QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(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(s) | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☒ | Smaller reporting company | ||||||||||
Emerging growth company |
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
($ in thousands) | June 30, 2023 (unaudited) | December 31, 2022 | ||||||||||||
ASSETS | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Available-for-sale debt securities, at fair value | ||||||||||||||
Other investments | ||||||||||||||
Loans held for sale | ||||||||||||||
Loans receivable, net of allowance for credit losses of $ | ||||||||||||||
Premises and equipment, net | ||||||||||||||
Accrued interest receivable | ||||||||||||||
Servicing assets | ||||||||||||||
Company owned life insurance | ||||||||||||||
Deferred tax assets, net | ||||||||||||||
Operating right-of-use assets | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Liabilities | ||||||||||||||
Deposits: | ||||||||||||||
Noninterest bearing | $ | $ | ||||||||||||
Interest bearing: | ||||||||||||||
Money market and others | ||||||||||||||
Time deposits greater than $250 | ||||||||||||||
Other time deposits | ||||||||||||||
Total deposits | ||||||||||||||
Federal Home Loan Bank advances | ||||||||||||||
Accrued interest payable | ||||||||||||||
Operating lease liabilities | ||||||||||||||
Other liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Shareholders’ equity | ||||||||||||||
Preferred stock | ||||||||||||||
Common stock – | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Retained earnings | ||||||||||||||
Accumulated other comprehensive loss | ( | ( | ||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders' equity | $ | $ | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousand, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
INTEREST INCOME | ||||||||||||||||||||||||||
Interest and fees on loans | $ | $ | $ | $ | ||||||||||||||||||||||
Interest on available-for-sale debt securities | ||||||||||||||||||||||||||
Other interest income | ||||||||||||||||||||||||||
Total interest income | ||||||||||||||||||||||||||
Interest expense | ||||||||||||||||||||||||||
Interest on deposits | ||||||||||||||||||||||||||
Interest on borrowings | ||||||||||||||||||||||||||
Total interest expense | ||||||||||||||||||||||||||
Net interest income | ||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ( | |||||||||||||||||||||||||
Net interest income after provision for credit losses | ||||||||||||||||||||||||||
NONINTEREST INCOME | ||||||||||||||||||||||||||
Service charges on deposits | ||||||||||||||||||||||||||
Loan servicing fees, net of amortization | ||||||||||||||||||||||||||
Gain on sale of loans | ||||||||||||||||||||||||||
Other income | ||||||||||||||||||||||||||
Total noninterest income | ||||||||||||||||||||||||||
NONINTEREST EXPENSE | ||||||||||||||||||||||||||
Salaries and employee benefits | ||||||||||||||||||||||||||
Occupancy and equipment | ||||||||||||||||||||||||||
Data processing and communication | ||||||||||||||||||||||||||
Professional fees | ||||||||||||||||||||||||||
FDIC insurance and regulatory assessments | ||||||||||||||||||||||||||
Promotion and advertising | ||||||||||||||||||||||||||
Directors’ fees | ||||||||||||||||||||||||||
Foundation donation and other contributions | ||||||||||||||||||||||||||
Other expenses | ||||||||||||||||||||||||||
Total noninterest expense | ||||||||||||||||||||||||||
INCOME BEFORE INCOME TAX EXPENSE | ||||||||||||||||||||||||||
Income tax expense | ||||||||||||||||||||||||||
NET INCOME | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER SHARE - BASIC | $ | $ | $ | $ | ||||||||||||||||||||||
EARNINGS PER SHARE - DILUTED | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Other comprehensive loss | ||||||||||||||||||||||||||
Change in unrealized loss on available-for-sale debt securities | ( | ( | ( | ( | ||||||||||||||||||||||
Tax effect | ||||||||||||||||||||||||||
Total other comprehensive loss | ( | ( | ( | ( | ||||||||||||||||||||||
Comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands, except per share data) | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Total Shareholders’ Equity | |||||||||||||||||||||||||||||||||
Shares Outstanding | Amount | |||||||||||||||||||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||||||||||||||||||||
Balance at April 1, 2023 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Stock issued under stock-based compensation plans | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Balance at April 1, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Stock issued under stock-based compensation plans | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at , June 30, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Six Months Ended | ||||||||||||||||||||||||||||||||||||||
Balance at January 1, 2023 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Cumulative effect related to adoption of ASC 326, net of tax | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Adjusted balance at January 1, 2023 | ( | |||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Stock issued under stock-based compensation plans | ( | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | ( | ( | — | — | — | ( |
Cash dividends declared( $ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | ( | $ | ||||||||||||||||||||||||||||||||||||
Balance at January 1, 2022 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Stock issued under stock-based compensation plans | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation, net | — | — | — | — | ||||||||||||||||||||||||||||||||||
Cash dividends declared ($ | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | ( | $ | ||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||
($ in thousands) | 2023 | 2022 | ||||||||||||
Cash flows from operating activities | ||||||||||||||
Net income | $ | $ | ||||||||||||
Adjustments to reconcile net income to net cash and cash equivalents provided by operating activities: | ||||||||||||||
(Reversal of) provision for credit losses | ( | |||||||||||||
Depreciation and amortization of premises and equipment | ||||||||||||||
Amortization of net premiums on securities | ||||||||||||||
Amortization of servicing assets | ||||||||||||||
Accretion of net discounts on loans | ( | ( | ||||||||||||
Amortization of low income housing partnerships | ||||||||||||||
Stock-based compensation | ||||||||||||||
Deferred income taxes | ( | |||||||||||||
Gain on sale of loans | ( | ( | ||||||||||||
Earnings on company owned life insurance | ( | ( | ||||||||||||
Net change in fair value of equity investment with readily determinable fair value | ( | |||||||||||||
Origination of loans held for sale | ( | ( | ||||||||||||
Proceeds from sales of loans held for sale | ||||||||||||||
Net change in: | ||||||||||||||
Accrued interest receivable | ( | |||||||||||||
Other assets | ( | |||||||||||||
Accrued interest payable | ||||||||||||||
Other liabilities | ( | ( | ||||||||||||
Net cash provided by operating activities | ||||||||||||||
Cash flows from investing activities | ||||||||||||||
Net change in loans receivable | ( | ( | ||||||||||||
Proceeds from matured, called, or paid-down securities available for sale | ||||||||||||||
Purchase of company owned life insurance | ( | |||||||||||||
Purchase of loans | ( | ( | ||||||||||||
Purchase of available-for-sale debt securities | ( | ( | ||||||||||||
Purchase of equity investments | ( | |||||||||||||
Purchase of Federal Home Loan Bank stock | ( | ( | ||||||||||||
Purchase of premises and equipment, net | ( | ( | ||||||||||||
Investment in low income housing partnerships | ( | ( | ||||||||||||
Net cash used in investing activities | ( | ( | ||||||||||||
Cash flows from financing activities | ||||||||||||||
Net change in deposits | ( | |||||||||||||
Cash received from stock option exercises | ||||||||||||||
Proceeds from Federal Home Loan Bank advances | ||||||||||||||
Repurchase of common stock | ( | |||||||||||||
Cash dividend paid on common stock | ( | ( | ||||||||||||
Payments related to tax-withholding for vested restricted stock awards | ( | ( | ||||||||||||
Net cash provided by financing activities | ||||||||||||||
Net change in cash and cash equivalents | ||||||||||||||
Cash and cash equivalents at beginning of period |
Cash and cash equivalents at end of period | $ | $ | ||||||||||||
Supplemental cash flow information: | ||||||||||||||
Cash paid during the period for | ||||||||||||||
Income taxes | $ | $ | ||||||||||||
Interest | ||||||||||||||
Supplemental non-cash disclosure: | ||||||||||||||
Initial recognition of right-of-use assets | $ | $ | ||||||||||||
January 1, 2023, Adoption Date | ||||||||||||||||||||
($ in thousands) | As Reported | Pre-ASU 2016-13 | Impact | |||||||||||||||||
Assets: | ||||||||||||||||||||
Loans: | ||||||||||||||||||||
Commercial real estate | $ | $ | $ | |||||||||||||||||
SBA—real estate | ( | |||||||||||||||||||
SBA—non-real estate | ( | |||||||||||||||||||
C&I | ( | |||||||||||||||||||
Home mortgage | ||||||||||||||||||||
Consumer | ( | |||||||||||||||||||
Allowance for credit losses on loans | $ | $ | $ | |||||||||||||||||
Liabilities: | ||||||||||||||||||||
Allowance for credit losses on off-balance sheet commitments | $ | $ | $ | |||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Residential collateralized mortgage obligations | ( | |||||||||||||||||||||||||
Municipal securities-tax exempt | ||||||||||||||||||||||||||
Total AFS debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Gross Unrealized Gain | Gross Unrealized Loss | Fair Value | ||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
Residential collateralized mortgage obligations | ( | |||||||||||||||||||||||||
Total AFS debt securities | $ | $ | $ | ( | $ | |||||||||||||||||||||
($ in thousands) | Amortized Cost | Fair Value | ||||||||||||
After one year through five years | $ | $ | ||||||||||||
After five years through ten years | ||||||||||||||
After ten years | ||||||||||||||
Total AFS debt securities | $ | $ | ||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total AFS debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Less Than 12 Months | 12 Months or Longer | Total | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | ( | ( | ( | |||||||||||||||||||||||||||||||||||
Total AFS debt securities | $ | $ | ( | $ | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
FHLB stock | $ | $ | ||||||||||||
Pacific Coast Bankers Bank ("PCBB") stock | ||||||||||||||
Mutual fund - Community Reinvestment Act ("CRA") qualified | ||||||||||||||
Time deposits placed in other banks | ||||||||||||||
Total other investments | $ | $ | ||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Commercial real estate | $ | $ | ||||||||||||
SBA—real estate | ||||||||||||||
SBA—non-real estate | ||||||||||||||
C&I | ||||||||||||||
Home mortgage | ||||||||||||||
Consumer | ||||||||||||||
Gross loans receivable | ||||||||||||||
Allowance for credit losses | ( | ( | ||||||||||||
Loans receivable, net (1) | $ | $ | ||||||||||||
($ in thousands) | Commercial Real Estate | SBA— Real Estate | SBA —Non- Real Estate | C&I | Home Mortgage | Consumer | Total | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ||||||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Provision for (reversal of) credit losses | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Commercial Real Estate | SBA— Real Estate | SBA —Non- Real Estate | C&I | Home Mortgage | Consumer | Total | |||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Impact of CECL adoption | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
(Reversal of) provision for credit losses | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
Six Months Ended June 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
(Reversal of) provision for credit losses(1) | ( | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||
Charge-offs | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Recoveries | ||||||||||||||||||||||||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Individually Evaluated for Impairment | Collectively Evaluated for Impairment | Total | |||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||
Commercial real estate | $ | $ | $ | |||||||||||||||||
SBA—real estate | ||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||
C&I | ||||||||||||||||||||
Home mortgage | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Loans(1): | ||||||||||||||||||||
Commercial real estate | $ | $ | $ | |||||||||||||||||
SBA—real estate(2) | ||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||
C&I | ||||||||||||||||||||
Home mortgage | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||
Allowance for credit losses: | ||||||||||||||||||||
Commercial real estate | $ | $ | $ | |||||||||||||||||
SBA—real estate | ||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||
C&I | ||||||||||||||||||||
Home mortgage | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
Loans(1): | ||||||||||||||||||||
Commercial real estate | $ | $ | $ | |||||||||||||||||
SBA—real estate | ||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||
C&I | ||||||||||||||||||||
Home mortgage | ||||||||||||||||||||
Consumer | ||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||
December 31, 2022(1) | ||||||||||||||||||||||||||
($ in thousands) | Unpaid Principal Balance | Recorded Investment With No Allowance | Recorded Investment With Allowance | Related Allowance | ||||||||||||||||||||||
SBA—real estate | $ | $ | $ | $ | ||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands) | Hotel / Motel | Gas Station | Single-Family Residential | Total | ||||||||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||||||||
SBA—real estate(1) | $ | $ | $ | $ | ||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands) | Nonaccrual Loans with a Related Allowance for Credit Losses | Nonaccrual Loans without a Related Allowance for Credit Losses | Total Nonaccrual Loans | 90 or More Days Past Due & Still Accruing | Total(1) | |||||||||||||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||||||||||||||
SBA—real estate | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||
SBA—real estate | $ | $ | $ | |||||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | |||||||||||||||||||||||||||||
($ in thousands) | 30-59 Days Past Due | 60-89 Days Past Due | > 90 Days Past Due | Total Past Due(1) | Loans Not Past Due | Total(2) | ||||||||||||||||||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
SBA—real estate | ||||||||||||||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
SBA—real estate | ||||||||||||||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
($ in thousands) | Interest Only | Total | Percentage to Each Loan Type | |||||||||||||||||
As of June 30, 2023 | ||||||||||||||||||||
