Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-22193 | |
Entity Registrant Name | PACIFIC PREMIER BANCORP INC | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 33-0743196 | |
Entity Address, Address Line One | 17901 Von Karman Avenue | |
Entity Address, Address Line Two | Suite 1200 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92614 | |
City Area Code | 949 | |
Local Phone Number | 864-8000 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | PPBI | |
Security Exchange Name | NASDAQ | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 59,363,829 | |
Entity Central Index Key | 0001028918 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash and due from banks | $ 166,238 | $ 125,036 |
Interest-bearing deposits with financial institutions | 261,477 | 78,370 |
Cash and cash equivalents | 427,715 | 203,406 |
Interest-bearing time deposits with financial institutions | 2,711 | 6,143 |
Investments held-to-maturity, at amortized cost (fair value of $41,302 and $44,672 as of September 30, 2019 and December 31, 2018, respectively) | 40,433 | 45,210 |
Investment securities available-for-sale, at fair value | 1,256,655 | 1,103,222 |
FHLB, FRB and other stock, at cost | 92,986 | 94,918 |
Loans held for sale, at lower of cost or fair value | 7,092 | 5,719 |
Loans held for investment | 8,757,476 | 8,836,818 |
Allowance for loan losses | (35,000) | (36,072) |
Loans held for investment, net | 8,722,476 | 8,800,746 |
Accrued interest receivable | 38,603 | 37,837 |
Other real estate owned | 126 | 147 |
Premises and equipment | 62,851 | 64,691 |
Deferred income taxes, net | 0 | 15,627 |
Bank owned life insurance | 112,716 | 110,871 |
Intangible assets | 87,560 | 100,556 |
Goodwill | 808,322 | 808,726 |
Other assets | 151,251 | 89,568 |
Total assets | 11,811,497 | 11,487,387 |
Deposit accounts: | ||
Noninterest-bearing checking | 3,623,546 | 3,495,737 |
Interest-bearing: | ||
Checking | 529,401 | 526,088 |
Money market/savings | 3,362,453 | 3,225,849 |
Retail certificates of deposit | 1,019,433 | 1,009,066 |
Wholesale/brokered certificates of deposit | 324,455 | 401,611 |
Total interest-bearing | 5,235,742 | 5,162,614 |
Total deposits | 8,859,288 | 8,658,351 |
FHLB advances and other borrowings | 604,558 | 667,681 |
Subordinated debentures | 217,825 | 110,313 |
Deferred income taxes, net | 301 | 0 |
Accrued expenses and other liabilities | 140,527 | 81,345 |
Total liabilities | 9,822,499 | 9,517,690 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $.01 par value; 1,000,000 authorized; none issued and outstanding | 0 | 0 |
Common stock, $.01 par value; 150,000,000 shares authorized at September 30, 2019 and December 31, 2018; 59,364,340 shares and 62,480,755 shares issued and outstanding, respectively. | 584 | 617 |
Additional paid-in capital | 1,590,168 | 1,674,274 |
Retained earnings | 368,051 | 300,407 |
Accumulated other comprehensive income (loss) | 30,195 | (5,601) |
Total stockholders’ equity | 1,988,998 | 1,969,697 |
Total liabilities and stockholders’ equity | $ 11,811,497 | $ 11,487,387 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Investments held-to-maturity, fair value | $ 41,302 | $ 44,672 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 59,364,340 | 62,480,755 |
Common stock, shares outstanding (in shares) | 59,364,340 | 62,480,755 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
INTEREST INCOME | |||||
Loans | $ 122,974 | $ 121,860 | $ 119,271 | $ 366,310 | $ 289,069 |
