(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading symbol | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Page | |||||||||||
PART I. | |||||||||||
ITEM 1. | |||||||||||
NOTE 1. | |||||||||||
NOTE 2. | |||||||||||
NOTE 3. | |||||||||||
NOTE 4. | |||||||||||
NOTE 5. | |||||||||||
NOTE 6. | |||||||||||
NOTE 7. | |||||||||||
NOTE 8. | |||||||||||
NOTE 9. | |||||||||||
NOTE 10. | |||||||||||
ITEM 2. | |||||||||||
ITEM 3. | |||||||||||
ITEM 4. |
PART II. | OTHER INFORMATION | ||||||||||
ITEM 1. | |||||||||||
ITEM 1A. | |||||||||||
ITEM 2. | |||||||||||
ITEM 3. | |||||||||||
ITEM 4. | |||||||||||
ITEM 5. | |||||||||||
ITEM 6. | |||||||||||
2022 Annual Form 10-K | Company's Annual Report on Form 10-K for the year ended December 31, 2022 | ||||
ACL | Allowance for credit losses | ||||
AOCI | Accumulated other comprehensive income (loss), net | ||||
ASU | Accounting Standards Update | ||||
Bank | Heritage Bank | ||||
CECL | Current Expected Credit Loss | ||||
CMO | Collateralized Mortgage Obligation | ||||
Company | Heritage Financial Corporation | ||||
COVID-19 Pandemic | Coronavirus Disease of 2019 pandemic | ||||
CRE | Commercial real estate | ||||
FASB | Financial Accounting Standards Board | ||||
FDIC | Federal Deposit Insurance Corporation | ||||
Federal Reserve | Board of Governors of the Federal Reserve System | ||||
Federal Reserve Bank | Federal Reserve Bank of San Francisco | ||||
GAAP | U.S. Generally Accepted Accounting Principles | ||||
LIBOR | London Interbank Offering Rate | ||||
LIHTC | Low-Income Housing Tax Credit | ||||
MBS | Mortgage-backed security | ||||
PPP | Paycheck Protection Program | ||||
SBA | Small Business Administration | ||||
SEC | Securities and Exchange Commission | ||||
SM | Special Mention | ||||
SS | Substandard | ||||
TDR | Troubled debt restructured |
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | |||||||||||
Cash on hand and in banks | $ | $ | |||||||||
Interest earning deposits | |||||||||||
Cash and cash equivalents | |||||||||||
Investment securities available for sale, at fair value, net (amortized cost of $ | |||||||||||
Investment securities held to maturity, at amortized cost, net (fair value of $ | |||||||||||
Total investment securities | |||||||||||
Loans receivable | |||||||||||
Allowance for credit losses on loans | ( | ( | |||||||||
Loans receivable, net | |||||||||||
Premises and equipment, net | |||||||||||
Federal Home Loan Bank stock, at cost | |||||||||||
Bank owned life insurance | |||||||||||
Accrued interest receivable | |||||||||||
Prepaid expenses and other assets | |||||||||||
Other intangible assets, net | |||||||||||
Goodwill | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Deposits | $ | $ | |||||||||
Deposits held for sale | |||||||||||
Total deposits | |||||||||||
Federal Home Loan Bank advances | |||||||||||
Junior subordinated debentures | |||||||||||
Securities sold under agreement to repurchase | |||||||||||
Accrued expenses and other liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies (Note 10) | |||||||||||
Stockholders’ equity: | |||||||||||
Preferred stock, | |||||||||||
Common stock, | |||||||||||
Retained earnings | |||||||||||
Accumulated other comprehensive loss, net | ( | ( | |||||||||
Total stockholders’ equity | |||||||||||
Total liabilities and stockholders’ equity | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
INTEREST INCOME: | |||||||||||
Interest and fees on loans | $ | $ | |||||||||
Taxable interest on investment securities | |||||||||||
Nontaxable interest on investment securities | |||||||||||
Interest on interest earning deposits | |||||||||||
Total interest income | |||||||||||
INTEREST EXPENSE: | |||||||||||
Deposits | |||||||||||
Junior subordinated debentures | |||||||||||
Other borrowings | |||||||||||
Total interest expense | |||||||||||
Net interest income | |||||||||||
Provision for (reversal of) credit losses | ( | ||||||||||
Net interest income after provision for (reversal of) credit losses | |||||||||||
NONINTEREST INCOME: | |||||||||||
Service charges and other fees | |||||||||||
Card revenue | |||||||||||
Loss on sale of investment securities, net | ( | ||||||||||
Gain on sale of loans, net | |||||||||||
Interest rate swap fees | |||||||||||
Bank owned life insurance income | |||||||||||
Gain on sale of other assets, net | |||||||||||
Other income | |||||||||||
Total noninterest income | |||||||||||
NONINTEREST EXPENSE: | |||||||||||
Compensation and employee benefits | |||||||||||
Occupancy and equipment | |||||||||||
Data processing | |||||||||||
Marketing | |||||||||||
Professional services | |||||||||||
State/municipal business and use taxes | |||||||||||
Federal deposit insurance premium | |||||||||||
Amortization of intangible assets | |||||||||||
Other expense | |||||||||||
Total noninterest expense | |||||||||||
Income before income taxes | |||||||||||
Income tax expense | |||||||||||
Net income | $ | $ | |||||||||
Basic earnings per share | $ | $ | |||||||||
Diluted earnings per share | $ | $ | |||||||||
Dividends declared per share | $ | $ | |||||||||
Average number of basic shares outstanding | |||||||||||
Average number of diluted shares outstanding |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Net Income | $ | $ | |||||||||
Change in fair value of investment securities available for sale, net of tax of $ | ( | ||||||||||
Amortization of net unrealized gain for the reclassification of investment securities available for sale to held to maturity, net of tax of $( | ( | ( | |||||||||
Reclassification adjustment for net loss from sale of investment securities available for sale included in income, net of tax of $ | |||||||||||
Other comprehensive income (loss) | ( | ||||||||||
Comprehensive income (loss) | $ | $ | ( |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Number of common shares | Common stock | Retained earnings | AOCI | Total stockholders’ equity | |||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ||||||||||||||||||||||||
Restricted stock units vested | — | — | — | — | |||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Common stock repurchased | ( | ( | — | — | ( | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive income, net of tax | — | — | — | ||||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Number of common shares | Common stock | Retained earnings | AOCI | Total stockholders’ equity | |||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | $ | |||||||||||||||||||||||||
Restricted stock units vested | — | — | — | — | |||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | ||||||||||||||||||||||||||
Common stock repurchased | ( | ( | — | — | ( | ||||||||||||||||||||||||
Net income | — | — | — | ||||||||||||||||||||||||||
Other comprehensive loss, net of tax | — | — | — | ( | ( | ||||||||||||||||||||||||
Cash dividends declared on common stock ($ | — | — | ( | — | ( | ||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ |
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | $ | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation, amortization and accretion | ( | ||||||||||
Provision for (reversal of) credit losses | ( | ||||||||||
Stock-based compensation expense | |||||||||||
Amortization of intangible assets | |||||||||||
Origination of mortgage loans held for sale | ( | ( | |||||||||
Proceeds from sale of mortgage loans held for sale | |||||||||||
Bank owned life insurance income | ( | ( | |||||||||
Valuation adjustment on interest rate swaps | ( | ||||||||||
Gain on sale of mortgage loans held for sale, net | ( | ( | |||||||||
Loss on sale of investment securities available for sale, net | |||||||||||
Gain on sale of assets held for sale | ( | ||||||||||
Other | ( | ( | |||||||||
Net cash provided by operating activities | |||||||||||
Cash flows from investing activities: | |||||||||||
Loan originations and purchases, net of payments | ( | ( | |||||||||
Maturities and repayments of investment securities available for sale | |||||||||||
Maturities and repayments of investment securities held to maturity | |||||||||||
Purchase of investment securities available for sale | ( | ( | |||||||||
Purchase of investment securities held to maturity | ( | ||||||||||
Purchase of premises and equipment | ( | ( | |||||||||
Purchase of bank owned life insurance | ( | ||||||||||
Purchases of Federal Home Loan Bank stock | ( | ( | |||||||||
Proceeds from sales of investment securities available for sale | |||||||||||
Proceeds from redemption of Federal Home Loan Bank stock | |||||||||||
Proceeds from sales of premises and equipment | |||||||||||
Capital contributions to low-income housing tax credit partnerships | ( | ||||||||||
Net cash provided by investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Net (decrease) increase in deposits | ( | ||||||||||
Federal Home Loan Bank advances | |||||||||||
Repayment of Federal Home Loan Bank advances | ( | ||||||||||
Common stock cash dividends paid | ( | ( | |||||||||
Net decrease in securities sold under agreement to repurchase | ( | ( | |||||||||
Repurchase of common stock | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
Net increase (decrease) in cash and cash equivalents | ( | ||||||||||
Cash and cash equivalents at beginning of period | |||||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
March 31, | |||||||||||
2023 | 2022 | ||||||||||
Supplemental disclosures of cash flow information: | |||||||||||
Cash paid for interest | $ | $ | |||||||||
Supplemental non-cash disclosures of cash flow information: | |||||||||||
Investment in LIHTC partnership and related funding commitment | |||||||||||
Right of use assets obtained in exchange for new operating lease liabilities | |||||||||||
March 31, 2023 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||
Residential CMO and MBS | ( | ||||||||||||||||||||||
Commercial CMO and MBS | ( | ||||||||||||||||||||||
Corporate obligations | ( | ||||||||||||||||||||||
Other asset-backed securities | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
March 31, 2023 | |||||||||||||||||||||||
Amortized Cost | Gross Unrecognized Gains | Gross Unrecognized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Investment securities held to maturity: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential CMO and MBS | ( | ||||||||||||||||||||||
Commercial CMO and MBS | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
December 31, 2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Municipal securities | ( | ||||||||||||||||||||||
Residential CMO and MBS | ( | ||||||||||||||||||||||
Commercial CMO and MBS | ( |
December 31, 2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Corporate obligations | ( | ||||||||||||||||||||||
Other asset-backed securities | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ | ||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Amortized Cost | Gross Unrecognized Gains | Gross Unrecognized Losses | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Investment securities held to maturity: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | ( | $ | ||||||||||||||||||
Residential CMO and MBS | ( | ||||||||||||||||||||||
Commercial CMO and MBS | ( | ||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
March 31, 2023 | |||||||||||||||||||||||
Securities Available for Sale | Securities Held to Maturity | ||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Due in one year or less | $ | $ | $ | $ | |||||||||||||||||||
Due after one year through five years | |||||||||||||||||||||||
Due after five years through ten years | |||||||||||||||||||||||
Due after ten years | |||||||||||||||||||||||
Total investment securities due at a single maturity date | |||||||||||||||||||||||
Mortgage-backed securities (1) | |||||||||||||||||||||||
Total investment securities | $ | $ | $ | $ |
March 31, 2023 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential CMO and MBS(1) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | ( | ( | ( |
