (2,457) | 20,614 |
Cash Flows From Investing Activities | ||
Maturities and principal receipts of investment securities | 47,272 | 45,124 |
Sales of investment securities | 23,044 | |
Purchases of investment securities | (75,717) | (46,640) |
Net decrease (increase) in loans | 71,032 | (74,766) |
Proceeds from the sale of portfolio loans | 49,891 | |
Purchase of leasehold improvements and equipment | (281) | (582) |
Net cash provided by (used in) investing activities | 65,350 | (26,973) |
Cash Flows From Financing Activities | ||
Net increase (decrease) in deposits | 149,853 | (16,118) |
Proceeds from advances from Federal Home Loan Bank | 100,000 | 1,021,000 |
Repayments of advances from Federal Home Loan Bank | (981,000) | |
Net change in line of credit with Federal Home Loan Bank | 51 | |
Repurchases of shares of common stock | (82) | (11,544) |
Dividends paid to shareholders | (499) | (526) |
Net cash provided by financing activities | 249,272 | 11,863 |
Net change in cash and due from banks | 312,165 | 5,504 |
Cash and due from banks at beginning of period | 77,819 | 52,526 |
Cash and due from banks at end of period | 389,984 | 58,030 |
Cash paid: | ||
Interest | 9,993 | 12,278 |
Income taxes | 102 | |
Noncash investing and financing activities: | ||
Transfers of residential real estate loans to mortgage loans held for sale | 48,260 | |
Transfers of residential real estate loans from mortgage loans held for sale | 103 | |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 42 | $ 513 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
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 of 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 residential and commercial real estate loans, construction loans, commercial lines of credit, and other consumer loans and provides deposit products, consisting primarily of checking, savings and term certificate accounts. The Bank operates through a network of 30 branches of which 26 branches are located in San Francisco and Los Angeles, California with the remaining branches located in New York, New York, Southfield, Michigan and the greater Seattle market. 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. Basis of Presentation The condensed consolidated balance sheet as of March 31, 2020, and the condensed consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for the three months ended March 31, 2020 and 2019 are unaudited. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and reflect all adjustments, in the opinion of management, of a normal 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, 2020 are not necessarily indicative of the results that may be expected for the year ended December 31, 2020 or for any future annual or interim period. The consolidated balance sheet at December 31, 2019 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, 2019. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2020 | |
New Accounting Standards | |
New Accounting Standards | Note 2—New Accounting Standards Recently Issued Accounting Guidance Not Yet Adopted 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. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which clarifies the scope of the credit losses standard and addresses issues related to accrued interest receivable balances and recoveries, among other things. In May 2019, the FASB issued ASU 2019-05, Financial Instruments—Credit Losses (Topic 326): Targeted Transition Relief. The amendments provide entities with an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis, upon adoption of Topic 326. In November 2019, the FASB issued ASU 2019-10, Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates . This update deferred the effective dates of Topic 326 to January 1, 2023 for certain entities including smaller reporting companies (as defined by the U.S. Securities and Exchange Commission (the “SEC”)). The Company, as a smaller reporting company as of the relevant measuring period, qualifies for this extension. At this time, the Company has formed a cross-functional implementation team consisting of individuals from credit, finance and information systems. The implementation team has been working with a software vendor to assist in implementing required changes to credit loss estimation models and processes. The historical data set for model development has been finalized, and the credit loss estimation models are in the process of being developed and tested. The Company expects to recognize a cumulative effect adjustment to the opening balance of retained earnings 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 cumulative adjustment or of the overall impact of ASU No. 2016-13 on its consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3—Summary of Significant Accounting Policies Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates. During 2020, economies throughout the world have been severely disrupted because of the outbreak of the novel coronavirus (“COVID-19”). The Company’s primary market areas of California, the greater Seattle market, and New York became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees, and to comply with applicable government directives. As of March 31, 2020, the impact of the outbreak of COVID-19 was continuing to unfold. As a result, many of management’s estimates and assumptions required increased judgement and carried a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, management’s estimates may change materially in future periods. Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans which are collateralized by real estate. At March 31, 2020 and December 31, 2019, residential real estate loans accounted for 83% and 85%, respectively, 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, 2020 and December 31, 2019, approximately 88% and 89%, respectively, of the loan portfolio was originated in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. This Program was a material component of the Bank’s total loan originations. Loans under the Advantage Loan Program totaled $1,791,863, or 76% of residential loan portfolio, as of March 31, 2020, and $1,942,657, or 78% of residential loan portfolio, as of December 31, 2019. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities | |
Investment Securities | Note 4—Investment Securities Debt Securities The following tables summarize the amortized cost and fair value of debt securities available for sale at March 31, 2020 and December 31, 2019 and the corresponding amounts of gross unrealized gains and losses: March 31, 2020 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 95,949 $ 917 $ — $ 96,866 Mortgage-backed securities 15,157 4 — 15,161 Collateralized mortgage obligations 41,458 226 (67) 41,617 Collateralized debt obligations 215 — (26) 189 Total $ 152,779 $ 1,147 $ (93) $ 153,833 December 31, 2019 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 122,634 $ 170 $ (1) $ 122,803 Mortgage-backed securities 23,028 76 — 23,104 Collateralized mortgage obligations 1,138 45 — 1,183 Collateralized debt obligations 216 — (17) 199 Total $ 147,016 $ 291 $ (18) $ 147,289 All of the Company's mortgage-backed securities and the majority of the Company's collateralized mortgage obligations are issued and/or guaranteed by a U.S. government agency (Government National Mortgage Association) or a U.S. government-sponsored enterprise (Federal Home Loan Mortgage Corporation or Federal National Mortgage Association). No securities of any single issuer, other than debt securities issued by the U.S. government, government agency and government-sponsored enterprises, were in excess of 10% of total shareholders’ equity as of March 31, 2020 and December 31, 2019. For the three months ended March 31, 2020, the proceeds from sales of debt securities available for sale were $23,044. The Company recorded gross realized gains of $235 and gross realized losses of $(2). The amortized cost and fair value of debt securities available for sale issued by U.S. Treasury at March 31, 2020 are shown by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations 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 Cost Value U.S. Treasury securities Due less than one year $ 76,095 $ 76,654 Due after one year through five years 19,854 20,212 Mortgage-backed securities 15,157 15,161 Collateralized mortgage obligations 41,458 41,617 Collateralized debt obligations 215 189 Total $ 152,779 $ 153,833 The table summarizes debt securities available for sale, at fair value, with unrealized losses at March 31, 2020 and December 31, 2019 aggregated by major security type and length of time the individual securities have been in a continuous unrealized loss position, as follows: March 31, 2020 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Collateralized mortgage obligations $ 1,016 $ (67) $ — $ — $ 1,016 $ (67) Collateralized debt obligations — — 189 (26) 189 (26) Total $ 1,016 $ (67) $ 189 $ (26) $ 1,205 $ (93) December 31, 2019 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury securities $ 5,011 $ (1) $ — $ — $ 5,011 $ (1) Collateralized debt obligations — — 199 (17) 199 (17) Total $ 5,011 $ (1) $ 199 $ (17) $ 5,210 $ (18) As of March 31, 2020, the debt securities portfolio consisted of 14 debt securities, with three 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. Non-agency collateralized mortgage obligations with a carrying value of $1,016 had an unrealized loss of $67 due to a temporary dislocation of the market for non-Agency mortgages and the corresponding effect on non-Agency securitizations as a result of the COVID-19 pandemic. These investments have historically been in a gain position, and is expected to recover within the coming months. All interest and dividends are considered taxable. A collateralized debt obligation with a carrying value of $189 and $199 at March 31, 2020 and December 31, 2019, respectively, was rated high quality at inception, but it was subsequently rated by Moody’s as Ba1, which is defined as “speculative.” The issuers of the underlying investments (the collateral) of the collateralized debt obligation are primarily banks. Management 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 collateralized debt obligation remained classified as available for sale and represented $26 and $17 of the unrealized losses reported at March 31, 2020 and December 31, 2019, 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, 2020 and December 31, 2019, equity securities totaled $5,335 and $5,255, respectively. 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, 2020 and December 31, 2019, equity securities with readily determinable fair values were $5,089 and $5,009, respectively. The following is a summary of unrealized and realized gains and losses recognized in the condensed consolidated statements of income during the three months ended March 31, 2020 and 2019: Three Months Ended March 31, 2020 2019 Net gains recorded during the period on equity securities $ 80 $ 49 Less: net gains (losses) recorded during the period on equity securities sold during the period — — Unrealized gains recorded during the period on equity securities held at the reporting date $ 80 $ 49 The Company has elected to account for its investment in a thinly traded, restricted stock using the measurement alternative for equity securities without readily determinable fair values. The investment was reported at $246 at both March 31, 2020 and December 31, 2019. |
Loans
Loans | 3 Months Ended |
Mar. 31, 2020 | |
Loans | |
Loans | Note 5—Loans Major categories of loans were as follows: March 31, December 31, 2020 2019 Residential real estate $ 2,345,328 $ 2,476,866 Commercial real estate 279,508 240,081 Construction 198,115 178,376 Commercial lines of credit 19,271 17,903 Other consumer 36 34 Total loans 2,842,258 2,913,260 Less: allowance for loan losses (42,613) (21,730) Loans, net $ 2,799,645 $ 2,891,530 Loans with carrying values of $1,157,536 and $933,747 were pledged as collateral on FHLB borrowings at March 31, 2020 and December 31, 2019, respectively. The table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2020 and 2019: Commercial Residential Commercial Lines of Other Three Months Ended March 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Provision for loan losses 6,808 5,999 7,616 40 — 390 20,853 Charge offs — — — — — — — Recoveries 10 19 1 — — — 30 Total ending balance $ 19,154 $ 11,261 $ 11,439 $ 368 $ 1 $ 390 $ 42,613 Commercial Residential Commercial Lines of Other Three Months Ended March 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 Provision (recovery) for loan losses (343) (253) (558) (58) — 198 (1,014) Charge offs — — — (176) — — (176) Recoveries 5 31 2 — — — 38 Total ending balance $ 13,488 $ 2,351 $ 2,717 $ 824 $ 1 $ 1,317 $ 20,698 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, 2020 and December 31, 2019: Commercial Residential Commercial Lines of Other March 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 42 $ — $ — $ 5 $ — $ — $ 47 Collectively evaluated for impairment 19,112 11,261 11,439 363 1 390 42,566 Total ending allowance balance $ 19,154 $ 11,261 $ 11,439 $ 368 $ 1 $ 390 $ 42,613 Loans: Loans individually evaluated for impairment $ 211 $ 1,079 $ 26,846 $ 1,373 $ — $ — $ 29,509 Loans collectively evaluated for impairment 2,345,117 278,429 171,269 17,898 36 — 2,812,749 Total ending loans balance $ 2,345,328 $ 279,508 $ 198,115 $ 19,271 $ 36 $ — $ 2,842,258 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 43 $ — $ — $ 5 $ — $ — $ 48 Collectively evaluated for impairment 12,293 5,243 3,822 323 1 — 21,682 Total ending allowance balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Loans: Loans individually evaluated for impairment $ 215 $ 1,100 $ 17,112 $ 1,377 $ — $ — $ 19,804 Loans collectively evaluated for impairment 2,476,651 238,981 161,264 16,526 34 — 2,893,456 Total ending loans balance $ 2,476,866 $ 240,081 $ 178,376 $ 17,903 $ 34 $ — $ 2,913,260 The following tables present information related to impaired loans by class of loans as of and for the periods indicated: At March 31, 2020 At December 31, 2019 Unpaid Allowance Unpaid Allowance Principal Recorded for Loan Principal Recorded for Loan Balance Investment Losses Balance Investment Losses With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 121 $ 95 $ — $ 125 $ 98 $ — Commercial real estate, retail 1,292 1,079 — 1,308 1,100 — Construction 26,889 26,846 — 17,156 17,112 — Commercial lines of credit, private banking 1,245 1,242 — 1,245 1,245 — Subtotal 29,547 29,262 — 19,834 19,555 — With an allowance for loan losses recorded: Residential real estate, first mortgage 116 116 42 116 117 43 Commercial lines of credit, private banking 131 131 5 132 132 5 Subtotal 247 247 47 248 249 48 Total $ 29,794 $ 29,509 $ 47 $ 20,082 $ 19,804 $ 48 In the above tables, the unpaid principal balance is not reduced for partial charge offs. Also, the recorded investment excludes accrued interest receivable on loans which was not significant. Three Months Ended March 31, 2020 2019 Average Interest Cash Basis Average Interest Cash Basis Recorded Income Interest Recorded Income Interest Investment Recognized Recognized Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 96 $ — $ — $ 107 $ — $ — Commercial real estate: Retail 1,089 15 10 1,165 15 10 Multifamily — — — 1,080 12 8 Offices — — — 1,516 25 17 Construction 26,653 466 269 9,325 146 97 Commercial lines of credit: Private banking 1,243 21 14 — — — C&I lending — — — 100 2 1 Subtotal 29,081 502 293 13,293 200 133 With an allowance for loan losses recorded: Residential real estate, first mortgage 117 1 1 120 1 1 Commercial lines of credit, private banking 131 2 1 139 2 1 Subtotal 248 3 2 259 3 2 Total $ 29,329 $ 505 $ 295 $ 13,552 $ 203 $ 135 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 table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Loans Past Loans Past Due Over Due Over 90 Days Still 90 Days Still Nonaccrual Accruing Nonaccrual Accruing Residential real estate: Residential first mortgage $ 15,768 $ 48 $ 14,482 $ 50 Residential second mortgage 505 — 210 — Commercial real estate: Retail 35 — 40 — Total $ 16,308 $ 48 $ 14,732 $ 50 The following tables present the aging of the recorded investment in past due loans as of March 31, 2020 and December 31, 2019 by class of loans: Greater 30 - 59 60 - 89 than Days Days 89 Days Total Loans Not March 31, 2020 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 29,528 $ 12,668 $ 15,816 $ 58,012 $ 2,262,732 $ 2,320,744 Residential second mortgage 477 127 505 1,109 23,475 24,584 Commercial real estate: Retail — — 35 35 17,995 18,030 Multifamily 979 — — 979 92,293 93,272 Offices — — — — 27,822 27,822 Hotels/Single room occupancy hotels 13,538 — — 13,538 59,949 73,487 Industrial — — — — 14,089 14,089 Other — — — — 52,808 52,808 Construction 20,214 — — 20,214 177,901 198,115 Commercial lines of credit: Private banking — — — — 10,874 10,874 C&I lending — — — — 8,397 8,397 Other consumer — — — — 36 36 Total $ 64,736 $ 12,795 $ 16,356 $ 93,887 $ 2,748,371 $ 2,842,258 