Investment securities and other interest-earning assets | 9,630 | 10,554 | 9,605 | 29,951 | 23,333 |
Total interest income | 132,604 | 132,414 | 128,876 | 396,261 | 312,402 |
INTEREST EXPENSE | |||||
Deposits | 15,878 | 15,991 | 11,942 | 45,153 | 25,612 |
FHLB advances and other borrowings | 1,214 | 3,083 | 2,494 | 9,099 | 6,642 |
Subordinated debentures | 3,177 | 2,699 | 1,727 | 7,627 | 4,983 |
Total interest expense | 20,269 | 21,773 | 16,163 | 61,879 | 37,237 |
Net interest income before provision for credit losses | 112,335 | 110,641 | 112,713 | 334,382 | 275,165 |
Provision for credit losses | 1,562 | 334 | 1,981 | 3,422 | 5,995 |
Net interest income after provision for credit losses | 110,773 | 110,307 | 110,732 | 330,960 | 269,170 |
NONINTEREST INCOME | |||||
Loan servicing fees | 546 | 409 | 400 | 1,353 | 1,037 |
Earnings on bank-owned life insurance | 861 | 851 | 1,270 | 2,622 | 2,498 |
Net gain from sales of loans | 2,313 | 902 | 2,029 | 4,944 | 8,830 |
Net gain from sales of investment securities | 4,261 | 212 | 1,063 | 4,900 | 1,399 |
Other income | 1,228 | 1,001 | 530 | 3,689 | 2,697 |
Total noninterest income | 11,430 | 6,324 | 8,240 | 25,435 | 24,057 |
NONINTEREST EXPENSE | |||||
Compensation and benefits | 35,543 | 33,847 | 37,901 | 102,778 | 96,048 |
Premises and occupancy | 7,593 | 7,517 | 7,214 | 22,645 | 17,040 |
Data processing | 3,094 | 3,036 | 4,095 | 9,060 | 9,544 |
Other real estate owned operations, net | 64 | 62 | 0 | 129 | 3 |
FDIC insurance premiums | (10) | 740 | 1,060 | 1,530 | 2,252 |
Legal, audit and professional expense | 3,058 | 3,545 | 3,280 | 9,601 | 6,935 |
Marketing expense | 1,767 | 1,425 | 1,569 | 4,689 | 4,451 |
Office, telecommunications and postage expense | 1,200 | 1,311 | 1,538 | 3,721 | 3,733 |
Loan expense | 1,137 | 1,005 | 1,139 | 3,015 | 2,324 |
Deposit expense | 3,478 | 3,668 | 2,833 | 10,729 | 6,811 |
Merger-related expense | (4) | 5 | 13,978 | 656 | 15,857 |
Core deposit intangible (“CDI”) amortization | 4,281 | 4,281 | 4,693 | 12,998 | 8,963 |
Other expense | 4,135 | 3,494 | 3,482 | 11,298 | 8,705 |
Total noninterest expense | 65,336 | 63,936 | 82,782 | 192,849 | 182,666 |
Net income before income taxes | 56,867 | 52,695 | 36,190 | 163,546 | 110,561 |
Income tax | 15,492 | 14,168 | 7,798 | 44,926 | 26,864 |
Net income | $ 41,375 | $ 38,527 | $ 28,392 | $ 118,620 | $ 83,697 |
EARNINGS PER SHARE | |||||
Basic (in dollars per share) | $ 0.69 | $ 0.62 | $ 0.46 | $ 1.93 | $ 1.63 |
Diluted (in dollars per share) | $ 0.69 | $ 0.62 | $ 0.46 | $ 1.92 | $ 1.61 |
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||
Basic (in shares) | 59,293,218 | 61,308,046 | 61,727,030 | 60,853,081 | 51,282,533 |
Diluted (in shares) | 59,670,855 | 61,661,773 | 62,361,804 | 61,201,858 | 51,965,647 |
Service charges on deposit accounts | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 1,440 | $ 1,441 | $ 1,570 | $ 4,211 | $ 3,777 |
Other service fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | 360 | 363 | 317 | 1,079 | 632 |
Debit card interchange fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 421 | $ 1,145 | $ 1,061 | $ 2,637 | $ 3,187 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | ||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 41,375 | $ 38,527 | $ 28,392 | $ 118,620 | $ 83,697 | |
Other comprehensive income, net of tax: | ||||||
Unrealized holding gain (loss) on securities available-for-sale arising during the period, net of income taxes | [1] | 10,864 | 17,449 | (3,630) | 39,280 | (16,095) |