SBA—non-real estate | $ | $ | % | |||||||||||||||||
Total | $ | $ | % | |||||||||||||||||
($ in thousands) | Current | Total | ||||||||||||
As of June 30, 2023 | ||||||||||||||
SBA—non-real estate | $ | $ | ||||||||||||
Total | $ | $ | ||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Term Loans by Origination Year | Revolving Loans | Total(1) | ||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2021 | 2020 | 2019 | Prior | ||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
SBA— real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ |
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Total loans | ||||||||||||||||||||||||||||||||||||||||||||||||||
Pass | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Special mention | ||||||||||||||||||||||||||||||||||||||||||||||||||
Substandard | ||||||||||||||||||||||||||||||||||||||||||||||||||
Doubtful | ||||||||||||||||||||||||||||||||||||||||||||||||||
Subtotal | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
Current period charge-offs | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Pass | Special Mention | Substandard | Doubtful | Total(1) | |||||||||||||||||||||||||||
As of December 31, 2022 | ||||||||||||||||||||||||||||||||
Commercial real estate | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
SBA—real estate | ||||||||||||||||||||||||||||||||
SBA—non-real estate | ||||||||||||||||||||||||||||||||
C&I | ||||||||||||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||||||||
Consumer | ||||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Leasehold improvements | $ | $ | ||||||||||||
Furniture and fixtures | ||||||||||||||
Equipment and others | ||||||||||||||
Total premises and equipment | ||||||||||||||
Accumulated depreciation | ( | ( | ||||||||||||
Total premises and equipment, net | $ | $ | ||||||||||||
Three Months Ended June 30, 2023 | Six Months Ended June 30, 2023 | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Beginning balance | $ | $ | $ | $ | ||||||||||||||||||||||
Additions from loans sold with servicing retained | ||||||||||||||||||||||||||
Amortized to expense | ( | ( | ( | ( | ||||||||||||||||||||||
Ending balance | $ | $ | $ | $ | ||||||||||||||||||||||
($ in thousands) | ||||||||
Remainder of 2023 | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 and thereafter | ||||||||
Total | $ | |||||||
($ in thousands) | ||||||||
FHLB | $ | |||||||
Federal Reserve Bank | ||||||||
Pacific Coast Bankers Bank | ||||||||
Zions Bank | ||||||||
First Horizon Bank | ||||||||
Total | $ | |||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Loan commitments | $ | $ | ||||||||||||
Standby letter of credit | ||||||||||||||
Commercial letter of credit | ||||||||||||||
Total undisbursed credit related commitments | $ | $ | ||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Investments in low-income housing partnerships | $ | $ | ||||||||||||
Unfunded commitments to fund investments for low-income housing partnerships | ||||||||||||||
($ in thousands, except share data) | Number of Options Outstanding | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||
Outstanding, as of January 1, 2023 | $ | $ | ||||||||||||||||||
Options granted | ||||||||||||||||||||
Options exercised | ||||||||||||||||||||
Options forfeited | ||||||||||||||||||||
Options expired | ||||||||||||||||||||
Outstanding, as of June 30, 2023 | $ | $ | ||||||||||||||||||
Fully vested and expected to vest | $ | $ | ||||||||||||||||||
Vested | $ | $ | ||||||||||||||||||
($ in thousands, except share data) | Number of Options Outstanding | Weighted Average Exercise Price | Aggregate Intrinsic Value | |||||||||||||||||
Outstanding, as of January 1, 2023 | $ | $ | ||||||||||||||||||
Options granted | ||||||||||||||||||||
Options exercised | ( | |||||||||||||||||||
Options forfeited | ||||||||||||||||||||
Options expired | ||||||||||||||||||||
Outstanding, as of June 30, 2023 | $ | $ | ||||||||||||||||||
Fully vested and expected to vest | $ | $ | ||||||||||||||||||
Vested | $ | $ | ||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Intrinsic value of options exercised | $ | $ | $ | $ | ||||||||||||||||||||||
Cash received from option exercises | $ | |||||||||||||||||||||||||
Tax (provision) benefit realized from option exercised | ( | $ | ||||||||||||||||||||||||
($ in thousands, except share data) | Shares Issued | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value | |||||||||||||||||
Non-vested, as of January 1, 2023 | $ | $ | ||||||||||||||||||
Awards granted | ||||||||||||||||||||
Awards vested | ||||||||||||||||||||
Awards forfeited | ||||||||||||||||||||
Non-vested, as of June 30, 2023 | $ | $ | ||||||||||||||||||
($ in thousands, except share data) | Shares Issued | Weighted Average Grant Date Fair Value | Aggregate Intrinsic Value | |||||||||||||||||
Non-vested, as of January 1, 2023 | $ | $ | ||||||||||||||||||
Awards granted | ||||||||||||||||||||
Awards vested | ( | |||||||||||||||||||
Awards forfeited | ( | |||||||||||||||||||
Non-vested, as of June 30, 2023 | $ | $ | ||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Tax (provision) benefit realized from awards vested | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
Fair Value Measure on a Recurring Basis | ||||||||||||||||||||||||||
($ in thousands) | Total Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Residential collateralized mortgage obligations | ||||||||||||||||||||||||||
Municipal securities-tax exempt | ||||||||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||||
Mutual fund - CRA qualified | ||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | $ | $ | $ | ||||||||||||||||||||||
Residential collateralized mortgage obligations | ||||||||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||||
Mutual fund - CRA qualified | ||||||||||||||||||||||||||
Fair Value Measure on a Nonrecurring Basis | ||||||||||||||||||||||||||
($ in thousands) | Total Fair Value | Quoted Prices in Active Markets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||
Collateral-dependent loans: | ||||||||||||||||||||||||||
SBA—real estate | $ | $ | $ | $ | ||||||||||||||||||||||
Home mortgage | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Impaired loans: | ||||||||||||||||||||||||||
SBA—real estate | $ | $ | $ | $ | ||||||||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||||||||||||
Total |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Collateral-dependent loans: | ||||||||||||||||||||||||||
SBA—real estate | $ | ( | $ | $ | $ | |||||||||||||||||||||
Total | $ | ( | $ | $ | $ | |||||||||||||||||||||
($ in thousands) | Fair Value Measurements (Level 3) | Valuation Techniques | Unobservable Inputs | Range of Inputs | Weighted- Average of Inputs(1) | |||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||
Collateral-dependent loans: | ||||||||||||||||||||||||||||||||
SBA—real estate | $ | Income approach - income capitalization | Capitalization rate | |||||||||||||||||||||||||||||
Home mortgage | Sales comparison approach | Market data comparison | ||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
Impaired loans: | ||||||||||||||||||||||||||||||||
SBA—real estate | $ | Income approach - income capitalization | Capitalization rate | |||||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||
($ in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Loans receivable, net | ||||||||||||||||||||||||||||||||
Accrued interest receivable, net | ||||||||||||||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||||||||||
FHLB and PCBB stock | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
Time deposits placed | ||||||||||||||||||||||||||||||||
Servicing assets | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Accrued interest payable | ||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||
($ in thousands) | Carrying Amount | Level 1 | Level 2 | Level 3 | Fair Value | |||||||||||||||||||||||||||
Financial assets: | ||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||
Loans held for sale | ||||||||||||||||||||||||||||||||
Loans receivable, net | ||||||||||||||||||||||||||||||||
Accrued interest receivable, net | ||||||||||||||||||||||||||||||||
Other investments: | ||||||||||||||||||||||||||||||||
FHLB and PCBB stock | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||
Time deposits placed | ||||||||||||||||||||||||||||||||
Servicing assets | ||||||||||||||||||||||||||||||||
Financial liabilities: | ||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||
Accrued interest payable | ||||||||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||
Actual(1) | Required for Capital Adequacy Purposes | Minimum To be Considered "Well Capitalized" | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to average assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
Actual(1) | Required for Capital Adequacy Purposes | Minimum To be Considered "Well Capitalized" | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | $ | % | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||
Bank | $ | % | $ | % | ||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
Common equity Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
Tier 1 capital (to average assets) | ||||||||||||||||||||||||||||||||||||||
Consolidated | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||
Bank | ||||||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Basic | ||||||||||||||||||||||||||
Net income | $ | $ | $ | $ | ||||||||||||||||||||||
Distributed and undistributed earnings allocated to participating securities | ( | ( | ( | ( | ||||||||||||||||||||||
Net income allocated to common shares | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding | ||||||||||||||||||||||||||
Basic earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Diluted | ||||||||||||||||||||||||||
Net income allocated to common shares | $ | $ | $ | $ | ||||||||||||||||||||||
Weighted average common shares outstanding for basic earnings per common share | ||||||||||||||||||||||||||
Add: Dilutive effects of assumed exercises of stock options | ||||||||||||||||||||||||||
Average shares and dilutive potential common shares | ||||||||||||||||||||||||||
Diluted earnings per common share | $ | $ | $ | $ | ||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||||
Interest income | $ | 30,102 | $ | 20,148 | $ | 58,696 | $ | 38,092 | ||||||||||||||||||
Interest expense | 12,850 | 1,069 | 23,552 | 1,723 | ||||||||||||||||||||||
Net interest income | 17,252 | 19,079 | 35,144 | 36,369 | ||||||||||||||||||||||
Provision for (reversal of) credit losses | — | 996 | (338) | 1,337 | ||||||||||||||||||||||
Noninterest income | 3,605 | 5,359 | 7,900 | 9,575 | ||||||||||||||||||||||
Noninterest expense | 12,300 | 11,503 | 24,208 | 21,165 | ||||||||||||||||||||||
Income before income taxes | 8,557 | 11,939 | 19,174 | 23,442 | ||||||||||||||||||||||
Income tax expense | 2,466 | 3,459 | 5,549 | 6,810 | ||||||||||||||||||||||
Net income | 6,091 | 8,480 | 13,625 | 16,632 | ||||||||||||||||||||||
Per Share Data: | ||||||||||||||||||||||||||
Basic income per share | $ | 0.39 | $ | 0.55 | $ | 0.88 | $ | 1.08 | ||||||||||||||||||
Diluted income per share | 0.39 | 0.54 | 0.88 | 1.07 | ||||||||||||||||||||||
Book value per share | 12.16 | 11.16 | 12.16 | 11.16 | ||||||||||||||||||||||
Shares of common stock outstanding | 15,118,268 | 15,137,808 | 15,118,268 | 15,137,808 | ||||||||||||||||||||||
Performance Ratios: | ||||||||||||||||||||||||||
Return on average assets(1) | 1.15 | % | 1.79 | % | 1.29 | % | 1.82 | % | ||||||||||||||||||
Return on average equity(1) | 13.27 | 20.29 | 15.02 | 19.92 | ||||||||||||||||||||||
Yield on total loans(1) | 6.34 | 4.91 | 6.22 | 4.88 | ||||||||||||||||||||||
Yield on average earning assets(1) | 5.94 | 4.44 | 5.83 | 4.36 | ||||||||||||||||||||||
Cost of average interest bearing liabilities(1) | 4.01 | 0.50 | 3.79 | 0.42 | ||||||||||||||||||||||
Cost of deposits(1) | 2.63 | 0.25 | 2.44 | 0.21 | ||||||||||||||||||||||
Net interest margin(1) | 3.40 | 4.21 | 3.48 | 4.16 | ||||||||||||||||||||||
Efficiency ratio(2) | 58.97 | 47.07 | 56.24 | 46.07 | ||||||||||||||||||||||
As of | ||||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Balance Sheet Data: | ||||||||||||||
Gross loans receivable | $ | 1,716,197 | $ | 1,678,292 | ||||||||||
Loans held for sale | — | 44,335 | ||||||||||||
Allowance for credit losses | (20,802) | (19,241) | ||||||||||||
Total assets | 2,151,701 | 2,094,497 | ||||||||||||
Deposits | 1,859,639 | 1,885,771 | ||||||||||||
Shareholders’ equity | 183,770 | 176,916 | ||||||||||||
Asset Quality Data: | ||||||||||||||
Nonperforming loans to gross loans receivable | 0.51 | % | 0.18 | % | ||||||||||
Allowance for credit losses to nonperforming loans | 236 | 625 | ||||||||||||
Allowance for credit losses to gross loans receivable | 1.21 | 1.15 | ||||||||||||
Balance Sheet and Capital Ratios: | ||||||||||||||
Gross loans receivable to deposits | 92.29 | % | 89.00 | % | ||||||||||
Noninterest-bearing deposits to deposits | 34.13 | 37.20 | ||||||||||||
Average equity to average total assets | 8.68 | 8.88 | ||||||||||||
Leverage ratio | 9.50 | 9.38 | ||||||||||||
Common equity tier 1 ratio | 11.92 | 11.87 | ||||||||||||
Tier 1 risk-based capital ratio | 11.92 | 11.87 | ||||||||||||
Total risk-based capital ratio | 13.10 | 13.06 | ||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||
($ in thousands) | 2023 | 2022 | Change | |||||||||||||||||
Interest income | $ | 30,102 | $ | 20,148 | $ | 9,954 | ||||||||||||||
Interest expense | 12,850 | 1,069 | 11,781 | |||||||||||||||||
Net interest income | 17,252 | 19,079 | (1,827) | |||||||||||||||||
Provision for credit losses | — | 996 | (996) | |||||||||||||||||
Noninterest income | 3,605 | 5,359 | (1,754) | |||||||||||||||||
Noninterest expense | 12,300 | 11,503 | 797 | |||||||||||||||||
Income before income tax expense | 8,557 | 11,939 | (3,382) | |||||||||||||||||
Income tax expense | 2,466 | 3,459 | (993) | |||||||||||||||||
Net income | $ | 6,091 | $ | 8,480 | $ | (2,389) | ||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||
($ in thousands) | 2023 | 2022 | Change | |||||||||||||||||
Interest income | $ | 58,696 | $ | 38,092 | $ | 20,604 | ||||||||||||||
Interest expense | 23,552 | 1,723 | 21,829 | |||||||||||||||||
Net interest income | 35,144 | 36,369 | (1,225) | |||||||||||||||||
(Reversal of) provision for credit losses | (338) | 1,337 | (1,675) | |||||||||||||||||
Noninterest income | 7,900 | 9,575 | (1,675) | |||||||||||||||||
Noninterest expense | 24,208 | 21,165 | 3,043 | |||||||||||||||||
Income before income tax expense | 19,174 | 23,442 | (4,268) | |||||||||||||||||
Income tax expense | 5,549 | 6,810 | (1,261) | |||||||||||||||||