Greater 30 - 59 60 - 89 than Days Days 89 Days Total Loans Not December 31, 2019 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 36,112 $ 5,112 $ 14,532 $ 55,756 $ 2,396,800 $ 2,452,556 Residential second mortgage 97 295 210 602 23,708 24,310 Commercial real estate: Retail — — 40 40 6,089 6,129 Multifamily — — — — 64,873 64,873 Offices — — — — 28,048 28,048 Hotel/Single room occupancy hotels 5,605 — — 5,605 76,165 81,770 Industrial — — — — 14,150 14,150 Other — — — — 45,111 45,111 Construction 15,008 — — 15,008 163,368 178,376 Commercial lines of credit: Private banking — — — — 11,914 11,914 C&I lending 1,249 — — 1,249 4,740 5,989 Other consumer — — — — 34 34 Total $ 58,071 $ 5,407 $ 14,782 $ 78,260 $ 2,835,000 $ 2,913,260 The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential real estate and other consumer loans, 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. As a response to COVID-19, the Company has offered forbearance under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act to customers facing COVID-19 related financial difficulties. The Company is not adjusting the aging of loans for customers granted a payment deferral in response to COVID-19. These loans remain in the aging category that was applicable at the time of payment deferral. Interest continues to accrue on these loans. Troubled Debt Restructurings At March 31, 2020 and December 31, 2019, the balance of outstanding loans identified as troubled debt restructurings was $24,563 and $13,708, respectively. The allocated portion of the allowance for loan losses with respect to these loans was $47 and $48 at March 31, 2020 and December 31, 2019, respectively. There were no loans identified as troubled debt restructurings that subsequently defaulted. During the three months ended March 31, 2020, the Bank modified the terms of two construction loans and one private banking loan with an extension of the maturity dates at the contract's existing rate of interest, which is lower than the current market rate for new debt with similar risk. The total outstanding recorded investments were $10,863 both before and after modification. During the three months ended March 31, 2019, the Bank modified the terms of a construction loan by providing for an extension of the maturity dates at the contract’s existing rate of interest, which is lower than the current market rate for new debt with similar risk. The outstanding recorded investment was $1,046 both before and after modification. The effect of the modification on the allowance for loan losses was not significant. The terms of certain other loans have been modified during the three months ended March 31, 2020 and 2019 that did not meet the definition of a troubled debt restructuring. These other loans that were modified were not considered significant. Certain provisions of the CARES Act encourage financial institutions to practice prudent efforts to work with borrowers impacted by COVID-19. Under these provisions, a modification deemed to be COVID-19 related would not be considered a troubled debt restructuring if the loan was not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or December 31, 2020. The banking regulators issued similar guidance, which also clarified that a COVID-19 related modification should not be considered a troubled debt restructuring if the borrower was current on payments at the time the underlying loan modification program was implemented and if the modification is considered to be short-term. Under these terms, the Company had implemented a COVID-19 forbearance program that generally provides for principal and interest forbearance for 120 days to residential and commercial borrowers and these loans were not considered troubled debt restructurings. As of March 31, 2020, the Company had received approximately 150 forbearance requests under this program with an aggregate loan balance of $70,288, the vast majority of which were in the process of review as of that date. As of September 30, 2020, the Company approved 245 forbearance requests on loans totaling $114,989. Of these, 116 loans, totaling $69,828 have completed the agreed-upon deferment period and have returned to normal debt service. There are 62 loans that remain in payment deferral totaling $75,161. Foreclosure Proceedings At March 31, 2020 and December 31, 2019, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process is $8,132 and $1,643, respectively. 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 other consumer loans and non-homogeneous loans, such as commercial lines of credit, construction and commercial real estate loans. This analysis is performed at least quarterly. 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, 2020 and December 31, 2019, the risk rating of loans by class of loans was as follows: Special March 31, 2020 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,304,928 $ — $ 15,459 $ 357 $ 2,320,744 Residential second mortgage 24,079 — 505 — 24,584 Commercial real estate: Retail 16,118 833 1,079 — 18,030 Multifamily 84,601 7,118 1,553 — 93,272 Offices 24,343 — 3,479 — 27,822 Hotels/Single room occupancy hotels 28,205 15,355 29,927 — 73,487 Industrial 5,888 — 8,201 — 14,089 Other 45,468 916 6,424 — 52,808 Construction 163,679 14,539 19,897 — 198,115 Commercial lines of credit: Private banking 9,632 1,242 — — 10,874 C&I lending 7,015 1,382 — — 8,397 Other consumer loans 36 — — — 36 Total $ 2,713,992 $ 41,385 $ 86,524 $ 357 $ 2,842,258 Special December 31, 2019 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,438,024 $ — $ 14,077 $ 455 $ 2,452,556 Residential second mortgage 24,100 — 210 — 24,310 Commercial real estate: Retail 4,195 834 1,100 — 6,129 Multifamily 56,164 7,150 1,559 — 64,873 Offices 24,484 645 2,919 — 28,048 Hotels/Single room occupancy hotels 60,074 18,189 3,507 — 81,770 Industrial 5,894 8,256 — — 14,150 Other 37,693 920 6,498 — 45,111 Construction 156,339 7,008 15,029 — 178,376 Commercial lines of credit: Private banking 10,669 1,245 — — 11,914 C&I lending 4,013 — 1,976 — 5,989 Other consumer 34 — — — 34 Total $ 2,821,683 $ 44,247 $ 46,875 $ 455 $ 2,913,260 During the three months ended March 31, 2019, the Bank sold pools of residential real estate mortgages for $49,891 to third-party investors. The transactions resulted in full de-recognition of the mortgages (i.e. transferred assets) from the condensed consolidated balance sheets and recognition of gain on sale of portfolio loans of $2,442. After the sales, the Bank’s only continuing involvement in the transferred assets is to act as servicer or subservicer of the mortgages. For more information on repurchase exposures, see Note 16 — Commitments and Contingencies. |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net | 3 Months Ended |
Mar. 31, 2020 | |
Mortgage Servicing Rights, net | |
Mortgage Servicing Rights, net | Note 6—Mortgage Servicing Rights, net The Bank records servicing assets from the sale of residential real estate 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 condensed consolidated balance sheets. The principal balance of these loans at March 31, 2020 and December 31, 2019 are as follows: March 31, December 31, 2020 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 136,184 $ 130,425 FHLB 87,753 86,778 Private investors 610,094 656,035 Total $ 834,031 $ 873,238 Custodial escrow balances maintained with these serviced loans were $7,122 and $7,688 at March 31, 2020 and December 31, 2019, respectively. Activity for mortgage servicing rights and the related valuation allowance are as follows: Three Months Ended March 31, 2020 2019 Mortgage servicing rights: Beginning of period $ 10,845 $ 10,733 Additions 107 843 Amortization (650) (684) End of period 10,302 10,892 Valuation allowance at beginning of period 1,080 100 Additions (recoveries) 1,246 37 Valuation allowance at end of period 2,326 137 Mortgage servicing rights, net $ 7,976 $ 10,755 Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance, was $(911) and $325 for the three months ended March 31, 2020 and 2019, respectively. The fair value of mortgage servicing rights was $8,119 and $10,271 at March 31, 2020 and December 31, 2019, 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, 2020 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds ranging from 7.3% to 47.8%, depending on the stratification of the specific right, and a weighted average default rate of 0.2%. The fair value at December 31, 2019 was determined using discount rates ranging from 9.5% to 12.0%, prepayment speeds ranging from 6.8% to 47.1%, depending on the stratification of the specific right, and a weighted average default rate of 0.2%. At March 31, 2020 and December 31, 2019, the carrying amount of certain individual groupings exceeded their fair values. See Note 13 — Fair Values of Financial Instruments. |
Deposits
Deposits | 3 Months Ended |
Mar. 31, 2020 | |
Deposits | |
Deposits | Note 7—Deposits Time deposits, included in interest‑bearing deposits, were $1,377,610 and $1,154,076 at March 31, 2020 and December 31, 2019, respectively. Time deposits included brokered deposits of $167,751 and $25,000 at March 31, 2020 and December 31, 2019, respectively. Time deposits that meet or exceed the FDIC insurance limit of $250 were $335,218 and $283,457 at March 31, 2020 and December 31, 2019, respectively. |
FHLB Borrowings
FHLB Borrowings | 3 Months Ended |
Mar. 31, 2020 | |
FHLB Borrowings | |
FHLB Borrowings | Note 8—FHLB Borrowings FHLB borrowings at March 31, 2020 and December 31, 2019 consist of the following: March 31, December 31, 2020 Interest Rates 2019 Interest Rates Long-term fixed rate advances $ 329,000 0.43%-1.96% $ 229,000 1.07%-1.96% FHLB Advances The long-term fixed rate advances have maturity dates ranging from July 2020 to February 2030. Interest on these 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, 2020, advances totaling $307,000 were callable by the FHLB as follows: $100,000 in August 2020; $67,000 in September 2021; $90,000 in October 2021; and $50,000 in May 2024. At March 31, 2020, the Bank had additional borrowing capacity of $430,153 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, 2020 and 2019 was $5 and $4,133, respectively. Borrowings accrue interest based on a variable rate based on the FHLB’s overnight cost of funds rate, which was 0.53% and 1.99% at March 31, 2020 and December 31, 2019, respectively. The agreement has a one-year term and terminates in October 2020. The FHLB advances and the overdraft line of credit are collateralized by pledged loans totaling $1,157,536 and $933,747 at March 31, 2020 and December 31, 2019, respectively. Other Borrowings The Bank had available unsecured credit lines with other banks totaling $70,000 at both March 31, 2020 and December 31, 2019. There were no borrowings under these credit lines during the three months ended March 31, 2020 or the year ended December 31, 2019. |
Subordinated Notes, net
Subordinated Notes, net | 3 Months Ended |
Mar. 31, 2020 | |
Subordinated Notes, net | |
Subordinated Notes, net | Note 9—Subordinated Notes, net The subordinated notes (the "Notes") were as follows: March 31, December 31, 2020 2019 7.0% fixed to floating rate subordinated notes $ 65,000 $ 65,000 Unamortized note premium 458 474 Unamortized debt issuance costs (240) (295) Total $ 65,218 $ 65,179 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 London Interbank Offered Rate (“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 $1,177 and $1,174 for the three months ended March 31, 2020 and 2019, 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 that (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 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 in Note 14 — Regulatory Capital Requirements. |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2020 | |
Stock Repurchase Program | |
Stock Repurchase Program | Note 10—Stock Repurchase Program In late 2018, the board of directors approved the repurchase of up to $50,000 of the Company’s outstanding shares of common stock. The stock repurchase program permits the Company to purchase shares of its common stock from time to time in the open market or in privately negotiated transactions. The program does not have an expiration date. The Company received regulatory approval of its stock repurchase program and publicly announced the program in January 2019. Under this program, the Company is not obligated to repurchase shares of its common stock. The repurchased shares will be canceled and returned to authorized but unissued status. During the three months ended March 31, 2020, the Company repurchased and cancelled 10,912 shares of its common stock for $82, including commissions and fees (average repurchase price of $7.57 per share). Such repurchases of common stock were funded through cash generated from operations. As of March 31, 2020, the Company had $19,568 of common stock purchases remaining that may be made under the program. In March 2020, in connection with the issues giving rise to the internal review of the Advantage Loan Program (the “Internal Review”), the Company suspended the stock repurchase program for at least the near term. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2020 | |
Stock-based Compensation | |
Stock-based Compensation | Note 11—Stock-based Compensation The board of directors established a 2017 Omnibus Equity Incentive Plan (the “Plan”) which was approved by the shareholders. 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. Stock option awards granted prior to 2020 generally vest in installments of 50% in each of the third and fourth year after the date of grant, while stock options awards granted beginning in 2020 will vest ratably over three years (33% per year) after the date of grant. All stock option awards 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 2, 2020, the board of directors approved the issuance of options to purchase 67,361 shares of common stock with an exercise price of $7.10 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 $1.78 per option. The grant-date fair value of each stock option award was estimated using the Black-Scholes option pricing model that uses the assumptions set forth in the following table: Exercise price of options $ 7.10 Risk-free interest rate 0.94 % Expected term (in years) 6.00 Expected stock price volatility 26.45 % Dividend yield .56 % A summary of the Company's stock option activity as of and for the three months ended March 31, 2020 is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2020 142,477 $ 12.29 8.60 $ — Granted 67,361 7.10 Exercised — — Forfeited /expired (8,673) 11.78 Outstanding at March 31, 2020 201,165 $ 10.57 $ — The Company recorded stock-based compensation expense associated with stock options of $26 and $32 for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, there was $422 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 2.51 years. No options are exercisable at March 31, 2020. Restricted Stock Awards On March 2, 2020, the board of directors approved the issuance of 141,374 restricted stock awards to certain key employees. The restricted stock awards vest ratably over three years (33% per year) after the date of grant. Upon a change in control, as defined in the Plan, the outstanding restricted stock awards will immediately vest. 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. A summary of the Company's restricted stock awards activity for the three months ended March 31, 2020 is as follows: Weighted Average Number Grant Date Fair of Shares Value Nonvested at January 1, 2020 100,096 $ 11.02 Granted 141,374 6.98 Vested — — Forfeited (7,197) 11.35 Nonvested at March 31, 2020 234,273 $ 8.57 The fair value of the award is recorded as compensation expense on a straight-line basis over the vesting period. The Company recorded stock-based compensation expense associated with restricted stock awards of $83 and $94 for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, there was $1,557 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 2.78 years. |
Income (Loss) Per Share
Income (Loss) Per Share | 3 Months Ended |
Mar. 31, 2020 | |
Income (Loss) Per Share | |
Income (Loss) Per Share | Note 12—Income (Loss) 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. The following table presents the computation of income (loss) per share, basic and diluted: Three Months Ended March 31, 2020 2019 Numerator: Net income (loss) $ (4,030) $ 15,683 Denominator: Weighted average common shares outstanding, basic 49,837,662 52,554,446 Weighted average effect of potentially dilutive common shares: Stock options — — Restricted stock — 8,374 Weighted average common shares outstanding, diluted 49,837,662 52,562,820 Income (loss) per share: Basic $ (0.08) $ 0.30 Diluted $ (0.08) $ 0.30 For the three months ended March 31, 2020, the effect of 234,273 nonvested restricted shares of common stock and 201,165 options to purchase shares of common stock were excluded in computing diluted income per common share, as the inclusion would be antidilutive. For the three months ended March 31, 2019, the effect of 104,244 nonvested restricted shares of common stock and 177,514 options to purchase shares of common stock were excluded in computing diluted income per common share, as the inclusion would be antidilutive. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 3 Months Ended |
