Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Receivables [Abstract]

Schedule of Allowance for Loan Losses

The analyses by loan segment of the changes in the ACL for the three and six month periods ended June 30, 2023 and 2022 is summarized in the following tables:

	Three Months Ended June 30, 2023
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	23,195	$	30,647	$	—	$	30,519	$	84,361
Provision for credit losses	18,903		6,386		—		3,788		29,077
Loans charged-off	—		(1,452)		—		(7,633)		(9,085)
Recoveries	140		1,045		—		418		1,603
Balance at end of the period	$	42,238	$	36,626	$	—	$	27,092	$	105,956

	Six Months Ended June 30, 2023
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	25,237	$	25,888	$	—	$	32,375	$	83,500
Provision for credit losses	16,722		15,787		—		8,268		40,777
Loans charged-off	—		(9,427)		—		(13,987)		(23,414)
Recoveries	279		4,378		—		436		5,093
Balance at end of the period	$	42,238	$	36,626	$	—	$	27,092	$	105,956

	Three Months Ended June 30, 2022
	Recast (1)
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	25,027	$	25,079	$	—	$	25,344	$	75,450
(Reversal of) provision for credit losses (1)	(4,578)		(718)		—		4,345		(951)
Loans charged-off	—		(4,605)		—		(915)		(5,520)
Recoveries	10		1,396		—		90		1,496
Balance at end of the period (1)	$	20,459	$	21,152	$	—	$	28,864	$	70,475

_______________

(1)Recast amounts reflect the impact of the adoption of CECL effective as of January 1, 2022. See Note 1 “Business, Basis of Presentation and Summary of Significant Accounting Policies” for additional information.

	Six Months Ended June 30, 2022
	Recast (1)
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	17,952	$	38,979	$	42	$	12,926	$	69,899
Cumulative effect of adoption of accounting principle (1)	17,418		(8,281)		(42)		9,579		18,674
(Reversal of) provision for credit losses (1)	(14,925)		(3,362)		—		8,061		(10,226)
Loans charged-off	—		(7,880)		—		(1,962)		(9,842)
Recoveries	14		1,696		—		260		1,970
Balance at end of the period (1)	$	20,459	$	21,152	$	—	$	28,864	$	70,475

______________

(1)Recast amounts reflect the impact of the adoption of CECL effective as of January 1, 2022. See Note 1 “Business, Basis of Presentation and Summary of Significant Accounting Policies” for additional information.

The following is a summary of net proceeds from sales of loans held for investment by portfolio segment:

Three Months Ended June 30, (in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and others		Total
2023	$	3,575	$	887	$	—	$	—	$	4,462
2022	$	11,566	$	—	$	—	$	—	$	11,566

Six Months Ended June 30, (in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and others		Total
2023	$	13,575	$	887	$	—	$	—	$	14,462
2022	$	11,566	$	—	$	—	$	1,313	$	12,879

Schedule of Credit Quality Indicators

The following is a summary of the master risk categories and their associated loan risk ratings, as well as a description of the general characteristics of the master risk category:

	Loan Risk Rating
Master risk category
Nonclassified	4 to 10
Classified	1 to 3
Substandard	3
Doubtful	2
Loss	1

Schedule Of Financing Receivables By Type Of Collateral

The following tables present Loans held for investment by credit quality indicators and year of origination as of June 30, 2023 and December 31, 2022:

	June 30, 2023
	Term Loans
	Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Real estate loans
Commercial real estate
Nonowner occupied
Credit Risk Rating:
Nonclassified
Pass	$	65,271	$	195,538	$	618,505	$	33,976	$	90,962	$	402,635	$	228,283	$	1,635,170
Special Mention	—		—		—		—		—		8,301		—		8,301
Classified
Substandard	—		—		—		—		—		1,753		—		1,753
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Nonowner occupied	65,271		195,538		618,505		33,976		90,962		412,689		228,283		1,645,224
Multi-family residential
Credit Risk Rating:
Nonclassified
Pass	1,484		67,844		109,783		26,731		117,683		113,106		303,775		740,406
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		24,306		—		24,306
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multi-family residential	1,484		67,844		109,783		26,731		117,683		137,412		303,775		764,712
Land development and construction loans
Credit Risk Rating:
Nonclassified
Pass	36,606		9,730		28,140		22,000		—		26,930		184,107		307,513
Special Mention	—		—		—		—		—		—		6,497		6,497
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total land development and construction loans	36,606		9,730		28,140		22,000		—		26,930		190,604		314,010
Single-family residential
Credit Risk Rating:
Nonclassified
Pass	626,167		76,619		136,977		68,884		21,260		76,098		277,698		1,283,703
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		426		1,728		2,154
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Single-family residential	626,167		76,619		136,977		68,884		21,260		76,524		279,426		1,285,857
Owner occupied
Credit Risk Rating:
Nonclassified
Pass	69,246		259,143		439,399		21,973		62,762		167,636		33,873		1,054,032
Special Mention	—		—		—		—		—		356		1,880		2,236
Classified
Substandard	—		1,931		2,845		625		—		1,571		—		6,972
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total owner occupied	69,246		261,074		442,244		22,598		62,762		169,563		35,753		1,063,240