March 31, 2023 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
Corporate obligations | ( | ( | |||||||||||||||||||||||||||||||||
Other asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
December 31, 2022 | |||||||||||||||||||||||||||||||||||
Less than 12 Months | 12 Months or Longer | Total | |||||||||||||||||||||||||||||||||
Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | ||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | ||||||||||||||||||||||||||
Municipal securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Residential CMO and MBS(1) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | ( | ( | ( | ||||||||||||||||||||||||||||||||
Corporate obligations | ( | ( | |||||||||||||||||||||||||||||||||
Other asset-backed securities | ( | ( | ( | ||||||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ | $ | ( |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Gross realized gains | $ | $ | |||||||||
Gross realized losses | ( | ||||||||||
Net realized loss | $ | ( | $ |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amortized Cost | Fair Value | Amortized Cost | Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Washington and Oregon state public deposits | $ | $ | $ | $ | |||||||||||||||||||
Federal Reserve Bank credit facility | |||||||||||||||||||||||
Securities sold under agreement to repurchase | |||||||||||||||||||||||
Other securities pledged | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||
(In thousands) | |||||||||||
Commercial business: | |||||||||||
Commercial and industrial | $ | $ | |||||||||
SBA PPP | |||||||||||
Owner-occupied CRE |
March 31, 2023 | December 31, 2022 | ||||||||||
(In thousands) | |||||||||||
Non-owner occupied CRE | |||||||||||
Total commercial business | |||||||||||
Residential real estate | |||||||||||
Real estate construction and land development: | |||||||||||
Residential | |||||||||||
Commercial and multifamily | |||||||||||
Total real estate construction and land development | |||||||||||
Consumer | |||||||||||
Loans receivable | |||||||||||
Allowance for credit losses on loans | ( | ( | |||||||||
Loans receivable, net | $ | $ | |||||||||
Balances included in the amortized cost of loans receivable: | |||||||||||
Unamortized net discount on acquired loans | $ | ( | $ | ( | |||||||
Unamortized net deferred fee | $ | ( | $ | ( |
March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Revolving Loans Converted (1) | Loans Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | ||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA PPP | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial business | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial business gross charge-offs | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass(1) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate gross charge-offs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and multifamily | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total |
March 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Revolving Loans Converted (1) | Loans Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | 2021 | 2020 | 2019 | Prior | ||||||||||||||||||||||||||||||||||||||||||||||||
Total real estate construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate construction and land development gross writeoffs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer gross charge-offs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
Gross writeoffs: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Current period total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Revolving Loans Converted (1) | Loans Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | ||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SBA PPP | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Non-owner-occupied CRE | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM |
December 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans Amortized Cost Basis by Origination Year | Revolving Loans | Revolving Loans Converted (1) | Loans Receivable | ||||||||||||||||||||||||||||||||||||||||||||||||||
2022 | 2021 | 2020 | 2019 | 2018 | Prior | ||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total commercial business | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Commercial and multifamily | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total real estate construction and land development | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SM | |||||||||||||||||||||||||||||||||||||||||||||||||||||
SS | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | $ | $ | $ |
March 31, 2023 | |||||||||||||||||
Nonaccrual without ACL | Nonaccrual with ACL | Total Nonaccrual | |||||||||||||||
(In thousands) | |||||||||||||||||
Commercial business: | |||||||||||||||||
Commercial and industrial | $ | $ | $ | ||||||||||||||
Owner-occupied CRE | |||||||||||||||||
Total | $ | $ | $ |
December 31, 2022 | |||||||||||||||||
Nonaccrual without ACL | Nonaccrual with ACL | Total Nonaccrual | |||||||||||||||
(In thousands) | |||||||||||||||||
Commercial business: | |||||||||||||||||
Commercial and industrial | $ | $ | $ | ||||||||||||||
Owner-occupied CRE | |||||||||||||||||
Total commercial business | |||||||||||||||||
Real estate construction and land development: | |||||||||||||||||
Commercial and multifamily | |||||||||||||||||
Total | $ | $ | $ |
Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | ||||||||||||||||||||||
Interest Income Reversed | Interest Income Recognized | Interest Income Reversed | Interest Income Recognized | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | ( | $ | $ | ( | $ | |||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||
Total commercial business | ( | ( | |||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | ( | $ | $ | ( | $ |
March 31, 2023 | |||||||||||||||||||||||||||||
30-89 Days | 90 Days or Greater | Total Past Due | Current | Loans Receivable | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ |
March 31, 2023 | |||||||||||||||||||||||||||||
30-89 Days | 90 Days or Greater | Total Past Due | Current | Loans Receivable | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
SBA PPP | |||||||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||||||||
Total commercial business | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||
Commercial and multifamily | |||||||||||||||||||||||||||||
Total real estate construction and land development | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||
30-89 Days | 90 Days or Greater | Total Past Due | Current | Loans Receivable | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
SBA PPP | |||||||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||||||||
Total commercial business | |||||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential | |||||||||||||||||||||||||||||
Commercial and multifamily | |||||||||||||||||||||||||||||
Total real estate construction and land development | |||||||||||||||||||||||||||||
Consumer | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
March 31, 2023 | |||||||||||||||||||||||||||||
CRE | Farmland | Residential Real Estate | Equipment | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||||||||
CRE | Farmland | Residential Real Estate | Equipment | Total | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||
Term Extension | Term Extension & Int. Rate Reduction | Total Modified Loans | % of Modified Loans to Loans Receivable, net | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | % | |||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||
Total commercial business | |||||||||||||||||||||||
Consumer | |||||||||||||||||||||||
Total | $ | $ | $ | % |
Three Months Ended March 31, 2023 | |||||||||||
Weighted Average % of Interest Rate Reductions | Weighted Average Years of Term Extensions | ||||||||||
Commercial business: | |||||||||||
Commercial and industrial | % | ||||||||||
Non-owner occupied CRE | |||||||||||
Total commercial business | |||||||||||
Consumer | |||||||||||
Total | % |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Beginning balance | $ | $ | |||||||||
Charge-offs | ( | ( | |||||||||
Recoveries of loans previously charged-off | |||||||||||
Provision for (reversal of) credit losses | ( | ||||||||||
Ending balance | $ | $ |
Three Months Ended March 31, 2023 | |||||||||||||||||||||||||||||
Beginning Balance | Charge-offs | Recoveries | Provision for (Reversal of) Credit Losses | Ending Balance | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Non-owner occupied CRE | ( | ||||||||||||||||||||||||||||
Total commercial business | ( | ( | |||||||||||||||||||||||||||
Residential real estate | |||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Commercial and multifamily | |||||||||||||||||||||||||||||
Total real estate construction and land development | |||||||||||||||||||||||||||||
Consumer | ( | ||||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | $ |
Three Months Ended March 31, 2022 | |||||||||||||||||||||||||||||
Beginning Balance | Charge-offs | Recoveries | (Reversal of) Provision for Credit Losses | Ending Balance | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||||
Owner-occupied CRE | ( | ||||||||||||||||||||||||||||
Non-owner occupied CRE | |||||||||||||||||||||||||||||
Total commercial business | ( | ( | |||||||||||||||||||||||||||
Residential real estate | ( | ||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||
Residential | ( | ||||||||||||||||||||||||||||
Commercial and multifamily | ( | ||||||||||||||||||||||||||||
Total real estate construction and land development | ( | ||||||||||||||||||||||||||||
Consumer | ( | ( | |||||||||||||||||||||||||||
Total | $ | $ | ( | $ | $ | ( | $ |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Notional Amounts | Estimated Fair Value | Notional Amounts | Estimated Fair Value | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Non-hedging interest rate derivatives | |||||||||||||||||||||||
Interest rate swap asset (1) | $ | $ | $ | ||||||||||||||||||||
Interest rate swap liability (1) | ( | ( |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands, except shares) | |||||||||||
Net income: | |||||||||||
Net income | $ | $ | |||||||||
Dividends and undistributed earnings allocated to participating securities (1) | |||||||||||
Net income allocated to common shareholders | $ | $ | |||||||||
Basic: | |||||||||||
Weighted average common shares outstanding | |||||||||||
Diluted: | |||||||||||
Basic weighted average common shares outstanding | |||||||||||
Effect of potentially dilutive common shares (1) | |||||||||||
Total diluted weighted average common shares outstanding |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands, except shares) | |||||||||||
Potentially dilutive shares that were excluded from the computation of diluted earnings per share because to do so would be anti-dilutive (2) |
Declared | Cash Dividend per Share | Record Date | Paid Date | |||||||||||||||||
$ | ||||||||||||||||||||
$ | ||||||||||||||||||||
$ | ||||||||||||||||||||
$ | ||||||||||||||||||||
$ |
Three Months Ended March 31, | |||||||||||||||||
2023 | 2022 | Plan Total(1) | |||||||||||||||
Repurchased shares | |||||||||||||||||
Stock repurchase average share price | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
Repurchased shares to pay withholding taxes | |||||||||||
Stock repurchase to pay withholding taxes average share price | $ | $ |
March 31, 2023 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Residential CMO and MBS | |||||||||||||||||||||||
Commercial CMO and MBS | |||||||||||||||||||||||
Corporate obligations | |||||||||||||||||||||||
Other asset-backed securities | |||||||||||||||||||||||
Total investment securities available for sale | |||||||||||||||||||||||
Equity security | |||||||||||||||||||||||
Derivative assets - interest rate swaps | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities - interest rate swaps | $ | $ | $ | $ |