Mar. 31, 2020 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 13—Fair Values of Financial Instruments Financial instruments include assets carried at fair value, as well as certain assets and liabilities carried at cost or amortized cost but disclosed at fair value in these condensed 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 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 following methods and significant assumptions are used to estimate fair value: 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 analysis. Rating agency and industry research reports as well as defaults and deferrals on individual investment securities are reviewed and incorporated into the calculations. Mortgage Servicing Rights Fair value of mortgage servicing rights is initially determined at the individual grouping level based on an internal valuation model that calculates the present value of estimated future net servicing income. On a quarterly basis, mortgage servicing rights are evaluated for impairment based upon third party valuations obtained. As disclosed in Note 5, the valuation model utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income (Level 3). 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, 2020 and December 31, 2019: Fair Value Measurements at March 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury securities $ 96,866 $ 96,866 $ — $ — Mortgage-backed securities 15,161 — 15,161 — Collateralized mortgage obligations 41,617 — 41,617 — Collateralized debt obligations 189 — — 189 Equity securities 5,089 5,089 — — Fair Value Measurements at December 31, 2019 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury securities $ 122,803 $ 122,803 $ — $ — Mortgage-backed securities 23,104 — 23,104 — Collateralized mortgage obligations 1,183 — 1,183 — Collateralized debt obligations 199 — — 199 Equity securities 5,009 5,009 — — 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, 2020 and 2019: Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Collateralized Debt Obligations March 31, 2020 March 31, 2019 Balance of recurring Level 3 assets at beginning of period $ 199 $ 297 Total gains or losses (realized/unrealized): Included in income-realized — — Included in other comprehensive income (loss) (9) (6) Principal maturities/settlements (1) (1) Sales — — Transfers in and/or out of Level 3 — — Balance of recurring Level 3 assets at end of period $ 189 $ 290 Unrealized losses on Level 3 investments for collateralized debt obligations was $26 and $17 at March 31, 2020 and December 31, 2019, respectively. In addition to the amounts included in income as presented in the table above, interest income recorded on collateralized debt obligations was $2 and $4 for the three months ended March 31, 2020 and 2019, respectively. The fair value of the collateralized debt obligations is obtained from third party pricing information. It is determined by calculating discounted cash flows using LIBOR curves plus spreads that adjust for credit risk and illiquidity. The Company also performs an internal analysis that considers the structure and term of the collateralized debt obligations and the financial condition of the underlying issuers to corroborate the information used from the independent third party. 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. For assets measured at fair value on a nonrecurring basis which were still held in the condensed consolidated balance sheet at March 31, 2020 and December 31, 2019, the following table provides the level of valuation assumptions used to determine each adjustment and the related carrying value: Fair Value Measurements at March 31, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,466 $ — $ — $ 7,466 Fair Value Measurements at December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,949 $ — $ — $ 7,949 The following table presents quantitative information about Level 3 fair value measurements for the financial instruments measured at fair value on a nonrecurring basis at March 31, 2020 and December 31, 2019: Quantitative Information about Level 3 Fair Value Measurements at March 31, 2020 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,466 Discounted cash flow Discount rate 9.5% - 12.0% (11.7%) Prepayment speed 7.8% - 47.8% (22.5%) Default rate 0.1% - 0.3% (0.2%) (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,949 Discounted cash flow Discount rate 9.5% - 12.0% (11.9%) Prepayment speed 7.2% - 47.1% (21.3%) Default rate 0.1% - 0.3% (0.2%) (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Fair Value of Financial Instruments The carrying amounts and estimated fair values of financial instruments not carried at fair value at March 31, 2020 and December 31, 2019, are as follows: Fair Value Measurements at March 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 391,009 $ 391,009 $ 391,009 $ — $ — Interest-bearing time deposits with other banks 1,025 1,031 — 1,031 — Mortgage loans held for sale 3,776 3,890 — 3,890 — Loans, net 2,799,645 2,840,329 — — 2,840,329 Financial Liabilities Time deposits 1,377,610 1,383,282 — 1,383,282 — Federal Home Loan Bank borrowings 329,000 344,961 — 344,961 — Subordinated notes, net 65,218 59,150 — 59,150 — Fair Value Measurements at December 31, 2019 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 77,819 $ 77,819 $ 77,819 $ — $ — Interest-bearing time deposits with other banks 1,025 1,025 1,025 — — Mortgage loans held for sale 1,337 1,368 — 1,368 — Loans, net 2,891,530 2,978,846 — — 2,978,846 Financial Liabilities Time deposits 1,154,076 1,161,490 — 1,161,490 — Federal Home Loan Bank borrowings 229,000 227,333 — 227,333 — Subordinated notes, net 65,179 65,650 — 65,650 — |
Regulatory Capital Requirements
Regulatory Capital Requirements | 3 Months Ended |
Mar. 31, 2020 | |
Regulatory Capital Requirements | |
Regulatory Capital Requirements | Note 14—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 condensed consolidated financial statements. 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. Under the Basel III rules, the Company must hold a capital conservation buffer over the adequately capitalized risk-based capital ratios. At present, in order to avoid the imposition of restrictions on capital distributions and discretionary bonus payments, the Company in required to maintain a capital conservation buffer of at least 2.50%. The net unrealized gain or loss on investment securities is not included in regulatory capital. Banking organizations are required to maintain a minimum total capital ratio of 10.5%, a minimum Tier 1 capital ratio of 8.5% and a minimum common equity Tier 1 capital ratio of 7.0%, respectively (in each case accounting for the required capital conservation buffer). Management believes that at March 31, 2020, the Company and the Bank meet all regulatory capital requirements to which they are subject. The holding company contributed $50,000 of capital into the Bank during the three months ended March 31, 2020. At March 31, 2020 and December 31, 2019, the Bank exceeded all capital requirements to be categorized as well-capitalized and the Company exceeded the applicable capital adequacy requirements as presented below. The Company and the Bank’s actual and minimum required capital amounts and ratios, with such regulatory minimums not including the capital conservation buffer, at March 31, 2020 and December 31, 2019 are as follows: For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio March 31, 2020 Total adjusted capital to risk-weighted assets Consolidated $ 413,905 21.15 % $ 156,553 8.00 % N/A N/A Bank 396,945 20.37 155,911 8.00 $ 194,889 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 327,917 16.76 117,415 6.00 N/A N/A Bank 372,307 19.10 116,933 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 327,917 16.76 88,061 4.50 N/A N/A Bank 372,307 19.10 87,700 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 327,917 9.95 131,795 4.00 N/A N/A Bank 372,307 11.31 131,681 4.00 164,337 5.00 For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2019 Total adjusted capital to risk-weighted assets Consolidated $ 419,327 21.49 % $ 156,081 8.00 % N/A N/A Bank 346,985 17.82 155,809 8.00 $ 194,761 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 332,418 17.04 117,061 6.00 N/A N/A Bank 325,255 16.70 116,857 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 332,418 17.04 87,796 4.50 N/A N/A Bank 325,255 16.70 87,643 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 332,418 10.11 131,471 4.00 N/A N/A Bank 325,255 9.90 131,469 4.00 164,337 5.00 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. Approval by regulatory authorities is required if the total capital distributions for the applicable calendar year exceed the sum of the Bank’s net income for that year to date plus the Bank’s retained net income for the preceding two years, or the Bank would not be at least adequately capitalized following the distribution. The Qualified Thrift Lender (“QTL”) test requires that a minimum of 65% of assets be maintained in “qualified thrift investments”, including mortgage loans, housing- and real estate-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. 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, 2020, the Bank has the ability to pay aggregate dividends of approximately $79,036 to the Company without prior regulatory approval. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Related Party Transactions | Note 15—Related Party Transactions From time to time, the Company makes charitable contributions to a foundation for which certain members of the boards of directors of the Company and Bank, and who are also related to the Company’s controlling shareholders, serve as trustees. The Company paid $225 to the foundation during both the three months ended March 31, 2020 and 2019. The Bank provides monthly data processing and programming services to entities controlled by the Company’s controlling shareholders. Aggregate fees received for such services amounted to $27 during both the three months ended March 31, 2020 and 2019. The Company leases certain storage and office space from entities owned by the Company’s controlling shareholders. Amounts paid under such leases totaled $60 and $59 during the three months ended March 31, 2020 and 2019, respectively. The Company also subleases certain office space to entities owned by the Company’s controlling shareholders. Amounts received under such subleases totaled $69 and $68 during the three months ended March 31, 2020 and 2019, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 16—Commitments and Contingencies Financial Instruments with Off-Balance Sheet Risk The Bank is a party to financial instruments with off-balance sheet 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 condensed 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, 2020, outstanding commitments to make loans consisted of fixed rate loans of $49,123 with interest rates ranging from 2.375% to 4.50% and maturities ranging from 15 years to 30 years and variable rate loans of $38,640 with varying interest rates (ranging from 3.375% to 6.75% at March 31, 2020) and maturities ranging from 15 to 30 years. Unused Lines of Credit The Bank also issues unused lines of credit to meet customer financing needs. At March 31, 2020, the unused lines of credit include residential second mortgages of $20,283, construction loans of $212,448, commercial lines of credit of $11,716 and consumer loans of $401. These unused lines of credit consisted of fixed rate loans of $438 with interest rates ranging from 5.25% to 18.0% and maturities ranging from three months to 7 years and variable rate loans of $244,410 with varying interest rates (ranging from 3.25% to 8.5%) and maturities ranging from one month to 15 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 may 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, 2020 and December 31, 2019: March 31, December 31, 2020 2019 Commitments to make loans $ 87,762 $ 76,927 Unused lines of credit 244,848 220,553 Standby letters of credit 24 24 Legal Proceedings The Bank is currently under formal investigation by the OCC and continues to be subject to a publicly available formal agreement with the OCC, dated June 18, 2019 (the “OCC Agreement”), relating primarily to certain aspects of its Bank Secrecy Act/Anti-Money Laundering compliance program as well as the Bank’s credit administration. The OCC Agreement generally requires that the Bank enhance its policies and procedures to ensure compliance with BSA/AML laws and regulations and ensure effective controls over residential loan underwriting. Specifically, the OCC Agreement requires the Bank to: (i) establish a compliance committee to monitor and oversee the Bank’s compliance with the provisions of OCC Agreement; (ii) develop a revised customer due diligence and enhanced due diligence program; (iii) develop a revised suspicious activity monitoring program; (iv) engage an independent, third-party consultant to review and provide a written report on the Bank’s suspicious activity monitoring; (v) develop revised policies and procedures to ensure effective BSA/AML model risk management for the Bank’s automated suspicious activity monitoring system, which must be validated by a qualified, independent third party; (vi) ensure that the Bank’s BSA Department maintains sufficient personnel; and (vii) develop revised policies and procedures to ensure effective controls over loan underwriting. In addition to these requirements, while the OCC Agreement remains in effect, the Bank is subject to certain restrictions on expansion activities, such as growth through acquisition or branching to supplement organic growth of the Bank. Further, any failure to comply with the requirements of the OCC Agreement could result in further enforcement actions, the imposition of material restrictions on the activities of the Bank, or the assessment of fines or penalties. The Bank established a Compliance Committee to monitor and assure compliance with the OCC Agreement, oversee the completion of an independent review of account and transaction activity to be conducted by a third party vendor, and engage a third party to conduct a model validation for its BSA/AML monitoring software. The Bank is fully cooperating with the OCC investigation and implementing the items necessary to achieve compliance with the obligations in the OCC Agreement. A finding by the OCC that the Bank failed to comply with the OCC Agreement or adverse findings in the OCC investigation could result in additional regulatory scrutiny, constraints on the Bank’s business, or other formal enforcement action. Any of those events could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank has incurred significant costs in its efforts to comply with the OCC Agreement and respond to the OCC investigation, which are reflected in the Company’s results of operations for the first quarter of 2020. The Bank also has received grand jury subpoenas from the United States Department of Justice (the “DOJ”) beginning in 2020 requesting the production of documents and information in connection with an investigation that appears to be focused on the Bank’s residential lending practices and related issues. The Bank is fully cooperating with this ongoing investigation. Adverse findings in the DOJ investigation could result in material losses due to damages, penalties, costs, and/or expenses imposed on the Company, which could have a material adverse effect on our future operations, financial condition, growth, or other aspects of our business. The Bank expects to incur significant costs in its efforts to comply with the DOJ investigation in 2020. In addition, the Company, certain of its current and former officers and directors, and other parties have been named as defendants in a shareholder class action captioned Oklahoma Police Pension and Retirement System v. Sterling Bancorp, Inc., et al. , Case No. 5:20-cv-10490-JEL-EAS, filed on February 26, 2020 in the United States District Court for the Eastern District of Michigan. The plaintiffs filed an amended complaint on July 2, 2020. This action alleges violations of the federal securities laws, primarily with respect to disclosures concerning the Bank’s residential lending practices that were made in the Company’s registration statement and prospectus for its initial public offering, in subsequent press releases, in periodic and other filings with the SEC, and during earnings calls. The Company filed a motion to dismiss the amended complaint with the court on September 22, 2020. The Company intends to vigorously defend this and any related actions. On December 9, 2019, the Company announced it had voluntarily suspended