Net income | $ | 13,625 | $ | 16,632 | $ | (3,007) | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Average Balance | Interest and Fees | Yield / Rate(1) | Average Balance | Interest and Fees | Yield / Rate(1) | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits in other banks | $ | 79,200 | $ | 1,003 | 5.01 | % | $ | 79,628 | $ | 197 | 0.98 | % | ||||||||||||||||||||||||||
Federal funds sold and other investments(2) | 15,374 | 249 | 6.46 | 11,966 | 140 | 4.70 | ||||||||||||||||||||||||||||||||
Available-for-sale debt securities | 209,801 | 1,562 | 2.98 | 165,499 | 703 | 1.70 | ||||||||||||||||||||||||||||||||
Total investments | 304,375 | 2,814 | 3.68 | 257,093 | 1,040 | 1.62 | ||||||||||||||||||||||||||||||||
Commercial real estate loans | 838,526 | 11,823 | 5.66 | 751,610 | 8,743 | 4.67 | ||||||||||||||||||||||||||||||||
SBA loans | 262,825 | 7,174 | 10.95 | 353,138 | 5,707 | 6.48 | ||||||||||||||||||||||||||||||||
Commercial and industrial loans | 114,103 | 2,232 | 7.85 | 160,291 | 1,811 | 4.53 | ||||||||||||||||||||||||||||||||
Home mortgage loans | 508,976 | 6,043 | 4.75 | 294,341 | 2,837 | 3.86 | ||||||||||||||||||||||||||||||||
Consumer & other loans | 1,334 | 16 | 4.77 | 684 | 10 | 5.49 | ||||||||||||||||||||||||||||||||
Loans(3) | 1,725,764 | 27,288 | 6.34 | 1,560,064 | 19,108 | 4.91 | ||||||||||||||||||||||||||||||||
Total interest-earning assets | 2,030,139 | 30,102 | 5.94 | 1,817,157 | 20,148 | 4.44 | ||||||||||||||||||||||||||||||||
Noninterest-earning assets | 84,991 | 73,594 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,115,130 | $ | 1,890,751 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Money market deposits and others | $ | 357,517 | $ | 3,201 | 3.59 | % | $ | 470,013 | $ | 503 | 0.43 | % | ||||||||||||||||||||||||||
Time deposits | 843,836 | 8,719 | 4.14 | 389,059 | 566 | 0.58 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,201,353 | 11,920 | 3.98 | 859,072 | 1,069 | 0.50 | ||||||||||||||||||||||||||||||||
Borrowings | 82,586 | 930 | 4.52 | — | — | — | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,283,939 | 12,850 | 4.01 | 859,072 | 1,069 | 0.50 | ||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 615,748 | 843,788 | ||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 31,810 | 20,720 | ||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 647,558 | 864,508 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 183,633 | 167,171 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,115,130 | $ | 1,890,751 | ||||||||||||||||||||||||||||||||||
Net interest income / interest rate spreads | $ | 17,252 | 1.93 | % | $ | 19,079 | 3.94 | % | ||||||||||||||||||||||||||||||
Net interest margin | 3.40 | % | 4.21 | % | ||||||||||||||||||||||||||||||||||
Cost of deposits | 2.63 | % | 0.25 | % | ||||||||||||||||||||||||||||||||||
Cost of funds | 2.71 | % | 0.25 | % | ||||||||||||||||||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Average Balance | Interest and Fees | Yield / Rate(1) | Average Balance | Interest and Fees | Yield / Rate(1) | ||||||||||||||||||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||||||||||||||||||||
Interest-bearing deposits in other banks | $ | 76,695 | $ | 1,849 | 4.79 | % | $ | 83,231 | $ | 238 | 0.57 | % | ||||||||||||||||||||||||||
Federal funds sold and other investments(1) | 13,761 | 420 | 6.10 | 11,465 | 256 | 4.45 | ||||||||||||||||||||||||||||||||
Available-for-sale debt securities | 210,130 | 3,128 | 2.98 | 161,230 | 1,233 | 1.53 | ||||||||||||||||||||||||||||||||
Total investments | 300,586 | 5,397 | 3.58 | % | 255,926 | 1,727 | 1.35 | % | ||||||||||||||||||||||||||||||
Commercial real estate loans | 839,459 | 23,002 | 5.53 | 731,413 | 16,545 | 4.56 | ||||||||||||||||||||||||||||||||
SBA loans | 268,823 | 14,156 | 10.62 | 355,916 | 11,542 | 6.54 | ||||||||||||||||||||||||||||||||
Commercial and industrial loans | 117,988 | 4,432 | 7.58 | 158,334 | 3,348 | 4.26 | ||||||||||||||||||||||||||||||||
Home mortgage loans | 497,949 | 11,676 | 4.69 | 255,936 | 4,911 | 3.84 | ||||||||||||||||||||||||||||||||
Consumer & other loans | 1,360 | 33 | 4.92 | 780 | 19 | 5.15 | ||||||||||||||||||||||||||||||||
Loans(2) | 1,725,579 | 53,299 | 6.22 | 1,502,379 | 36,365 | 4.88 | ||||||||||||||||||||||||||||||||
Total interest-earning assets | 2,026,165 | 58,696 | 5.83 | 1,758,305 | 38,092 | 4.36 | ||||||||||||||||||||||||||||||||
Noninterest-earning assets | 83,771 | 68,334 | ||||||||||||||||||||||||||||||||||||
Total assets | $ | 2,109,936 | $ | 1,826,639 | ||||||||||||||||||||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Money market deposits and others | $ | 383,521 | $ | 6,351 | 3.34 | % | $ | 441,314 | $ | 754 | 0.34 | % | ||||||||||||||||||||||||||
Time deposits | 815,267 | 15,952 | 3.95 | 381,879 | 969 | 0.51 | ||||||||||||||||||||||||||||||||
Total interest-bearing deposits | 1,198,788 | 22,303 | 3.75 | 823,193 | 1,723 | 0.42 | ||||||||||||||||||||||||||||||||
Borrowings | 54,533 | 1,249 | 4.62 | — | — | — | ||||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 1,253,321 | 23,552 | 3.79 | 823,193 | 1,723 | 0.42 | ||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities: | ||||||||||||||||||||||||||||||||||||||
Noninterest-bearing deposits | 643,465 | 813,791 | ||||||||||||||||||||||||||||||||||||
Other noninterest-bearing liabilities | 31,729 | 22,649 | ||||||||||||||||||||||||||||||||||||
Total noninterest-bearing liabilities | 675,194 | 836,440 | ||||||||||||||||||||||||||||||||||||
Shareholders’ equity | 181,421 | 167,006 | ||||||||||||||||||||||||||||||||||||
Total liabilities and shareholders’ equity | $ | 2,109,936 | $ | 1,826,639 | ||||||||||||||||||||||||||||||||||
Net interest income / interest rate spreads | $ | 35,144 | 2.04 | % | $ | 36,369 | 3.94 | % | ||||||||||||||||||||||||||||||
Net interest margin | 3.48 | % | 4.16 | % | ||||||||||||||||||||||||||||||||||
Cost of deposits | 2.44 | % | 0.21 | % | ||||||||||||||||||||||||||||||||||
Cost of funds | 2.50 | % | 0.21 | % | ||||||||||||||||||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||
2023 vs 2022 | ||||||||||||||||||||
Increases (Decreases) Due to Change in | ||||||||||||||||||||
($ in thousands) | Volume | Rate | Total | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Interest-bearing deposits in other banks | $ | (3) | $ | 809 | $ | 806 | ||||||||||||||
Federal funds sold and other investments | 59 | 50 | 109 | |||||||||||||||||
Available-for-sale debt securities | 262 | 597 | 859 | |||||||||||||||||
Total investments | 318 | 1,456 | 1,774 | |||||||||||||||||
Commercial real estate loans | 1,118 | 1,962 | 3,080 | |||||||||||||||||
SBA loans | (1,838) | 3,305 | 1,467 | |||||||||||||||||
Commercial and industrial loans | (774) | 1,195 | 421 | |||||||||||||||||
Home mortgage loans | 2,364 | 842 | 3,206 | |||||||||||||||||
Consumer & other loans | 8 | (2) | 6 | |||||||||||||||||
Total loans | 878 | 7,302 | 8,180 | |||||||||||||||||
Total interest-earning assets | 1,196 | 8,758 | 9,954 | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Money market deposits and others | (194) | 2,892 | 2,698 | |||||||||||||||||
Time deposits | 2,759 | 5,394 | 8,153 | |||||||||||||||||
Total interest-bearing deposits | 2,565 | 8,286 | 10,851 | |||||||||||||||||
Borrowings | 465 | 465 | 930 | |||||||||||||||||
Total interest-bearing liabilities | 3,030 | 8,751 | 11,781 | |||||||||||||||||
Net interest income | $ | (1,834) | $ | 7 | $ | (1,827) | ||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||
2023 vs 2022 | ||||||||||||||||||||
Increases (Decreases) Due to Change in | ||||||||||||||||||||
($ in thousands) | Volume | Rate | Total | |||||||||||||||||
Interest-earning assets: | ||||||||||||||||||||
Interest-bearing deposits in other banks | $ | (87) | $ | 1,698 | $ | 1,611 | ||||||||||||||
Federal funds sold and other investments | 80 | 84 | 164 | |||||||||||||||||
Available-for-sale debt securities | 556 | 1,339 | 1,895 | |||||||||||||||||
Total investments | 549 | 3,121 | 3,670 | |||||||||||||||||
Commercial real estate loans | 2,702 | 3,755 | 6,457 | |||||||||||||||||
SBA loans | (3,479) | 6,093 | 2,614 | |||||||||||||||||
Commercial and industrial loans | (1,321) | 2,405 | 1,084 | |||||||||||||||||
Home mortgage loans | 5,167 | 1,598 | 6,765 | |||||||||||||||||
Consumer & other loans | 15 | (1) | 14 | |||||||||||||||||
Total loans | 3,084 | 13,850 | 16,934 | |||||||||||||||||
Total interest-earning assets | 3,633 | 16,971 | 20,604 | |||||||||||||||||
Interest-bearing liabilities: | ||||||||||||||||||||
Money market deposits and others | 227 | 5,370 | 5,597 | |||||||||||||||||
Time deposits | 4,917 | 10,066 | 14,983 | |||||||||||||||||
Total interest-bearing deposits | 5,144 | 15,436 | 20,580 | |||||||||||||||||
Borrowings | 625 | 624 | 1,249 | |||||||||||||||||
Total interest-bearing liabilities | 5,769 | 16,060 | 21,829 | |||||||||||||||||
Net interest income | $ | (2,136) | $ | 911 | $ | (1,225) | ||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Service charges on deposits | $ | 573 | $ | 427 | $ | 146 | 34.2 | % | ||||||||||||||||||
Loan servicing fees, net of amortization | 595 | 654 | (59) | (9.0) | ||||||||||||||||||||||
Gain on sale of loans | 2,098 | 3,873 | (1,775) | (45.8) | ||||||||||||||||||||||
Other income | 339 | 405 | (66) | (16.3) | ||||||||||||||||||||||
Total noninterest income | $ | 3,605 | $ | 5,359 | $ | (1,754) | (32.7) | % | ||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||
Noninterest income: | ||||||||||||||||||||||||||
Service charges on deposit | $ | 991 | $ | 815 | $ | 176 | 21.6 | % | ||||||||||||||||||
Loan servicing fees, net of amortization | 1,441 | 1,101 | 340 | 30.9 | ||||||||||||||||||||||
Gain on sale of loans | 4,668 | 7,111 | (2,443) | (34.4) | ||||||||||||||||||||||
Other income | 800 | 548 | 252 | 46.0 | ||||||||||||||||||||||
Total noninterest income | $ | 7,900 | $ | 9,575 | $ | (1,675) | (17.5) | % | ||||||||||||||||||
Three Months Ended June 30, | ||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||
Salaries and employee benefits | $ | 7,681 | $ | 7,109 | $ | 572 | 8.0 | % | ||||||||||||||||||
Occupancy and equipment | 1,598 | 1,489 | 109 | 7.3 | ||||||||||||||||||||||
Data processing and communication | 546 | 492 | 54 | 11.0 | ||||||||||||||||||||||
Professional fees | 381 | 364 | 17 | 4.7 | ||||||||||||||||||||||
FDIC insurance and regulatory assessments | 420 | 192 | 228 | 118.8 | ||||||||||||||||||||||
Promotion and advertising | 159 | 165 | (6) | (3.6) | ||||||||||||||||||||||
Directors' fees | 210 | 190 | 20 | 10.5 | ||||||||||||||||||||||
Foundation donation and other contributions | 594 | 852 | (258) | (30.3) | ||||||||||||||||||||||
Other expenses | 711 | 650 | 61 | 9.4 | ||||||||||||||||||||||
Total noninterest expense | $ | 12,300 | $ | 11,503 | $ | 797 | 6.9 | % | ||||||||||||||||||
Six Months Ended June 30, | ||||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | $ Change | % Change | ||||||||||||||||||||||
Noninterest expense: | ||||||||||||||||||||||||||
Salaries and employee benefits | $ | 14,933 | $ | 12,766 | $ | 2,167 | 17.0 | % | ||||||||||||||||||
Occupancy and equipment | 3,168 | 2,867 | 301 | 10.5 | ||||||||||||||||||||||
Data processing and communication | 1,096 | 985 | 111 | 11.3 | ||||||||||||||||||||||
Professional fees | 740 | 688 | 52 | 7.6 | ||||||||||||||||||||||
FDIC insurance and regulatory assessments | 887 | 399 | 488 | 122.3 | ||||||||||||||||||||||
Promotion and advertising | 321 | 354 | (33) | (9.3) | ||||||||||||||||||||||
Directors' fees | 371 | 367 | 4 | 1.1 | ||||||||||||||||||||||
Foundation donation and other contributions | 1,347 | 1,667 | (320) | (19.2) | ||||||||||||||||||||||
Other expenses | 1,345 | 1,072 | 273 | 25.5 | ||||||||||||||||||||||
Total noninterest expense | $ | 24,208 | $ | 21,165 | $ | 3,043 | 14.4 | % | ||||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Fair Value | Unrealized (Loss) Gain | Amortized Cost | Fair Value | Unrealized Loss | ||||||||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | 51,660 | $ | 46,332 | $ | (5,328) | $ | 55,189 | $ | 49,764 | $ | (5,425) | ||||||||||||||||||||||||||
Residential collateralized mortgage obligations | 170,707 | 150,131 | (20,576) | 179,953 | 160,045 | (19,908) | ||||||||||||||||||||||||||||||||
Municipal securities-tax exempt | 5,677 | 5,787 | 110 | — | — | — | ||||||||||||||||||||||||||||||||
Total available-for-sale debt securities | $ | 228,044 | $ | 202,250 | $ | (25,794) | $ | 235,142 | $ | 209,809 | $ | (25,333) | ||||||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Due in One Year or Less | Due after One Year Through Five Years | Due after Five Years Through Ten Years | Due after Ten Years | |||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | Amortized Cost | Weighted Average Yield | ||||||||||||||||||||||||||||||||||||||||||
U.S. Government agencies or sponsored agency securities: | ||||||||||||||||||||||||||||||||||||||||||||||||||
Residential mortgage-backed securities | $ | — | — | % | $ | 1,373 | 2.12 | % | $ | 732 | 2.28 | % | $ | 49,555 | 2.25 | % | ||||||||||||||||||||||||||||||||||
Residential collateralized mortgage obligations | — | — | 311 | 1.81 | 3,037 | 1.25 | 167,359 | 2.81 | ||||||||||||||||||||||||||||||||||||||||||
Municipal securities-tax exempt | — | — | — | — | — | — | 5,677 | 5.11 | ||||||||||||||||||||||||||||||||||||||||||
Total available-for-sale debt securities | $ | — | — | % | $ | 1,684 | 2.07 | % | $ | 3,769 | 1.45 | % | $ | 222,591 | 2.74 | % | ||||||||||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Amount | % of Total | Amount | % of Total | ||||||||||||||||||||||
Commercial real estate | $ | 847,863 | 49.4 | % | $ | 842,208 | 50.1 | % | ||||||||||||||||||
SBA—real estate | 224,476 | 13.1 | 221,340 | 13.2 | ||||||||||||||||||||||
SBA—non-real estate | 14,309 | 0.8 | 13,377 | 0.8 | ||||||||||||||||||||||
Commercial and industrial | 112,160 | 6.5 | 116,951 | 7.0 | ||||||||||||||||||||||
Home mortgage | 516,226 | 30.1 | 482,949 | 28.8 | ||||||||||||||||||||||
Consumer | 1,163 | 0.1 | 1,467 | 0.1 | ||||||||||||||||||||||
Gross loans receivable | 1,716,197 | 100.0 | % | 1,678,292 | 100.0 | % | ||||||||||||||||||||
Allowance for credit losses | (20,802) | (19,241) | ||||||||||||||||||||||||
Loans receivable, net(1) | $ | 1,695,395 | $ | 1,659,051 | ||||||||||||||||||||||
June 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||
Due in One Year or Less | Due after One Year Through Five Years | Due after Five Years | ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Fixed Rate | Adjustable Rate | Fixed Rate | Adjustable Rate | Fixed Rate | Adjustable Rate | Total | |||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 38,093 | $ | 59,791 | $ | 407,579 | $ | 88,490 | $ | 228,868 | $ | 25,042 | $ | 847,863 | ||||||||||||||||||||||||||||||
SBA—real estate | — | — | — | 29 | — | 224,447 | 224,476 | |||||||||||||||||||||||||||||||||||||
SBA—non- real estate | — | 123 | 247 | 3,843 | — | 10,096 | 14,309 | |||||||||||||||||||||||||||||||||||||