December 31, 2022 | |||||||||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment securities available for sale: | |||||||||||||||||||||||
U.S. government and agency securities | $ | $ | $ | $ | |||||||||||||||||||
Municipal securities | |||||||||||||||||||||||
Residential CMO and MBS | |||||||||||||||||||||||
Commercial CMO and MBS | |||||||||||||||||||||||
Corporate obligations | |||||||||||||||||||||||
Other asset-backed securities | |||||||||||||||||||||||
Total investment securities available for sale | |||||||||||||||||||||||
Equity security | |||||||||||||||||||||||
Derivative assets - interest rate swaps | |||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Derivative liabilities - interest rate swaps | $ | $ | $ | $ |
Fair Value at March 31, 2023 | |||||||||||||||||||||||||||||
Basis(1) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Collateral-dependent loans: | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Commercial and industrial | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Total assets measured at fair value on a nonrecurring basis | $ | $ | $ | $ | $ |
Fair Value at December 31, 2022 | |||||||||||||||||||||||||||||
Basis(1) | Total | Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Collateral-dependent loans: | |||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||
Owner-occupied CRE | |||||||||||||||||||||||||||||
Total assets measured at fair value on a nonrecurring basis | $ | $ | $ | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Collateral-dependent loans: | |||||||||||
Commercial business: | |||||||||||
Commercial and industrial | $ | ( | $ | ( | |||||||
Net loss from nonrecurring fair value adjustments | $ | ( | $ | ( |
March 31, 2023 | |||||||||||||||||||||||
Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range of Inputs; Weighted Average | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Collateral-dependent loans | $ | Market approach | Adjustment for differences between the comparable sales | N/A(1) | |||||||||||||||||||
December 31, 2022 | |||||||||||||||||||||||
Fair Value | Valuation Technique(s) | Unobservable Input(s) | Range of Inputs; Weighted Average | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Collateral-dependent loans | $ | Market approach | Adjustment for differences between the comparable sales | N/A(1) | |||||||||||||||||||
March 31, 2023 | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Fair Value Measurements Using: | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Investment securities available for sale | |||||||||||||||||||||||||||||
Investment securities held to maturity | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Derivative assets - interest rate swaps | |||||||||||||||||||||||||||||
Equity security | |||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Non-maturity deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
Federal Home Loan Bank advances | |||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | |||||||||||||||||||||||||||||
Junior subordinated debentures | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Derivative liabilities - interest rate swaps |
December 31, 2022 | |||||||||||||||||||||||||||||
Carrying Value | Fair Value | Fair Value Measurements Using: | |||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | |||||||||||||||||||||||||||
(In thousands) | |||||||||||||||||||||||||||||
Financial Assets: | |||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Investment securities available for sale | |||||||||||||||||||||||||||||
Investment securities held to maturity | |||||||||||||||||||||||||||||
Loans receivable, net | |||||||||||||||||||||||||||||
Accrued interest receivable | |||||||||||||||||||||||||||||
Derivative assets - interest rate swaps | |||||||||||||||||||||||||||||
Equity security | |||||||||||||||||||||||||||||
Financial Liabilities: | |||||||||||||||||||||||||||||
Non-maturity deposits | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Certificates of deposit | |||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | |||||||||||||||||||||||||||||
Junior subordinated debentures | |||||||||||||||||||||||||||||
Accrued interest payable | |||||||||||||||||||||||||||||
Derivative liabilities - interest rate swaps |
March 31, 2023 | December 31, 2022 | ||||||||||
(In thousands) | |||||||||||
Commercial business: | |||||||||||
Commercial and industrial | $ | $ | |||||||||
Owner-occupied CRE | |||||||||||
Non-owner occupied CRE | |||||||||||
Total commercial business | |||||||||||
Real estate construction and land development: | |||||||||||
Residential | |||||||||||
Commercial and multifamily | |||||||||||
Total real estate construction and land development | |||||||||||
Consumer | |||||||||||
Total outstanding commitments | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(In thousands) | |||||||||||
Balance, beginning of period | $ | $ | |||||||||
Provision for (reversal of) credit losses on unfunded commitments | ( | ||||||||||
Balance, end of period | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | Change | |||||||||||||||||||||||||||||||||||||||||||||||||||
Average Balance(1) | Interest Earned/ Paid | Average Yield/ Rate | Average Balance(1) | Interest Earned/ Paid | Average Yield/ Rate | Average Balance(1) | Interest Earned/ Paid | Average Yield/ Rate | |||||||||||||||||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans receivable, net (2)(3) | $ | 4,039,395 | $ | 50,450 | 5.07 | % | $ | 3,773,325 | $ | 41,025 | 4.41 | % | $ | 266,070 | $ | 9,425 | 0.66 | % | |||||||||||||||||||||||||||||||||||
Taxable securities | 2,007,339 | 14,657 | 2.96 | 1,271,557 | 6,003 | 1.91 | 735,782 | 8,654 | 1.05 | ||||||||||||||||||||||||||||||||||||||||||||
Nontaxable securities (3) | 82,893 | 586 | 2.87 | 146,409 | 860 | 2.38 | (63,516) | (274) | 0.49 | ||||||||||||||||||||||||||||||||||||||||||||
Interest earning deposits | 83,376 | 972 | 4.73 | 1,503,287 | 706 | 0.19 | (1,419,911) | 266 | 4.54 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest earning assets | 6,213,003 | 66,665 | 4.35 | % | 6,694,578 | 48,594 | 2.94 | % | (481,575) | 18,071 | 1.41 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest earning assets | 848,956 | 740,209 | 108,747 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total assets | $ | 7,061,959 | $ | 7,434,787 | $ | (372,828) | |||||||||||||||||||||||||||||||||||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Certificates of Deposit | $ | 350,206 | $ | 1,224 | 1.42 | % | $ | 336,353 | $ | 338 | 0.41 | % | $ | 13,853 | $ | 886 | 1.01 | % | |||||||||||||||||||||||||||||||||||
Savings accounts | 601,166 | 142 | 0.10 | 646,684 | 87 | 0.05 | (45,518) | 55 | 0.05 | ||||||||||||||||||||||||||||||||||||||||||||
Interest bearing demand and money market accounts | 2,829,198 | 3,162 | 0.45 | 3,066,320 | 999 | 0.13 | (237,122) | 2,163 | 0.32 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing deposits | 3,780,570 | 4,528 | 0.49 | 4,049,357 | 1,424 | 0.14 | (268,787) | 3,104 | 0.35 | ||||||||||||||||||||||||||||||||||||||||||||
Junior subordinated debentures | 21,501 | 482 | 9.09 | 21,214 | 194 | 3.71 | 287 | 288 | 5.38 | ||||||||||||||||||||||||||||||||||||||||||||
Securities sold under agreement to repurchase | 43,202 | 47 | 0.44 | 50,017 | 32 | 0.26 | (6,815) | 15 | 0.18 | ||||||||||||||||||||||||||||||||||||||||||||
FHLB advances and other borrowings | 145,605 | 1,766 | 4.92 | — | — | — | 145,605 | 1,766 | 4.92 | ||||||||||||||||||||||||||||||||||||||||||||
Total interest bearing liabilities | 3,990,878 | 6,823 | 0.69 | % | 4,120,588 | 1,650 | 0.16 | % | (129,710) | 5,173 | 0.53 | % | |||||||||||||||||||||||||||||||||||||||||
Noninterest bearing demand deposits | 2,068,688 | 2,359,451 | (290,763) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other noninterest bearing liabilities | 189,893 | 108,663 | 81,230 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders’ equity | 812,500 | 846,085 | (33,585) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Total liabilities and stock-holders’ equity | $ | 7,061,959 | $ | 7,434,787 | $ | (372,828) | |||||||||||||||||||||||||||||||||||||||||||||||
Net interest income and spread | $ | 59,842 | 3.66 | % | $ | 46,944 | 2.78 | % | $ | 12,898 | 0.88 | % | |||||||||||||||||||||||||||||||||||||||||
Net interest margin | 3.91 | % | 2.84 | % | 1.07 | % |
Change Date | Rate (%) | Rate Change (%) | ||||||||||||
December 31, 2021 | 0.00% - 0.25% | N/A | ||||||||||||
March 17, 2022 | 0.25% - 0.50% | 0.25 | % | |||||||||||
May 5, 2022 | 0.75% - 1.00% | 0.50 | % | |||||||||||
June 16, 2022 | 1.50% - 1.75% | 0.75 | % | |||||||||||
July 28, 2022 | 2.25% - 2.50% | 0.75 | % | |||||||||||
September 22, 2022 | 3.00% - 3.25% | 0.75 | % | |||||||||||
November 3, 2022 | 3.75% - 4.00% | 0.75 | % | |||||||||||
December 15, 2022 | 4.25% - 4.50% | 0.50 | % | |||||||||||
February 2, 2023 | 4.50% - 4.75% | 0.25 | % | |||||||||||
March 23, 2023 | 4.75% - 5.00% | 0.25 | % |
Increase (Decrease) Due to Changes In: | |||||||||||||||||||||||
Volume | Yield/Rate | Total | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Interest Earning Assets: | |||||||||||||||||||||||
Loans receivable, net | $ | 3,031 | $ | 6,394 | $ | 9,425 | 23.0 | % | |||||||||||||||
Taxable securities | 4,449 | 4,205 | 8,654 | 144.2 | |||||||||||||||||||
Nontaxable securities | (425) | 151 | (274) | (31.9) | |||||||||||||||||||
Interest earning deposits | (1,271) | 1,537 | 266 | 37.7 | |||||||||||||||||||
Total interest income | $ | 5,784 | $ | 12,287 | $ | 18,071 | 37.2 | % | |||||||||||||||
Interest Bearing Liabilities: | |||||||||||||||||||||||
Certificates of deposit | $ | 15 | $ | 871 | $ | 886 | 262.1 | % | |||||||||||||||
Savings accounts | (6) | 61 | 55 | 63.2 | |||||||||||||||||||
Interest bearing demand and money market accounts | (83) | 2,246 | 2,163 | 216.5 | |||||||||||||||||||
Total interest bearing deposits | (74) | 3,178 | 3,104 | 218.0 | |||||||||||||||||||
Junior subordinated debentures | 3 | 285 | 288 | 148.5 | |||||||||||||||||||
Securities sold under agreement to repurchase | (4) | 19 | 15 | 46.9 | |||||||||||||||||||
FHLB advances and other borrowings | 1,766 | — | 1,766 | 100.0 | |||||||||||||||||||
Total interest expense | $ | 1,691 | $ | 3,482 | $ | 5,173 | 313.5 | % | |||||||||||||||
Net interest income | $ | 4,093 | $ | 8,805 | $ | 12,898 | 27.5 | % |
Three Months Ended | |||||||||||
March 31, 2023 | March 31, 2022 | ||||||||||
Loan yield (GAAP) | 5.07 | % | 4.41 | % | |||||||
Exclude impact from SBA PPP loans | (0.01) | (0.21) | |||||||||
Exclude impact from incremental accretion on acquired loans | (0.02) | (0.06) | |||||||||
Loan yield, excluding SBA PPP loans and incremental accretion on acquired loans (non-GAAP) (1) | 5.04 | % | 4.14 | % |
Three Months Ended March 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Provision for (reversal of) credit losses on loans | $ | 1,713 | $ | (2,522) | $ | 4,235 | 167.9 | % | |||||||||||||||
Provision for (reversal of) credit losses on unfunded commitments | 112 | (1,055) | 1,167 | 110.6 | |||||||||||||||||||
Provision for (reversal of) credit losses | $ | 1,825 | $ | (3,577) | $ | 5,402 | 151.0 | % |
Three Months Ended March 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Service charges and other fees | $ | 2,624 | $ | 2,474 | $ | 150 | 6.1 | % | |||||||||||||||
Card revenue | 2,000 | 2,263 | (263) | (11.6) | |||||||||||||||||||
Gain (loss) on sale of investment securities, net | (286) | — | (286) | 100.0 | |||||||||||||||||||
Gain on sale of loans, net | 49 | 241 | (192) | (79.7) | |||||||||||||||||||
Interest rate swap fees | 53 | 279 | (226) | (81.0) | |||||||||||||||||||
Bank owned life insurance income | 709 | 1,695 | (986) | (58.2) | |||||||||||||||||||
Gain on sale of other assets, net | 2 | 204 | (202) | (99.0) | |||||||||||||||||||
Other income | 3,107 | 1,382 | 1,725 | 124.8 | |||||||||||||||||||
