Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 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 nine month periods ended September 30, 2023 and 2022 is summarized in the following tables:

	Three Months Ended September 30, 2023
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	42,238	$	36,626	$	—	$	27,092	$	105,956
(Reversal of ) provision for credit losses - loans	(3,067)		4,852		—		5,615		7,400
Loans charged-off	(90)		(9,288)		—		(6,441)		(15,819)
Recoveries	10		736		—		490		1,236
Balance at end of the period	$	39,091	$	32,926	$	—	$	26,756	$	98,773

	Nine Months Ended September 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 - loans	13,655		20,639		—		13,883		48,177
Loans charged-off	(90)		(18,715)		—		(20,428)		(39,233)
Recoveries	289		5,114		—		926		6,329
Balance at end of the period	$	39,091	$	32,926	$	—	$	26,756	$	98,773

	Three Months Ended September 30, 2022
	Recast (1)
(in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and Others		Total
Balance at beginning of the period	$	20,459	$	21,152	$	—	$	28,864	$	70,475
Provision for credit losses - loans (1)	2,869		927		—		3,518		7,314
Loans charged-off	—		(99)		—		(1,712)		(1,811)
Recoveries	12		443		—		40		495
Balance at end of the period (1)	$	23,340	$	22,423	$	—	$	30,710	$	76,473

_______________

(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.

	Nine Months Ended September 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 - loans (1)	(12,056)		(2,435)		—		11,579		(2,912)
Loans charged-off	—		(7,979)		—		(3,674)		(11,653)
Recoveries	26		2,139		—		300		2,465
Balance at end of the period (1)	$	23,340	$	22,423	$	—	$	30,710	$	76,473

______________

(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 September 30, (in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and others		Total
2023	$	20,500	$	6,909	$	—	$	—	$	27,409
2022	$	—	$	6,483	$	—	$	—	$	6,483

Nine Months Ended September 30, (in thousands)	Real Estate		Commercial		Financial Institutions		Consumer and others		Total
2023	$	34,075	$	7,796	$	—	$	—	$	41,871
2022	$	11,566	$	6,483	$	—	$	1,313	$	19,362

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 September 30, 2023 and December 31, 2022:

	September 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	$	99,056	$	191,221	$	597,265	$	35,803	$	90,311	$	402,213	$	177,702	$	1,593,571
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Nonowner occupied	99,056		191,221		597,265		35,803		90,311		402,213		177,702		1,593,571
Multi-family residential
Credit Risk Rating:
Nonclassified
Pass	1,801		70,396		105,857		26,605		117,535		120,969		305,147		748,310
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		23,344		—		23,344
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Multi-family residential	1,801		70,396		105,857		26,605		117,535		144,313		305,147		771,654
Land development and construction loans
Credit Risk Rating:
Nonclassified
Pass	42,384		9,735		28,911		21,945		—		26,928		172,035		301,938
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total land development and construction loans	42,384		9,735		28,911		21,945		—		26,928		172,035		301,938
Single-family residential
Credit Risk Rating:
Nonclassified
Pass	286,064		460,287		181,306		65,722		21,041		71,615		282,074		1,368,109
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		691		2,394		3,085
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total Single-family residential	286,064		460,287		181,306		65,722		21,041		72,306		284,468		1,371,194
Owner occupied
Credit Risk Rating:
Nonclassified
Pass	143,861		262,104		434,620		20,904		58,112		161,840		44,066		1,125,507
Special Mention	—		—		—		—		—		354		1,880		2,234
Classified
Substandard	—		—		1,316		—		—		864		—		2,180
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total owner occupied	143,861		262,104		435,936		20,904		58,112		163,058		45,946		1,129,921

	September 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	302,410		292,024		79,465		12,127		34,900		38,184		660,939		1,420,049
Special Mention	7,007		—		—		—		—		—		19,968		26,975
Classified
Substandard	—		623		17		106		1,777		854		2,355		5,732
Doubtful	—		—		—		—		3		—		—		3
Loss	—		—		—		—		—		—		—		—
Total commercial Loans	309,417		292,647		79,482		12,233		36,680		39,038		683,262		1,452,759
Loans to financial institutions and acceptances
Credit Risk Rating:
Nonclassified
Pass	—		—		—		—		—		13,353		—		13,353
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total loans to financial institutions and acceptances	—		—		—		—		—		13,353		—		13,353
Consumer loans
Credit Risk Rating:
Nonclassified
Pass	28,583		211,027		61,386		21,306		35		10		116,649		438,996
Special Mention	—		—		—		—		—		—		—		—
Classified
Substandard	—		—		—		—		—		1		—		1
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total consumer loans	28,583		211,027		61,386		21,306		35		11		116,649		438,997
Total loans held for investment, gross	$	911,166	$	1,497,417	$	1,490,143	$	204,518	$	323,714	$	861,220	$	1,785,209	$	7,073,387

	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 tables present gross charge-offs by year of origination for the periods presented:

	Three Months Ended September 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	$	—	$	—	$	—	$	—	$	—	$	90	$	—	$	90
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		90		—		90
Single-family residential	—		—		—		—		—		—		—		—
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		90		—		90
Commercial loans	108		534		46		4,868		1,814		1,918		—		9,288
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	193		3,527		2,365		185		9		162		—		6,441
Total Quarter-To-Date Gross Charge-Offs	$	301	$	4,061	$	2,411	$	5,053	$	1,823	$	2,170	$	—	$	15,819

	Nine Months Ended September 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	$	—	$	—	$	—	$	—	$	—	$	90	$	—	$	90
Multi-family residential	—		—		—		—		—		—		—		—
Land development and construction loans	—		—		—		—		—		—		—		—
	—		—		—		—		—		90		—		90
Single-family residential	—		—		—		—		—		39		—		39
Owner occupied	—		—		—		—		—		—		—		—
	—		—		—		—		—		129		—		129
Commercial loans	108		9,308		216		5,026		1,814		2,243		—		18,715
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	592		9,589		8,608		1,031		22		547		—		20,389
Total Year-To-Date Gross Charge-Offs	$	700	$	18,897	$	8,824	$	6,057	$	1,836	$	2,919	$	—	$	39,233

	Three Months Ended September 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	—		—		—		—		—		99		—		99
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	622		785		305		—		—				—		1,712
Total Quarter-To-Date Gross Charge-Offs	$	622	$	785	$	305	$	—	$	—	$	99	$	—	$	1,811

	Nine Months Ended September 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		—		486		—		7,979
Loans to financial institutions and acceptances	—		—		—		—		—		—		—		—
Consumer loans and overdrafts	665		2,008		986		—		—		1		—		3,660
Total Year-To-Date Gross Charge-Offs	$	3,188	$	2,008	$	5,415	$	541	$	—	$	501	$	—	$	11,653

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

	As of September 30, 2023
	Collateral Type
(in thousands)	Commercial Real Estate		Residential Real Estate		Other		Total		Specific Reserves
Real estate loans
Commercial real estate
Multi-family residential	$	23,344	—		—		$	23,344	8,567
Single-family residential (1)	—		797		—		797		—
Owner occupied (2)	1,951		—		—		1,951		—
Commercial loans	—		—		3,620		3,620		—
Total	$	25,295	$	797	$	3,620	$	29,712	$	8,567

_________________

(1)Weighted-average loan-to-value was approximately 66.8% at September 30, 2023.

(2)Weighted-average loan-to-value was approximately 58.1% at September 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.