Commercial and industrial | 12,498 | 21,302 | 7,787 | 24,133 | 25,639 | 20,801 | 112,160 | |||||||||||||||||||||||||||||||||||||
Home mortgage | — | — | — | — | 495,756 | 20,470 | 516,226 | |||||||||||||||||||||||||||||||||||||
Consumer | — | 1,038 | — | 125 | — | — | 1,163 | |||||||||||||||||||||||||||||||||||||
Gross loans | $ | 50,591 | $ | 82,254 | $ | 415,613 | $ | 116,620 | $ | 750,263 | $ | 300,856 | $ | 1,716,197 | ||||||||||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||
Due in One Year or Less | Due after One Year Through Five Years | Due after Five Years | ||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Fixed Rate | Adjustable Rate | Fixed Rate | Adjustable Rate | Fixed Rate | Adjustable Rate | Total | |||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 27,735 | $ | 33,894 | $ | 387,902 | $ | 116,088 | $ | 248,812 | $ | 27,777 | $ | 842,208 | ||||||||||||||||||||||||||||||
SBA—real estate | — | — | — | 34 | — | 221,306 | 221,340 | |||||||||||||||||||||||||||||||||||||
SBA—non- real estate | — | 75 | 442 | 3,964 | — | 8,896 | 13,377 | |||||||||||||||||||||||||||||||||||||
Commercial and industrial | 8,905 | 27,917 | 1,611 | 28,082 | 31,185 | 19,251 | 116,951 | |||||||||||||||||||||||||||||||||||||
Home mortgage | — | — | — | — | 465,749 | 17,200 | 482,949 | |||||||||||||||||||||||||||||||||||||
Consumer | — | 1,136 | — | 331 | — | — | 1,467 | |||||||||||||||||||||||||||||||||||||
Gross loans | $ | 36,640 | $ | 63,022 | $ | 389,955 | $ | 148,499 | $ | 745,746 | $ | 294,430 | $ | 1,678,292 | ||||||||||||||||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
($ in thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Beginning balance | $ | 12,898 | $ | 12,341 | $ | 12,759 | $ | 12,720 | ||||||||||||||||||
Additions from loans sold with servicing retained | 869 | 1,357 | 1,969 | 2,149 | ||||||||||||||||||||||
Amortized to expense | (1,113) | (990) | (2,074) | (2,161) | ||||||||||||||||||||||
Ending balance | $ | 12,654 | $ | 12,708 | $ | 12,654 | $ | 12,708 | ||||||||||||||||||
As of and for the Three Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Beginning | Provision (Reversal) | Net (Charge-offs) Recoveries | Ending | Beginning | Provision (Reversal) | Net (Charge-offs) Recoveries | Ending | ||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 6,784 | $ | — | $ | — | $ | 6,784 | $ | 6,480 | $ | 1,263 | $ | — | $ | 7,743 | ||||||||||||||||||||||||||||||||||
SBA—real estate | 1,218 | — | — | 1,218 | 1,750 | 43 | 7 | 1,800 | ||||||||||||||||||||||||||||||||||||||||||
SBA—non- real estate | 67 | — | (12) | 55 | 169 | (61) | 27 | 135 | ||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | 1,270 | — | — | 1,270 | 3,492 | (1,390) | — | 2,102 | ||||||||||||||||||||||||||||||||||||||||||
Home mortgage | 11,472 | — | — | 11,472 | 4,768 | 1,145 | — | 5,913 | ||||||||||||||||||||||||||||||||||||||||||
Consumer | 3 | — | $ | — | 3 | 13 | (4) | — | 9 | |||||||||||||||||||||||||||||||||||||||||
Total | $ | 20,814 | $ | — | $ | (12) | $ | 20,802 | $ | 16,672 | $ | 996 | $ | 34 | $ | 17,702 | ||||||||||||||||||||||||||||||||||
Gross loans(1) | $ | 1,716,197 | $ | 1,484,718 | ||||||||||||||||||||||||||||||||||||||||||||||
Average loans(1) | $ | 1,725,764 | $ | 1,461,081 | ||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries to average gross loans | (0.00) | % | (0.01) | % | ||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses to gross loans | 1.21 | % | 1.19 | % | ||||||||||||||||||||||||||||||||||||||||||||||
As of and for the Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2023 | 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Beginning | Impact of CECL Adoption | (Reversal) Provision | Net (Charge-offs) Recoveries | Ending | Beginning | (Reversal) Provision | Net (Charge-offs) Recoveries | Ending | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial real estate | $ | 6,951 | $ | 875 | $ | (951) | $ | (91) | $ | 6,784 | $ | 8,150 | $ | (407) | $ | — | $ | 7,743 | ||||||||||||||||||||||||||||||||||||||
SBA—real estate | 1,607 | (238) | (140) | (11) | 1,218 | 2,022 | (215) | (7) | 1,800 | |||||||||||||||||||||||||||||||||||||||||||||||
SBA—non- real estate | 207 | (142) | (7) | (3) | 55 | 199 | (108) | 44 | 135 | |||||||||||||||||||||||||||||||||||||||||||||||
Commercial and industrial | 1,643 | (320) | (53) | — | 1,270 | 2,848 | (746) | — | 2,102 | |||||||||||||||||||||||||||||||||||||||||||||||
Home mortgage | 8,826 | 1,753 | 893 | — | 11,472 | 2,891 | 3,022 | — | 5,913 | |||||||||||||||||||||||||||||||||||||||||||||||
Consumer | 7 | (4) | — | $ | — | 3 | 13 | (5) | 1 | 9 | ||||||||||||||||||||||||||||||||||||||||||||||
Total | $ | 19,241 | $ | 1,924 | $ | (258) | $ | (105) | $ | 20,802 | $ | 16,123 | $ | 1,541 | $ | 38 | $ | 17,702 | ||||||||||||||||||||||||||||||||||||||
Gross loans(1) | $ | 1,716,197 | $ | 1,484,718 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Average loans(1) | $ | 1,725,764 | $ | 1,406,075 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Net (charge-offs) recoveries to average gross loans | (0.02) | % | (0.01) | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for credit losses to gross loans | 1.21 | % | 1.19 | % | ||||||||||||||||||||||||||||||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Amount | % to Total | Amount | % to Total | ||||||||||||||||||||||
Commercial real estate | $ | 6,784 | 32.6 | % | $ | 6,951 | 36.1 | % | ||||||||||||||||||
SBA—real estate | 1,218 | 5.9 | 1,607 | 8.4 | ||||||||||||||||||||||
SBA—non- real estate | 55 | 0.3 | 207 | 1.1 | ||||||||||||||||||||||
Commercial and industrial | 1,270 | 6.1 | 1,643 | 8.5 | ||||||||||||||||||||||
Home mortgage | 11,472 | 55.1 | 8,826 | 45.9 | ||||||||||||||||||||||
Consumer | 3 | — | 7 | — | ||||||||||||||||||||||
Total | $ | 20,802 | 100.0 | % | $ | 19,241 | 100.0 | % | ||||||||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Nonaccrual loans | $ | 8,566 | $ | 2,639 | ||||||||||
Past due loans 90 days or more and still accruing | 246 | 442 | ||||||||||||
Total nonperforming loans(1) | 8,812 | 3,081 | ||||||||||||
OREO | — | — | ||||||||||||
Total nonperforming assets | $ | 8,812 | $ | 3,081 | ||||||||||
Nonperforming loans to gross loans | 0.51 | % | 0.18 | % | ||||||||||
Nonperforming assets to total assets | 0.41 | % | 0.15 | % | ||||||||||
Allowance for credit losses to nonperforming loans | 236 | % | 625 | % | ||||||||||
June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||||
($ in thousands) | Amount | Percent | Amount | Percent | ||||||||||||||||||||||
Noninterest-bearing demand | $ | 634,745 | 34.1 | % | $ | 701,584 | 37.2 | % | ||||||||||||||||||
Interest-bearing: | ||||||||||||||||||||||||||
Money market and others | 344,162 | 18.5 | 526,321 | 27.9 | ||||||||||||||||||||||
Time deposits (more than $250) | 416,208 | 22.4 | 356,197 | 18.9 | ||||||||||||||||||||||
Time deposits ($250 or less) | 464,524 | 25.0 | 301,669 | 16.0 | ||||||||||||||||||||||
Total interest-bearing | 1,224,894 | 65.9 | 1,184,187 | 62.8 | ||||||||||||||||||||||
Total deposits | $ | 1,859,639 | 100.0 | % | $ | 1,885,771 | 100.0 | % | ||||||||||||||||||
Maturity Within: | ||||||||||||||||||||||||||||||||
($ in thousands) | Three Months | Three to Six Months | Six to 12 Months | After 12 Months | Total | |||||||||||||||||||||||||||
Time deposits (more than $250) | $ | 30,086 | $ | 188,654 | $ | 195,818 | $ | 1,650 | $ | 416,208 | ||||||||||||||||||||||
Time deposits ($250 or less) | 67,165 | 174,086 | 180,766 | 42,507 | 464,524 | |||||||||||||||||||||||||||
Total time deposits | $ | 97,251 | $ | 362,740 | $ | 376,584 | $ | 44,157 | $ | 880,732 | ||||||||||||||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | ||||||||||||
Deposits | $ | 1,859,639 | $ | 1,885,771 | ||||||||||
Deposits as a % of total liabilities | 94.5 | % | 98.3 | % | ||||||||||
Loans, net | $ | 1,695,395 | $ | 1,659,051 | ||||||||||
Loans-to-deposits ratio | 91.2 | % | 88.0 | % | ||||||||||
($ in thousands) | June 30, 2023 | December 31, 2022 | % Change | |||||||||||||||||
Liquid assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 143,761 | $ | 82,972 | 73.3 | % | ||||||||||||||
AFS debt securities | 202,250 | 209,809 | (3.6) | |||||||||||||||||
Liquid assets | $ | 346,011 | $ | 292,781 | 18.2 | % | ||||||||||||||
Liquid assets to total assets | 16.1 | % | 14.0 | % | ||||||||||||||||
Available borrowings: | ||||||||||||||||||||
FHLB | $ | 400,543 | $ | 440,358 | (9.0) | % | ||||||||||||||
Federal Reserve Bank | 172,316 | 175,605 | (1.9) | |||||||||||||||||
Pacific Coast Bankers Bank | 50,000 | 50,000 | — | |||||||||||||||||
Zions Bank | 25,000 | 25,000 | — | |||||||||||||||||
First Horizon Bank | 25,000 | 24,950 | 0.2 | |||||||||||||||||
Total available borrowings | $ | 672,859 | $ | 715,913 | (6.0) | % | ||||||||||||||
Total available borrowings to total assets | 31.3 | % | 34.2 | % | ||||||||||||||||
Liquid assets and available borrowings to total assets | 47.4 | % | 48.2 | % | ||||||||||||||||
Material Cash Requirements | ||||||||||||||||||||||||||||||||||||||
($ in thousands) | Within One Year | One to Three Years | Three to Five Years | After Five Years | Indeterminable maturity(1) | Total | ||||||||||||||||||||||||||||||||
Deposits(2) | $ | 459,991 | $ | 403,084 | $ | 17,657 | $ | — | $ | 978,907 | $ | 1,859,639 | ||||||||||||||||||||||||||
Operating lease commitments | 2,601 | 4,040 | 3,899 | 2,680 | — | 13,220 | ||||||||||||||||||||||||||||||||
Advances from FHLB(2) | — | 75,000 | — | — | — | 75,000 | ||||||||||||||||||||||||||||||||
Commitments to fund investment for Low Income Housing Tax Credit | 3,828 | 2,984 | 122 | 251 | — | 7,185 | ||||||||||||||||||||||||||||||||
Total contractual obligations | $ | 466,420 | $ | 485,108 | $ | 21,678 | $ | 2,931 | $ | 978,907 | $ | 1,955,044 | ||||||||||||||||||||||||||
As of June 30, 2023 | Actual(1) | Regulatory Capital Ratio Requirements | Minimum to be Considered "Well Capitalized" | Regulatory Capital Ratio Requirements, including fully phased in Capital Conservation Buffer | ||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 222,643 | 13.10 | % | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||
Bank | 220,584 | 12.98 | $ | 136,000 | 8.00 | % | $ | 170,000 | 10.00 | % | $ | 178,500 | 10.50 | % | ||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 202,589 | 11.92 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 200,530 | 11.80 | 102,000 | 6.00 | 136,000 | 8.00 | 144,500 | 8.50 | ||||||||||||||||||||||||||||||||||||||||||
CET1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 202,589 | 11.92 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 200,530 | 11.80 | 76,500 | 4.50 | 110,500 | 6.50 | 119,000 | 7.00 | ||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage (to average assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 202,589 | 9.50 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 200,530 | 9.41 | 85,257 | 4.00 | 106,571 | 5.00 | 85,257 | 4.00 | ||||||||||||||||||||||||||||||||||||||||||
As of December 31, 2022 | Actual(1) | Regulatory Capital Ratio Requirements | Minimum to be Considered "Well Capitalized" | Regulatory Capital Ratio Requirements, including fully phased in Capital Conservation Buffer | ||||||||||||||||||||||||||||||||||||||||||||||
($ in thousands) | Amount | Ratio | Amount | Ratio | Amount | Ratio | Amount | Ratio | ||||||||||||||||||||||||||||||||||||||||||
Total capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | $ | 213,862 | 13.06 | % | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||
Bank | 211,981 | 12.94 | $ | 131,020 | 8.00 | % | $ | 163,775 | 10.00 | % | $ | 171,964 | 10.50 | % | ||||||||||||||||||||||||||||||||||||
Tier 1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 194,358 | 11.87 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 192,477 | 11.75 | 98,265 | 6.00 | 131,020 | 8.00 | 139,209 | 8.50 | ||||||||||||||||||||||||||||||||||||||||||
CET1 capital (to risk-weighted assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 194,358 | 11.87 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 192,477 | 11.75 | 73,699 | 4.50 | 106,454 | 6.50 | 114,642 | 7.00 | ||||||||||||||||||||||||||||||||||||||||||
Tier 1 leverage (to average assets) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated | 194,358 | 9.38 | N/A | N/A | N/A | N/A | N/A | N/A | ||||||||||||||||||||||||||||||||||||||||||
Bank | 192,477 | 9.29 | 82,836 | 4.00 | 103,545 | 5.00 | 82,836 | 4.00 | ||||||||||||||||||||||||||||||||||||||||||
Net Interest Sensitivity | Economic Value of Equity Sensitivity | |||||||||||||||||||||||||
June 30, 2023 | December 31, 2022 | June 30, 2023 | December 31, 2022 | |||||||||||||||||||||||
+300 basis points | (0.65) | % | 0.12 | % | (39.84) | % | (42.72) | % | ||||||||||||||||||
+200 basis points | 0.53 | 1.13 | (19.06) | (23.29) | ||||||||||||||||||||||
+100 basis points | 0.58 | 0.97 | (7.37) | (9.11) | ||||||||||||||||||||||
-100 basis points | (0.37) | (0.94) | 1.96 | (1.78) | ||||||||||||||||||||||
-200 basis points | 0.67 | (0.70) | (1.47) | (7.31) | ||||||||||||||||||||||
-300 basis points | 1.19 | (3.24) | (11.28) | (18.42) | ||||||||||||||||||||||
Exhibit Number | Description | |||||||
3.1 | ||||||||
3.2 | ||||||||
3.3 | ||||||||
31.1 | ||||||||
31.2 | ||||||||
32.1 | ||||||||
32.2 | ||||||||
101.INS | XBRL Instance Document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
OP Bancorp | ||||||||
Date: August 9, 2023 | By: | /s/ MIN J. KIM | ||||||
Min J. Kim President and Chief Executive Officer | ||||||||
Date: August 9, 2023 | By: | /s/ CHRISTINE Y. OH | ||||||
Christine Y. Oh Chief Financial Officer |
Date: August 9, 2023 | By: | /s/ MIN J. KIM | ||||||
Min J. Kim | ||||||||
President and Chief Executive Officer |
Date: August 9, 2023 | By: | /s/ CHRISTINE Y. OH | ||||||
Christine Y. Oh | ||||||||
Executive Vice President and Chief Financial Officer |
Date: August 9, 2023 | By: | /s/ MIN J. KIM | ||||||
Min J. Kim | ||||||||
President and Chief Executive Officer |
Date: August 9, 2023 | By: | /s/ CHRISTINE Y. OH | ||||||
Christine Y. Oh | ||||||||
Executive Vice President and Chief Financial Officer |
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Loans receivable, net of allowance | $ 20,802 | $ 19,241 |
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares, issued (in shares) | 15,270,344 | 15,118,268 |
Common stock, shares, outstanding (in shares) | 15,270,344 | 15,118,268 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 6,091 | $ 8,480 | $ 13,625 | $ 16,632 |
Other comprehensive loss | ||||
Change in unrealized loss on available-for-sale debt securities | (3,565) | (5,243) | (461) | (13,881) |
Tax effect | 1,055 | 1,550 | 136 | 4,104 |
Total other comprehensive loss | (2,510) | (3,693) | (325) | (9,777) |
Comprehensive income | $ 3,581 | $ 4,787 | $ 13,300 | $ 6,855 |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (unaudited) - $ / shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.12 | $ 0.12 | $ 0.24 | $ 0.22 |