Total noninterest income | $ | 8,258 | $ | 8,538 | $ | (280) | (3.3) | % |
Three Months Ended March 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Compensation and employee benefits | $ | 25,536 | $ | 21,252 | $ | 4,284 | 20.2 | % | |||||||||||||||
Occupancy and equipment | 4,892 | 4,331 | 561 | 13.0 | |||||||||||||||||||
Data processing | 4,342 | 4,061 | 281 | 6.9 | |||||||||||||||||||
Marketing | 402 | 266 | 136 | 51.1 | |||||||||||||||||||
Professional services | 628 | 699 | (71) | (10.2) | |||||||||||||||||||
State/municipal business and use tax | 1,008 | 796 | 212 | 26.6 | |||||||||||||||||||
Federal deposit insurance premium | 850 | 600 | 250 | 41.7 | |||||||||||||||||||
Amortization of intangible assets | 623 | 704 | (81) | (11.5) | |||||||||||||||||||
Other expense | 3,324 | 3,011 | 313 | 10.4 | |||||||||||||||||||
Total noninterest expense | $ | 41,605 | $ | 35,720 | $ | 5,885 | 16.5 | % |
Three Months Ended March 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Income before income taxes | $ | 24,670 | $ | 23,339 | $ | 1,331 | 5.7 | % | |||||||||||||||
Income tax expense | $ | 4,213 | $ | 3,582 | $ | 631 | 17.6 | % | |||||||||||||||
Effective income tax rate | 17.1 | % | 15.3 | % | 1.8 | % | 11.8 | % |
March 31, 2023 | December 31, 2022 | $ Change | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Assets | |||||||||||||||||||||||
Cash and cash equivalents | $ | 301,481 | $ | 103,590 | $ | 197,891 | 191.0 | % | |||||||||||||||
Investment securities available for sale, at fair value, net | 1,318,072 | 1,331,443 | (13,371) | (1.0) | |||||||||||||||||||
Investment securities held to maturity, at amortized cost, net | 760,163 | 766,396 | (6,233) | (0.8) | |||||||||||||||||||
Loans receivable, net | 4,083,003 | 4,007,872 | 75,131 | 1.9 | |||||||||||||||||||
Premises and equipment, net | 80,094 | 76,930 | 3,164 | 4.1 | |||||||||||||||||||
Federal Home Loan Bank stock, at cost | 23,697 | 8,916 | 14,781 | 165.8 | |||||||||||||||||||
Bank owned life insurance | 122,767 | 122,059 | 708 | 0.6 | |||||||||||||||||||
Accrued interest receivable | 18,548 | 18,547 | 1 | — | |||||||||||||||||||
Prepaid expenses and other assets | 281,438 | 296,181 | (14,743) | (5.0) | |||||||||||||||||||
Other intangible assets, net | 6,604 | 7,227 | (623) | (8.6) | |||||||||||||||||||
Goodwill | 240,939 | 240,939 | — | — | |||||||||||||||||||
Total assets | $ | 7,236,806 | $ | 6,980,100 | $ | 256,706 | 3.7 | % | |||||||||||||||
Liabilities and Stockholders' Equity | |||||||||||||||||||||||
Deposits | $ | 5,771,787 | $ | 5,907,420 | $ | (135,633) | (2.3) | % | |||||||||||||||
Deposits held for sale | 17,235 | 17,420 | (185) | (1.1) | |||||||||||||||||||
Total deposits | 5,789,022 | 5,924,840 | (135,818) | (2.3) | |||||||||||||||||||
Federal Home Loan Bank advances | 383,100 | — | 383,100 | 100.0 | |||||||||||||||||||
Junior subordinated debentures | 21,546 | 21,473 | 73 | 0.3 | |||||||||||||||||||
Securities sold under agreement to repurchase | 39,161 | 46,597 | (7,436) | (16.0) | |||||||||||||||||||
Accrued expenses and other liabilities | 177,895 | 189,297 | (11,402) | (6.0) | |||||||||||||||||||
Total liabilities | 6,410,724 | 6,182,207 | 228,517 | 3.7 | |||||||||||||||||||
Common stock | 550,869 | 552,397 | (1,528) | (0.3) | |||||||||||||||||||
Retained earnings | 358,010 | 345,346 | 12,664 | 3.7 | |||||||||||||||||||
Accumulated other comprehensive (loss) income, net | (82,797) | (99,850) | 17,053 | 17.1 | |||||||||||||||||||
Total stockholders' equity | 826,082 | 797,893 | 28,189 | 3.5 | |||||||||||||||||||
Total liabilities and stockholders' equity | $ | 7,236,806 | $ | 6,980,100 | $ | 256,706 | 3.7 | % |
March 31, 2023 | December 31, 2022 | Change | |||||||||||||||||||||||||||||||||
Balance | % of Total | Balance | % of Total | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Investment securities available for sale, at fair value: | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 64,550 | 3.1 | % | $ | 63,859 | 3.0 | % | $ | 691 | 1.1 | % | |||||||||||||||||||||||
Municipal securities | 132,497 | 6.4 | 153,026 | 7.3 | (20,529) | (13.4) | |||||||||||||||||||||||||||||
Residential CMO and MBS(1) | 433,712 | 20.9 | 424,386 | 20.2 | 9,326 | 2.2 | |||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | 663,497 | 31.8 | 664,421 | 31.8 | (924) | (0.1) | |||||||||||||||||||||||||||||
Corporate obligations | 3,817 | 0.2 | 3,834 | 0.2 | (17) | (0.4) | |||||||||||||||||||||||||||||
Other asset-backed securities | 19,999 | 1.0 | 21,917 | 1.0 | (1,918) | (8.8) | |||||||||||||||||||||||||||||
Total | $ | 1,318,072 | 63.4 | % | $ | 1,331,443 | 63.5 | % | $ | (13,371) | (1.0) | % | |||||||||||||||||||||||
Investment securities held to maturity, at amortized cost: | |||||||||||||||||||||||||||||||||||
U.S. government and agency securities | $ | 150,969 | 7.3 | % | $ | 150,936 | 7.2 | % | $ | 33 | — | % | |||||||||||||||||||||||
Residential CMO and MBS(1) | 285,337 | 13.7 | 290,318 | 13.8 | (4,981) | (1.7) | |||||||||||||||||||||||||||||
Commercial CMO and MBS(1) | 323,857 | 15.6 | 325,142 | 15.5 | (1,285) | (0.4) | |||||||||||||||||||||||||||||
Total | $ | 760,163 | 36.6 | % | $ | 766,396 | 36.5 | % | $ | (6,233) | (0.8) | % | |||||||||||||||||||||||
Total investment securities | $ | 2,078,235 | 100.0 | % | $ | 2,097,839 | 100.0 | % | $ | (19,604) | (0.9) | % |
March 31, 2023 | December 31, 2022 | Change | |||||||||||||||||||||||||||||||||
Amortized Cost | % of Loans Receivable | Amortized Cost | % of Loans Receivable | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial business: | |||||||||||||||||||||||||||||||||||
Commercial and industrial | $ | 684,998 | 16.6 | % | $ | 692,100 | 17.1 | % | $ | (7,102) | (1.0) | % | |||||||||||||||||||||||
SBA PPP | 900 | — | 1,468 | — | (568) | (38.7) | |||||||||||||||||||||||||||||
Owner-occupied CRE | 949,064 | 23.0 | 937,040 | 23.1 | 12,024 | 1.3 | |||||||||||||||||||||||||||||
Non-owner occupied CRE | 1,601,789 | 38.8 | 1,586,632 | 39.2 | 15,157 | 1.0 | |||||||||||||||||||||||||||||
Total commercial business | 3,236,751 | 78.4 | 3,217,240 | 79.4 | 19,511 | 0.6 | |||||||||||||||||||||||||||||
Residential real estate | 363,777 | 8.8 | 343,631 | 8.5 | 20,146 | 5.9 |
March 31, 2023 | December 31, 2022 | Change | |||||||||||||||||||||||||||||||||
Amortized Cost | % of Loans Receivable | Amortized Cost | % of Loans Receivable | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Real estate construction and land development: | |||||||||||||||||||||||||||||||||||
Residential | 72,926 | 1.8 | 80,074 | 2.0 | (7,148) | (8.9) | |||||||||||||||||||||||||||||
Commercial and multifamily | 270,547 | 6.6 | 214,038 | 5.3 | 56,509 | 26.4 | |||||||||||||||||||||||||||||
Total real estate construction and land development | 343,473 | 8.4 | 294,112 | 7.3 | 49,361 | 16.8 | |||||||||||||||||||||||||||||
Consumer | 183,471 | 4.4 | 195,875 | 4.8 | (12,404) | (6.3) | |||||||||||||||||||||||||||||
Total | $ | 4,127,472 | 100.0 | % | $ | 4,050,858 | 100.0 | % | $ | 76,614 | 1.9 | % |
March 31, 2023 | December 31, 2022 | Change | % Change | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Nonaccrual loans: (1) | |||||||||||||||||||||||
Commercial business | $ | 4,815 | $ | 5,869 | $ | (1,054) | (18.0) | % | |||||||||||||||
Real estate construction and land development | — | 37 | (37) | (100.0) | |||||||||||||||||||
Total nonaccrual loans | 4,815 | 5,906 | (1,091) | (18.5) | |||||||||||||||||||
Other real estate owned | — | — | — | n/a | |||||||||||||||||||
Total nonperforming assets | $ | 4,815 | $ | 5,906 | $ | (1,091) | (18.5) | % | |||||||||||||||
Accruing loans past due 90 days or more | $ | 2,344 | $ | 1,615 | $ | 729 | 45.1 | % | |||||||||||||||
Credit quality ratios: | |||||||||||||||||||||||
Nonaccrual loans to loans receivable | 0.12 | % | 0.15 | % | (0.03) | % | (20.0) | % | |||||||||||||||
Nonaccrual loans to total assets | 0.07 | 0.08 | (0.01) | (12.5) | |||||||||||||||||||
Modified loans: (2) | |||||||||||||||||||||||
Commercial business | $ | 3,035 | |||||||||||||||||||||
Consumer | 25 | ||||||||||||||||||||||
Total performing modified loans | $ | 3,060 |
(In thousands) | |||||
Balance, beginning of period | $ | 5,906 | |||
Additions | 468 | ||||
Net principal payments, sales and transfers to accruing status | (909) | ||||
Payoffs | (650) | ||||
Charge-offs | — | ||||
Balance, end of period | $ | 4,815 |
At or For the Three Months Ended March 31, | Change | ||||||||||||||||||||||
2023 | 2022 | $ | % | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
ACL on loans at the end of period | $ | 44,469 | $ | 40,333 | $ | 4,136 | 10.3 | % | |||||||||||||||
Credit quality ratios: | |||||||||||||||||||||||
ACL on loans to loans receivable | 1.08 | % | 1.06 | % | 0.02 | 1.9 | |||||||||||||||||
ACL on loans to nonaccrual loans | 923.55 | 244.04 | 679.51 | 278.4 | |||||||||||||||||||
Net (charge-offs) recoveries | $ | (230) | $ | 494 | $ | (724) | (146.6) | ||||||||||||||||
Average loans receivable, net during the period (1) | 4,039,395 | 3,773,325 | 266,070 | 7.1 | |||||||||||||||||||
Net charge-offs (recoveries) on loans to average loans receivable, net(2) | 0.02 | % | (0.05) | % | 0.07 | % | 140.0 | % |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||||||||||||||
ACL on Loans | ACL as a % of Loans in Loan Category | % of Loans in Loan Category to Total Loans | ACL on Loans | ACL as a % of Loans in Loan Category | % of Loans in Loan Category to Total Loans | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Commercial business | $ | 29,937 | 0.92 | % | 78.4 | % | $ | 30,718 | 0.95 | % | 79.4 | % | |||||||||||||||||||||||
Residential real estate | 2,902 | 0.80 | % | 8.8 | 2,872 | 0.84 | 8.5 | ||||||||||||||||||||||||||||
Real estate construction and land development | 8,985 | 2.62 | % | 8.4 | 7,063 | 2.40 | 7.3 | ||||||||||||||||||||||||||||
Consumer | 2,645 | 1.44 | % | 4.4 | 2,333 | 1.19 | 4.8 | ||||||||||||||||||||||||||||
Total ACL on loans | $ | 44,469 | 1.08 | % | 100.0 | % | $ | 42,986 | 1.06 | % | 100.0 | % |
March 31, 2023 | December 31, 2022 | Change | |||||||||||||||||||||||||||||||||
Balance (1) | % of Total Deposits | Balance | % of Total Deposits | $ | % | ||||||||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||||||||||||
Noninterest demand deposits | $ | 1,982,909 | 34.3 | % | $ | 2,099,464 | 35.5 | % | $ | (116,555) | (5.6) | % | |||||||||||||||||||||||
Interest bearing demand deposits | 1,675,393 | 28.9 | 1,830,727 | 30.9 | (155,334) | (8.5) | |||||||||||||||||||||||||||||
Money market accounts | 1,155,559 | 20.0 | 1,063,243 | 17.9 | 92,316 | 8.7 | |||||||||||||||||||||||||||||
Savings accounts | 578,807 | 10.0 | 623,833 | 10.5 | (45,026) | (7.2) | |||||||||||||||||||||||||||||
Total non-maturity deposits | 5,392,668 | 93.2 | 5,617,267 | 94.8 | (224,599) | (4.0) | |||||||||||||||||||||||||||||
Certificates of deposit | 396,354 | 6.8 | 307,573 | 5.2 | 88,781 | 28.9 | |||||||||||||||||||||||||||||
Total deposits | $ | 5,789,022 | 100.0 | % | $ | 5,924,840 | 100.0 | % | $ | (135,818) | (2.3) | % |
Company | Bank | ||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | March 31, 2023 | December 31, 2022 | ||||||||||||||||||||
Common equity Tier 1 capital ratio | 12.9 | % | 12.8 | % | 13.0 | % | 12.9 | % | |||||||||||||||
Leverage ratio | 9.9 | 9.7 | 9.7 | 9.4 | |||||||||||||||||||
Tier 1 capital ratio | 13.3 | 13.2 | 13.0 | 12.9 | |||||||||||||||||||
Total capital ratio | 14.1 | 14.0 | 13.9 | 13.7 | |||||||||||||||||||
Capital conservation buffer | 6.1 | 6.0 | 5.9 | 5.7 |
March 31, 2023 | |||||||||||||||||
Total Available | Amount Used | Net Availability | |||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Internal Sources | |||||||||||||||||
Cash and cash equivalents | $ | 301,481 | $ | — | $ | 301,481 | |||||||||||
Unencumbered investment securities available for sale(1) | 1,116,013 | — | 1,116,013 | ||||||||||||||
External Sources | — | ||||||||||||||||
Federal Home Loan Bank (FHLB) borrowing availability(2) | 1,197,964 | 383,100 | 814,864 | ||||||||||||||
