XML 71 R13.htm IDEA: XBRL DOCUMENT v3.20.1
Loans
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Loans

NOTE 5 - LOANS

The Company's loan portfolio consists primarily of loans to borrowers within the Los Angeles, California metropolitan area, the New York City metropolitan area, and Las Vegas, Nevada.  Although the Company seeks to avoid concentrations of loans to a single industry or based upon a single class of collateral, real estate and real estate associated businesses are among the principal industries in the Company's market area and, as a result, the Company's loan and collateral portfolios are, to some degree, concentrated in those industries.

A summary of the changes in the allowance for loan losses as of December 31 follows:

 

(dollars in thousands)

 

2019

 

 

2018

 

 

2017

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$

17,577

 

 

$

13,773

 

 

$

14,162

 

Additions (reductions) to the allowance charged to expense

 

 

2,390

 

 

 

4,469

 

 

 

(1,053

)

Recoveries on loans charged-off

 

 

108

 

 

 

36

 

 

 

747

 

Less loans charged-off

 

 

(1,259

)

 

 

(701

)

 

 

(83

)

Ending balance

 

$

18,816

 

 

$

17,577

 

 

$

13,773

 

 

 

The following table presents the recorded investment in loans and impairment method as of December 31, 2019, 2018 and 2017 and the activity in the allowance for loan losses for the years then ended, by portfolio segment:

 

(dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

Real Estate

 

 

Commercial

 

 

Other

 

 

Unallocated

 

 

Total

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of year

 

$

13,437

 

 

$

4,140

 

 

$

—

 

 

$

—

 

 

$

17,577

 

Provisions

 

 

1,847

 

 

 

433

 

 

 

9

 

 

 

101

 

 

 

2,390

 

Charge-offs

 

 

(166

)

 

 

(1,093

)

 

 

—

 

 

 

—

 

 

 

(1,259

)

Recoveries

 

 

—

 

 

 

108

 

 

 

—

 

 

 

—

 

 

 

108

 

 

 

$

15,118

 

 

$

3,588

 

 

$

9

 

 

$

101

 

 

$

18,816

 

Reserves:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specific

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

General

 

 

15,118

 

 

 

3,588

 

 

 

9

 

 

 

101

 

 

 

18,816

 

 

 

$

15,118

 

 

$

3,588

 

 

$

9

 

 

$

101

 

 

$

18,816

 

Loans evaluated for impairment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$

3,795

 

 

$

9,423

 

 

$

—

 

 

$

—

 

 

$

13,218

 

Collectively

 

 

1,842,747

 

 

 

340,148

 

 

 

821

 

 

 

—

 

 

 

2,183,716

 

 

 

$

1,846,542

 

 

$

349,571

 

 

$

821

 

 

$

—

 

 

$

2,196,934

 

 

 

December 31, 2018

 

Real Estate

 

 

Commercial

 

 

Unallocated

 

 

Total

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of year

 

$

9,309

 

 

$

4,044

 

 

$

420

 

 

$

13,773

 

Provisions

 

 

4,128

 

 

 

761

 

 

 

(420

)

 

 

4,469

 

Charge-offs

 

 

—

 

 

 

(701

)

 

 

—

 

 

 

(701

)

Recoveries

 

 

—

 

 

 

36

 

 

 

—

 

 

 

36

 

 

 

$

13,437

 

 

$

4,140

 

 

$

—

 

 

$

17,577

 

Reserves:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specific

 

$

—

 

 

$

44

 

 

$

—

 

 

$

44

 

General

 

 

13,393

 

 

 

4,140

 

 

 

—

 

 

 

17,533

 

Loans acquired with deteriorated credit quality

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

13,437

 

 

$

4,140

 

 

$

—

 

 

$

17,577

 

Loans evaluated for impairment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$

2,309

 

 

$

972

 

 

$

—

 

 

$

3,281

 

Collectively

 

 

1,750,896

 

 

 

387,838

 

 

 

—

 

 

 

2,138,734

 

Loans acquired with deteriorated credit quality

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

1,753,205

 

 

$

388,810

 

 

$

—

 

 

$

2,142,015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2017

 

Real Estate

 

 

Commercial

 

 

Unallocated

 

 

Total

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning of year

 

$

8,111

 

 

$

6,051

 

 

$

—

 

 

$

14,162

 

Provisions

 

 

1,198

 

 

 

(2,671

)

 

 

420

 

 

 

(1,053

)

Charge-offs

 

 

—

 

 

 

(83

)

 

 

—

 

 

 

(83

)

Recoveries

 

 

—

 

 

 

747

 

 

 

—

 

 

 

747

 

 

 

$

9,309

 

 

$

4,044

 

 

$

420

 

 

$

13,773

 

Reserves:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Specific

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

General

 

 

9,309

 

 

 

4,044

 

 

 

420

 

 

 

13,773

 

Loans acquired with deteriorated credit quality

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

$

9,309

 

 

$

4,044

 

 

$

420

 

 