	June 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Total
Non-real estate loans
Commercial Loans
Credit Risk Rating:
Nonclassified
Pass	298,064		345,865		83,131		14,000		39,049		34,566		736,190		1,550,865
Special Mention	—		—		—		—		—		—		13,029		13,029
Classified
Substandard	—		23		12		1,648		179		906		10,544		13,312
Doubtful	—		—		—		—		3		—		—		3
Loss	—		—		—		—		—		—		—		—
Total commercial Loans	298,064		345,888		83,143		15,648		39,231		35,472		759,763		1,577,209
Loans to financial institutions and acceptances
Credit Risk Rating:
Nonclassified
Pass	—		—		—		—		—		13,332		—		13,332
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total loans to financial institutions and acceptances	—		—		—		—		—		13,332		—		13,332
Consumer loans
Credit Risk Rating:
Nonclassified
Pass	23,836		43,698		117,325		198,640		47		23		119,793		503,362
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		1		69		70
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total consumer loans	23,836		43,698		117,325		198,640		47		24		119,862		503,432
Total loans held for investment, gross	$	1,120,674	$	1,000,391	$	1,536,117	$	388,477	$	331,945	$	871,946	$	1,917,466	$	7,167,016

	December 31, 2022
	Term Loans
	Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Real estate loans
Commercial real estate
Nonowner occupied
Credit Risk Rating:
Nonclassified
Pass	$	177,852	$	637,015	$	34,525	$	91,941	$	82,385	$	342,174	$	221,333	$	1,587,225
Special Mention	—		—		—		—		—		8,378		—		8,378
Classified
Substandard	—		—		—		20,113		—		—		—		20,113
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Nonowner occupied	177,852		637,015		34,525		112,054		82,385		350,552		221,333		1,615,716
Multi-family residential
Credit Risk Rating:
Nonclassified
Pass	85,670		110,943		26,881		126,724		27,242		124,433		318,130		820,023
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multi-family residential	85,670		110,943		26,881		126,724		27,242		124,433		318,130		820,023
Land development and construction loans
Credit Risk Rating:
Nonclassified
Pass	8,846		27,746		23,459		188		—		26,930		186,005		273,174
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total land development and construction loans	8,846		27,746		23,459		188		—		26,930		186,005		273,174
Single-family residential
Credit Risk Rating:
Nonclassified
Pass	480,328		186,790		70,853		21,654		16,630		65,249		259,411		1,100,915
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		741		1,189		1,930
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Single-family residential	480,328		186,790		70,853		21,654		16,630		65,990		260,600		1,102,845
Owner occupied
Credit Risk Rating:
Nonclassified
Pass	256,816		479,961		22,341		63,629		21,790		162,411		33,146		1,040,094
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	2,096		1,631		656		—		650		1,283		40		6,356
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total owner occupied	258,912		481,592		22,997		63,629		22,440		163,694		33,186		1,046,450

	December 31, 2022
	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Total
Non-real estate loans
Commercial Loans
Credit Risk Rating:
Nonclassified
Pass	400,781		95,470		19,815		42,936		32,248		16,297		761,489		1,369,036
Special Mention	—		—		—		—		1,499		—		250		1,749
Classified
Substandard	—		84		267		194		27		984		8,890		10,446
Doubtful	—		—		—		3		—		—		—		3
Loss	—		—		—		—		—		—		—		—
Total commercial Loans	400,781		95,554		20,082		43,133		33,774		17,281		770,629		1,381,234
Loans to financial institutions and acceptances
Credit Risk Rating:
Nonclassified
Pass	—		—		—		—		—		13,292		—		13,292
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total loans to financial institutions and acceptances	—		—		—		—		—		13,292		—		13,292
Consumer loans
Credit Risk Rating:
Nonclassified
Pass	338,744		121,011		29,053		68		54		—		115,300		604,230
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	98		128		—		—		—		4		—		230
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total consumer loans	338,842		121,139		29,053		68		54		4		115,300		604,460
Total loans held for investment, gross	$	1,751,231	$	1,660,779	$	227,850	$	367,450	$	182,525	$	762,176	$	1,905,183	$	6,857,194