Federal Reserve Bank (FRB) borrowing availability(3) | 640,635 | — | 640,635 | ||||||||||||||
Fed funds line borrowing availability with correspondent banks | 215,000 | — | 215,000 | ||||||||||||||
Total liquidity | $ | 3,471,093 | $ | 383,100 | $ | 3,087,993 |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(Dollars in thousands) | |||||||||||
Loan yield, excluding SBA PPP Loans and Incremental Accretion on Acquired Loans, annualized: | |||||||||||
Interest and fees on loans (GAAP) | $ | 50,450 | $ | 41,025 | |||||||
Exclude interest and fees on SBA PPP loans | (26) | (3,081) |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
(Dollars in thousands) | |||||||||||
Exclude incremental accretion on acquired loans | (253) | (584) | |||||||||
Adjusted interest and fees on loans (non-GAAP) | $ | 50,171 | $ | 37,360 | |||||||
Average loans receivable, net (GAAP) | $ | 4,039,395 | $ | 3,773,325 | |||||||
Exclude average SBA PPP loans | (1,071) | (109,594) | |||||||||
Adjusted average loans receivable, net (non-GAAP) | $ | 4,038,324 | $ | 3,663,731 | |||||||
Loan yield, annualized (GAAP) | 5.07 | % | 4.41 | % | |||||||
Loan yield, excluding SBA PPP loans and incremental accretion on acquired loans, annualized (non-GAAP) | 5.04 | % | 4.14 | % |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amount | % Change in Net Interest Income | Amount | % Change in Net Interest Income | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Modeled increase in market interest rates of 100 basis points | |||||||||||||||||||||||
Increase in net interest income in Year 1 | $ | 2,198 | 0.9 | % | $ | 5,113 | 2.0 | % | |||||||||||||||
Increase in net interest income in Year 2 | 7,871 | 3.1 | 11,147 | 4.1 | |||||||||||||||||||
Modeled increase in market interest rates of 200 basis points | |||||||||||||||||||||||
Increase in net interest income in Year 1 | 2,412 | 1.0 | 8,181 | 3.2 | |||||||||||||||||||
Increase in net interest income in Year 2 | 13,218 | 5.2 | 19,889 | 7.3 |
March 31, 2023 | December 31, 2022 | ||||||||||||||||||||||
Amount | % Change in Net Interest Income | Amount | % Change in Net Interest Income | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Modeled decrease in market interest rates of 100 basis points | |||||||||||||||||||||||
Decrease in net interest income in Year 1 | (2,011) | (0.8) | (5,433) | (2.1) | |||||||||||||||||||
Decrease in net interest income in Year 2 | (6,425) | (2.5) | (10,534) | (3.9) | |||||||||||||||||||
Modeled decrease in market interest rates of 200 basis points | |||||||||||||||||||||||
Decrease in net interest income in Year 1 | (7,879) | (3.3) | (16,840) | (6.6) | |||||||||||||||||||
Decrease in net interest income in Year 2 | $ | (19,686) | (7.7) | % | $ | (29,942) | (11.0) | % |
Period | Total Number of Shares Purchased (1) | Average Price Paid Per Share (1) | Total number of shares purchased as part of publicly announced plans or programs | Maximum number of shares that may yet be purchased under the plans or programs (2) | |||||||||||||||||||
January 1, 2023—January 31, 2023 | — | $ | — | 9,986,863 | 638,214 | ||||||||||||||||||
February 1, 2023— February 28, 2023 | 40 | 28.28 | 9,986,863 | 638,214 | |||||||||||||||||||
March 1, 2023—March 31, 2023 | 115,039 | 22.83 | 10,075,218 | 549,859 | |||||||||||||||||||
Total | 115,079 | $ | 22.83 |
Incorporated by Reference | ||||||||||||||||||||||||||
Exhibit No. | Description of Exhibit | Form | Exhibit | Filing Date/Period End Date | ||||||||||||||||||||||
31.1 | ||||||||||||||||||||||||||
31.2 | ||||||||||||||||||||||||||
32.1 | ||||||||||||||||||||||||||
101.INS | XBRL Instance Document (1) | |||||||||||||||||||||||||
101.SCH | XBRL Taxonomy Extension Schema Document (1) | |||||||||||||||||||||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document (1) | |||||||||||||||||||||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document (1) | |||||||||||||||||||||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document (1) | |||||||||||||||||||||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document (1) | |||||||||||||||||||||||||
104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) | |||||||||||||||||||||||||
HERITAGE FINANCIAL CORPORATION | ||||||||
Date: | ||||||||
May 4, 2023 | /S/ JEFFREY J. DEUEL | |||||||
Jeffrey J. Deuel | ||||||||
President and Chief Executive Officer | ||||||||
Date: | ||||||||
May 4, 2023 | /S/ DONALD J. HINSON | |||||||
Donald J. Hinson | ||||||||
Executive Vice President and Chief Financial Officer |
/s/ Jeffrey J. Deuel | ||
Jeffrey J. Deuel | ||
Chief Executive Officer Principal Executive Officer |
/s/ Donald J. Hinson | ||
Donald J. Hinson | ||
Executive Vice President and Chief Financial Officer Principal Financial and Accounting Officer |
May 4, 2023 | /s/ Jeffrey J. Deuel | ||||
Jeffrey J. Deuel | |||||
Chief Executive Officer Principal Executive Officer | |||||
May 4, 2023 | /s/ Donald J. Hinson | ||||
Donald J. Hinson | |||||
Executive Vice President and Chief Financial Officer Principal Financial and Accounting Officer |
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - USD ($) |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized cost | $ 1,424,969,000 | |
Total investment securities | $ 684,647,000 | $ 673,434,000 |
Preferred Stock, No Par Value | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 2,500,000 | 2,500,000 |
Preferred Stock, Value, Outstanding | $ 0 | $ 0 |
Common stock, no par value (in usd per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 35,108,120 | 35,106,697 |
Common stock, shares outstanding (in shares) | 35,108,120 | 35,106,697 |
Fair Value, Recurring [Member] | ||
Amortized cost | $ 1,424,969,000 | $ 1,460,033,000 |
Total investment securities | 684,647,000 | $ 673,434,000 |
Level 2 | Fair Value, Recurring [Member] | ||
Total investment securities | $ 684,647,000 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Net Income | $ 20,457 | $ 19,757 |
Other comprehensive income (loss) | 17,053 | (43,624) |
Comprehensive income (loss) | 37,510 | (23,867) |
AOCI Attributable to Parent [Member] | ||
Change in fair value of investment securities available for sale, net of tax of $4,517 and $(12,113), respectively | 16,890 | (43,482) |
Amortization of net unrealized gain for the reclassification of investment securities available for sale to held to maturity, net of tax of $(15) and $(39), respectively | (60) | (142) |
Reclassification adjustment for net loss from sale of investment securities available for sale included in income, net of tax of $63 and $0, respectively | 223 | 0 |
Other comprehensive income (loss) | $ 17,053 | $ (43,624) |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||
Change in fair value of securities available for sale, tax | $ 4,517 | $ (12,113) |
OCI, Debt Securities, Available-for-Sale, Transfer to Held-to-Maturity, Adjustment from AOCI for Amortization of Gain (Loss), Tax | (15) | (39) |
Reclassification adjustment of net gain from sale of investment securities included in income, tax | $ 63 | $ 0 |
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares |
3 Months Ended | ||||||
---|---|---|---|---|---|---|---|
Jan. 25, 2023 |
Oct. 19, 2022 |
Jul. 20, 2022 |
Apr. 20, 2022 |
Jan. 26, 2022 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Statement of Stockholders' Equity [Abstract] | |||||||
Cash dividends declared on common stock (in usd per share) | $ 0.22 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.22 | $ 0.21 |
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements | Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements (a) Description of Business The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, the Bank. The Bank is headquartered in Olympia, Washington and conducts business from its 51 branch offices located throughout Washington State, the greater Portland, Oregon area, Eugene, Oregon and Boise, Idaho. The Bank’s business consists primarily of commercial lending and deposit relationships with small and medium-sized businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. The Bank's deposits are insured by the FDIC subject to limitations. (b) Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is recommended these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the 2022 Annual Form 10-K. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. To prepare unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Management believes the judgments, estimates and assumptions used in the preparation of the unaudited Condensed Consolidated Financial Statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to management's estimate of the ACL on investment securities, management's estimate of the ACL on loans, management's estimate of the ACL on unfunded commitments, management's evaluation of goodwill impairment and management's estimate of the fair value of financial instruments. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany balances and transactions among the Company and the Bank have been eliminated in consolidation. There have been reclassifications in certain prior year amounts in the unaudited Condensed Consolidated Statements of Income. Reclassifications had no effect on the prior year's net income or stockholders’ equity. (c) Significant Accounting Policies The significant accounting policies used in preparation of the unaudited Condensed Consolidated Financial Statements are disclosed in greater detail in the 2022 Annual Form 10-K. There have not been any material changes in the Company's significant accounting policies from those contained in the 2022 Annual Form 10-K during the three months ended March 31, 2023. (d) Recently Issued or Adopted Accounting Pronouncements FASB ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2021-01, and ASU 2022-06 was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020. In December 2022, FASB amended this ASU and deferred the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. The amendments are elective, apply to all entities, and provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Bank’s interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee. The Company does not expect the adoption of this ASU to have a material impact on its business operations or Consolidated Statements of Financial Condition. FASB ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, was issued in March 2022. The ASU eliminates the accounting guidance for TDR loans by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, the entity will apply the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or continuation of an existing loan. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. These amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, since the Company previously adopted the amendments in ASU 2016-13. Early adoption is permitted in any interim period if an entity has adopted ASU 2016-13 and such election may be made individually to adopt the guidance related to TDRs, including related disclosures, and the presentation of gross write-offs in the vintage disclosure. This update requires prospective transition for the disclosures related to loan restructurings for borrowers experiencing financial difficulty and the presentation of gross write-offs in the vintage disclosures. The guidance related to the recognition and measurement of TDRs may be adopted on a prospective or modified retrospective transition method. The Company adopted ASU 2022-02 on a prospective basis January 1, 2023. The Company elected at the date of adoption to account for existing TDR loans as of December 31, 2022 under the Company's TDR accounting policy which is disclosed in the 2022 Annual Form 10-K. All loan modifications post adoption are accounted for under the loan modification guidance in ASC 310-20. The adoption of this ASU did not have a material impact on business operations or the Consolidated Statements of Financial Condition.