its Advantage Loan Program in connection with an internal review of the program (the “Internal Review”). The primary focus of the Internal Review, which has been led by outside legal counsel under the direction of a special committee of independent directors (the “Special Committee”), has involved the origination of residential mortgage loans under the Advantage Loan Program and related matters. Results from the Special Committee’s Internal Review have indicated that certain employees engaged in misconduct in connection with the origination of a significant number of such loans, including with respect to verification of income, the amount of income reported for borrowers, reliance on third parties, and related documentation. As a result, the Company has permanently discontinued the Advantage Loan Program. While the Internal Review is substantially complete, the Company expects it to remain open during the pendency of the government investigations discussed herein, and it is possible additional work will be required in connection with the Internal Review. As of December 31, 2019, the Company established a liability of $25,000 for contingent losses based on additional information obtained during the course of the Internal Review and significant judgments by management. The Company has maintained the same level of liability for contingent losses at March 31, 2020. The outcome of the pending investigations and litigation is uncertain. There can be no assurance (i) that the Company will not incur material losses due to damages, penalties, costs and/or expenses as a result of such investigations and litigation, (ii) that the accrual for contingent losses will be sufficient to cover such losses, or (iii) that such losses will not materially exceed such accrual and have a material impact on the Company’s financial condition or results of operations. In addition, on July 28, 2020, the Company received a demand letter from two law firms representing a purported stockholder of the Company alleging facts and claims substantially the same as many of the alleged facts and claims in the class action lawsuit. The demand letter requests that the board of directors take action to (1) recover damages the Company has purportedly sustained as a result of alleged breaches of fiduciary duties by certain of its officers and directors; (2) recover for the benefit of the Company the amounts by which certain of its officers and directors purportedly were unjustly enriched; and (3) correct alleged deficiencies in the Company's internal controls. The demand letter states that, if the board of directors has not taken the actions demanded within 90 days after the receipt of the letter, or in the event the board of directors refuses to take the actions demanded, the purported stockholder will commence a stockholder derivative action on behalf of the Company seeking appropriate relief. The board of directors has recently established a demand review committee to evaluate the matters raised in the demand letter and to determine the actions, if any, that should be taken by the Company with respect to those matters. The Company has responded to the demand letter advising the purported shareholder of the appointment of the demand review committee. There can be no assurance as to whether any litigation will be commenced by or against the Company with respect to the claims set forth in the demand letter or that, if any such litigation is commenced, it will not have a material impact on our financial condition or results of operations. Mortgage Loan Repurchase Liability During the period 2015 through 2019, the Company sold portfolio loans originated under the Advantage Loan Program to private investors in the secondary market. The Company also sells conventional residential mortgage loans (which excludes Advantage Loan Program loans) in the secondary market primarily to Federal National Mortgage Association (“Fannie Mae”) on an ongoing basis. In connection with these loans sold, the Company makes customary representations and warranties about various characteristics of each loan. The Company may be required pursuant to the terms of the applicable mortgage loan purchase and sale agreements to repurchase any previously sold loan or indemnify (make whole) the investor for which the representation or warranty of the Company proves to be inaccurate, incomplete or misleading. In the event of a repurchase, the Company is typically required to pay the unpaid principal balance, the proportionate premium received when selling the loans and certain expenses. Historically, any repurchases due to a breach of any such representations and warranties have been de minimis. The Bank recorded a total mortgage repurchase liability of $7,823 at December 31, 2019 primarily related to probable losses on the sold Advantage Loan Program loan portfolio taking into account the results of the Internal Review. The Bank has maintained the same level of mortgage repurchase liability at March 31, 2020. The repurchase liability is included in accrued expenses and other liabilities in the condensed consolidated balance sheets. The unpaid principal balance of residential mortgage loans sold that were subject to potential repurchase obligations for breach of representations and warranties totaled $713,427 and $759,568 at March 31, 2020 and December 31, 2019, respectively. The repurchase liability reflects management’s estimate of losses based on a combination of factors. The Company’s estimation process requires management to make subjective and complex judgements about matters that are inherently uncertain, such as future repurchase demand expectations, economic factors, and findings from the Internal Review. The actual repurchase losses could vary significantly from the recorded repurchase liability, depending on the outcome of various factors, including those previously discussed. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Subsequent Events | Note 17—Subsequent Events Repurchases of Mortgage Loans In May 2020, the Company negotiated the repurchases of two pools of Advantage Loan Program loans sold to the secondary market with a total outstanding unpaid principal balance of $38,704. The Company recognized a loss of $136 in other non-interest expense in connection with this repurchase. These loans were previously sold to such third-party investors with servicing retained and were considered to be performing at the acquisition date. In addition, to avoid the uncertainty of audits and inquiries by third-party investors in Advantage Loan Program loans sold to the secondary market, beginning at the end of the second quarter of 2020, the Company commenced making offers to each of those investors to repurchase 100% of our sold Advantage Loan Program loan portfolio. In July 2020, three third-party investors accepted the above mentioned offer, from which the Company repurchased three pools of Advantage Loan Program loans sold with a total outstanding unpaid principal balance of $19,251. The Company recognized a loss of $135 in other non-interest expense and charged a loss of $433 against mortgage repurchase liability in connection with this repurchase. These loans were previously sold to such third-party investors with servicing retained and were considered to be performing at the acquisition date. Executive Transition The Company experienced significant executive transitions in late 2019 continuing through the first half of 2020. On May 7, 2020, Thomas Lopp resigned from each of his positions with the Company, including Chairman, President and Chief Executive Officer, and the board of directors appointed Stephen Huber as interim Chief Executive Officer in addition to his existing role as Chief Financial Officer. On May 29, 2020, Michael Montemayor was terminated from his positions as President of Commercial and Retail Banking and Chief Lending Officer. Effective June 3, 2020, the Company and the Bank appointed Thomas M. O’Brien as Chairman, President and Chief Executive Officer of the Company and the Bank, respectively. Mr. Huber continued in his role as Chief Financial Officer following the appointment of Mr. O’Brien. Stock-based Compensation Effective June 3, 2020, the Company and the Bank appointed Thomas M. O'Brien as Chairman, President and Chief Executive Officer of the Company and the Bank, respectively. In connection with Mr. O’Brien entering into an Employment Agreement with the Company on May 31, 2020, on June 5, 2020 the Company granted Mr. O’Brien options to purchase 300,000 shares of common stock with an exercise price of $4.00 per share. The options vest 1/3 on January 1, 2021, 1/3 on the first anniversary of the date of grant, and 1/3 on January 1, 2022 subject to his remaining employed on the vesting date; provided that the unvested portion of the Option would vest immediately in full upon Mr. O’Brien’s termination of employment due to “death” or “disability” and would vest immediately in full upon a “change of control” (each, as defined in Mr. O’Brien’s Employment Agreement). In the event of termination of employment other than termination for “cause” (as defined in Mr. O’Brien’s Employment Agreement), if the Option is exercisable at the time of such termination of employment, it will remain exercisable for three years following termination, provided that Mr. O’Brien remains in compliance with certain terms contained in his Employment Agreement. The Company is required to cause such equity awards to be registered with the SEC as soon as practicable following the Company’s eligibility to do so. The options have a maximum term of ten years. The unrecognized compensation cost associated with Mr. O’Brien’s stock options was $354 at the time of grant. The cost is expected to be recognized over a weighted-average period of 1.05 years. Subsequent to March 31, 2020, a total of 93,029 nonvested restricted stock awards and 123,238 options to purchase shares of common stock have been forfeited due to the termination or resignation of employees and loan officers, whether in connection with the Internal Review or otherwise. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The condensed consolidated financial statements include the results of the Company and its wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the condensed 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 condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Due to the inherent uncertainty involved in making estimates, actual results reported in the future periods may be based upon amounts that could differ from those estimates. During 2020, economies throughout the world have been severely disrupted because of the outbreak of the novel coronavirus (“COVID-19”). The Company’s primary market areas of California, the greater Seattle market, and New York became part of several epicenters of the COVID-19 pandemic. Banking and financial services have been designated essential businesses and the Bank’s operations are continuing, subject to certain modifications to business practices imposed to safeguard the health and wellness of the Bank’s customers and employees, and to comply with applicable government directives. As of March 31, 2020, the impact of the outbreak of COVID-19 was continuing to unfold. As a result, many of management’s estimates and assumptions required increased judgement and carried a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, management’s estimates may change materially in future periods. |
Concentration of Credit Risk | Concentration of Credit Risk The loan portfolio consists primarily of residential real estate loans which are collateralized by real estate. At March 31, 2020 and December 31, 2019, residential real estate loans accounted for 83% and 85%, respectively, 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, 2020 and December 31, 2019, approximately 88% and 89%, respectively, of the loan portfolio was originated in California. Starting December 9, 2019, the Bank suspended its Advantage Loan Program and announced that it permanently discontinued this program on March 6, 2020. This Program was a material component of the Bank’s total loan originations. Loans under the Advantage Loan Program totaled $1,791,863, or 76% of residential loan portfolio, as of March 31, 2020, and $1,942,657, or 78% of residential loan portfolio, as of December 31, 2019. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Investment Securities | |
Schedule of amortized cost and fair value of debt securities available for sale | March 31, 2020 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 95,949 $ 917 $ — $ 96,866 Mortgage-backed securities 15,157 4 — 15,161 Collateralized mortgage obligations 41,458 226 (67) 41,617 Collateralized debt obligations 215 — (26) 189 Total $ 152,779 $ 1,147 $ (93) $ 153,833 December 31, 2019 Amortized Gross Unrealized Fair Cost Gain Loss Value Available for sale: U.S. Treasury securities $ 122,634 $ 170 $ (1) $ 122,803 Mortgage-backed securities 23,028 76 — 23,104 Collateralized mortgage obligations 1,138 45 — 1,183 Collateralized debt obligations 216 — (17) 199 Total $ 147,016 $ 291 $ (18) $ 147,289 |
Schedule of amortized cost and fair value of 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, 2020 are shown by contractual maturity. Mortgage-backed securities, collateralized mortgage obligations 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 Cost Value U.S. Treasury securities Due less than one year $ 76,095 $ 76,654 Due after one year through five years 19,854 20,212 Mortgage-backed securities 15,157 15,161 Collateralized mortgage obligations 41,458 41,617 Collateralized debt obligations 215 189 Total $ 152,779 $ 153,833 |
Schedule of debt securities available for sale, at fair value, continuous unrealized losses position | March 31, 2020 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Collateralized mortgage obligations $ 1,016 $ (67) $ — $ — $ 1,016 $ (67) Collateralized debt obligations — — 189 (26) 189 (26) Total $ 1,016 $ (67) $ 189 $ (26) $ 1,205 $ (93) December 31, 2019 Less than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses U.S. Treasury securities $ 5,011 $ (1) $ — $ — $ 5,011 $ (1) Collateralized debt obligations — — 199 (17) 199 (17) Total $ 5,011 $ (1) $ 199 $ (17) $ 5,210 $ (18) |
Schedule of equity securities with readily determinable fair values | Three Months Ended March 31, 2020 2019 Net gains recorded during the period on equity securities $ 80 $ 49 Less: net gains (losses) recorded during the period on equity securities sold during the period — — Unrealized gains recorded during the period on equity securities held at the reporting date $ 80 $ 49 |
Loans (Tables)
Loans (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Loans | |
Schedule of major categories of loans | March 31, December 31, 2020 2019 Residential real estate $ 2,345,328 $ 2,476,866 Commercial real estate 279,508 240,081 Construction 198,115 178,376 Commercial lines of credit 19,271 17,903 Other consumer 36 34 Total loans 2,842,258 2,913,260 Less: allowance for loan losses (42,613) (21,730) Loans, net $ 2,799,645 $ 2,891,530 |
Schedule of activity in allowance for loan losses and recorded investment by portfolio segment | The table presents the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2020 and 2019: Commercial Residential Commercial Lines of Other Three Months Ended March 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Provision for loan losses 6,808 5,999 7,616 40 — 390 20,853 Charge offs — — — — — — — Recoveries 10 19 1 — — — 30 Total ending balance $ 19,154 $ 11,261 $ 11,439 $ 368 $ 1 $ 390 $ 42,613 Commercial Residential Commercial Lines of Other Three Months Ended March 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Beginning balance $ 13,826 $ 2,573 $ 3,273 $ 1,058 $ 1 $ 1,119 $ 21,850 Provision (recovery) for loan losses (343) (253) (558) (58) — 198 (1,014) Charge offs — — — (176) — — (176) Recoveries 5 31 2 — — — 38 Total ending balance $ 13,488 $ 2,351 $ 2,717 $ 824 $ 1 $ 1,317 $ 20,698 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, 2020 and December 31, 2019: Commercial Residential Commercial Lines of Other March 31, 2020 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 42 $ — $ — $ 5 $ — $ — $ 47 Collectively evaluated for impairment 19,112 11,261 11,439 363 1 390 42,566 Total ending allowance balance $ 19,154 $ 11,261 $ 11,439 $ 368 $ 1 $ 390 $ 42,613 Loans: Loans individually evaluated for impairment $ 211 $ 1,079 $ 26,846 $ 1,373 $ — $ — $ 29,509 Loans collectively evaluated for impairment 2,345,117 278,429 171,269 17,898 36 — 2,812,749 Total ending loans balance $ 2,345,328 $ 279,508 $ 198,115 $ 19,271 $ 36 $ — $ 2,842,258 Commercial Residential Commercial Lines of Other December 31, 2019 Real Estate Real Estate Construction Credit Consumer Unallocated Total Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 43 $ — $ — $ 5 $ — $ — $ 48 Collectively evaluated for impairment 12,293 5,243 3,822 323 1 — 21,682 Total ending allowance balance $ 12,336 $ 5,243 $ 3,822 $ 328 $ 1 $ — $ 21,730 Loans: Loans individually evaluated for impairment $ 215 $ 1,100 $ 17,112 $ 1,377 $ — $ — $ 19,804 Loans collectively evaluated for impairment 2,476,651 238,981 161,264 16,526 34 — 2,893,456 Total ending loans balance $ 2,476,866 $ 240,081 $ 178,376 $ 17,903 $ 34 $ — $ 2,913,260 |