Business and Basis of Presentation |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business and Basis of Presentation | Business and Basis of Presentation OP Bancorp is a California corporation that was formed to acquire 100% of the voting equity of Open Bank (the “Bank”) and commenced operation as a bank holding company on June 1, 2016. This transaction was treated as an internal reorganization as all shareholders of the Bank became shareholders of OP Bancorp. OP Bancorp has no operations other than ownership of the Bank. The Bank is a California state-chartered and FDIC-insured financial institution, which began its operations on June 10, 2005. Headquartered in downtown Los Angeles, California, OP Bancorp operates primarily in the traditional banking business arena that includes accepting deposits and making loans and investments. OP Bancorp’s primary deposit products are demand and time deposits, and the primary lending products are commercial business loans to small to medium sized businesses. OP Bancorp is operating with ten full-service branches. The accompanying unaudited Consolidated Financial Statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of the financial results for the interim periods presented, including eliminating intercompany transactions and balances. Certain items on the Consolidated Financial Statements and notes for prior years have been reclassified to conform to the 2023 presentation. The results of operations for the interim periods are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Annual Report on Form 10-K”). Descriptions of our significant accounting policies are included in Note 1. Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in the 2022 Annual Report on Form 10-K. New Accounting Pronouncements Adopted Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The Company adopted ASU 2016-13 using a modified retrospective approach on January 1, 2023 without electing the fair value option on eligible financial instruments under ASU 2019-05. The Company replaced the current incurred loss accounting model with the Current Expected Credit Losses ("CECL") approach for financial instruments measured at amortized cost and other commitments to extend credit. CECL requires the immediate recognition of estimated credit losses expected to occur over the estimated remaining life of the asset. The forward-looking concept of CECL requires loss estimates to consider historical experience, current conditions and reasonable and supportable forecasts. The adoption of this ASU increased the allowance for credit losses by $1.9 million and allowance for off-balance sheet commitments by $184 thousand. The Company also recorded a deferred tax assets of $624 thousand and a decrease to opening retained earnings of $1.5 million on January 1, 2023. The increase to allowance for credit losses was primarily longer duration of home mortgage loans, offset primarily by shorter duration of commercial and industrial ("C&I") loans. The Company did not record an allowance for credit losses on the Company’s available-for-sale debt securities as a result of this adoption. Disclosures for periods after January 1, 2023 are presented in accordance with ASC 326 while prior period amounts continue to be reported in accordance with previously applicable standards and the accounting policies. The following table illustrates the impact of ASU 2016-13:
FASB issued ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. ("ASU 2022-02"). ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings in Accounting Standards Codification (“ASC”) Subtopic 310-40, Receivables - Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. Additionally, ASU 2022-02 requires entities to disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases within the scope of ASC Subtopic 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost. The Company adopted ASU 2022-02 on January 1, 2023, and the adoption of ASU 2022-02 did not have a significant impact on its consolidated financial statements. Recently Issued Accounting Pronouncements under Evaluation In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. This ASU permits reporting entities to elect to account for tax equity investments, regardless of the tax credit program for which the income tax credits are received, using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense. A reporting entity makes an accounting policy election to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to apply the proportional amortization method at the reporting entity level or to individual investments. This ASU also requires specific disclosures of investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method. The updated guidance is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and the adoption is not expected to have a significant impact on the consolidated financial statements.
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Securities |
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Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Securities | Securities The following table summarizes the amortized cost, the corresponding amounts of gross unrealized gains and losses, and estimated fair value of available-for-sale ("AFS") debt securities as of June 30, 2023 and December 31, 2022:
There were no sales of AFS debt securities during the three and six months ended June 30, 2023 and 2022. The amortized cost and estimated fair value of AFS debt securities as of June 30, 2023, by contractual maturity, are shown below:
Expected maturities may differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. As of June 30, 2023 and December 31, 2022, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of shareholders’ equity. The following table presents the fair value and the associated gross unrealized losses on AFS debt securities by length of time those individual securities in each category have been in a continuous loss as of June 30, 2023 and December 31, 2022:
As a result of the Company's adoption of ASU 2016-03 on January 1, 2023, available-for-sale debt securities are measured at fair value and are subject to impairment testing. A security is impaired if the fair value of the security is less than its amortized cost basis. When an available-for-sale debt security is considered impaired, the Company must determine if the decline in fair value has resulted from a credit-related loss or other factors and then, (1) recognize an allowance for credit losses by a charge to earnings for the credit-related component of the decline in fair value, and (2) recognize in other comprehensive income (loss) any non-credit related components of the fair value decline. If the amount of the amortized cost basis expected to be recovered increases in a future period, the valuation reserve would be reduced, but not more than the amount of the current existing reserve for that security. The unrealized losses were primarily attributable to interest rate movement, not credit quality. The Company believes that the gross unrealized losses presented in the previous tables are temporary and no credit losses are expected. As a result, the Company expects full collection of the carrying amount of these securities, does not intend to sell the securities in an unrealized loss position, and it was more-likely-than-not the Company will not have to sell these securities prior to recovery of amortized cost. Accordingly, for available-for-sale debt securities, the Company did not record allowance for credit losses on January 1, 2013 and did not have allowance for credit losses as of June 30, 2023. As of June 30, 2023 or December 31, 2022, there were no pledged securities to secure public deposits, borrowing and letters of credit from Federal Home Loan Bank ("FHLB") and the Board of Governors of the Federal Reserve System, and for other purposes required or permitted by law. The following table presents the other investment securities, which are included in Other investments on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
The Company has equity investment in a mutual fund with readily determinable fair value of $3.4 million and $3.3 million, as of June 30, 2023 and December 31, 2022, respectively, which is measured at fair value with changes in fair value recorded in net income. The Company invested in the mutual fund for CRA purposes. For the mutual fund, the Company recorded a $53 thousand loss and a $120 thousand loss for the three months ended June 30, 2023 and 2022, respectively, and a $1 thousand gain and a $293 thousand loss for the six months ended June 30, 2023 and 2022, respectively. The gains (losses) of the mutual fund are included in Other income in the Consolidated Statements of Income.
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Loans and Allowance for Credit Losses on Loans |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans and Allowance for Credit Losses on Loans | Loans and Allowance for Credit Losses on Loans Loans Receivable The following table presents the composition of the loan portfolio as of June 30, 2023 and December 31, 2022:
(1)Includes net deferred loan costs/(fees) and unamortized premiums/(unaccreted discounts) of $(381) thousand and $160 thousand as of June 30, 2023 and December 31, 2022, respectively. No loans were outstanding to related parties as of June 30, 2023 and December 31, 2022. Allowance for Credit Losses on Loans The Company employs a modeled approach that takes into account current and future economic conditions to estimate lifetime expected losses on a collective basis. With the adoption of CECL, the Company elected not to consider accrued interest receivable in its estimated credit losses because the Company writes off uncollectible accrued interest receivable in a timely manner. The Company considers writing off accrued interest amounts once the amounts become 90 days past due to be considered within a timely manner. The Company has elected to write off accrued interest receivable by reversing interest income. The Company uses transition matrices to develop the Probability of Default ("PD") and Loss Given Default ("LGD") approach, incorporating quantitative factors and qualitative considerations in the calculation of the allowance for credit losses for collectively assessed loans. The model provides forecasts of PD and LGD based on national unemployment rates using regression analysis. The Company incorporates future economic conditions using a weighted multiple scenario approach: baseline and adverse. The Company applies a reasonable and supportable period of one year for the baseline scenario and two years for the adverse scenario, after which loss assumptions revert to historical loss information through a one-year reversion period for the baseline scenario and a two-year reversion period for the adverse scenario. In order to quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors listed below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the loss rates. This matrix considers the following nine factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council Interagency Policy Statement on the Allowance for Credit Losses, updated to reflect the adoption of CECL: • Changes in lending policies and procedures, including changes in underwriting standards and practices for collection, charge-offs, and recoveries; • Actual and expected changes in national and local economic and business conditions and developments in which the institution operates that affect the collectivity of loans; • Changes in the nature and volume of the loan portfolio; • Changes in the experience, ability, and depth of lending management and staff; • Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans; • Changes in the quality of the credit review function; • Changes in the value of the underlying collateral for loans that are not collateral-dependent; • The existence, growth, and effect of any concentrations of credit, and • The effect of other external factors, such as the regulatory, legal and technological environments; competition; and events such as natural disasters. For loans that do not share similar risk characteristics such as nonaccrual loans above $250 thousand, the Company evaluates these loans on an individual basis in accordance with ASC 326. Such nonaccrual loans are considered to have different risk profiles than performing loans and are therefore evaluated individually. The Company elected to collectively assess nonaccrual loans with balances below $250 thousand along with the performing and accrual loans, in order to reduce the operational burden of individually assessing small nonaccrual loans with immaterial balances. For individually assessed loans, the allowance for credit losses is measured using either 1) the present value of future cash flows discounted at the loan’s effective interest rate; or 2) the fair value of the collateral, if the loan is collateral-dependent. For the collateral-dependent loans, the Company obtains a new appraisal to determine the fair value of collateral. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, the Company obtains updated appraisals every twelve months from a qualified independent appraiser. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an allowance for credit losses with a corresponding charge to the provision for credit losses. The Company maintains a separate allowance for credit losses for its off-balance sheet commitments. The Company uses an estimated funding rate to allocate an allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn lines of credit can potentially become drawn at any point. The funding rate is determined based on a look-back period of 8 quarters. Credit loss is not estimated for off-balance sheet commitments that are unconditionally cancellable by the Company. The following table summarizes the activity in the allowance for credit losses on loans by portfolio segment for the three and six months ended June 30, 2023 and 2022:
(1)Excludes reversal of uncollectible accrued interest receivable of $205 thousand for the six months ended June 30, 2022. The following table presents the allowance for credit losses on loans and recorded investment (not including accrued interest receivable) by portfolio segment and impairment methodology as of June 30, 2023 and December 31, 2022:
(1)Excludes accrued interest receivables of $6.8 million and $6.4 million as of June 30, 2023 and December 31, 2022, respectively. (2)Individually evaluated loans of $4.4 million include guaranteed portion of SBA loans of $3.6 million as of June 30, 2023. The following table presents the recorded investment in impaired loans and the specific allowance for loan losses as of December 31, 2022.