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Investment Securities |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investment Securities | Investment Securities The Company’s investment policy is designed primarily to provide and maintain liquidity, generate a favorable return on assets without incurring undue interest rate and credit risk, and complement the Bank’s lending activities. There were no investment securities classified as trading at March 31, 2023 or December 31, 2022. (a) Investment Securities by Classification, Type and Maturity The following tables present the amortized cost and fair value of investment securities, and the corresponding amounts of gross unrealized and unrecognized gains and losses including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in AOCI, at the dates indicated:
The following table presents the amortized cost and fair value of investment securities by contractual maturity at the date indicated. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
(1) Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their payment speed. There were no holdings of investment securities of any one issuer, other than the U.S. government and its agencies, in an amount greater than 10% of stockholders’ equity at March 31, 2023 and December 31, 2022. (b) Unrealized Losses on Investment Securities Available for Sale The following tables present the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an ACL on investment securities available for sale has not been recorded, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:
(1) U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations.
(1) U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations. (c) ACL on Investment Securities The Company evaluated investment securities available for sale as of March 31, 2023 and December 31, 2022 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all rated investment securities and none of these securities had a below investment grade credit rating as of both March 31, 2023 and December 31, 2022. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of March 31, 2023 and December 31, 2022. The Company also evaluated investment securities held to maturity for current expected credit losses as of March 31, 2023 and December 31, 2022. There were no investment securities held to maturity classified as nonaccrual or past due as of March 31, 2023 and December 31, 2022 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and had a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of March 31, 2023 and December 31, 2022. (d) Realized Gains and Losses The following table presents the gross realized gains and losses on the sale of investment securities available for sale for the periods indicated:
(e) Pledged Securities The following table summarizes the amortized cost and fair value of investment securities that were pledged as collateral for the following obligations at the dates indicated:
(f) Accrued Interest Receivable Accrued interest receivable excluded from the amortized cost of investment securities available for sale totaled $4.3 million and $4.8 million at March 31, 2023 and December 31, 2022, respectively. Accrued interest receivable excluded from the amortized cost on investment securities held to maturity totaled $2.3 million and $2.4 million at March 31, 2023 and December 31, 2022, respectively. No amounts of accrued interest receivable on investment securities available for sale or held to maturity were reversed against interest income on investment securities during three months ended March 31, 2023 and 2022. (G) Non-Marketable Securities At December 31, 2022, as a member bank of Visa U.S.A., we held 6,549 shares of Visa Inc. Class B common stock. These shares had a carrying value of zero and were restricted from resale to non-member banks of Visa U.S.A. until their conversion into Class A (voting) shares upon the termination of Visa Inc.'s Covered Litigation escrow account. During the three months ended March 31, 2023, the Bank sold all shares of Visa Inc. Class B common stock and recognized a $1.6 million gain which is included in other income.
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Loans Receivable |
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable The Bank originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Accrued interest receivable was excluded from disclosures presenting the Bank's amortized cost of loans receivable as it was deemed insignificant. In addition to originating loans, the Bank may also purchase loans through pool purchases, participation purchases and syndicated loan purchases. (a) Loan Origination/Risk Management The Bank categorizes the individual loans in the total loan portfolio into four segments: commercial business; residential real estate; real estate construction and land development; and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2022 Annual Form 10-K. The Bank has certain lending policies and guidelines in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and guidelines on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and criticized loans. The Bank also conducts internal loan reviews and validates the credit risk assessment on a periodic basis and presents the results of these reviews to management. The loan review process complements and reinforces the risk identification and assessment decisions made by loan officers and credit personnel. The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:
(b) Concentrations of Credit Most of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County, Washington to Lane County, Oregon, as well as Yakima County in Washington and Ada County in Idaho. Additionally, the Bank's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, SBA PPP, owner-occupied and nonowner-occupied CRE, and commercial and multifamily real estate construction and land development loans. Commercial business loans, excluding SBA PPP loans, are generally considered as having a more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis. (c) Credit Quality Indicators As part of the on-going monitoring of the credit quality of the Bank’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington and Oregon. The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of Pass for grades 1 to 6, Special Mention or "SM" for grade 7, Substandard or "SS" for grade 8, Doubtful for grade 9 and Loss for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2022 Annual Form 10-K. Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, results of annual term loan reviews and scheduled loan reviews. For consumer loans, the Bank follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property. Loan grades relate to the likelihood of losses in that the higher the grade, the greater the loss potential. Loans with a pass grade may have some estimated inherent losses, but to a lesser extent than the other loan grades. The SM loan grade is transitory in that the Bank is waiting on additional information to determine the likelihood and extent of any potential loss. The likelihood of loss for SM graded loans, however, is greater than Watch graded loans because there has been measurable credit deterioration. Loans with a SS grade have further credit deterioration and include both accrual loans and nonaccrual loans. For Doubtful and Loss graded loans, the Bank is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value. The following table presents the amortized cost of loans receivable by risk grade and origination year at the dates indicated. The Bank adopted the vintage disclosure requirements of ASU 2022-02 prospectively as described in Note 1 beginning in January 2023. Accordingly, the following vintage table reflects the gross charge-offs by loan class and year of origination for the date indicated:
(1) Represents the loans receivable balance at March 31, 2023 which was converted from a revolving loan to an amortizing loan during the three months ended months ended March 31, 2023.
1) Represents the loans receivable balance at December 31, 2022 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2022. (d) Nonaccrual Loans The following tables present the amortized cost of nonaccrual loans for the dates indicated:
The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the following periods:
For the three months ended March 31, 2023 and 2022, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above due to payment in full or sale. (e) Past due loans The Bank performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The amortized cost of past due loans as of March 31, 2023 and December 31, 2022 were as follows:
Loans 90 days or more past due and still accruing interest were $2.3 million and $1.6 million as of March 31, 2023 and December 31, 2022, respectively. (f) Collateral-dependent Loans The type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of March 31, 2023 and December 31, 2022 was as follows, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:
There have been no significant changes to the collateral securing loans individually evaluated for credit losses and for which repayment was expected to be provided substantially through the operation or sale of the collateral during the three months ended March 31, 2023, except changes due to additions or removals of loans in this classification. (g) Modification of Loans In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting guidance TDRs while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Modifications of loans to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following table presents modifications of loans by type of modification at amortized cost that were modified as a result of experiencing both financial difficulty and modified during the period indicated:
The following table presents the financial effect of the loan modifications presented in the preceding table during the the period indicated:
There were no modified loans past due or on nonaccrual as of March 31, 2023. There were no modified loans made during the three months ended March 31, 2023, that subsequently defaulted. (h) Accrued interest receivable on loans receivable Accrued interest receivable on loans receivable totaled $11.7 million and $11.3 million at March 31, 2023 and December 31, 2022, respectively, and is excluded from the calculation of the ACL on loans as interest accrued, but not received, is reversed timely. (i) Foreclosure proceedings in process At March 31, 2023, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.
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Concentration Risk Disclosure | Concentrations of CreditMost of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County, Washington to Lane County, Oregon, as well as Yakima County in Washington and Ada County in Idaho. Additionally, the Bank's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, SBA PPP, owner-occupied and nonowner-occupied CRE, and commercial and multifamily real estate construction and land development loans. Commercial business loans, excluding SBA PPP loans, are generally considered as having a more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis. |
Allowance for Credit Losses on Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans The Company's methodology for determining the ACL on loans is based upon key assumptions, including the lookback periods, historic net charge-off factors, economic forecasts, reversion periods, prepayments and qualitative adjustments. The allowance is measured on a collective, or pool, basis when similar risk characteristics exist. Loans that do not share common risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation. For a description of the Company's ACL policy, see Note 1 - Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements included in Item 8. Financial Statements And Supplementary Data in our 2022 Annual Form 10-K. GAAP requires the Company to develop reasonable and supportable forecasts of future conditions, and estimate how those forecasts are expected to impact a borrower’s ability to satisfy their obligation to the Company and the ultimate collectability of future cash flows over the life of a loan. The Company uses macroeconomic scenarios from an independent third party. These scenarios are based on past events, current conditions, and the likelihood of future events occurring. The Company’s ACL model at March 31, 2023 includes assumptions concerning the rising interest rate environment, ongoing inflationary pressures throughout the U.S. economy, higher energy prices, and general uncertainty concerning future economic conditions, and the potential for recessionary conditions. The Company recognizes that historical information used as the basis for determining future expected credit losses may not always, by itself, provide a sufficient basis for determining future expected credit losses. The Company, therefore, considers the need for qualitative adjustments to the ACL on a quarterly basis. Qualitative adjustments may be related to and include, but not be limited to, factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation, and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of model data inputs used to determine the ACL. As of March 31, 2023, qualitative adjustments primarily relate to certain segments of the loan portfolio deemed by management to be of a higher-risk profile where management believes the quantitative component of the Company’s ACL model may not have fully captured the associated impact to the ACL. In addition, qualitative adjustments also relate to heightened uncertainty as to future macroeconomic conditions and the related impact on certain loan segments. Management reviews the need for an appropriate level of qualitative adjustments on a quarterly basis, and as such, the amount and allocation of qualitative adjustments may change in future periods. During the three months ended March 31, 2023, the ACL on loans increased $1.5 million, or 3.4%, due primarily to a provision for credit losses on loans of $1.7 million driven by growth in loans receivable and changes in loan mix primarily due to the increase in commercial and multifamily construction loans. The following table presents a summary of the changes in the ACL for the periods indicated:
The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:
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Goodwill and Other Intangible Assets |
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Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets (a) Goodwill There were no additions to goodwill during the three months ended March 31, 2023 and 2022. Additionally, management analyzes its goodwill on an annual basis on December 31 and between annual tests in certain circumstances such as material adverse changes in legal, business, regulatory and economic factors. An impairment loss is recorded to the extent the carrying amount of goodwill exceeds its implied fair value. The Company performed an annual impairment assessment as of December 31, 2022 and concluded that there was no impairment. (b) Other Intangible Assets Other intangible assets represent core deposit intangible acquired in business combinations with estimated useful lives of ten years. There were no additions to other intangible assets during the three months ended March 31, 2023 and 2022.