Schedule of information related to impaired loans by class of loans | At March 31, 2020 At December 31, 2019 Unpaid Allowance Unpaid Allowance Principal Recorded for Loan Principal Recorded for Loan Balance Investment Losses Balance Investment Losses With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 121 $ 95 $ — $ 125 $ 98 $ — Commercial real estate, retail 1,292 1,079 — 1,308 1,100 — Construction 26,889 26,846 — 17,156 17,112 — Commercial lines of credit, private banking 1,245 1,242 — 1,245 1,245 — Subtotal 29,547 29,262 — 19,834 19,555 — With an allowance for loan losses recorded: Residential real estate, first mortgage 116 116 42 116 117 43 Commercial lines of credit, private banking 131 131 5 132 132 5 Subtotal 247 247 47 248 249 48 Total $ 29,794 $ 29,509 $ 47 $ 20,082 $ 19,804 $ 48 Three Months Ended March 31, 2020 2019 Average Interest Cash Basis Average Interest Cash Basis Recorded Income Interest Recorded Income Interest Investment Recognized Recognized Investment Recognized Recognized With no related allowance for loan losses recorded: Residential real estate, first mortgage $ 96 $ — $ — $ 107 $ — $ — Commercial real estate: Retail 1,089 15 10 1,165 15 10 Multifamily — — — 1,080 12 8 Offices — — — 1,516 25 17 Construction 26,653 466 269 9,325 146 97 Commercial lines of credit: Private banking 1,243 21 14 — — — C&I lending — — — 100 2 1 Subtotal 29,081 502 293 13,293 200 133 With an allowance for loan losses recorded: Residential real estate, first mortgage 117 1 1 120 1 1 Commercial lines of credit, private banking 131 2 1 139 2 1 Subtotal 248 3 2 259 3 2 Total $ 29,329 $ 505 $ 295 $ 13,552 $ 203 $ 135 |
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 | The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2020 and December 31, 2019: March 31, 2020 December 31, 2019 Loans Past Loans Past Due Over Due Over 90 Days Still 90 Days Still Nonaccrual Accruing Nonaccrual Accruing Residential real estate: Residential first mortgage $ 15,768 $ 48 $ 14,482 $ 50 Residential second mortgage 505 — 210 — Commercial real estate: Retail 35 — 40 — Total $ 16,308 $ 48 $ 14,732 $ 50 The following tables present the aging of the recorded investment in past due loans as of March 31, 2020 and December 31, 2019 by class of loans: Greater 30 - 59 60 - 89 than Days Days 89 Days Total Loans Not March 31, 2020 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 29,528 $ 12,668 $ 15,816 $ 58,012 $ 2,262,732 $ 2,320,744 Residential second mortgage 477 127 505 1,109 23,475 24,584 Commercial real estate: Retail — — 35 35 17,995 18,030 Multifamily 979 — — 979 92,293 93,272 Offices — — — — 27,822 27,822 Hotels/Single room occupancy hotels 13,538 — — 13,538 59,949 73,487 Industrial — — — — 14,089 14,089 Other — — — — 52,808 52,808 Construction 20,214 — — 20,214 177,901 198,115 Commercial lines of credit: Private banking — — — — 10,874 10,874 C&I lending — — — — 8,397 8,397 Other consumer — — — — 36 36 Total $ 64,736 $ 12,795 $ 16,356 $ 93,887 $ 2,748,371 $ 2,842,258 Greater 30 - 59 60 - 89 than Days Days 89 Days Total Loans Not December 31, 2019 Past Due Past Due Past Due Past Due Past Due Total Residential real estate: Residential first mortgage $ 36,112 $ 5,112 $ 14,532 $ 55,756 $ 2,396,800 $ 2,452,556 Residential second mortgage 97 295 210 602 23,708 24,310 Commercial real estate: Retail — — 40 40 6,089 6,129 Multifamily — — — — 64,873 64,873 Offices — — — — 28,048 28,048 Hotel/Single room occupancy hotels 5,605 — — 5,605 76,165 81,770 Industrial — — — — 14,150 14,150 Other — — — — 45,111 45,111 Construction 15,008 — — 15,008 163,368 178,376 Commercial lines of credit: Private banking — — — — 11,914 11,914 C&I lending 1,249 — — 1,249 4,740 5,989 Other consumer — — — — 34 34 Total $ 58,071 $ 5,407 $ 14,782 $ 78,260 $ 2,835,000 $ 2,913,260 |
Schedule of risk rating of loans by class of loans | Special March 31, 2020 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,304,928 $ — $ 15,459 $ 357 $ 2,320,744 Residential second mortgage 24,079 — 505 — 24,584 Commercial real estate: Retail 16,118 833 1,079 — 18,030 Multifamily 84,601 7,118 1,553 — 93,272 Offices 24,343 — 3,479 — 27,822 Hotels/Single room occupancy hotels 28,205 15,355 29,927 — 73,487 Industrial 5,888 — 8,201 — 14,089 Other 45,468 916 6,424 — 52,808 Construction 163,679 14,539 19,897 — 198,115 Commercial lines of credit: Private banking 9,632 1,242 — — 10,874 C&I lending 7,015 1,382 — — 8,397 Other consumer loans 36 — — — 36 Total $ 2,713,992 $ 41,385 $ 86,524 $ 357 $ 2,842,258 Special December 31, 2019 Pass Mention Substandard Doubtful Total Residential real estate: Residential first mortgage $ 2,438,024 $ — $ 14,077 $ 455 $ 2,452,556 Residential second mortgage 24,100 — 210 — 24,310 Commercial real estate: Retail 4,195 834 1,100 — 6,129 Multifamily 56,164 7,150 1,559 — 64,873 Offices 24,484 645 2,919 — 28,048 Hotels/Single room occupancy hotels 60,074 18,189 3,507 — 81,770 Industrial 5,894 8,256 — — 14,150 Other 37,693 920 6,498 — 45,111 Construction 156,339 7,008 15,029 — 178,376 Commercial lines of credit: Private banking 10,669 1,245 — — 11,914 C&I lending 4,013 — 1,976 — 5,989 Other consumer 34 — — — 34 Total $ 2,821,683 $ 44,247 $ 46,875 $ 455 $ 2,913,260 |
Mortgage Servicing Rights, net
Mortgage Servicing Rights, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Mortgage Servicing Rights, net | |
Schedule of principal balance of mortgage loans serviced for others | March 31, December 31, 2020 2019 Residential real estate mortgage loan portfolios serviced for: FNMA $ 136,184 $ 130,425 FHLB 87,753 86,778 Private investors 610,094 656,035 Total $ 834,031 $ 873,238 |
Schedule of activity for mortgage servicing rights and related valuation allowance | Three Months Ended March 31, 2020 2019 Mortgage servicing rights: Beginning of period $ 10,845 $ 10,733 Additions 107 843 Amortization (650) (684) End of period 10,302 10,892 Valuation allowance at beginning of period 1,080 100 Additions (recoveries) 1,246 37 Valuation allowance at end of period 2,326 137 Mortgage servicing rights, net $ 7,976 $ 10,755 |
FHLB Borrowings (Tables)
FHLB Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
FHLB Borrowings | |
Schedule of FHLB borrowings | March 31, December 31, 2020 Interest Rates 2019 Interest Rates Long-term fixed rate advances $ 329,000 0.43%-1.96% $ 229,000 1.07%-1.96% |
Subordinated Notes, net (Tables
Subordinated Notes, net (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Subordinated Notes, net | |
Schedule of subordinated notes | March 31, December 31, 2020 2019 7.0% fixed to floating rate subordinated notes $ 65,000 $ 65,000 Unamortized note premium 458 474 Unamortized debt issuance costs (240) (295) Total $ 65,218 $ 65,179 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Stock-based Compensation | |
Schedule of assumptions used to estimate grant date fair value of stock option awards using Black-Scholes option pricing model | Exercise price of options $ 7.10 Risk-free interest rate 0.94 % Expected term (in years) 6.00 Expected stock price volatility 26.45 % Dividend yield .56 % |
Summary of the Company's stock option activity | Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic of Shares Price Term Value (Years) Outstanding at January 1, 2020 142,477 $ 12.29 8.60 $ — Granted 67,361 7.10 Exercised — — Forfeited /expired (8,673) 11.78 Outstanding at March 31, 2020 201,165 $ 10.57 $ — |
Summary of the Company's restricted stock awards activity | Weighted Average Number Grant Date Fair of Shares Value Nonvested at January 1, 2020 100,096 $ 11.02 Granted 141,374 6.98 Vested — — Forfeited (7,197) 11.35 Nonvested at March 31, 2020 234,273 $ 8.57 |
Income (Loss) Per Share (Tables
Income (Loss) Per Share (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income (Loss) Per Share | |
Schedule of computation of income (loss) per share, basic and diluted | Three Months Ended March 31, 2020 2019 Numerator: Net income (loss) $ (4,030) $ 15,683 Denominator: Weighted average common shares outstanding, basic 49,837,662 52,554,446 Weighted average effect of potentially dilutive common shares: Stock options — — Restricted stock — 8,374 Weighted average common shares outstanding, diluted 49,837,662 52,562,820 Income (loss) per share: Basic $ (0.08) $ 0.30 Diluted $ (0.08) $ 0.30 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
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 March 31, 2020 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury securities $ 96,866 $ 96,866 $ — $ — Mortgage-backed securities 15,161 — 15,161 — Collateralized mortgage obligations 41,617 — 41,617 — Collateralized debt obligations 189 — — 189 Equity securities 5,089 5,089 — — Fair Value Measurements at December 31, 2019 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) Financial Assets Available for sale debt securities: U.S. Treasury securities $ 122,803 $ 122,803 $ — $ — Mortgage-backed securities 23,104 — 23,104 — Collateralized mortgage obligations 1,183 — 1,183 — Collateralized debt obligations 199 — — 199 Equity securities 5,009 5,009 — — |
Summary of reconciliation for all assets measured at fair value on a recurring basis using significant unobservable inputs | Fair Value Measurements Using Significant Unobservable Inputs (Level 3) Collateralized Debt Obligations March 31, 2020 March 31, 2019 Balance of recurring Level 3 assets at beginning of period $ 199 $ 297 Total gains or losses (realized/unrealized): Included in income-realized — — Included in other comprehensive income (loss) (9) (6) Principal maturities/settlements (1) (1) Sales — — Transfers in and/or out of Level 3 — — Balance of recurring Level 3 assets at end of period $ 189 $ 290 |
Schedule of assets measured at fair value on a nonrecurring basis categorized by level of inputs | Fair Value Measurements at March 31, 2020 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,466 $ — $ — $ 7,466 Fair Value Measurements at December 31, 2019 Quoted Prices in Significant Active Markets Other Significant for Identical Observable Unobservable Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Mortgage servicing rights $ 7,949 $ — $ — $ 7,949 |
Schedule of quantitative information about nonrecurring Level 3 fair value measurements | Quantitative Information about Level 3 Fair Value Measurements at March 31, 2020 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,466 Discounted cash flow Discount rate 9.5% - 12.0% (11.7%) Prepayment speed 7.8% - 47.8% (22.5%) Default rate 0.1% - 0.3% (0.2%) (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. Quantitative Information about Level 3 Fair Value Measurements at December 31, 2019 Range Fair Value Valuation Technique Unobservable Inputs (Weighted Average) (1) Mortgage servicing rights $ 7,949 Discounted cash flow Discount rate 9.5% - 12.0% (11.9%) Prepayment speed 7.2% - 47.1% (21.3%) Default rate 0.1% - 0.3% (0.2%) (1) The range and weighted average for an asset category consisting of a single investment represents the significant unobservable input used in the fair value of the investment. |
Schedule of carrying amounts and estimated fair values of financial instruments not carried at fair value | Fair Value Measurements at March 31, 2020 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 391,009 $ 391,009 $ 391,009 $ — $ — Interest-bearing time deposits with other banks 1,025 1,031 — 1,031 — Mortgage loans held for sale 3,776 3,890 — 3,890 — Loans, net 2,799,645 2,840,329 — — 2,840,329 Financial Liabilities Time deposits 1,377,610 1,383,282 — 1,383,282 — Federal Home Loan Bank borrowings 329,000 344,961 — 344,961 — Subordinated notes, net 65,218 59,150 — 59,150 — Fair Value Measurements at December 31, 2019 Carrying Fair Amount Value Level 1 Level 2 Level 3 Financial Assets Cash and due from banks $ 77,819 $ 77,819 $ 77,819 $ — $ — Interest-bearing time deposits with other banks 1,025 1,025 1,025 — — Mortgage loans held for sale 1,337 1,368 — 1,368 — Loans, net 2,891,530 2,978,846 — — 2,978,846 Financial Liabilities Time deposits 1,154,076 1,161,490 — 1,161,490 — Federal Home Loan Bank borrowings 229,000 227,333 — 227,333 — Subordinated notes, net 65,179 65,650 — 65,650 — |
Regulatory Capital Requiremen_2
Regulatory Capital Requirements (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Regulatory Capital Requirements | |
Schedule of actual and minimum required capital amounts and ratios | For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio March 31, 2020 Total adjusted capital to risk-weighted assets Consolidated $ 413,905 21.15 % $ 156,553 8.00 % N/A N/A Bank 396,945 20.37 155,911 8.00 $ 194,889 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 327,917 16.76 117,415 6.00 N/A N/A Bank 372,307 19.10 116,933 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 327,917 16.76 88,061 4.50 N/A N/A Bank 372,307 19.10 87,700 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 327,917 9.95 131,795 4.00 N/A N/A Bank 372,307 11.31 131,681 4.00 164,337 5.00 For Capital Adequacy To be Well Actual Purposes Capitalized Amount Ratio Amount Ratio Amount Ratio December 31, 2019 Total adjusted capital to risk-weighted assets Consolidated $ 419,327 21.49 % $ 156,081 8.00 % N/A N/A Bank 346,985 17.82 155,809 8.00 $ 194,761 10.00 % Tier 1 (core) capital to risk-weighted assets Consolidated 332,418 17.04 117,061 6.00 N/A N/A Bank 325,255 16.70 116,857 6.00 155,809 8.00 Common Equity Tier 1 (CET1) Consolidated 332,418 17.04 87,796 4.50 N/A N/A Bank 325,255 16.70 87,643 4.50 126,595 6.50 Tier 1 (core) capital to adjusted tangible assets Consolidated 332,418 10.11 131,471 4.00 N/A N/A Bank 325,255 9.90 131,469 4.00 164,337 5.00 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Summary of total amount of unfunded commitments to extend credit and standby letters of credit outstanding | March 31, December 31, 2020 2019 Commitments to make loans $ 87,762 $ 76,927 Unused lines of credit 244,848 220,553 Standby letters of credit 24 24 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Details) | 3 Months Ended |
Mar. 31, 2020segmentitem | |
Nature of Operations and Basis of Presentation | |
Number of branches | 30 |
Number of reportable segments | segment | 1 |
San Francisco and Los Angeles, California | |
Nature of Operations and Basis of Presentation | |
Number of branches | 26 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Concentration of Credit Risk (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |
Concentration of Credit Risk | |||
Loans Receivable | $ 2,842,258 | $ 2,842,258 | $ 2,913,260 |
Residential real estate | |||
Concentration of Credit Risk | |||
Loans Receivable | $ 2,345,328 | $ 2,345,328 | $ 2,476,866 |
Residential real estate loans | Loans receivables | |||
Concentration of Credit Risk | |||
Concentration of credit risk | 83.00% | 85.00% | |
California | Loans receivables | |||
Concentration of Credit Risk | |||
Concentration of credit risk | 88.00% | 89.00% | |
Advantage loan program | Loans receivables | Residential real estate | |||
Concentration of Credit Risk | |||
Concentration of credit risk | 76.00% | 78.00% | |
Loans Receivable | $ 1,791,863 | $ 1,791,863 | $ 1,942,657 |
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, 2020 | Dec. 31, 2019 | |
Available for sale: | ||
Available for sale, Amortized Cost | $ 152,779,000 | $ 147,016,000 |
Available for sale, Gross Unrealized Gain | 1,147,000 | 291,000 |
Available for sale, Gross Unrealized Loss | (93,000) | (18,000) |
Investment securities available for sale, at fair value | 153,833,000 | 147,289,000 |
Carrying value of debt securities held of any single issuer in excess of 10% of shareholders' equity | $ 0 | $ 0 |
Threshold percentage of total shareholders' equity above which securities of any single issuer exceed | 10.00% | 10.00% |
Sales of investment securities | $ 23,044,000 | |
Gross realized gains | 235,000 | |
Gross realized losses | (2,000) | |
U.S. Treasury securities | ||
Available for sale: | ||
Available for sale, Amortized Cost | 95,949,000 | $ 122,634,000 |
Available for sale, Gross Unrealized Gain | 917,000 | 170,000 |
Available for sale, Gross Unrealized Loss | (1,000) | |
Investment securities available for sale, at fair value | 96,866,000 | 122,803,000 |
Mortgage-backed securities | ||
Available for sale: | ||
Available for sale, Amortized Cost | 15,157,000 | 23,028,000 |
Available for sale, Gross Unrealized Gain | 4,000 | 76,000 |
Investment securities available for sale, at fair value | 15,161,000 | 23,104,000 |
Collateralized mortgage obligations | ||
Available for sale: | ||
Available for sale, Amortized Cost | 41,458,000 | 1,138,000 |
Available for sale, Gross Unrealized Gain | 226,000 | 45,000 |
Available for sale, Gross Unrealized Loss | (67,000) | |