The following table present gross charge-offs by year of origination for the periods presented:

	Three Months Ended June 30, 2023
	Term Loans Charge-offs by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Charge-Offs		Total
Quarter-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—
Single-family residential	—		—		—		—		—		7		—		7
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		7		—		7
Commercial loans			1,216		77		158		—		1		—		1,452
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	399		3,172		3,364		553		13		125		—		7,626
Total Quarter-To-Date Gross Charge-Offs	$	399	$	4,388	$	3,441	$	711	$	13	$	133	$	—	$	9,085

	Six Months Ended June 30, 2023
	Term Loans Charge-offs by Origination Year
(in thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Charge-Offs		Total
Year-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—
Single-family residential	—		—		—		—		—		39		—		39
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		39		—		39
Commercial loans	—		8,774		170		158		—		325		—		9,427
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	399		6,062		6,243		846		13		385		—		13,948
Total Year-To-Date Gross Charge-Offs	$	399	$	14,836	$	6,413	$	1,004	$	13	$	749	$	—	$	23,414

	Three Months Ended June 30, 2022
	Term Loans Charge-offs by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Charge-Offs		Total
Quarter-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—
Single-family residential	—		—		—		—		—				—		—
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—
Commercial loans	—		—		3,679		541		—		385		—		4,605
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	24		632		259		—		—		—		—		915
Total Quarter-To-Date Gross Charge-Offs	$	24	$	632	$	3,938	$	541	$	—	$	385	$	—	$	5,520

	Six Months Ended June 30, 2022
	Term Loans Charge-offs by Origination Year
(in thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Charge-Offs		Total
Year-To-Date Gross Charge-offs
Real estate loans
Commercial real estate
Nonowner occupied	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		—		—		—
Single-family residential	—		—		—		—		—		14		—		14
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		14		—		14
Commercial loans	2,523		—		4,429		541		—		387		—		7,880
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	43		1,223		681		—		—		1		—		1,948
Total Year-To-Date Gross Charge-Offs	$	2,566	$	1,223	$	5,110	$	541	$	—	$	402	$	—	$	9,842

The following tables present the amortized cost basis of collateral dependent loans related to borrowers experiencing financial difficulty by type of collateral as of June 30, 2023 and December 31, 2022:

	As of June 30, 2023
	Collateral Type
(in thousands)	Commercial Real Estate		Residential Real Estate		Other		Total		Specific Reserves
Real estate loans
Commercial real estate
Nonowner occupied (1)	$	1,821	$	—	$	—	$	1,821	$	—
Multi-family residential	24,306		—		—		24,306		8,568
Single-family residential (2)	—		803		—		803		—
Owner occupied (3)	6,688		—		—		6,688		—
Commercial loans	—		—		11,709		11,709		5,707
Total	$	32,815	$	803	$	11,709	$	45,327	$	14,275

_________________

(1)Weighted-average loan-to-value was approximately 62.1% at June 30, 2023.

(2)Weighted-average loan-to-value was approximately 67.3% at June 30, 2023.

(3)Weighted-average loan-to-value was approximately 62.0% at June 30, 2023.

	As of December 31, 2022
	Collateral Type
(in thousands)	Commercial Real Estate		Residential Real Estate		Other		Total		Specific Reserves
Real estate loans
Commercial real estate
Nonowner occupied (1)	$	20,121	$	—	$	—	$	20,121	$	—
Owner occupied (2)	5,934		—		—		5,934		—
	26,055		—		—		26,055		—
Commercial loans (3)	1,998		—		6,401		8,399		5,179
Total	$	28,053	$	—	$	6,401	$	34,454	$	5,179

_________________

(1)Weighted-average loan-to-value was approximately 92.7% at December 31, 2022.

(2)Weighted-average loan-to-value was approximately 62.7% at December 31, 2022.

(3)Includes loans with no specific reserves totaling $0.5 million with a weighted-average loan-to-value of approximately 42.0% at December 31, 2022.