(1) The difference between the unpaid principal balance (net of partial charge-offs) and the recorded investment in the loans was not considered to be material Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. The estimated credit losses for these loans are based on the collateral’s fair value less selling costs. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less selling costs at the time of foreclosure. As of June 30, 2023, there were $6.7 million of collateral-dependent loans which are primarily secured by residential and commercial real estate, as well as equipment. The allowance for credit losses allocated to these loans as of June 30, 2023 was $57 thousand. The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2023, for which repayment is expected to be obtained through the sale of the underlying collateral.
(1) Includes guaranteed portion of SBA loans of $3.6 million as of June 30, 2023. The following table presents the recorded investment in nonaccrual loans and loans past due 90 or more days and still accruing interest, by portfolio as of June 30, 2023 and December 31, 2022:
(1) Includes guaranteed portion of SBA loans of $5.4 million and $1.0 million as of June 30, 2023 and December 31, 2022, respectively. Nonaccrual loans and loans past due 90 or more days and still accruing interest include both homogeneous loans that are collectively and individually evaluated for impairment and individually classified impaired loans. The following table represents the aging analysis of the recorded investment in past due loans as of June 30, 2023 and December 31, 2022:
(1)Includes guaranteed portion of SBA loans of $5.3 million as of June 30, 2023. (2)Excludes accrued interest receivables of $6.8 million and $6.4 million as of June 30, 2023 and December 31, 2022, respectively. Loan Modifications to Borrowers Experiencing Financial Difficult: On January 1, 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”, which eliminated the accounting guidance for troubled debt restructurings (“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. Upon adoption of this guidance, the Company no longer establishes a specific reserve for modifications to borrowers experiencing financial difficulty, unless those loans do not share the same risk characteristics with other loans in the portfolio. Provided that is not the case, these modifications are included in their respective cohort and the allowance for credit losses is estimated on a pooled basis consistent with the other loans with similar risk characteristics. Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, other than insignificant payment deferrals, other than insignificant term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The disclosure below provide information on loan modification to borrowers experiencing financial difficulty. No charge-offs of previously modified loans were recorded for the three and six months ended June 30, 2023. The following table presents the amortized cost of modified loans and the financial effects of the modification as of June 30, 2023 by loan class and modification type:
The Company tracks the performance of modified loans. A modified loan may become delinquent and may result in a payment default (generally 90 days past due) subsequent to modification. There were no loans that received a modification during the three and six months ended June 30, 2023 that subsequently defaulted. The following table presents the performance of loans that were modified as of June 30, 2023 since the adoption of ASU 2022-02 on January 1, 2023:
The Company had no additional commitments to lend to borrowers whose loans were modified as of June 30, 2023. Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For consumer loans, a credit grade is established at inception, and generally only adjusted based on performance. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: Special Mention—Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard—Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful—Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. The following table presents the loan portfolio's amortized cost by loan type, risk rating and year of origination as of as of June 30, 2023:
(1) of $6.8 million as of June 30, 2023. The following table presents the loan portfolio's amortized cost by loan type and risk rating of as of December 31, 2022:
(1) of $6.8 million and $6.4 million as of June 30, 2023 and December 31, 2022, respectively..
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Premises and Equipment |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Premises and Equipment | Premises and Equipment The following table presents information regarding the premises and equipment as of June 30, 2023 and December 31, 2022:
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Servicing Assets |
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Servicing Asset [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicing Assets | Servicing Assets The Company recognizes the right to service SBA loans for others as servicing assets when the servicing income the Company receives is more than adequate compensation. Servicing assets are accounted for using the amortization method. Under this method, the Company amortizes the servicing assets over the period of the economic life of the assets arising from estimated net servicing revenue. The Company periodically stratifies its servicing assets into groupings based on risk characteristics and assesses each group for impairment based on fair value. Based on the results of the impairment test, there was no valuation allowance for impairment as of June 30, 2023 and December 31, 2022. The following table presents an analysis of the changes in activity for loan servicing assets during the three and six months ended June 30, 2023 and 2022:
The fair value of the servicing assets was $18.2 million as of June 30, 2023, which was determined using discount rates ranging from 3.75% to 10.50% and prepayment speeds ranging from 12.40% to 12.90%, depending on the stratification of the specific assets. The fair value of the servicing assets was $15.2 million as of June 30, 2022, which was determined using discount rates ranging from 5.17% to 11.42% and prepayment speeds ranging from 15.00% to 15.50% depending on the stratification of the specific assets.
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Deposits |
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Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits | Deposits Time deposits that exceed the FDIC insurance limit of $250 thousand as of June 30, 2023 and December 31, 2022 were $416.2 million and $356.2 million, respectively. The following table presents the scheduled contractual maturities of time deposits as of June 30, 2023:
Deposits from principal officers, directors, and their affiliates as of June 30, 2023 and December 31, 2022 were $1.1 million and $810 thousand, respectively. The Company had estimated uninsured deposits of $1.09 billion, or 58.7% of total deposits, and $1.14 billion, or 60.3% of total deposits, as of June 30, 2023 and December 31, 2022, respectively.
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Borrowing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Borrowing Arrangements | Borrowing Arrangements As of June 30, 2023, the Company had $75.0 million advances from FHLB with a weighted average interest rate of 4.22% and a weighted average remaining term of 1.7 years. The Company has a letter of credit with the FHLB in the amount of $67.0 million to secure a public deposit as of both June 30, 2023 and December 31, 2022. The Company had available borrowing capacity from the following institutions as of June 30, 2023:
The Company has pledged approximately $1.30 billion and $1.24 billion of loans as collateral for these lines of credit as of June 30, 2023 and December 31, 2022, respectively.
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Income Taxes |
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Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s income tax expense was $2.5 million and $3.5 million for the three months ended June 30, 2023 and 2022, respectively, and $5.5 million and $6.8 million for the six months ended June 30, 2023 and 2022, respectively. The effective income tax rate was 28.8% and 29.0% for the three months ended June 30, 2023 and 2022, respectively, and 28.9% and 29.1% for the six months ended June 30, 2023 and 2022, respectively. The Company is subject to U.S. Federal income tax as well as various state taxing jurisdictions. The Company is no longer subject to examination by Federal taxing authorities for tax years prior to 2019 and for state taxing authorities for tax years prior to 2018. There were no significant unrealized tax benefits recorded as of June 30, 2023 and 2022, and the Company does not expect any significant increase in unrealized tax benefits in the next twelve months.
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Commitments and Contingencies |
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Commitments and Contingencies | Commitments and Contingencies Off-Balance-Sheet Credit Risk: In the normal course of business, the Company enters into commitments to extend credit such as loan commitments and standby letters of credits (“SBLC”s). These commitments expose the Company to varying degrees of credit and market risk and are subject to the same credit and market risk limitation reviews as those instruments recorded on the Consolidated Balance Sheets. Loan commitments represent arrangements to lend funds or provide liquidity subject to specified contractual conditions. Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These commitments generally have fixed expiration dates or contain termination clauses in the event the customer’s credit quality deteriorates. Since many of the commitments are expected to expire without being drawn upon, the commitment amounts do not necessarily represent future funding requirements. The Company applies the same credit underwriting criteria to extend loans and commitments to customers. Each customer’s credit worthiness is evaluated on a case-by-case basis. Collateral may be obtained based on management’s assessment of a customer’s credit. Collateral may include securities, accounts receivable, inventory, property, plant and equipment, and income producing commercial or other properties. The following table presents the distribution of undisbursed credit-related commitments as of June 30, 2023 and December 31, 2022:
The majority of these off-balance sheet commitments have a variable interest rate. Management does not anticipate any material losses as a result of these transactions. Investments in low-income housing partnership: The Company invests in qualified affordable housing partnerships. The following table shows the balance of the investments in low-income housing partnerships and the total unfunded commitments related to the investments in low-income housing partnerships as of June 30, 2023 and December 31, 2022:
These balances are reflected in the other assets and other liabilities lines on the Consolidated Balance Sheets. The Company expects to finish fulfilling these commitments during the year ending 2039. Under the proportional amortization method, the Company amortizes the initial cost of the investment in proportion to the tax credit and other benefits received and recognizes the amortization in income tax expense on the Consolidated Statements of Income. The Company recognized amortization expense of $362 thousand and $187 thousand for the three months ended June 30, 2023 and 2022, respectively, and $723 thousand and $374 thousand for the six months ended June 30, 2023 and 2022, respectively. Additionally, the Company recognized tax credits and other benefits from the investments in low-income housing partnerships of $456 thousand and $160 thousand for the three months ended June 30, 2023 and 2022, respectively, and $912 thousand and $320 thousand, respectively, for the six months ended June 30, 2023 and 2022, respectively.
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Stock-Based Compensation |
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Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation The Company has three stock-based compensation plans currently in effect as of June 30, 2023, as described further below. Total compensation cost that has been charged against earnings for these plans for the three months ended June 30, 2023 and 2022 was $314 thousand and $308 thousand, respectively, and $638 thousand and $523 thousand for the six months ended June 30, 2023 and 2022, respectively. 2005 Plan: In 2005, the Board of Directors and shareholders of the Bank approved a stock option plan for the benefit of directors and employees of the Bank (the “2005 Plan”). The 2005 Plan was assumed by the Company in 2016 at the time of the bank holding company reorganization. Under the 2005 Plan, the Bank was authorized to grant options to purchase up to 770,000 shares of the Company’s common stock. The exercise prices of the options may not be less than 100% of the fair value of the Company’s common stock at the date of grant. The options, when granted, vest either immediately or ratably over five years from the date of the grant and expire after ten years if not exercised. The 2005 Plan expired in 2015, and no future grants can be made under the 2005 Plan. A summary of the transactions under the 2005 Plan for the six months ended June 30, 2023 is as follows:
No tax benefits or expenses were realized from restricted stock units under the 2010 Plan for the three and six months ended June 30, 2023 and 2022. The weighted average remaining contractual term of stock options outstanding under the 2005 Plan as of June 30, 2023 was 0.2 year. The weighted average remaining contractual term of stock options that were exercisable as of June 30, 2023 was 0.2 year. All of the stock options that are outstanding under the 2005 Plan were fully vested as of June 30, 2023. 2010 Plan: In 2010, the Board of Directors of the Bank approved a new equity incentive plan for granting stock options and restricted stock awards to key employees, officers, and non-employee directors of the Bank (the “2010 Plan”). In 2013, the 2010 Plan was amended and approved by the shareholders to increase the number of shares authorized to be issued under from 1,350,000 shares to 2,500,000 shares of common stock. The 2010 Plan was assumed by the Company in 2016 at the time of the bank holding company reorganization. The exercise prices of stock options granted under the plan may not be less than 100% of the fair value of the Company’s stock at the date of grant. The options, when granted, vest ratably over five years from the date of the grant and expire after ten years if not exercised. The 2010 Plan expired in August 2020, and no further grants can be made under the 2010 Plan. Restricted stock awards issued under the 2010 Plan may or may not be subject to vesting provisions. Owners of the restricted stock awards shall have all of the rights of a shareholder including the right to vote the shares and to all dividends (cash or stock). Compensation expense related to restricted stock awards will be recognized over the vesting period of the awards based on the fair value of the Company’s common stock at the issue date. A summary of the stock options outstanding under the 2010 Plan for the six months ended June 30, 2023 is as follows:
Information related to stock options exercised under the 2010 Plan for the periods indicated follows:
The weighted average remaining contractual term of stock options outstanding as of June 30, 2023 was 0.8 years. The weighted average remaining contractual term of stock options that were exercisable as of June 30, 2023 was 0.8 years. A summary of the changes in the Company's non-vested restricted stock awards under the 2010 Plan for the six months ended June 30, 2023 is as follows:
No tax benefits or expenses were realized from restricted stock units under the 2010 Plan for the three and six months ended June 30, 2023 and 2022. As of June 30, 2023, the Company had approximately $26 thousand of unrecognized compensation cost related to unvested restricted stock awards under the 2010 Plan. The Company expects to recognize these costs over a weighted average period of 1.0 years. 2021 Plan: In 2021, the Board of Directors of the Company approved a new equity incentive plan for granting stock options and restricted stock awards to key employees, officers, and non-employee directors of the Company and the Bank (the “2021 Plan”). The 2021 Plan was approved by the Company’s shareholders at the 2021 Annual Meeting. The number of shares authorized to be issued under the 2021 Plan was 1,500,000 shares of the Company’s common stock. The exercise prices of stock options granted under the plan may not be less than 100.00% of the fair value of the Company’s stock at the date of grant. There are no stock options granted under the 2021 Plan as of June 30, 2023. Restricted stock awards issued under the 2021 Plan may or may not be subject to vesting provisions. Owners of the restricted stock awards shall have all rights of a shareholder including the right to vote the shares and to all dividends (cash or stock). Compensation expense related to restricted stock awards will be recognized over the vesting period of the awards based on the fair value of the Company’s common stock at the issue date. A summary of the changes in the Company’s non-vested restricted stock awards under the 2021 Plan for the six months ended June 30, 2023 is as follows:
Information related to vested restricted stock awards under the 2021 Plan for the periods indicated follows:
There were 1,111,190 shares available for future grants of either stock options or restricted stock awards under the 2021 Plan as of June 30, 2023. The Company had approximately $2.4 million of unrecognized compensation cost related to unvested restricted stock awards under the 2021 Plan as of June 30, 2023. The Company expects to recognize these costs over a weighted average period of 2.1 years.