$

13,773

 

Loans evaluated for impairment:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Individually

 

$

2,420

 

 

$

155

 

 

$

—

 

 

$

2,575

 

Collectively

 

 

834,152

 

 

 

412,032

 

 

 

—

 

 

 

1,246,184

 

Loans acquired with deteriorated credit quality

 

 

315

 

 

 

—

 

 

 

—

 

 

 

315

 

 

 

$

836,887

 

 

$

412,187

 

 

$

—

 

 

$

1,249,074

 

 

 

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors.  The Company analyzes loans individually by classifying the loans as to credit risk.  This analysis typically includes larger, non-homogeneous loans such as commercial real estate and commercial and industrial loans.  This analysis is performed on an ongoing basis as new information is obtained.  The Company uses the following definitions for risk ratings:

Pass - Loans classified as pass include loans not meeting the risk ratings defined below.

Special Mention - Loans classified as special mention have a potential weakness that deserves management's close attention.  If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard - Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any.  Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.  They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Impaired - A loan is considered impaired, when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Additionally, all loans classified as troubled debt restructurings are considered impaired.  

The risk category of loans by class of loans was as follows as of December 31, 2019 and 2018:

 

(dollars in thousands)

 

 

 

 

 

Special

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

Pass

 

 

Mention

 

 

Substandard

 

 

Impaired

 

 

Total

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

95,756

 

 

$

—

 

 

$

—

 

 

$

264

 

 

$

96,020

 

Commercial real estate

 

 

767,603

 

 

 

5,353

 

 

 

18,115

 

 

 

2,197

 

 

 

793,268

 

Single-family residential mortgages

 

 

955,327

 

 

 

—

 

 

 

593

 

 

 

1,334

 

 

 

957,254

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

265,178

 

 

 

4,078

 

 

 

5,330

 

 

 

—

 

 

 

274,586

 

SBA

 

 

61,496

 

 

 

189

 

 

 

3,877

 

 

 

9,423

 

 

 

74,985

 

Other:

 

 

821

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

821

 

 

 

$

2,146,181

 

 

$

9,620

 

 

$

27,915

 

 

$

13,218

 

 

$

2,196,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

112,959

 

 

$

—

 

 

$

—

 

 

$

276

 

 

$

113,235

 

Commercial real estate

 

 

743,123

 

 

 

7,069

 

 

 

6,496

 

 

 

2,033

 

 

 

758,721

 

Single-family residential mortgages

 

 

880,860

 

 

 

—

 

 

 

389

 

 

 

—

 

 

 

881,249

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

295,226

 

 

 

6,286

 

 

 

2,798

 

 

 

—

 

 

 

304,310

 

SBA

 

 

79,057

 

 

 

—

 

 

 

4,471

 

 

 

972

 

 

 

84,500

 

 

 

$

2,111,225

 

 

$

13,355

 

 

$

14,154

 

 

$

3,281

 

 

$

2,142,015

 

 

The following table presents the aging of the recorded investment in past-due loans as of December 31, 2019 and 2018 by class of loans:

 

(dollars in thousands)

 

30-59

 

 

60-89

 

 

90 Days

 

 

Total

 

 

Loans Not

 

 

 

 

 

 

Non-

Accrual

 

December 31, 2019

 

Days

 

 

Days

 

 

Or More

 

 

Past Due

 

 

Past Due

 

 

Total Loans

 

 

Loans (1)

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

96,020

 

 

$

96,020

 

 

$

—

 

Commercial real estate

 

 

—

 

 

 

—

 

 

 

725

 

 

 

725

 

 

 

792,543

 

 

 

793,268

 

 

 

725

 

Single-family residential mortgages

 

 

1,454

 

 

 

1,560

 

 

 

450

 

 

 

3,464

 

 

 

953,790

 

 

 

957,254

 

 

 

1,334

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

274,586

 

 

 

274,586

 

 

 

—

 

SBA

 

 

2,263

 

 

 

—

 

 

 

9,378

 

 

 

11,641

 

 

 

63,344

 

 

 

74,985

 

 

 

9,378

 

Other:

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

821

 

 

 

821

 

 

 

—

 

 

 

$

3,717

 

 

$

1,560

 

 

$

10,553

 

 

$

15,830

 

 

$

2,181,104

 

 

$

2,196,934

 

 

$

11,437

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single-family residential mortgages held

   for sale

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

108,194

 

 

$

108,194

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

113,235

 

 

$

113,235

 

 

$

—

 

Commercial real estate

 

 

—

 

 

 

678

 

 

 

—

 

 

 

678

 

 

 

758,043

 

 

 

758,721

 

 

 

—

 

Single-family residential mortgages

 

 

1,548

 

 

 

950

 

 

 

—

 

 

 

2,498

 

 

 

878,751

 

 

 

881,249

 

 

 

—

 

Commercial:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

304,310

 

 

 

304,310

 

 

 

—

 

SBA

 

 

957

 

 

 

—

 

 

 

914

 

 