Investment securities available for sale, at fair value | 41,617,000 | 1,183,000 |
Collateralized debt obligations | ||
Available for sale: | ||
Available for sale, Amortized Cost | 215,000 | 216,000 |
Available for sale, Gross Unrealized Loss | (26,000) | (17,000) |
Investment securities available for sale, at fair value | $ 189,000 | $ 199,000 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value By Contractual Maturity (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | $ 152,779 | $ 147,016 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 153,833 | 147,289 |
U.S. Treasury securities | ||
Available for sale, Amortized Cost | ||
Due less than one year | 76,095 | |
Due after one year through five years | 19,854 | |
Available for sale, Amortized Cost | 95,949 | 122,634 |
Available for sale, Fair Value | ||
Due less than one year | 76,654 | |
Due after one year through five years | 20,212 | |
Available for sale, Fair Value | 96,866 | 122,803 |
Mortgage-backed securities | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 15,157 | 23,028 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 15,161 | 23,104 |
Collateralized mortgage obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 41,458 | 1,138 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | 41,617 | 1,183 |
Collateralized debt obligations | ||
Available for sale, Amortized Cost | ||
Available for sale, Amortized Cost | 215 | 216 |
Available for sale, Fair Value | ||
Available for sale, Fair Value | $ 189 | $ 199 |
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, 2020USD ($)security | Dec. 31, 2019USD ($) | |
Fair Value | ||
Less than 12 Months, Fair value | $ 1,016 | $ 5,011 |
12 Months or More, Fair Value | 189 | 199 |
Available for sale, Continuous unrealized loss position, Fair Value | 1,205 | 5,210 |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (67) | (1) |
12 Months or More, Unrealized Losses | (26) | (17) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (93) | (18) |
Number of debt securities in portfolio | security | 14 | |
Number of debt securities in an unrealized loss position | security | 3 | |
U.S. Treasury securities | ||
Fair Value | ||
Less than 12 Months, Fair value | 5,011 | |
Available for sale, Continuous unrealized loss position, Fair Value | 5,011 | |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (1) | |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (1) | |
Collateralized mortgage obligations | ||
Fair Value | ||
Less than 12 Months, Fair value | $ 1,016 | |
Available for sale, Continuous unrealized loss position, Fair Value | 1,016 | |
Unrealized Losses | ||
Less than 12 Months, Unrealized Losses | (67) | |
Available for sale, Continuous unrealized loss position, Unrealized Losses | (67) | |
Collateralized debt obligations | ||
Fair Value | ||
12 Months or More, Fair Value | 189 | 199 |
Available for sale, Continuous unrealized loss position, Fair Value | 189 | 199 |
Unrealized Losses | ||
12 Months or More, Unrealized Losses | (26) | (17) |
Available for sale, Continuous unrealized loss position, Unrealized Losses | $ (26) | $ (17) |
Investment Securities - Equity
Investment Securities - Equity Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Equity Securities | |||
Fair value of equity securities | $ 5,335 | $ 5,255 | |
Equity securities with readily determinable fair values | 5,089 | 5,009 | |
Equity securities with readily determinable fair values | |||
Net gains recorded during the period on equity securities | 80 | $ 49 | |
Unrealized gains recorded during the period on equity securities held at the reporting date | 80 | $ 49 | |
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, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Major categories of loans | ||||
Total Loans | $ 2,842,258 | $ 2,913,260 | ||
Less: allowance for loan losses | (42,613) | (21,730) | $ (20,698) | $ (21,850) |
Loans, net | 2,799,645 | 2,891,530 | ||
Carrying value of loans pledged as collateral on FHLB borrowings | 1,157,536 | 933,747 | ||
Residential real estate | ||||
Major categories of loans | ||||
Total Loans | 2,345,328 | 2,476,866 | ||
Less: allowance for loan losses | (19,154) | (12,336) | (13,488) | (13,826) |
Loans, net | 713,427 | 759,568 | ||
Commercial real estate | ||||
Major categories of loans | ||||
Total Loans | 279,508 | 240,081 | ||
Less: allowance for loan losses | (11,261) | (5,243) | (2,351) | (2,573) |
Construction | ||||
Major categories of loans | ||||
Total Loans | 198,115 | 178,376 | ||
Less: allowance for loan losses | (11,439) | (3,822) | (2,717) | (3,273) |
Commercial lines of credit | ||||
Major categories of loans | ||||
Total Loans | 19,271 | 17,903 | ||
Less: allowance for loan losses | (368) | (328) | (824) | (1,058) |
Other consumer | ||||
Major categories of loans | ||||
Total Loans | 36 | 34 | ||
Less: allowance for loan losses | $ (1) | $ (1) | $ (1) | $ (1) |
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, 2020 | Mar. 31, 2019 | |
Allowance for loan losses | ||
Beginning balance | $ 21,730 | $ 21,850 |
Provision (recovery) for loan losses | 20,853 | (1,014) |
Charge offs | (176) | |
Recoveries | 30 | 38 |
Total ending balance | 42,613 | 20,698 |
Residential real estate | ||
Allowance for loan losses | ||
Beginning balance | 12,336 | 13,826 |
Provision (recovery) for loan losses | 6,808 | (343) |
Recoveries | 10 | 5 |
Total ending balance | 19,154 | 13,488 |
Commercial real estate | ||
Allowance for loan losses | ||
Beginning balance | 5,243 | 2,573 |
Provision (recovery) for loan losses | 5,999 | (253) |
Recoveries | 19 | 31 |
Total ending balance | 11,261 | 2,351 |
Construction | ||
Allowance for loan losses | ||
Beginning balance | 3,822 | 3,273 |
Provision (recovery) for loan losses | 7,616 | (558) |
Recoveries | 1 | 2 |
Total ending balance | 11,439 | 2,717 |
Commercial lines of credit | ||
Allowance for loan losses | ||
Beginning balance | 328 | 1,058 |
Provision (recovery) for loan losses | 40 | (58) |
Charge offs | (176) | |
Total ending balance | 368 | 824 |
Other consumer | ||
Allowance for loan losses | ||
Beginning balance | 1 | 1 |
Total ending balance | 1 | 1 |
Unallocated | ||
Allowance for loan losses | ||
Beginning balance | 1,119 | |
Provision (recovery) for loan losses | 390 | 198 |
Total ending balance | $ 390 | $ 1,317 |
Loans - Activity in the Allow_2
Loans - Activity in the Allowance For Loan Losses by Portfolio Segment And Based On Impairment Method (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | $ 47 | $ 48 | ||
Collectively evaluated for impairment | 42,566 | 21,682 | ||
Total ending allowance balance | 42,613 | 21,730 | $ 20,698 | $ 21,850 |
Loans: | ||||
Loans individually evaluated for impairment | 29,509 | 19,804 | ||
Loans collectively evaluated for impairment | 2,812,749 | 2,893,456 | ||
Total Loans | 2,842,258 | 2,913,260 | ||
Residential real estate | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 42 | 43 | ||
Collectively evaluated for impairment | 19,112 | 12,293 | ||
Total ending allowance balance | 19,154 | 12,336 | 13,488 | 13,826 |
Loans: | ||||
Loans individually evaluated for impairment | 211 | 215 | ||
Loans collectively evaluated for impairment | 2,345,117 | 2,476,651 | ||
Total Loans | 2,345,328 | 2,476,866 | ||
Commercial real estate | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 11,261 | 5,243 | ||
Total ending allowance balance | 11,261 | 5,243 | 2,351 | 2,573 |
Loans: | ||||
Loans individually evaluated for impairment | 1,079 | 1,100 | ||
Loans collectively evaluated for impairment | 278,429 | 238,981 | ||
Total Loans | 279,508 | 240,081 | ||
Construction | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 11,439 | 3,822 | ||
Total ending allowance balance | 11,439 | 3,822 | 2,717 | 3,273 |
Loans: | ||||
Loans individually evaluated for impairment | 26,846 | 17,112 | ||
Loans collectively evaluated for impairment | 171,269 | 161,264 | ||
Total Loans | 198,115 | 178,376 | ||
Commercial lines of credit | ||||
Ending allowance balance attributable to loans: | ||||
Individually evaluated for impairment | 5 | 5 | ||
Collectively evaluated for impairment | 363 | 323 | ||
Total ending allowance balance | 368 | 328 | 824 | 1,058 |
Loans: | ||||
Loans individually evaluated for impairment | 1,373 | 1,377 | ||
Loans collectively evaluated for impairment | 17,898 | 16,526 | ||
Total Loans | 19,271 | 17,903 | ||
Other consumer | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 1 | 1 | ||
Total ending allowance balance | 1 | 1 | 1 | 1 |
Loans: | ||||
Loans collectively evaluated for impairment | 36 | 34 | ||
Total Loans | 36 | $ 34 | ||
Unallocated | ||||
Ending allowance balance attributable to loans: | ||||
Collectively evaluated for impairment | 390 | |||
Total ending allowance balance | $ 390 | $ 1,317 | $ 1,119 |
Loans - Impaired Loans by Class
Loans - Impaired Loans by Class of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | $ 29,547 | $ 19,834 | |
Unpaid principal balance, with an allowance for loan losses recorded | 247 | 248 | |
Total Unpaid Principal Balance | 29,794 | 20,082 | |
Recorded investment, with no related allowance for loan losses recorded | 29,262 | 19,555 | |
Recorded investment, with an allowance for loan losses recorded | 247 | 249 | |
Total Recorded Investment | 29,509 | 19,804 | |
Allowance for Loan Losses | 47 | 48 | |
Average recorded investment, with no related allowance for loan losses recorded | 29,081 | $ 13,293 | |
Average recorded investment, with an allowance for loan losses recorded | 248 | 259 | |
Total Average Recorded Investment | 29,329 | 13,552 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 502 | 200 | |
Interest Income Recognized, with an allowance for loan losses recorded | 3 | 3 | |
Total Interest Income Recognized | 505 | 203 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 293 | 133 | |
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 2 | 2 | |
Total Cash Basis Interest Recognized | 295 | 135 | |
Residential real estate | Real estate loan, first mortgage | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 121 | 125 | |
Unpaid principal balance, with an allowance for loan losses recorded | 116 | 116 | |
Recorded investment, with no related allowance for loan losses recorded | 95 | 98 | |
Recorded investment, with an allowance for loan losses recorded | 116 | 117 | |
Allowance for Loan Losses | 42 | 43 | |
Average recorded investment, with no related allowance for loan losses recorded | 96 | 107 | |
Average recorded investment, with an allowance for loan losses recorded | 117 | 120 | |
Interest Income Recognized, with an allowance for loan losses recorded | 1 | 1 | |
Cash Basis Interest Recognized, with an allowance for loan losses recorded | 1 | 1 | |
Commercial real estate | Real estate loan, Retail | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 1,292 | 1,308 | |
Recorded investment, with no related allowance for loan losses recorded | 1,079 | 1,100 | |
Average recorded investment, with no related allowance for loan losses recorded | 1,089 | 1,165 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 15 | 15 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 10 | 10 | |
Commercial real estate | Real estate loan, Multifamily | |||
Impaired loans by class of loans | |||
Average recorded investment, with no related allowance for loan losses recorded | 1,080 | ||
Interest Income Recognized, with no related allowance for loan losses recorded | 12 | ||
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 8 | ||
Commercial real estate | Real estate loan, Offices | |||
Impaired loans by class of loans | |||
Average recorded investment, with no related allowance for loan losses recorded | 1,516 | ||
Interest Income Recognized, with no related allowance for loan losses recorded | 25 | ||
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 17 | ||
Construction | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 26,889 | 17,156 | |
Recorded investment, with no related allowance for loan losses recorded | 26,846 | 17,112 | |
Average recorded investment, with no related allowance for loan losses recorded | 26,653 | 9,325 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 466 | 146 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 269 | 97 | |
Commercial lines of credit | Private banking | |||
Impaired loans by class of loans | |||
Unpaid principal balance, with no related allowance for loan losses recorded | 1,245 | 1,245 | |
Unpaid principal balance, with an allowance for loan losses recorded | 131 | 132 | |
Recorded investment, with no related allowance for loan losses recorded | 1,242 | 1,245 | |
Recorded investment, with an allowance for loan losses recorded | 131 | 132 | |
Allowance for Loan Losses | 5 | $ 5 | |
Average recorded investment, with no related allowance for loan losses recorded | 1,243 | ||
Average recorded investment, with an allowance for loan losses recorded | 131 | 139 | |
Interest Income Recognized, with no related allowance for loan losses recorded | 21 | ||
Interest Income Recognized, with an allowance for loan losses recorded | 2 | 2 | |
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | 14 | ||
Cash Basis Interest Recognized, with an allowance for loan losses recorded | $ 1 | 1 | |
Commercial lines of credit | C&I lending | |||
Impaired loans by class of loans | |||
Average recorded investment, with no related allowance for loan losses recorded | 100 | ||
Interest Income Recognized, with no related allowance for loan losses recorded | 2 | ||
Cash Basis Interest Recognized, with no related allowance for loan losses recorded | $ 1 |
Loans - Investment in Nonaccrua
Loans - Investment in Nonaccrual and Loans Past Due Still Accruing by Class of Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | $ 16,308 | $ 14,732 |
Loans Past Due Over 90 Days Still Accruing | 48 | 50 |
Total Past Due | 93,887 | 78,260 |
Loans Not Past Due | 2,748,371 | 2,835,000 |
Total Loans | 2,842,258 | 2,913,260 |
30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 64,736 | 58,071 |
60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 12,795 | 5,407 |
Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 16,356 | 14,782 |
Residential real estate | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 2,345,328 | 2,476,866 |
Residential real estate | Real estate loan, first mortgage | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 15,768 | 14,482 |
Loans Past Due Over 90 Days Still Accruing | 48 | 50 |
Total Past Due | 58,012 | 55,756 |
Loans Not Past Due | 2,262,732 | 2,396,800 |
Total Loans | 2,320,744 | 2,452,556 |
Residential real estate | Real estate loan, first mortgage | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 29,528 | 36,112 |
Residential real estate | Real estate loan, first mortgage | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 12,668 | 5,112 |
Residential real estate | Real estate loan, first mortgage | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 15,816 | 14,532 |
Residential real estate | Real estate loan, second mortgage | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 505 | 210 |
Total Past Due | 1,109 | 602 |
Loans Not Past Due | 23,475 | 23,708 |
Total Loans | 24,584 | 24,310 |
Residential real estate | Real estate loan, second mortgage | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 477 | 97 |
Residential real estate | Real estate loan, second mortgage | 60 - 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 127 | 295 |
Residential real estate | Real estate loan, second mortgage | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 505 | 210 |
Commercial real estate | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 279,508 | 240,081 |
Commercial real estate | Real estate loan, Retail | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Nonaccrual | 35 | 40 |
Total Past Due | 35 | 40 |
Loans Not Past Due | 17,995 | 6,089 |
Total Loans | 18,030 | 6,129 |
Commercial real estate | Real estate loan, Retail | Greater than 89 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 35 | 40 |
Commercial real estate | Real estate loan, Multifamily | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 979 | |
Loans Not Past Due | 92,293 | 64,873 |
Total Loans | 93,272 | 64,873 |
Commercial real estate | Real estate loan, Multifamily | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 979 | |
Commercial real estate | Real estate loan, Offices | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 27,822 | 28,048 |
Total Loans | 27,822 | 28,048 |
Commercial real estate | Real estate loan, Hotels/Single room occupancy hotels | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 13,538 | 5,605 |
Loans Not Past Due | 59,949 | 76,165 |
Total Loans | 73,487 | 81,770 |
Commercial real estate | Real estate loan, Hotels/Single room occupancy hotels | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 13,538 | 5,605 |
Commercial real estate | Real estate loan, Industrial | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 14,089 | 14,150 |
Total Loans | 14,089 | 14,150 |
Commercial real estate | Real estate loan, Other | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 52,808 | 45,111 |