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Derivative Financial Instruments |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments | Derivative Financial InstrumentsThe Company utilizes interest rate swap derivative contracts to facilitate the needs of its commercial customers whereby it enters into an interest rate swap with a customer while at the same time entering into an offsetting interest rate swap with another financial institution. The transaction allows the Company’s customer to effectively convert a variable rate loan to a fixed rate loan, or a fixed rate loan to a variable rate loan, and the Company recognizes immediate income based upon the difference in the bid/ask spread of the underlying transactions with its customers and the third-party. These interest rate swaps are not designated as hedging instruments. The Company is exposed to interest rate risk as part of the transaction. However, the Company acts as an intermediary for its customer therefore changes in the fair value of the underlying derivative contracts for the most part offset each other and do not significantly impact the Company’s results of operations. Fee income related to interest rate swap derivative contract transactions is recorded in Interest rate swap fees on the unaudited Condensed Consolidated Statements of Income. The fair value of derivative positions outstanding is included in Prepaid expenses and other assets and Accrued expenses and other liabilities in the unaudited Condensed Consolidated Statements of Financial Condition. The gains and losses due to changes in fair value and all cash flows are included in Other income in the unaudited Condensed Consolidated Statements of Income, but typically net to zero based on the identical back-to-back interest rate swap derivative contracts unless a credit valuation adjustment is recorded to appropriately reflect nonperformance risk in the fair value measurement. Various factors impact changes in the credit valuation adjustments over time, including changes in the risk ratings of the parties to the contracts, as well as changes in market rates and volatilities, which affect the total expected exposure of the derivative instruments. The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:
(1) The estimated fair value of derivatives with customers was $(24.3) million and $(30.1) million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of derivatives with third-parties was $24.3 million and $30.1 million as of March 31, 2023 and December 31, 2022, respectively. The Company is exposed to credit-related losses in the event of nonperformance by the counterparty to these agreements. Credit risk for derivatives with the customer is controlled through the credit approval process, amount limits, and monitoring procedures and is concentrated within our primary market areas. Credit risk for derivatives with third-parties is concentrated among four well-known broker dealers.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity (a) Earnings Per Common Share The following table illustrates the calculation of weighted average shares used for earnings per common share computations for the periods indicated:
(1)Represents the effect of the vesting of restricted stock units. (2) Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock unit exceeds the market price of the Company’s stock. (b) Dividends The timing and amount of cash dividends paid on the Company's common stock depends on the Company’s earnings, capital requirements, financial condition and other relevant factors. Dividends on common stock from the Company depend substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income. The following table summarizes the dividend activity during the three months ended March 31, 2023 and the calendar year 2022:
The FDIC and the Washington State Department of Financial Institutions, Division of Banks have the authority under their supervisory powers to prohibit the payment of dividends by the Bank to the Company. Additionally, current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. Current regulations allow the Company and the Bank to pay dividends on their common stock if the Company’s or the Bank’s regulatory capital would not be reduced below the statutory capital requirements set by the Federal Reserve and the FDIC. (c) Stock Repurchase Program The Company has had various stock repurchase programs since March 1999. On March 12, 2020, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or 1,799,054 shares, under the twelfth stock repurchase plan with 549,859 shares remaining available for repurchase as of March 31, 2023. The number, timing and price of shares repurchased under the twelfth stock repurchase plan will depend on business and market conditions and other factors, including opportunities to deploy the Company's capital. The following table provides total repurchased shares and average share prices under the repurchase plan for the periods indicated:
(1)Represents total shares repurchased and average price per share paid during the duration of the repurchase plan. In addition to the stock repurchases under a stock repurchase plan, the Company repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. The following table provides total shares repurchased to pay withholding taxes during the periods indicated:
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds. Level 2: Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs. Level 3: Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. (a) Recurring and Nonrecurring Basis The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis: Investment Securities: The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Investment security valuations are obtained from third-party pricing services. Collateral-Dependent Loans: Collateral-dependent loans are identified for the calculation of the ACL on loans. The fair value used to measure credit loss for this type of loan is commonly based on recent real estate appraisals which are generally obtained at least every 18 months or earlier if there are changes to risk characteristics of the underlying loan. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. The Bank also incorporates an estimate of cost to sell the collateral when the sale is probable. Such adjustments may be significant and result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the customer and customer’s business (Level 3). Individually evaluated loans are analyzed for credit loss on a quarterly basis and the ACL on loans is adjusted as required based on the results. Appraisals on collateral-dependent loans are performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties whose qualifications and licenses have been reviewed and verified by the Bank. Once received, the Bank's internal appraisal department reviews and approves the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. Derivative Financial Instruments: The Bank obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2), and incorporates credit valuation adjustments to reflect nonperformance risk in the measurement of fair value (Level 3). Although the Bank has determined that the majority of the inputs used to value its interest rate swap derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as borrower risk ratings, to evaluate the likelihood of default by itself and its counterparties. As of March 31, 2023 and December 31, 2022, the Bank assessed the significance of the impact of the credit valuation adjustment on the overall valuation of its interest rate swap derivatives and determined the credit valuation adjustment was not significant to the overall valuation of its interest rate swap derivatives. As a result, the Bank has classified its interest rate swap derivative valuations in Level 2 of the fair value hierarchy. Recurring Basis The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:
Nonrecurring Basis The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:
(1) Basis represents the outstanding principal balance of collateral-dependent loans.
(1) Basis represents the outstanding principal balance of collateral-dependent loans. The following table represents the gains (losses) on collateral dependent loans and represents the amount of provision for (reversal of) credit losses on loans and/or charge-offs during the periods indicated:
The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:
(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.
(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period. (b) Fair Value of Financial Instruments Broadly traded markets do not exist for most of the Company’s financial instruments; therefore, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. The following tables present the carrying value amount of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated:
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Cash Restriction |
3 Months Ended |
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Mar. 31, 2023 | |
Banking and Thrift, Other Disclosure [Abstract] | |
Restricted Assets Disclosure | Cash RestrictionThe Bank had no cash restrictions at March 31, 2023 and December 31, 2022. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and ContingenciesIn the ordinary course of business, the Bank may enter into various types of transactions that include commitments to extend credit that are not included in its unaudited Condensed Consolidated Financial Statements. The Bank applies the same credit standards to these commitments as it uses in all its lending activities and has included these commitments in its lending risk evaluations. The majority of the commitments presented below are variable rate. Loan commitments can be either revolving or non-revolving. The Bank’s exposure to credit and market risk under commitments to extend credit is represented by the amount of these commitments. The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:
The following table details the activity in the ACL on unfunded commitments during the periods indicated:
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Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of BusinessThe Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, the Bank. The Bank is headquartered in Olympia, Washington and conducts business from its 51 branch offices located throughout Washington State, the greater Portland, Oregon area, Eugene, Oregon and Boise, Idaho. The Bank’s business consists primarily of commercial lending and deposit relationships with small and medium-sized businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. The Bank's deposits are insured by the FDIC subject to limitations. |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. It is recommended these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the 2022 Annual Form 10-K. In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. To prepare unaudited Condensed Consolidated Financial Statements in conformity with GAAP, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided. Management believes the judgments, estimates and assumptions used in the preparation of the unaudited Condensed Consolidated Financial Statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. Material estimates that are particularly susceptible to significant change relate to management's estimate of the ACL on investment securities, management's estimate of the ACL on loans, management's estimate of the ACL on unfunded commitments, management's evaluation of goodwill impairment and management's estimate of the fair value of financial instruments. The accompanying unaudited Condensed Consolidated Financial Statements include the accounts of the Company and its wholly-owned subsidiary, the Bank. All significant intercompany balances and transactions among the Company and the Bank have been eliminated in consolidation. There have been reclassifications in certain prior year amounts in the unaudited Condensed Consolidated Statements of Income. Reclassifications had no effect on the prior year's net income or stockholders’ equity.
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Significant Accounting Policies | Significant Accounting PoliciesThe significant accounting policies used in preparation of the unaudited Condensed Consolidated Financial Statements are disclosed in greater detail in the 2022 Annual Form 10-K. There have not been any material changes in the Company's significant accounting policies from those contained in the 2022 Annual Form 10-K during the three months ended March 31, 2023. |
Recently Issued or Adopted Accounting Pronouncements | Recently Issued or Adopted Accounting Pronouncements FASB ASU 2020-04, Reference Rate Reform (Topic 848), as amended by ASU 2021-01, and ASU 2022-06 was issued in March 2020 and provides optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. The amendments in this ASU are effective for all entities as of March 12, 2020. In December 2022, FASB amended this ASU and deferred the sunset date of Topic 848 from December 31, 2022, to December 31, 2024. The amendments are elective, apply to all entities, and provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The Bank’s interest rate swap-related transactions are the majority of the Company's LIBOR exposure. Effective January 25, 2021, the Company adhered to the Interbank Offered Rate Fallbacks Protocol as published by the International Swaps and Derivatives Association, Inc. and recommended by the Alternative Reference Rates Committee. The Company does not expect the adoption of this ASU to have a material impact on its business operations or Consolidated Statements of Financial Condition. FASB ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, was issued in March 2022. The ASU eliminates the accounting guidance for TDR loans by creditors while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty. Specifically, rather than applying the recognition and measurement guidance for TDRs, the entity will apply the loan refinancing and restructuring guidance to determine whether a modification or other form of restructuring results in a new loan or continuation of an existing loan. Additionally, the ASU requires public business entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. These amendments are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, since the Company previously adopted the amendments in ASU 2016-13. Early adoption is permitted in any interim period if an entity has adopted ASU 2016-13 and such election may be made individually to adopt the guidance related to TDRs, including related disclosures, and the presentation of gross write-offs in the vintage disclosure. This update requires prospective transition for the disclosures related to loan restructurings for borrowers experiencing financial difficulty and the presentation of gross write-offs in the vintage disclosures. The guidance related to the recognition and measurement of TDRs may be adopted on a prospective or modified retrospective transition method. The Company adopted ASU 2022-02 on a prospective basis January 1, 2023. The Company elected at the date of adoption to account for existing TDR loans as of December 31, 2022 under the Company's TDR accounting policy which is disclosed in the 2022 Annual Form 10-K. All loan modifications post adoption are accounted for under the loan modification guidance in ASC 310-20. The adoption of this ASU did not have a material impact on business operations or the Consolidated Statements of Financial Condition.