 

1,871

 

 

 

82,629

 

 

 

84,500

 

 

 

914

 

 

 

$

2,505

 

 

$

1,628

 

 

$

914

 

 

$

5,047

 

 

$

2,136,968

 

 

$

2,142,015

 

 

$

914

 

Real estate:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Single-family residential mortgages held

   for sale

 

$

—

 

 

$

458

 

 

$

—

 

 

$

458

 

 

$

434,064

 

 

$

434,522

 

 

$

—

 

 

(1)

Included in total loans

 

Information relating to individually impaired loans presented by class of loans was as follows as of December 31, 2019, 2018 and 2017:

 

 

 

Unpaid

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollars in thousands)

 

Principal

 

 

Recorded

 

 

Average

 

 

Interest

 

 

Related

 

December 31, 2019

 

Balance

 

 

Investment

 

 

Balance

 

 

Income

 

 

Allowance

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

264

 

 

$

264

 

 

$

271

 

 

$

24

 

 

$

—

 

Commercial real estate

 

 

2,198

 

 

 

2,197

 

 

 

2,384

 

 

 

100

 

 

 

—

 

Residential mortgage loans

 

 

1,349

 

 

 

1,334

 

 

 

1,351

 

 

 

—

 

 

 

—

 

Commercial - SBA

 

 

9,423

 

 

 

9,423

 

 

 

10,791

 

 

 

4

 

 

 

—

 

With related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial-SBA

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

13,234

 

 

$

13,218

 

 

$

14,797

 

 

$

128

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

276

 

 

$

276

 

 

$

283

 

 

$

23

 

 

$

—

 

Commercial real estate

 

 

2,033

 

 

 

2,033

 

 

 

2,126

 

 

 

134

 

 

 

—

 

Commercial - SBA

 

 

797

 

 

 

1,498

 

 

 

1,377

 

 

 

19

 

 

 

—

 

With related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial-SBA

 

 

175

 

 

 

175

 

 

 

193

 

 

 

1

 

 

 

44

 

Total

 

$

3,281

 

 

$

3,982

 

 

$

3,979

 

 

$

177

 

 

$

44

 

December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

With no related allowance recorded

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction and land development

 

$

289

 

 

$

289

 

 

$

296

 

 

$

16

 

 

$

—

 

Commercial real estate

 

 

2,131

 

 

 

2,131

 

 

 

2,192

 

 

 

297

 

 

 

—

 

Commercial - SBA

 

 

155

 

 

 

155

 

 

 

78

 

 

 

15

 

 

 

—

 

Total

 

$

2,575

 

 

$

2,575

 

 

$

2,566

 

 

$

328

 

 

$

—

 

 

No interest income was recognized on a cash basis as of December 31, 2019, 2018 and 2017.   We did not recognize any interest income on nonaccrual loans during the years ended December 31, 2019 and December 31, 2018 while the loans were in nonaccrual status. We recognized interest income on loans modified under troubled debt restructurings ("TDR's") of $128,000 and $177,000 during the years ended December 31, 2019 and December 31, 2018, respectively.

The Company had four loans identified as troubled debt restructurings at December 31, 2019 and 2018, respectively.  There were no specific reserves allocated to the loans as of December 31, 2019 and 2018.  There were no commitments to lend additional amounts as of December 31, 2019 and 2018, respectively, to customers with outstanding loans that are classified as TDR's.

 

During the year ended December 31, 2019, the terms of certain loans were modified as TDR's.  The modification of the terms generally included loans where a moratorium on loan payments was granted.  Such moratoriums ranged from three months to six months on the loans restructured in 2019.

 

The following table presents loans by class modified as TDR's that occurred during the year ended December 31, 2019:

 

 

 

 

 

 

 

Pre-

 

 

Post-

 

 

 

 

 

 

 

Modification

 

 

Modification

 

(dollars in thousands)

 

Number of

 

 

Recorded

 

 

Recorded

 

December 31, 2019

 

Loans

 

 

Investment

 

 

Investment

 

Commercial real estate

 

 

1

 

 

$

476

 

 

$

476

 

 

There were no defaults of TDR’s in 2019 and 2018 where the loan was modified within the prior twelve months.

In the past the Company has purchased loans as part of its whole bank acquisitions, for which there was at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The purchased credit-impaired loan fully paid off in September 2018.  There were no balances as of December 31, 2019 and 2018.  

 

 

 

Below is a summary of activity in the accretable yield on purchased credit-impaired loans for 2019, 2018 and 2017:

 

(dollars in thousands)

 

2019

 

 

2018

 

 

2017

 

Beginning balance

 

$

—

 

 

$

7

 

 

$

142

 

Disposals

 

 

—

 

 

 

—

 

 

 

—

 

Restructuring as TDR

 

 

—

 

 

 

—

 

 

 

—

 

Accretion of income

 

 

—

 

 

 

(7

)

 

 

(135

)

Ending balance

 

$

—

 

 

$

—

 

 

$

7