Total Loans | 52,808 | 45,111 |
Construction | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 20,214 | 15,008 |
Loans Not Past Due | 177,901 | 163,368 |
Total Loans | 198,115 | 178,376 |
Construction | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 20,214 | 15,008 |
Commercial lines of credit | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Loans | 19,271 | 17,903 |
Commercial lines of credit | Private banking | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 10,874 | 11,914 |
Total Loans | 10,874 | 11,914 |
Commercial lines of credit | C&I lending | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,249 | |
Loans Not Past Due | 8,397 | 4,740 |
Total Loans | 8,397 | 5,989 |
Commercial lines of credit | C&I lending | 30 - 59 Days Past Due | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Total Past Due | 1,249 | |
Other consumer | ||
Investment in nonaccrual and loans past due still accruing by class of loans | ||
Loans Not Past Due | 36 | 34 |
Total Loans | $ 36 | $ 34 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructurings (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020USD ($)loanitem | Sep. 30, 2020USD ($)item | Dec. 31, 2019USD ($) | |
Troubled Debt Restructurings | |||
Loans classified as troubled debt restructurings | $ 24,563 | $ 13,708 | |
Allowance for outstanding loan losses classified as troubled debt restructurings | $ 47 | 48 | |
Number of TDRs subsequently defaulted | loan | 0 | ||
Total outstanding recorded investment | $ 1,046 | ||
Number of forbearance requests received under the CARES Act COVID-19 forbearance program | item | 150 | 245 | |
Aggregate loan balance of forbearance requests received under the CARES Act COVID-19 forbearance program | $ 70,288 | $ 114,989 | |
Loans that have completed deferment period under the CARES Act COVID-19 forbearance program and returned to normal debt service | item | 116 | ||
Aggregate loan balance of loans that have completed deferment period under the CARES Act COVID-19 forbearance program and returned to normal debt service | $ 69,828 | ||
Loans that remain in payment deferral under the CARES Act COVID-19 forbearance program | item | 62 | ||
Aggregate loan balance of loans that remain in payment deferral under the CARES Act COVID-19 forbearance program | $ 75,161 | ||
Residential real estate | |||
Troubled Debt Restructurings | |||
Mortgage Loans in Process of Foreclosure, Amount | 8,132 | $ 1,643 | |
Construction | Pre and Post Modification | |||
Troubled Debt Restructurings | |||
Loans classified as troubled debt restructurings | $ 10,863 |
Loans - Risk Rating of Loans by
Loans - Risk Rating of Loans by Class of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2020 | Dec. 31, 2019 | |
Recorded investment in loans | |||
Total | $ 2,842,258 | $ 2,913,260 | |
Portfolio loans sold during the period | $ 49,891 | ||
Gain on sale of portfolio loans | $ 2,442 | ||
Pass | |||
Recorded investment in loans | |||
Total | 2,713,992 | 2,821,683 | |
Special Mention | |||
Recorded investment in loans | |||
Total | 41,385 | 44,247 | |
Substandard | |||
Recorded investment in loans | |||
Total | 86,524 | 46,875 | |
Doubtful | |||
Recorded investment in loans | |||
Total | 357 | 455 | |
Residential real estate | |||
Recorded investment in loans | |||
Total | 2,345,328 | 2,476,866 | |
Residential real estate | Real estate loan, first mortgage | |||
Recorded investment in loans | |||
Total | 2,320,744 | 2,452,556 | |
Residential real estate | Real estate loan, second mortgage | |||
Recorded investment in loans | |||
Total | 24,584 | 24,310 | |
Residential real estate | Pass | Real estate loan, first mortgage | |||
Recorded investment in loans | |||
Total | 2,304,928 | 2,438,024 | |
Residential real estate | Pass | Real estate loan, second mortgage | |||
Recorded investment in loans | |||
Total | 24,079 | 24,100 | |
Residential real estate | Substandard | Real estate loan, first mortgage | |||
Recorded investment in loans | |||
Total | 15,459 | 14,077 | |
Residential real estate | Substandard | Real estate loan, second mortgage | |||
Recorded investment in loans | |||
Total | 505 | 210 | |
Residential real estate | Doubtful | Real estate loan, first mortgage | |||
Recorded investment in loans | |||
Total | 357 | 455 | |
Commercial real estate | |||
Recorded investment in loans | |||
Total | 279,508 | 240,081 | |
Commercial real estate | Real estate loan, Retail | |||
Recorded investment in loans | |||
Total | 18,030 | 6,129 | |
Commercial real estate | Real estate loan, Multifamily | |||
Recorded investment in loans | |||
Total | 93,272 | 64,873 | |
Commercial real estate | Real estate loan, Offices | |||
Recorded investment in loans | |||
Total | 27,822 | 28,048 | |
Commercial real estate | Real estate loan, Hotels/Single room occupancy hotels | |||
Recorded investment in loans | |||
Total | 73,487 | 81,770 | |
Commercial real estate | Real estate loan, Industrial | |||
Recorded investment in loans | |||
Total | 14,089 | 14,150 | |
Commercial real estate | Real estate loan, Other | |||
Recorded investment in loans | |||
Total | 52,808 | 45,111 | |
Commercial real estate | Pass | Real estate loan, Retail | |||
Recorded investment in loans | |||
Total | 16,118 | 4,195 | |
Commercial real estate | Pass | Real estate loan, Multifamily | |||
Recorded investment in loans | |||
Total | 84,601 | 56,164 | |
Commercial real estate | Pass | Real estate loan, Offices | |||
Recorded investment in loans | |||
Total | 24,343 | 24,484 | |
Commercial real estate | Pass | Real estate loan, Hotels/Single room occupancy hotels | |||
Recorded investment in loans | |||
Total | 28,205 | 60,074 | |
Commercial real estate | Pass | Real estate loan, Industrial | |||
Recorded investment in loans | |||
Total | 5,888 | 5,894 | |
Commercial real estate | Pass | Real estate loan, Other | |||
Recorded investment in loans | |||
Total | 45,468 | 37,693 | |
Commercial real estate | Special Mention | Real estate loan, Retail | |||
Recorded investment in loans | |||
Total | 833 | 834 | |
Commercial real estate | Special Mention | Real estate loan, Multifamily | |||
Recorded investment in loans | |||
Total | 7,118 | 7,150 | |
Commercial real estate | Special Mention | Real estate loan, Offices | |||
Recorded investment in loans | |||
Total | 645 | ||
Commercial real estate | Special Mention | Real estate loan, Hotels/Single room occupancy hotels | |||
Recorded investment in loans | |||
Total | 15,355 | 18,189 | |
Commercial real estate | Special Mention | Real estate loan, Industrial | |||
Recorded investment in loans | |||
Total | 8,256 | ||
Commercial real estate | Special Mention | Real estate loan, Other | |||
Recorded investment in loans | |||
Total | 916 | 920 | |
Commercial real estate | Substandard | Real estate loan, Retail | |||
Recorded investment in loans | |||
Total | 1,079 | 1,100 | |
Commercial real estate | Substandard | Real estate loan, Multifamily | |||
Recorded investment in loans | |||
Total | 1,553 | 1,559 | |
Commercial real estate | Substandard | Real estate loan, Offices | |||
Recorded investment in loans | |||
Total | 3,479 | 2,919 | |
Commercial real estate | Substandard | Real estate loan, Hotels/Single room occupancy hotels | |||
Recorded investment in loans | |||
Total | 29,927 | 3,507 | |
Commercial real estate | Substandard | Real estate loan, Industrial | |||
Recorded investment in loans | |||
Total | 8,201 | ||
Commercial real estate | Substandard | Real estate loan, Other | |||
Recorded investment in loans | |||
Total | 6,424 | 6,498 | |
Construction | |||
Recorded investment in loans | |||
Total | 198,115 | 178,376 | |
Construction | Pass | |||
Recorded investment in loans | |||
Total | 163,679 | 156,339 | |
Construction | Special Mention | |||
Recorded investment in loans | |||
Total | 14,539 | 7,008 | |
Construction | Substandard | |||
Recorded investment in loans | |||
Total | 19,897 | 15,029 | |
Commercial lines of credit | |||
Recorded investment in loans | |||
Total | 19,271 | 17,903 | |
Commercial lines of credit | Private banking | |||
Recorded investment in loans | |||
Total | 10,874 | 11,914 | |
Commercial lines of credit | C&I lending | |||
Recorded investment in loans | |||
Total | 8,397 | 5,989 | |
Commercial lines of credit | Pass | Private banking | |||
Recorded investment in loans | |||
Total | 9,632 | 10,669 | |
Commercial lines of credit | Pass | C&I lending | |||
Recorded investment in loans | |||
Total | 7,015 | 4,013 | |
Commercial lines of credit | Special Mention | Private banking | |||
Recorded investment in loans | |||
Total | 1,242 | 1,245 | |
Commercial lines of credit | Special Mention | C&I lending | |||
Recorded investment in loans | |||
Total | 1,382 | ||
Commercial lines of credit | Substandard | C&I lending | |||
Recorded investment in loans | |||
Total | 1,976 | ||
Other consumer | |||
Recorded investment in loans | |||
Total | 36 | 34 | |
Other consumer | Pass | |||
Recorded investment in loans | |||
Total | $ 36 | $ 34 |
Mortgage Servicing Rights, ne_2
Mortgage Servicing Rights, net - Principle Balance by Category (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Mortgage Servicing Rights | ||
Total | $ 834,031 | $ 873,238 |
Custodial escrow balances maintained on serviced loans | 7,122 | 7,688 |
FNMA | ||
Mortgage Servicing Rights | ||
Total | 136,184 | 130,425 |
FHLB | ||
Mortgage Servicing Rights | ||
Total | 87,753 | 86,778 |
Private investors | ||
Mortgage Servicing Rights | ||
Total | $ 610,094 | $ 656,035 |
Mortgage Servicing Rights, ne_3
Mortgage Servicing Rights, net - Activity and Related Valuation Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Mortgage servicing rights activity | |||
Mortgage servicing rights Beginning of period | $ 10,845 | $ 10,733 | |
Additions | 107 | 843 | |
Amortization | (650) | (684) | |
Mortgage servicing rights End of period | 10,302 | 10,892 | |
Valuation allowance at beginning of period | 1,080 | 100 | |
Additions (recoveries) | 1,246 | 37 | |
Valuation allowance at end of period | 2,326 | 137 | |
Mortgage servicing rights, net | 7,976 | 10,755 | $ 9,765 |
Servicing fee income, net of amortization of servicing rights and changes in the valuation allowance | $ (911) | $ 325 |
Mortgage Servicing Rights, ne_4
Mortgage Servicing Rights, net - Valuation techniques (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Dec. 31, 2019 | |
Mortgage Servicing Rights | ||
Fair value of mortgage servicing rights | $ 8,119 | $ 10,271 |
Weighted average default rate | 0.20% | 0.20% |
Minimum | ||
Mortgage Servicing Rights | ||
Discount rate range | 9.50% | 9.50% |
Prepayment speed range | 7.30% | 6.80% |
Maximum | ||
Mortgage Servicing Rights | ||
Discount rate range | 12.00% | 12.00% |
Prepayment speed range | 47.80% | 47.10% |
Deposits - Time deposits (Detai
Deposits - Time deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Deposits | ||
Interest-bearing time deposits | $ 1,377,610 | $ 1,154,076 |
Brokered time deposits | 167,751 | 25,000 |
Time deposits that meet or exceed the FDIC insurance limit of $250 | $ 335,218 | $ 283,457 |
FHLB Borrowings (Details)
FHLB Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
FHLB Borrowings | ||
Long-term fixed rate advances | $ 329,000 | $ 229,000 |
Minimum | Long term | ||
FHLB Borrowings | ||
FHLB interest rates (as a percent) | 0.43% | 1.07% |
Maximum | Long term | ||
FHLB Borrowings | ||
FHLB interest rates (as a percent) | 1.96% | 1.96% |
FHLB Borrowings - FHLB Advances
FHLB Borrowings - FHLB Advances (Details) $ in Thousands | Mar. 31, 2020USD ($) |
FHLB Borrowings | |
Additional borrowing capacity | $ 430,153 |
Callable Option | |
FHLB Borrowings | |
Total FHLB advances | 307,000 |
Callable Option August, 2020 | |
FHLB Borrowings | |
Total FHLB advances | 100,000 |
Callable Option September, 2021 | |
FHLB Borrowings | |
Total FHLB advances | 67,000 |
Callable Option October, 2021 | |
FHLB Borrowings | |
Total FHLB advances | 90,000 |
Callable Option May, 2024 | |
FHLB Borrowings | |
Total FHLB advances | $ 50,000 |
FHLB Borrowings - FHLB Overdraf
FHLB Borrowings - FHLB Overdraft Line of Credit (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
FHLB Borrowings | |||
FHLB line of credit agreement maximum borrowing limit | $ 50,000 | ||
FHLB overdraft line of credit average borrowings outstanding | $ 5 | $ 4,133 | |
FHLB overdraft line of credit (as percent) | 0.53% | 1.99% | |
FHLB, agreement term | 1 year | ||
Carrying value of loans pledged as collateral on FHLB borrowings | $ 1,157,536 | $ 933,747 |
FHLB Borrowings - Other Borrowi
FHLB Borrowings - Other Borrowings (Details) - Other Banks - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Other Borrowings | |||
Maximum borrowing capacity | $ 70,000 | $ 70,000 | |
Outstanding balance | $ 0 | $ 0 |
Subordinated Notes, net (Detail
Subordinated Notes, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Subordinated Notes | |||
Total | $ 65,218 | $ 65,179 | |
Cash proceeds from capital contribution | 50,000 | ||
Interest expense | 1,177 | $ 1,174 | |
Subordinated notes | |||
Subordinated Notes | |||
7.0% fixed to floating rate subordinated notes | 65,000 | 65,000 | |
Unamortized note premium | 458 | 474 | |
Unamortized debt issuance costs | (240) | (295) | |
Total | $ 65,218 | $ 65,179 | |
Interest rate (as a percent) | 7.00% | 7.00% | |
Interest expense | $ 1,177 | $ 1,174 | |
Redemption price percentage of outstanding principal amount | 100.00% | ||
LIBOR | Subordinated notes | |||
Subordinated Notes | |||
Variable interest rate on subordinate notes (in percent) | 5.82% |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | |
Stock Repurchase Program | |||
Shares repurchased and cancelled, value | $ 82 | $ 11,544 | |
Common stock | |||
Stock Repurchase Program | |||
Shares repurchased and canceled | 10,912 | 1,212,574 | |
Shares repurchased and cancelled, value | $ 82 | $ 11,544 | |
Average repurchase price (in dollars per share) | $ 7.57 | ||
Common stock repurchases remaining value | $ 19,568 | ||
Maximum | Common stock | |||
Stock Repurchase Program | |||
Stock repurchase program authorized amount | $ 50,000 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - 2017 Omnibus Equity Incentive Plan - USD ($) $ / shares in Units, $ in Thousands | Mar. 02, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 |
Stock-based Compensation | ||||
Number of shares authorized | 4,237,100 | |||
Stock Options | ||||
Stock-based Compensation | ||||
Maximum term of stock awards granted | 10 years | |||
Number of share instruments issued | 67,361 | |||
Weighted average grant-date fair value | $ 1.78 | |||
Fair value assumptions used in Black-Scholes option pricing model | ||||
Exercise price of options | $ 7.10 | $ 7.10 | ||
Risk-free interest rate | 0.94% | |||
Expected term (in years) | 6 years | |||
Expected stock price volatility | 26.45% | |||
Dividend yield | 0.56% | |||
Number of Shares | ||||
Outstanding at January 1, 2020 | 142,477 | |||
Granted | 67,361 | |||
Forfeited/expired | (8,673) | |||
Outstanding at March 31, 2020 | 201,165 | 142,477 | ||
Weighted Average Exercise Price | ||||
Outstanding at January 1, 2020 | $ 12.29 | |||
Granted | 7.10 | |||
Forfeited | 11.78 | |||
Outstanding at March 31, 2020 | $ 10.57 | $ 12.29 | ||
Weighted Average Remaining Contractual Term | ||||
Weighted Average Remaining Contractual Term (Years) | 8 years 10 months 17 days | 8 years 7 months 6 days | ||
Stock-based compensation costs recognized | $ 26 | $ 32 | ||
Total unrecognized compensation cost - stock options | $ 422 | |||
Unrecognized compensation cost related to nonvested awards, expected weighted-average recognition period | 2 years 6 months 4 days | |||
Number of options exercisable | 0 | |||
Stock Options | Awards vesting at the end of the fourth year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
Stock Options granted prior to 2020 | Awards vesting at the end of the third year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 50.00% | |||
Stock Options granted starting in 2020 | ||||
Stock-based Compensation | ||||
Vesting period | 3 years | |||
Stock Options granted starting in 2020 | Awards vesting on the first anniversary of the grant date | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% | |||
Stock Options granted starting in 2020 | Awards vesting at the end of the second year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% | |||
Stock Options granted starting in 2020 | Awards vesting at the end of the third year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% | |||
Restricted Stock | ||||
Weighted Average Remaining Contractual Term | ||||
Stock-based compensation costs recognized | $ 83 | $ 94 | ||
Total unrecognized compensation cost - restricted stock awards | $ 1,557 | |||
Unrecognized compensation cost related to nonvested awards, expected weighted-average recognition period | 2 years 9 months 11 days | |||
Number of Shares | ||||
Nonvested at January 1, 2020 | 100,096 | |||
Granted | 141,374 | |||
Forfeited | (7,197) | |||