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Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or the price that would be paid to transfer a liability on the measurement date and is determined using an exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. Assets and liabilities recorded at fair value on a recurring basis, such as AFS securities and equity investments. Additionally, from time to time, the Company records fair value adjustments on a nonrecurring basis. These nonrecurring adjustments typically involve application of lower of cost or fair value accounting and write-downs of individual assets. The Company classifies its assets and liabilities recorded at fair value as one of the following three categories and a financial instrument’s level within the fair value hierarchy is based on the lowest level of input significant to the fair value measurement: Level 1—Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2—Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. Level 3—Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. Assets and Liabilities Measured at Fair Value on a Recurring Basis Following is a description of the valuation methodologies used for instruments measured at fair value on a recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy. Securities AFS: The fair values of investment securities are determined by matrix pricing, which is a mathematical technique used to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2). Management obtains the fair values of investment securities on a monthly basis from a third-party pricing service. Other Investment: The Company has an equity investment with readily determinable fair value. The fair value for the equity investment with readily determinable fair value is obtained from unadjusted quoted prices in active markets on the date of measurement and classified as Level 1. Assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are summarized below:
There were no transfers of assets or liabilities between the Level 1 and Level 2 classifications for the three and six months ended June 30, 2023 or 2022. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis The Company may be required, from time to time, to measure certain assets at fair value on a nonrecurring basis in accordance with GAAP. These adjustments to fair value usually result from application of lower of cost or fair value and write-downs of individual assets. Collateral-dependent loans: Collateral-dependent loans are loans where repayment is expected to be provided solely by the sale of the underlying collateral and there are no other available and reliable sources of repayment. Prior to the adoption of ASU 2016-13, impaired loans were evaluated and valued at the time the loan was identified as impaired, at the lower of cost or fair value. Fair value for both collateral-dependent and impaired loans are measured based on the value of the collateral securing these loans and are classified at a Level 3 in the fair value hierarchy. Collateral may include real estate, or business assets including equipment, inventory and accounts receivable. The value of real estate collateral is determined based on an appraisal by qualified licensed appraisers hired by the Company. The value of business equipment is based on an appraisal by qualified licensed appraisers hired by the Company if significant, or the equipment’s net book value on the business’ financial statements. Inventory and accounts receivable collateral are valued based on independent field examiner review or aging reports. Appraisals may utilize a single valuation approach or a combination or approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available for similar loans and collateral underlying such loans. Appraised values are reviewed by management using historical knowledge, market considerations, and knowledge of the client and client’s business. The following table presents the fair value hierarchy and fair value of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of June 30, 2023 and December 31, 2022:
The following table presents the increase (decrease) in value of certain assets held at the end of the respective reporting periods presented for which a nonrecurring fair value adjustment was recognized during the period presented:
The following table presents information about significant unobservable inputs utilized in the Company’s nonrecurring Level 3 fair value measurements as of June 30, 2023 and December 31, 2022:
(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of June 30, 2023 and December 31, 2022. Financial Instruments: The carrying amounts and estimated fair values of financial instruments that are not carried at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are as follows. These financial assets and liabilities are measured at amortized cost basis on the Company’s Consolidated Balance Sheets:
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Regulatory Capital Matters |
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Regulatory Capital Matters | Regulatory Capital MattersThe Bank is subject to certain risk-based capital and leverage ratio requirements under the U.S. Basel III capital rules administered by the federal and state banking agencies. Failure to be well-capitalized or to meet minimum capital requirements could result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have an adverse material effect on the Company's operations or financial condition. The Basel III capital rules also require the Bank to maintain a capital conservation buffer of 2.5% above the minimum risk-based capital ratios in order to absorb losses during periods of economic stress, effective January 1, 2019. Banking institutions with a ratio of common equity tier 1 capital to risk-weighted assets above the minimum but below the capital conservation buffer will face constraints on dividends. equity repurchases and compensation based on the amount of the shortfall. Management believes that as of June 30, 2023 and December 31, 2022, the Bank met all capital adequacy requirements to which they are subject to. Based on recent changes to the Federal Reserve’s definition of a “Small Bank Holding Company” that increased the threshold to $3 billion in assets, the Company is not currently subject to separate minimum capital measurements. At such time as the Company reaches the $3 billion asset level, it will again be subject to capital measurements independent of the Bank. The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:
(1)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
(1)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
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Earnings Per Share |
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Earnings Per Share | Earnings Per ShareBasic EPS is calculated using the two-class method. Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock and participating securities. The Company grants restricted stock awards, which entitle recipients to receive nonforfeitable dividends during the vesting period on a basis equivalent to dividends paid to holders of the Company's common stock. These restricted stock awards meet the definition of participating securities based on their respective rights to receive nonforfeitable dividends, and they are treated as a separate class of securities in computing basic EPS. Participating securities are not included as incremental shares in computing diluted EPS. Diluted EPS incorporates the potential impact of contingently issuable shares. Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported. For each of the periods presented in the table below, diluted EPS calculated under two-class method was more dilutive. The following table presents the calculation of net income applicable to common stockholders and basic and diluted EPS for the three and six months ended June 30, 2023 and 2022:
No share of common stock was antidilutive for the three and six months ended June 30, 2023 and 2022.
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Business and Basis of Presentation (Policies) |
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Jun. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited Consolidated Financial Statements and notes thereto of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”) for Form 10-Q and conform to practices within the banking industry and include all of the information and disclosures required by accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. The accompanying unaudited Consolidated Financial Statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair presentation of the financial results for the interim periods presented, including eliminating intercompany transactions and balances. Certain items on the Consolidated Financial Statements and notes for prior years have been reclassified to conform to the 2023 presentation. The results of operations for the interim periods are not necessarily indicative of the results for the full year. These interim unaudited financial statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 (“2022 Annual Report on Form 10-K”). Descriptions of our significant accounting policies are included in Note 1. Summary of Significant Accounting Policies in the Notes to Consolidated Financial Statements in the 2022 Annual Report on Form 10-K. |
Allowance for Credit Losses | Allowance for Credit Losses on Loans The Company employs a modeled approach that takes into account current and future economic conditions to estimate lifetime expected losses on a collective basis. With the adoption of CECL, the Company elected not to consider accrued interest receivable in its estimated credit losses because the Company writes off uncollectible accrued interest receivable in a timely manner. The Company considers writing off accrued interest amounts once the amounts become 90 days past due to be considered within a timely manner. The Company has elected to write off accrued interest receivable by reversing interest income. The Company uses transition matrices to develop the Probability of Default ("PD") and Loss Given Default ("LGD") approach, incorporating quantitative factors and qualitative considerations in the calculation of the allowance for credit losses for collectively assessed loans. The model provides forecasts of PD and LGD based on national unemployment rates using regression analysis. The Company incorporates future economic conditions using a weighted multiple scenario approach: baseline and adverse. The Company applies a reasonable and supportable period of one year for the baseline scenario and two years for the adverse scenario, after which loss assumptions revert to historical loss information through a one-year reversion period for the baseline scenario and a two-year reversion period for the adverse scenario. In order to quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors listed below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the loss rates. This matrix considers the following nine factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council Interagency Policy Statement on the Allowance for Credit Losses, updated to reflect the adoption of CECL: • Changes in lending policies and procedures, including changes in underwriting standards and practices for collection, charge-offs, and recoveries; • Actual and expected changes in national and local economic and business conditions and developments in which the institution operates that affect the collectivity of loans; • Changes in the nature and volume of the loan portfolio; • Changes in the experience, ability, and depth of lending management and staff; • Changes in the volume and severity of past due loans, the volume of nonaccrual loans, and the volume and severity of adversely classified loans; • Changes in the quality of the credit review function; • Changes in the value of the underlying collateral for loans that are not collateral-dependent; • The existence, growth, and effect of any concentrations of credit, and • The effect of other external factors, such as the regulatory, legal and technological environments; competition; and events such as natural disasters.
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Recently Issued Accounting Pronouncements under Evaluation | Recently Issued Accounting Pronouncements under Evaluation In March 2023, the FASB issued ASU 2023-02, Investments - Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method. This ASU permits reporting entities to elect to account for tax equity investments, regardless of the tax credit program for which the income tax credits are received, using the proportional amortization method if certain conditions are met. Under the proportional amortization method, an entity amortizes the initial cost of the investment in proportion to the income tax credits and other income tax benefits received and recognizes the net amortization and income tax credits and other income tax benefits in the income statement as a component of income tax expense. A reporting entity makes an accounting policy election to apply the proportional amortization method on a tax-credit-program-by-tax-credit-program basis rather than electing to apply the proportional amortization method at the reporting entity level or to individual investments. This ASU also requires specific disclosures of investments that generate income tax credits and other income tax benefits from a tax credit program for which the entity has elected to apply the proportional amortization method. The updated guidance is effective for fiscal years beginning after December 15, 2023. The Company is currently evaluating the impact of this new standard on its consolidated financial statements and the adoption is not expected to have a significant impact on the consolidated financial statements. Loan Modifications to Borrowers Experiencing Financial Difficult: On January 1, 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures”, which eliminated the accounting guidance for troubled debt restructurings (“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. Upon adoption of this guidance, the Company no longer establishes a specific reserve for modifications to borrowers experiencing financial difficulty, unless those loans do not share the same risk characteristics with other loans in the portfolio. Provided that is not the case, these modifications are included in their respective cohort and the allowance for credit losses is estimated on a pooled basis consistent with the other loans with similar risk characteristics.Modifications to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, other than insignificant payment deferrals, other than insignificant term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral.
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Business and Summary of Significant Accounting Policies (Tables) |
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Accounting Standards Update and Change in Accounting Principle | The following table illustrates the impact of ASU 2016-13:
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Securities (Tables) |
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, Debt and Equity Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Amortized Cost, Fair Value, and Corresponding Amounts of Gross Unrealized Gains and Losses for Available for Sale Securities | The following table summarizes the amortized cost, the corresponding amounts of gross unrealized gains and losses, and estimated fair value of available-for-sale ("AFS") debt securities as of June 30, 2023 and December 31, 2022:
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Schedule of Amortized Cost and Estimated Fair Value of Securities Available for Sale by Contractual Maturity | The amortized cost and estimated fair value of AFS debt securities as of June 30, 2023, by contractual maturity, are shown below:
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Schedule of Unrealized Losses on AFS Debt Securities | The following table presents the fair value and the associated gross unrealized losses on AFS debt securities by length of time those individual securities in each category have been in a continuous loss as of June 30, 2023 and December 31, 2022:
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Schedule of Other Investments | The following table presents the other investment securities, which are included in Other investments on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
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Loans and Allowance for Credit Losses on Loans (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Composition of Loan Portfolio | The following table presents the composition of the loan portfolio as of June 30, 2023 and December 31, 2022:
(1)Includes net deferred loan costs/(fees) and unamortized premiums/(unaccreted discounts) of $(381) thousand and $160 thousand as of June 30, 2023 and December 31, 2022, respectively. The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2023, for which repayment is expected to be obtained through the sale of the underlying collateral.
(1) Includes guaranteed portion of SBA loans of $3.6 million as of June 30, 2023.
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Schedule of Activity in Allowance for Loan Losses by Portfolio Segment | The following table summarizes the activity in the allowance for credit losses on loans by portfolio segment for the three and six months ended June 30, 2023 and 2022:
(1)Excludes reversal of uncollectible accrued interest receivable of $205 thousand for the six months ended June 30, 2022. The following table presents the allowance for credit losses on loans and recorded investment (not including accrued interest receivable) by portfolio segment and impairment methodology as of June 30, 2023 and December 31, 2022:
(1)Excludes accrued interest receivables of $6.8 million and $6.4 million as of June 30, 2023 and December 31, 2022, respectively. (2)Individually evaluated loans of $4.4 million include guaranteed portion of SBA loans of $3.6 million as of June 30, 2023. The following table presents the recorded investment in impaired loans and the specific allowance for loan losses as of December 31, 2022.
(1) The difference between the unpaid principal balance (net of partial charge-offs) and the recorded investment in the loans was not considered to be material
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Schedule of Recorded Investment in Nonaccrual Loans and Loans Past Due 90 or More Days and Still Accruing Interest by Portfolio Segment | The following table presents the recorded investment in nonaccrual loans and loans past due 90 or more days and still accruing interest, by portfolio as of June 30, 2023 and December 31, 2022:
(1) Includes guaranteed portion of SBA loans of $5.4 million and $1.0 million as of June 30, 2023 and December 31, 2022, respectively.
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Schedule of Aging Analysis of Recorded Investment in Past Due Loans | The following table represents the aging analysis of the recorded investment in past due loans as of June 30, 2023 and December 31, 2022:
(1)Includes guaranteed portion of SBA loans of $5.3 million as of June 30, 2023. (2)Excludes accrued interest receivables of $6.8 million and $6.4 million as of June 30, 2023 and December 31, 2022, respectively.
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Financing Receivable, Modified | The following table presents the amortized cost of modified loans and the financial effects of the modification as of June 30, 2023 by loan class and modification type:
The following table presents the performance of loans that were modified as of June 30, 2023 since the adoption of ASU 2022-02 on January 1, 2023:
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Schedule of Credit Risk Ratings by Portfolio Segment | The following table presents the loan portfolio's amortized cost by loan type, risk rating and year of origination as of as of June 30, 2023:
(1) of $6.8 million as of June 30, 2023. The following table presents the loan portfolio's amortized cost by loan type and risk rating of as of December 31, 2022:
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Premises and Equipment (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Premises and Equipment | The following table presents information regarding the premises and equipment as of June 30, 2023 and December 31, 2022:
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Servicing Assets (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Servicing Asset [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Activity for Loan Servicing Assets | The following table presents an analysis of the changes in activity for loan servicing assets during the three and six months ended June 30, 2023 and 2022:
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Deposits (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deposits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Maturities of Time Deposits | The following table presents the scheduled contractual maturities of time deposits as of June 30, 2023:
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Borrowing Arrangements (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Borrowings Available to the Company from Institutions | The Company had available borrowing capacity from the following institutions as of June 30, 2023:
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Distribution of Undisbursed Loan Commitments | The following table presents the distribution of undisbursed credit-related commitments as of June 30, 2023 and December 31, 2022:
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Schedule of Balance and Total Unfunded Commitments Related to Investment in Low Income Housing Partnerships | The following table shows the balance of the investments in low-income housing partnerships and the total unfunded commitments related to the investments in low-income housing partnerships as of June 30, 2023 and December 31, 2022:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-based Compensation Stock Options Activity | A summary of the transactions under the 2005 Plan for the six months ended June 30, 2023 is as follows:
A summary of the stock options outstanding under the 2010 Plan for the six months ended June 30, 2023 is as follows:
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Schedule of Information Related to Stock Option Plan | Information related to stock options exercised under the 2010 Plan for the periods indicated follows:
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Schedule of Changes in Non-vested Restricted Stock Awards | A summary of the changes in the Company's non-vested restricted stock awards under the 2010 Plan for the six months ended June 30, 2023 is as follows:
A summary of the changes in the Company’s non-vested restricted stock awards under the 2021 Plan for the six months ended June 30, 2023 is as follows:
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Schedule of Share Based Compensation Arrangement Information Related to Plan | Information related to vested restricted stock awards under the 2021 Plan for the periods indicated follows:
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Fair Value of Financial Instruments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are summarized below:
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Schedule of Fair Value Hierarchy and Fair Value of Assets that Were Still Held and Had Fair Value Adjustments Measured On a Nonrecurring Basis | The following table presents the fair value hierarchy and fair value of assets that were still held and had fair value adjustments measured on a nonrecurring basis as of June 30, 2023 and December 31, 2022:
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Schedule of Increase (Decrease) In Value of Certain Assets Held at End of Respective Reporting Periods Presented for Which a Nonrecurring Fair Value Adjustment | The following table presents the increase (decrease) in value of certain assets held at the end of the respective reporting periods presented for which a nonrecurring fair value adjustment was recognized during the period presented:
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Schedule of Information about Significant Unobservable Inputs Utilized in Company's Nonrecurring Level 3 Fair Value Measurements | The following table presents information about significant unobservable inputs utilized in the Company’s nonrecurring Level 3 fair value measurements as of June 30, 2023 and December 31, 2022:
(1)Weighted-average of inputs is based on the relative fair value of the respective assets as of June 30, 2023 and December 31, 2022.