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ACL on Investment Securities | ACL on Investment Securities The Company evaluated investment securities available for sale as of March 31, 2023 and December 31, 2022 and determined that any declines in fair value were attributable to changes in interest rates relative to where these investments fall within the yield curve and individual characteristics. Management monitors published credit ratings for adverse changes for all rated investment securities and none of these securities had a below investment grade credit rating as of both March 31, 2023 and December 31, 2022. In addition, the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of the amortized cost basis, which may be upon maturity. Therefore, no ACL on investment securities available for sale was recorded as of March 31, 2023 and December 31, 2022. The Company also evaluated investment securities held to maturity for current expected credit losses as of March 31, 2023 and December 31, 2022. There were no investment securities held to maturity classified as nonaccrual or past due as of March 31, 2023 and December 31, 2022 and all were issued by the U.S. government and its agencies and either explicitly or implicitly guaranteed by the U.S. government, highly rated by major credit rating agencies and had a long history of no credit losses. Accordingly, the Company did not measure expected credit losses on investment securities held to maturity since the historical credit loss information adjusted for current conditions and reasonable and supportable forecasts results in an expectation that nonpayment of the amortized cost basis is zero. Therefore, no ACL on investment securities held to maturity was recorded as of March 31, 2023 and December 31, 2022.
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Investment Securities (Tables) |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of securities available for sale | The following tables present the amortized cost and fair value of investment securities, and the corresponding amounts of gross unrealized and unrecognized gains and losses including the corresponding amounts of gross unrealized gains and losses on investment securities available for sale recognized in AOCI, at the dates indicated:
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Schedule of maturities of investment securities | The following table presents the amortized cost and fair value of investment securities by contractual maturity at the date indicated. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties.
(1) Mortgage-backed securities, which have prepayment provisions, are not assigned to maturity categories due to fluctuations in their payment speed.
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Schedule of fair value and unrealized losses of available for sale investment securities | The following tables present the gross unrealized losses and fair value of the Company’s investment securities available for sale for which an ACL on investment securities available for sale has not been recorded, aggregated by investment category and length of time the individual securities have been in a continuous unrealized loss position at the dates indicated:
(1) U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations.
(1) U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations.
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Schedule of realized gains and losses on sale of securities available for sale | The following table presents the gross realized gains and losses on the sale of investment securities available for sale for the periods indicated:
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Scheduled of amortized cost and fair value of securities pledged as collateral | The following table summarizes the amortized cost and fair value of investment securities that were pledged as collateral for the following obligations at the dates indicated:
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Loans Receivable (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Loans and Leases Receivable Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Receivable Credit Quality Indicators [Table Text Block] | The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:
Accordingly, the following vintage table reflects the gross charge-offs by loan class and year of origination for the date indicated:
(1) Represents the loans receivable balance at March 31, 2023 which was converted from a revolving loan to an amortizing loan during the three months ended months ended March 31, 2023.
1) Represents the loans receivable balance at December 31, 2022 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2022.
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Schedule of nonaccrual loans | The following tables present the amortized cost of nonaccrual loans for the dates indicated:
The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the following periods:
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Financing Receivable, Past Due [Table Text Block] | The amortized cost of past due loans as of March 31, 2023 and December 31, 2022 were as follows:
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Loans and Lease Receivable Collateral for Secured Borrowings [Table Text Block] | The type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of March 31, 2023 and December 31, 2022 was as follows, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:
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Troubled debt restructurings on financing receivables | The following table presents modifications of loans by type of modification at amortized cost that were modified as a result of experiencing both financial difficulty and modified during the period indicated:
The following table presents the financial effect of the loan modifications presented in the preceding table during the the period indicated:
There were no modified loans past due or on nonaccrual as of March 31, 2023. There were no modified loans made during the three months ended March 31, 2023, that subsequently defaulted.
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Allowance for Loan Losses (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of changes in allowance for loan losses | The following table presents a summary of the changes in the ACL for the periods indicated:
The following tables detail the activity in the ACL on loans by segment and class for the periods indicated:
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Derivative Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of notional amounts and estimated fair values of interest rate derivative contracts | The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at the dates indicated:
(1) The estimated fair value of derivatives with customers was $(24.3) million and $(30.1) million as of March 31, 2023 and December 31, 2022, respectively. The estimated fair value of derivatives with third-parties was $24.3 million and $30.1 million as of March 31, 2023 and December 31, 2022, respectively.
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Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of earnings per share reconciliation | The following table illustrates the calculation of weighted average shares used for earnings per common share computations for the periods indicated:
(1)Represents the effect of the vesting of restricted stock units. (2) Anti-dilution occurs when the unrecognized compensation cost per share of a restricted stock unit exceeds the market price of the Company’s stock.
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Schedule of dividends activity | The following table summarizes the dividend activity during the three months ended March 31, 2023 and the calendar year 2022:
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Stock Repurchased During Period | The following table provides total repurchased shares and average share prices under the repurchase plan for the periods indicated:
(1)Represents total shares repurchased and average price per share paid during the duration of the repurchase plan.
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Schedule of repurchased shares | The following table provides total shares repurchased to pay withholding taxes during the periods indicated:
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Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair value measurements of assets on a recurring basis | The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis at the dates indicated:
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Fair value measurements of assets on a nonrecurring basis | The following tables represent assets measured at fair value on a nonrecurring basis at the dates indicated:
(1) Basis represents the outstanding principal balance of collateral-dependent loans.
(1) Basis represents the outstanding principal balance of collateral-dependent loans. The following table represents the gains (losses) on collateral dependent loans and represents the amount of provision for (reversal of) credit losses on loans and/or charge-offs during the periods indicated:
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Fair value measurements for financial instruments measured at fair value on a non-recurring basis | The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the dates indicated:
(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.
(1)Quantitative disclosures are not provided for collateral-dependent loans because there were no adjustments made to the appraisal or stated values during the current period.
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Schedule of carrying value and fair value of financial instruments | The following tables present the carrying value amount of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated:
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Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Commitments to Extend Credit and Letters of Credit [Table Text Block] | The following table presents outstanding commitments to extend credit, including letters of credit, at the dates indicated:
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Allowance For Credit Losses And Allowance for Unfunded Commitments And Letters Of Credit | The following table details the activity in the ACL on unfunded commitments during the periods indicated:
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Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements (Details) |
Mar. 31, 2023
branch
|
---|---|
Heritage Bank [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Number of Branches Operating | 51 |
Investment Securities - Realized Gains and Losses (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized gains | $ 36 | $ 0 |
Gross realized losses | (322) | 0 |
Net realized loss | $ (286) | $ 0 |
Goodwill and Other Intangible Assets - Other Intangible Assets, Textual (Details) $ in Thousands |
3 Months Ended |
---|---|
Mar. 31, 2023
USD ($)
| |
Finite-Lived Intangible Assets [Line Items] | |
Goodwill, Impairment Loss | $ 0 |
Goodwill, Period Increase (Decrease) | 0 |
Finite-Lived Intangible Assets, Period Increase (Decrease) | 0 |
Finite-Lived Intangible Assets, Period Increase (Decrease) | $ 0 |
Core Deposits | Premier Commercial Bancorp | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Core Deposits | Puget Sound Bancorp | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Core Deposits | Washington Banking Company | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Core Deposits | Valley Community Bancshares | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Derivative Financial Instruments (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Customers | ||
Derivative Asset | ||
Estimated Fair Value | $ (24,300) | $ (30,100) |
Third Parties | ||
Derivative Asset | ||
Estimated Fair Value | 30,100 | |
Derivative Liability | ||
Estimated Fair Value | 24,300 | |
Interest rate swap | Non-hedging interest rate derivatives | ||
Derivative Asset | ||
Notional Amounts | 288,320 | 288,785 |
Estimated Fair Value | 24,498 | 30,107 |
Derivative Liability | ||
Notional Amounts | 288,320 | 288,785 |
Estimated Fair Value | $ 24,498 | $ 30,107 |
Stockholders' Equity - Reconciliation of Weighted Average Shares (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Net income: | ||
Net Income | $ 20,457 | $ 19,757 |
Basic: | ||
Weighted average common shares outstanding (in shares) | 35,108,390 | 35,094,725 |
Diluted: | ||
Basic weighted average common shares outstanding (in shares) | 35,108,390 | 35,094,725 |
Effect of potentially dilutive common shares (in shares) | 336,950 | 317,373 |
Total diluted weighted average common shares outstanding (in shares) | 35,445,340 | 35,412,098 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 88,488 | 17,041 |
Dividends and Undistributed Earnings | $ 0 | $ 0 |
Undistributed Earnings, Diluted | $ 20,457 | $ 19,757 |
Stockholders' Equity - Dividends (Details) - $ / shares |
3 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Jan. 25, 2023 |
Oct. 19, 2022 |
Jul. 20, 2022 |
Apr. 20, 2022 |
Jan. 26, 2022 |
Mar. 12, 2020 |
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Equity, Class of Treasury Stock [Line Items] | ||||||||
Declared | Jan. 25, 2023 | Oct. 19, 2022 | Jul. 20, 2022 | Apr. 20, 2022 | Jan. 26, 2022 | |||
Cash Dividend per Share (in usd per share) | $ 0.22 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.21 | $ 0.22 | $ 0.21 | |
Record Date | Feb. 08, 2023 | Nov. 02, 2022 | Aug. 03, 2022 | May 04, 2022 | Feb. 09, 2022 | |||
Paid Date | Feb. 22, 2023 | Nov. 16, 2022 | Aug. 17, 2022 | May 18, 2022 | Feb. 23, 2022 | |||
Twelfth Stock Repurchase Plan [Member] [Member] [Domain] | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Stock Repurchase Program Percentage of Outstanding Shares Authorized for Repurchase | 5.00% | |||||||
Outstanding common shares in the plan (in shares) | 1,799,054 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 549,859 |
Stockholders' Equity - Stock Repurchase Program (Details) - Twelfth Stock Repurchase Plan [Member] [Member] [Domain] |
Mar. 12, 2020
shares
|
---|---|
Stockholders Equity (Textual) [Abstract] | |
Outstanding share percent | 5.00% |
Outstanding common shares in the plan (in shares) | 1,799,054 |
Stockholders' Equity - Shares Repurchased (Details) - $ / shares |
3 Months Ended | 25 Months Ended | 28 Months Ended | |
---|---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Mar. 31, 2022 |
Jun. 30, 2022 |
|
Shares Related to Withholding Taxes on the Vesting of Restricted Stock | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchased shares to pay withholding taxes (in shares) | 26,724 | 24,531 | ||
Withholding taxes average price per share (in usd per share) | $ 22.84 | $ 25.46 | ||
Twelfth Stock Repurchase Plan [Member] [Member] [Domain] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchased shares to pay withholding taxes (in shares) | 88,355 | 80,559 | ||
Net Total Stock Repurchased During Periods Presented, Shares | 1,249,195 | |||
Net Stock Repurchased During Periods Presented, Value Per Share | $ 22.82 | $ 25.17 | $ 23.86 |
Cash Restriction (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Banking and Thrift, Other Disclosure [Abstract] | |
Restricted Cash | $ 0.0 |
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