Nonvested at March 31, 2020 | 234,273 | 100,096 | ||
Weighted Average Grant Date Fair Value | ||||
Nonvested at January 1, 2020 | $ 11.02 | |||
Granted | 6.98 | |||
Forfeited | 11.35 | |||
Nonvested at March 31, 2020 | $ 8.57 | $ 11.02 | ||
Restricted Stock | Key employees Restricted Stock Awards | ||||
Stock-based Compensation | ||||
Vesting period | 3 years | |||
Number of share instruments issued | 141,374 | |||
Restricted Stock | Key employees Restricted Stock Awards | Awards vesting on the first anniversary of the grant date | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% | |||
Restricted Stock | Key employees Restricted Stock Awards | Awards vesting at the end of the second year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% | |||
Restricted Stock | Key employees Restricted Stock Awards | Awards vesting at the end of the third year | ||||
Stock-based Compensation | ||||
Percentage of awards vesting | 33.00% |
Income (Loss) Per Share (Detail
Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Numerator: | ||
Net income (loss) | $ (4,030) | $ 15,683 |
Denominator: | ||
Weighted average common shares outstanding, basic | 49,837,662 | 52,554,446 |
Weighted average effect of potentially dilutive common shares: | ||
Weighted average common shares outstanding, diluted | 49,837,662 | 52,562,820 |
Income (loss) per share: | ||
Basic (in dollars per share) | $ (0.08) | $ 0.30 |
Diluted (in dollars per share) | $ (0.08) | $ 0.30 |
Common stock | Restricted Stock | ||
Weighted average effect of potentially dilutive common shares: | ||
Incremental shares from share-based compensation | 8,374 | |
Income (loss) per share: | ||
Potentially dilutive securities excluded from diluted per share calculation | 234,273 | 104,244 |
Common stock | Stock Options | ||
Income (loss) per share: | ||
Potentially dilutive securities excluded from diluted per share calculation | 201,165 | 177,514 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Assets measured at fair value on a recurring basis (Details) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | $ 153,833 | $ 147,289 |
Equity securities | ||
Equity securities | 5,089 | 5,009 |
U.S. Treasury securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 96,866 | 122,803 |
U.S. Treasury securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 96,866 | 122,803 |
U.S. Treasury securities | Level 1 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 96,866 | 122,803 |
Mortgage-backed securities | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 15,161 | 23,104 |
Mortgage-backed securities | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 15,161 | 23,104 |
Mortgage-backed securities | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 15,161 | 23,104 |
Collateralized mortgage obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 41,617 | 1,183 |
Collateralized mortgage obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 41,617 | 1,183 |
Collateralized mortgage obligations | Level 2 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 41,617 | 1,183 |
Collateralized debt obligations | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 189 | 199 |
Collateralized debt obligations | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 189 | 199 |
Collateralized debt obligations | Level 3 | Recurring | ||
Available for sale debt securities: | ||
Available for sale debt securities, at fair value | 189 | 199 |
Equity securities | Recurring | ||
Equity securities | ||
Equity securities | 5,089 | 5,009 |
Equity securities | Level 1 | Recurring | ||
Equity securities | ||
Equity securities | $ 5,089 | $ 5,009 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Reconciliation and income statement classification using Level 3 inputs (Details) - Collateralized debt obligations - Recurring - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
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 January 1 | $ 199 | $ 297 | $ 297 |
Included in other comprehensive income (loss) | (9) | (6) | |
Principal maturities/settlements | (1) | (1) | |
Balance of recurring Level 3 assets at end of period | 189 | 290 | 199 |
Investment income | |||
Unrealized losses on investments | 26 | $ 17 | |
Interest income | $ 2 | $ 4 |
Fair Values of Financial Inst_5
Fair Values of Financial Instruments - Assets Measured at Fair Value on a Non Recurring Basis and Fair Value of Financial Instruments (Details) $ in Thousands | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Financial Assets | ||
Interest-bearing time deposits with other banks | $ 1,025 | $ 1,025 |
Nonrecurring | Mortgage servicing rights | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 7,466 | 7,949 |
Nonrecurring | Mortgage servicing rights | Level 3 | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | 7,466 | 7,949 |
Nonrecurring | Mortgage servicing rights | Level 3 | Discounted cash flow | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value on a non-recurring basis | $ 7,466 | $ 7,949 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.120 | 0.120 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.478 | 0.471 |
Nonrecurring | Mortgage servicing rights | Maximum | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.003 | 0.003 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.095 | 0.095 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.078 | 0.072 |
Nonrecurring | Mortgage servicing rights | Minimum | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.001 | 0.001 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Discount rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.117 | 0.119 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Prepayment speed | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.225 | 0.213 |
Nonrecurring | Mortgage servicing rights | Weighted Average | Level 3 | Discounted cash flow | Default rate | ||
Fair value of financial assets and liabilities | ||
Assets measured at fair value, measurement input | 0.002 | 0.002 |
Carrying value per balance sheet | ||
Financial Assets | ||
Cash and due from banks | $ 391,009 | $ 77,819 |
Interest-bearing time deposits with other banks | 1,025 | 1,025 |
Mortgage loans held for sale | 3,776 | 1,337 |
Loans, net | 2,799,645 | 2,891,530 |
Financial Liabilities | ||
Time deposits | 1,377,610 | 1,154,076 |
Federal Home Loan Bank borrowings | 329,000 | 229,000 |
Subordinated notes, net | 65,218 | 65,179 |
Estimated fair value | ||
Financial Assets | ||
Cash and due from banks | 391,009 | 77,819 |
Interest-bearing time deposits with other banks | 1,031 | 1,025 |
Mortgage loans held for sale | 3,890 | 1,368 |
Loans, net | 2,840,329 | 2,978,846 |
Financial Liabilities | ||
Time deposits | 1,383,282 | 1,161,490 |
Federal Home Loan Bank borrowings | 344,961 | 227,333 |
Subordinated notes, net | 59,150 | 65,650 |
Estimated fair value | Level 1 | ||
Financial Assets | ||
Cash and due from banks | 391,009 | 77,819 |
Interest-bearing time deposits with other banks | 1,025 | |
Estimated fair value | Level 2 | ||
Financial Assets | ||
Interest-bearing time deposits with other banks | 1,031 | |
Mortgage loans held for sale | 3,890 | 1,368 |
Financial Liabilities | ||
Time deposits | 1,383,282 | 1,161,490 |
Federal Home Loan Bank borrowings | 344,961 | 227,333 |
Subordinated notes, net | 59,150 | 65,650 |
Estimated fair value | Level 3 | ||
Financial Assets | ||
Loans, net | $ 2,840,329 | $ 2,978,846 |
Regulatory Capital Requiremen_3
Regulatory Capital Requirements - Capital adequacy requirements (Details) | Mar. 31, 2020 |
Regulatory Capital Requirements | |
Capital conservation buffer (as a percent) | 2.50% |
Regulatory Capital Requiremen_4
Regulatory Capital Requirements - Actual and minimum required capital amounts and ratios and Dividend Restrictions (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2019 | |
Regulatory Capital Requirements | ||
Required Total capital adequacy with capital conservation buffer (as a percent) | 10.50% | |
Required Tier 1 capital adequacy with capital conservation buffer (as a percent) | 8.50% | |
Required Common Equity capital adequacy with capital conservation buffer (as a percent) | 7.00% | |
Cash proceeds from capital contribution | $ 50,000 | |
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | 413,905 | $ 419,327 |
For Capital Adequacy Purposes | $ 156,553 | $ 156,081 |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual (as a percent) | 21.15% | 21.49% |
For Capital Adequacy Purposes (as a percent) | 8.00% | 8.00% |
Tier 1 (core) capital to risk-weighted assets, Amount | ||
Actual | $ 327,917 | $ 332,418 |
For Capital Adequacy Purposes | $ 117,415 | $ 117,061 |
Tier 1 (core) capital to risk-weighted assets, Ratio | ||
Actual (as a percent) | 16.76% | 17.04% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
Common Equity Tier 1 (CET1), Amount | ||
Actual | $ 327,917 | $ 332,418 |
For Capital Adequacy Purposes | $ 88,061 | $ 87,796 |
Common Equity Tier 1 (CET1), Ratio | ||
Actual (as a percent) | 16.76% | 17.04% |
For Capital Adequacy Purposes (as a percent) | 4.50% | 4.50% |
Tier 1 (core) capital to adjusted tangible assets, Amount | ||
Actual | $ 327,917 | $ 332,418 |
For Capital Adequacy Purposes | $ 131,795 | $ 131,471 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual (as a percent) | 9.95% | 10.11% |
For Capital Adequacy Purposes (as a percent) | 4.00% | 4.00% |
Dividend Restrictions | ||
Minimum percentage of assets be maintained as per Qualified Thrift Lender ("QTL") test | 65.00% | |
Retained earnings available for distribution to Sterling Bancorp by its banking subsidiary as dividends | $ 79,036 | |
Bank | ||
Regulatory Capital Requirements | ||
Required Total capital adequacy with capital conservation buffer (as a percent) | 10.50% | |
Required Tier 1 capital adequacy with capital conservation buffer (as a percent) | 8.50% | |
Required Common Equity capital adequacy with capital conservation buffer (as a percent) | 7.00% | |
Total adjusted capital to risk-weighted assets, Amount | ||
Actual | $ 396,945 | $ 346,985 |
For Capital Adequacy Purposes | 155,911 | 155,809 |
To be Well Capitalized | $ 194,889 | $ 194,761 |
Total adjusted capital to risk-weighted assets, Ratio | ||
Actual (as a percent) | 20.37% | 17.82% |
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 | $ 372,307 | $ 325,255 |
For Capital Adequacy Purposes | 116,933 | 116,857 |
To be Well Capitalized | $ 155,809 | $ 155,809 |
Tier 1 (core) capital to risk-weighted assets, Ratio | ||
Actual (as a percent) | 19.10% | 16.70% |
For Capital Adequacy Purposes (as a percent) | 6.00% | 6.00% |
To be Well Capitalized (as a percent) | 8.00% | 8.00% |
Common Equity Tier 1 (CET1), Amount | ||
Actual | $ 372,307 | $ 325,255 |
For Capital Adequacy Purposes | 87,700 | 87,643 |
To be Well Capitalized | $ 126,595 | $ 126,595 |
Common Equity Tier 1 (CET1), Ratio | ||
Actual (as a percent) | 19.10% | 16.70% |
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 | $ 372,307 | $ 325,255 |
For Capital Adequacy Purposes | 131,681 | 131,469 |
To be Well Capitalized | $ 164,337 | $ 164,337 |
Tier 1 (core) capital to adjusted tangible assets, Ratio | ||
Actual (as a percent) | 11.31% | 9.90% |
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 | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Board of Directors | Charitable donation to foundation | ||
Related party transactions | ||
Amount of related party transaction, expense | $ 225 | $ 225 |
Controlling shareholders | ||
Related party transactions | ||
Payments under leases | 60 | 59 |
Sublease income | 69 | 68 |
Controlling shareholders | Data processing and programming services provided | ||
Related party transactions | ||
Amount of related party transaction, revenue | $ 27 | $ 27 |
Commitments and Contingencies -
Commitments and Contingencies - Unfunded Commitments to Extend Credit and Standby Letters of Credit (Details) $ in Thousands | Jul. 28, 2020item | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Commitments and Contingencies | |||
Outstanding principal balance | $ 2,799,645 | $ 2,891,530 | |
Loss contingency from legal proceedings | |||
Commitments and Contingencies | |||
Accrued liability | 25,000 | 25,000 | |
Demand letter from purported stockholders | |||
Commitments and Contingencies | |||
Number of law firms | item | 2 | ||
Threshold period for responding to Demand letter | 90 days | ||
Residential real estate | |||
Commitments and Contingencies | |||
Mortgage loan repurchase liability | 7,823 | ||
Outstanding principal balance | 713,427 | 759,568 | |
Unfunded Commitments to Extend Credit | Residential real estate | |||
Commitments and Contingencies | |||
Outstanding commitments regarding fixed rate loans | 49,123 | ||
Outstanding commitments with varying interest rates | $ 38,640 | ||
Unfunded Commitments to Extend Credit | Residential real estate | Minimum | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 2.375% | ||
Maturity period | 15 years | ||
Variable interest rate (as a percentage) | 3.375% | ||
Maturity period for variable interest loans | 15 years | ||
Unfunded Commitments to Extend Credit | Residential real estate | Maximum | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 4.50% | ||
Maturity period | 30 years | ||
Variable interest rate (as a percentage) | 6.75% | ||
Maturity period for variable interest loans | 30 years | ||
Commitments to make loans | |||
Commitments and Contingencies | |||
Unused lines of credit | $ 87,762 | 76,927 | |
Unused lines of credit | |||
Commitments and Contingencies | |||
Outstanding commitments regarding fixed rate loans | 438 | ||
Outstanding commitments with varying interest rates | 244,410 | ||
Unused lines of credit | $ 244,848 | 220,553 | |
Unused lines of credit | Minimum | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 5.25% | ||
Maturity period | 3 months | ||
Variable interest rate (as a percentage) | 3.25% | ||
Maturity period for variable interest loans | 1 month | ||
Unused lines of credit | Maximum | |||
Commitments and Contingencies | |||
Fixed interest rate (as a percent) | 18.00% | ||
Maturity period | 7 years | ||
Variable interest rate (as a percentage) | 8.50% | ||
Maturity period for variable interest loans | 15 years | ||
Unused lines of credit | Residential real estate | |||
Commitments and Contingencies | |||
Unused lines of credit | $ 20,283 | ||
Unused lines of credit | Construction | |||
Commitments and Contingencies | |||
Unused lines of credit | 212,448 | ||
Unused lines of credit | Commercial lines of credit | |||
Commitments and Contingencies | |||
Unused lines of credit | 11,716 | ||
Unused lines of credit | Other consumer | |||
Commitments and Contingencies | |||
Unused lines of credit | 401 | ||
Standby letters of credit | |||
Commitments and Contingencies | |||
Unused lines of credit | $ 24 | $ 24 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Thousands | Jun. 05, 2020USD ($)$ / sharesshares | Jul. 31, 2020USD ($)item | May 31, 2020USD ($)item | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Oct. 09, 2020shares | Jun. 30, 2020 | Dec. 31, 2019USD ($) |
Subsequent events | ||||||||
Other Noninterest Expense | $ 1,425 | $ 1,654 | ||||||
Outstanding principal balance | $ 2,799,645 | $ 2,891,530 | ||||||
Subsequent event | ||||||||
Subsequent events | ||||||||
Nonvested restricted stock awards forfeited | shares | 93,029 | |||||||
Options to purchase shares of stock forfeited | shares | 123,238 | |||||||
Subsequent event | Thomas M. O'Brien | ||||||||
Subsequent events | ||||||||
Number of awards granted | shares | 300,000 | |||||||
Exercise price | $ / shares | $ 4 | |||||||
Vesting period | 3 years | |||||||
Maximum term of options | 10 years | |||||||
Total unrecognized compensation cost - stock options | $ 354 | |||||||
Unrecognized compensation cost related to nonvested awards, expected weighted-average recognition period | 1 year 18 days | |||||||
Subsequent event | Thomas M. O'Brien | Awards vesting on January 1, 2021 | ||||||||
Subsequent events | ||||||||
Percentage of awards vesting | 33.00% | |||||||
Subsequent event | Thomas M. O'Brien | Awards vesting on the first anniversary of the grant date | ||||||||
Subsequent events | ||||||||
Percentage of awards vesting | 33.00% | |||||||
Subsequent event | Thomas M. O'Brien | Awards vesting on January 1, 2022 | ||||||||
Subsequent events | ||||||||
Percentage of awards vesting | 33.00% | |||||||
Subsequent event | Advantage Loan Program | ||||||||
Subsequent events | ||||||||
Number of loan pools negotiated to be repurchased | item | 3 | 2 | ||||||
Percentage of loans offered to each of investors to repurchase | 100.00% | |||||||
Other Noninterest Expense | $ 136 | |||||||
Outstanding principal balance | $ 38,704 | |||||||
Number of third party investors accepted to repurchase | item | 3 | |||||||
Subsequent event | Advantage Loan Program loans repurchased | ||||||||
Subsequent events | ||||||||
Other Noninterest Expense | $ 135 | |||||||
Outstanding principal balance | 19,251 | |||||||
Loss charged against mortgage repurchase liability | $ 433 |