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Schedule of Carrying Amounts and Estimated Fair Values of Financial Instruments Not Carried at Fair Value | Financial Instruments: The carrying amounts and estimated fair values of financial instruments that are not carried at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 are as follows. These financial assets and liabilities are measured at amortized cost basis on the Company’s Consolidated Balance Sheets:
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Regulatory Capital Matters (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Actual and Required Capital Amounts and Ratios, Exclusive of Capital Conservation Buffer | The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:
(1)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
(1)The capital requirements are only applicable to the Bank, and the Company's ratios are included for comparison purpose.
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Earnings Per Share (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Computation of Basic and Diluted Earnings Per Share | The following table presents the calculation of net income applicable to common stockholders and basic and diluted EPS for the three and six months ended June 30, 2023 and 2022:
|
Business and Basis of Presentation - Additional Information (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
branch
|
Jan. 01, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
---|---|---|---|
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Number of full service branches | branch | 10 | ||
Allowance for credit losses on off-balance sheet commitments | $ 446 | ||
Retained earnings | $ (114,177) | $ (105,690) | |
Impact | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Allowance for credit losses on off-balance sheet commitments | 184 | ||
Accounting Standards Update 2016-13 | Impact | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Accounts receivable, allowance for credit loss | 1,900 | ||
Allowance for credit losses on off-balance sheet commitments | 184 | ||
Deferred tax assets | 624 | ||
Retained earnings | $ 1,500 | ||
Open Bank | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Percentage of voting equity interests acquired | 100.00% |
Securities - Schedule of Amortized Cost, Fair Value, and Corresponding Amounts of Gross Unrealized Gains and Losses for Available for Sale Securities (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities [Line Items] | ||
Amortized Cost | $ 228,044 | $ 235,142 |
Gross Unrealized Gain | 110 | 1 |
Gross Unrealized Loss | (25,904) | (25,334) |
Fair Value | 202,250 | 209,809 |
Residential mortgage-backed securities | ||
Securities [Line Items] | ||
Amortized Cost | 51,660 | 55,189 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | (5,328) | (5,425) |
Fair Value | 46,332 | 49,764 |
Residential collateralized mortgage obligations | ||
Securities [Line Items] | ||
Amortized Cost | 170,707 | 179,953 |
Gross Unrealized Gain | 0 | 1 |
Gross Unrealized Loss | (20,576) | (19,909) |
Fair Value | 150,131 | $ 160,045 |
Municipal securities-tax exempt | ||
Securities [Line Items] | ||
Amortized Cost | 5,677 | |
Gross Unrealized Gain | 110 | |
Gross Unrealized Loss | 0 | |
Fair Value | $ 5,787 |
Securities - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Securities [Line Items] | |||||
Proceeds from sale of available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Equity investment in mutual fund with readily determinable fair value | 3,400,000 | 3,400,000 | $ 3,300,000 | ||
Unrealized holding gain (losses) of mutual fund | (53,000) | $ (120,000) | 1,000 | $ (293,000) | |
Collateral Pledged | |||||
Securities [Line Items] | |||||
Number of securities pledged as collateral | $ 0 | $ 0 | $ 0 |
Securities - Schedule of Amortized Cost and Estimated Fair Value of Securities Available for Sale by Contractual Maturity (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Amortized Cost | ||
After one year through five years | $ 1,684 | |
After five years through ten years | 3,769 | |
After ten years | 222,591 | |
Amortized Cost | 228,044 | $ 235,142 |
Fair Value | ||
After one year through five years | 1,598 | |
After five years through ten years | 3,377 | |
After ten years | 197,275 | |
Fair Value | $ 202,250 | $ 209,809 |
Securities - Schedule of Other Investments (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Securities [Line Items] | ||
Mutual fund - Community Reinvestment Act ("CRA") qualified | $ 3,400 | $ 3,300 |
Other Investments | ||
Securities [Line Items] | ||
FHLB stock | 12,527 | 8,483 |
Pacific Coast Bankers Bank ("PCBB") stock | 190 | 190 |
Mutual fund - Community Reinvestment Act ("CRA") qualified | 3,370 | 3,330 |
Time deposits placed in other banks | 96 | 95 |
Total other investments | $ 16,183 | $ 12,098 |
Loans and Allowance for Credit Losses on Loans - Modified Loans (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2023
USD ($)
| |
Financing Receivable, Modified [Line Items] | |
Recorded investment in troubled debt restructurings | $ 139 |
Percentage to Each Loan Type | 0.99% |
Principal Forgiveness | |
Financing Receivable, Modified [Line Items] | |
Recorded investment in troubled debt restructurings | $ 139 |
SBA—non-real estate | |
Financing Receivable, Modified [Line Items] | |
Recorded investment in troubled debt restructurings | $ 139 |
Percentage to Each Loan Type | 0.99% |
SBA—non-real estate | Principal Forgiveness | |
Financing Receivable, Modified [Line Items] | |
Recorded investment in troubled debt restructurings | $ 139 |
Premises and Equipment - Schedule of Premises and Equipment (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Property Plant And Equipment [Line Items] | ||
Total premises and equipment | $ 16,630 | $ 15,269 |
Accumulated depreciation | (11,537) | (10,869) |
Total premises and equipment, net | 5,093 | 4,400 |
Leasehold improvements | ||
Property Plant And Equipment [Line Items] | ||
Total premises and equipment | 8,754 | 7,998 |
Furniture and fixtures | ||
Property Plant And Equipment [Line Items] | ||
Total premises and equipment | 4,408 | 3,983 |
Equipment and others | ||
Property Plant And Equipment [Line Items] | ||
Total premises and equipment | $ 3,468 | $ 3,288 |
Premises and Equipment - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 338 | $ 341 | $ 673 | $ 671 |
Servicing Assets - Additional Information (Details) - USD ($) |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Dec. 31, 2022 |
|
Servicing Assets At Amortized Value [Line Items] | |||
Valuation allowance for impairment | $ 0 | $ 0 | |
Servicing assets | $ 18,177,000 | $ 15,200,000 | $ 16,845,000 |
Minimum | |||
Servicing Assets At Amortized Value [Line Items] | |||
Fair value of servicing assets, discount rates | 3.75% | 5.17% | |
Fair value of servicing assets, prepayment speed | 12.40% | 15.00% | |
Maximum | |||
Servicing Assets At Amortized Value [Line Items] | |||
Fair value of servicing assets, discount rates | 10.50% | 11.42% | |
Fair value of servicing assets, prepayment speed | 12.90% | 15.50% |
Servicing Assets - Schedule of Activity for Loan Servicing Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Analysis of Changes in Activity | ||||
Beginning balance | $ 12,898 | $ 12,341 | $ 12,759 | $ 12,720 |
Amortized to expense | (1,113) | (990) | (2,074) | (2,161) |
Ending balance | 12,654 | 12,708 | 12,654 | 12,708 |
Loans Sold with Servicing Retained | ||||
Analysis of Changes in Activity | ||||
Additions from loans sold with servicing retained | $ 869 | $ 1,357 | $ 1,969 | $ 2,149 |
Deposits - Additional Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Time Deposits [Line Items] | ||
Time deposits greater than $250 | $ 416,208 | $ 356,197 |
Uninsured deposits | $ 1,090,000 | $ 1,140,000 |
Uninsured deposits (percent) | 58.70% | 60.30% |
Principal Officers, Directors, and Affiliates | ||
Time Deposits [Line Items] | ||
Deposits from principal officers, directors, and their affiliates | $ 1,100 | $ 810 |
Deposits - Schedule of Maturities of Time Deposits (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Deposits [Abstract] | |
Remainder of 2023 | $ 459,991 |
2024 | 380,099 |
2025 | 22,985 |
2026 | 17,268 |
2027 and thereafter | 389 |
Total | $ 880,732 |
Borrowing Arrangements - Additional Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2023 |
Dec. 31, 2022 |
|
Debt Disclosure [Abstract] | ||
Federal Home Loan Bank borrowings | $ 75,000 | $ 0 |
FHLB interest rate | 4.22% | |
Federal home loan bank, advances, remaining term | 1 year 8 months 12 days | |
Letter of credit | $ 67,000 | 67,000 |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans, related parties | 1,695,395 | 1,659,051 |
Asset Pledged as Collateral | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Loans, related parties | $ 1,300,000 | $ 1,240,000 |
Borrowing Arrangements - Schedule of Borrowings Available to the Company from Institutions (Details) $ in Thousands |
Jun. 30, 2023
USD ($)
|
---|---|
Debt Disclosure [Line Items] | |
Amount of borrowings | $ 672,859 |
Federal Reserve Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 172,316 |
Pacific Coast Bankers Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 50,000 |
Zions Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 25,000 |
First Horizon Bank | |
Debt Disclosure [Line Items] | |
Amount of borrowings | 25,000 |
FHLB | |
Debt Disclosure [Line Items] | |
Amount of borrowings | $ 400,543 |
Income Taxes - Additional Information (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 2,466,000 | $ 3,459,000 | $ 5,549,000 | $ 6,810,000 |
Effective income tax rate | 28.80% | 29.00% | 28.90% | 29.10% |
Unrealized tax benefits | $ 0 | $ 0 | $ 0 | $ 0 |
Commitments and Contingencies - Schedule of Distribution of Undisbursed Credit-Related Commitments (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Other commitment | $ 294,388 | $ 270,847 |
Standby letter of credit | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Letters of credit outstanding | 5,959 | 5,286 |
Commercial letter of credit | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Letters of credit outstanding | 0 | 451 |
Loan commitments | ||
Fair Value Off Balance Sheet Risks Disclosure Information [Line Items] | ||
Other commitment | $ 288,429 | $ 265,110 |
Commitments and Contingencies - Schedule of Balance and Total Unfunded Commitments Related to Investment in Low Income Housing Partnerships (Details) - USD ($) $ in Thousands |
Jun. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Commitments and Contingencies Disclosure [Abstract] | ||
Investments in low-income housing partnerships | $ 11,489 | $ 12,212 |
Unfunded commitments to fund investments for low-income housing partnerships | $ 7,185 | $ 8,748 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Commitments and Contingencies Disclosure [Abstract] | ||||
Recognized amortization expense | $ 362 | $ 187 | $ 723 | $ 374 |
Recognized tax credits and other benefits | $ 456 | $ 160 | $ 912 | $ 320 |
Stock-Based Compensation - Schedule of Information Related to Stock Option Plan (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | $ 186 | $ 0 | ||
Cash received from option exercises | 720 | 0 | ||
Tax (provision) benefit realized from option exercised | (3) | 0 | ||
2010 Plan | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Intrinsic value of options exercised | $ 0 | $ 0 | ||
Cash received from option exercises | 0 | 0 | ||
Tax (provision) benefit realized from option exercised | 0 | 0 | ||
2021 Plan | Restricted Stock Units | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Tax (provision) benefit realized from option exercised | $ (32) | $ 12 | $ (34) | $ 12 |
Fair Value of Financial Instruments - Schedule of Increase (Decrease) in Value of Certain Assets Held at End of Respective Reporting Periods Presented for Which a Nonrecurring Fair Value Adjustment (Details) - Fair Value, Measurements, Nonrecurring - Loans Receivable - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Financing Receivable Impaired [Line Items] | ||||
Collateral-dependent loans: | $ (1) | $ 8 | $ 1 | $ 15 |
SBA—real estate | ||||
Financing Receivable Impaired [Line Items] | ||||
Collateral-dependent loans: | $ (1) | $ 8 | $ 1 | $ 15 |
Regulatory Capital Matters - Additional Information (Details) |
Jun. 30, 2023 |
---|---|
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] | |
Capital conservation buffer | 2.50% |
Earnings Per Share - Schedule of Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Basic | ||||
Net income | $ 6,091 | $ 8,480 | $ 13,625 | $ 16,632 |
Distributed and undistributed earnings allocated to participating securities | (127) | (205) | (286) | (346) |
Net income allocated to common shares | $ 5,964 | $ 8,275 | $ 13,339 | $ 16,286 |
Weighted average common shares outstanding (in shares) | 15,158,365 | 15,141,975 | 15,221,010 | 15,139,903 |
Basic earnings per common share (in dollars per share) | $ 0.39 | $ 0.55 | $ 0.88 | $ 1.08 |
Diluted | ||||
Net income allocated to common shares | $ 5,964 | $ 8,275 | $ 13,339 | $ 16,286 |
Weighted average common shares outstanding for basic earnings per common share (in shares) | 15,158,365 | 15,141,975 | 15,221,010 | 15,139,903 |
Add: Dilutive effects of assumed exercises of stock options | 11,429 | 92,602 | 20,893 | 98,210 |
Average shares and dilutive potential common shares (in shares) | 15,169,794 | 15,234,577 | 15,241,903 | 15,238,113 |
Diluted earnings per common share (in dollars per share) | $ 0.39 | $ 0.54 | $ 0.88 | $ 1.07 |
Earnings Per Share - Additional Information (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2023 |
Jun. 30, 2022 |
Jun. 30, 2023 |
Jun. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Antidilutive shares of common stock excluded from computation of earnings per share (in shares) | 0 | 0 | 0 | 0 |
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