Reclassification adjustment for net gain on sale of securities included in net income, net of income taxes | [2] | (3,027) | (151) | (834) | (3,484) | (1,079) |
Other comprehensive income (loss), net of tax | 7,837 | 17,298 | (4,464) | 35,796 | (17,174) | |
Comprehensive income, net of tax | $ 49,212 | $ 55,825 | $ 23,928 | $ 154,416 | $ 66,523 | |
[1] | Income tax expense (benefit) on the unrealized gain (loss) on securities was $4.4 million for the three months ended September 30, 2019 , $7.7 million for the three months ended June 30, 2019 , $(1.6) million for the three months ended September 30, 2018 , $16.0 million for the nine months ended September 30, 2019 and $(6.8) million for the nine months ended September 30, 2018 | |||||
[2] | Income tax expense (benefit) on the reclassification adjustment for net gains (losses) on sale of securities included in net income was $1.2 million for the three months ended September 30, 2019 , $61,000 for the three months ended June 30, 2019 , $229,000 for the three months ended September 30, 2018 , $1.4 million for the nine months ended September 30, 2019 and $320,000 for the nine months ended September 30, 2018 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | |||||
Unrealized holding gain (loss) on securities arising during the period, income tax expense (benefit) | $ 4,400 | $ 7,700 | $ (1,600) | $ 16,000 | $ (6,800) |
Reclassification adjustment for net (gains) losses on sale of securities included in net income, income tax expense (benefit) | $ 1,200 | $ 61 | $ 229 | $ 1,400 | $ 320 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | Accumulated Other Comprehensive Income (Loss) |
Balance at Dec. 31, 2017 | $ 1,241,996 | $ 458 | $ 1,063,974 | $ 177,149 | $ 415 |
Balance (in shares) at Dec. 31, 2017 | 46,245,050 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 83,697 | 83,697 | |||
Other comprehensive income | (17,174) | (17,174) | |||
Share-based compensation expense | 6,362 | 6,362 | |||
Issuance of restricted stock, net | 0 | ||||
Issuance of restricted stock, net (in shares) | 264,420 | ||||
Common stock issued | 601,171 | $ 158 | 601,013 | ||
Common stock issued (in shares) | 15,758,039 | ||||
Restricted stock surrendered and canceled | (1,586) | (1,586) | |||
Restricted stock surrendered and canceled (in shares) | (28,849) | ||||
Exercise of stock options | 1,911 | $ 1 | 1,910 | ||
Exercise of stock options (in shares) | 234,061 | ||||
Reclassification of certain tax effects of the Tax Cuts and Jobs Act | 0 | (82) | 82 | ||
Balance at Sep. 30, 2018 | 1,916,377 | $ 617 | 1,671,673 | 260,764 | (16,677) |
Balance (in shares) at Sep. 30, 2018 | 62,472,721 | ||||
Balance at Jun. 30, 2018 | 1,288,525 | $ 459 | 1,067,907 | 232,372 | (12,213) |
Balance (in shares) at Jun. 30, 2018 | 46,629,118 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 28,392 | 28,392 | |||
Other comprehensive income | (4,464) | (4,464) | |||
Share-based compensation expense | 2,445 | 2,445 | |||
Issuance of restricted stock, net | 0 | ||||
Issuance of restricted stock, net (in shares) | 68,884 | ||||
Common stock issued | 601,171 | $ 158 | 601,013 | ||
Common stock issued (in shares) | 15,758,039 | ||||
Restricted stock surrendered and canceled | (7) | (7) | |||
Restricted stock surrendered and canceled (in shares) | (3,091) | ||||
Exercise of stock options | 315 | $ 0 | 315 | ||
Exercise of stock options (in shares) | 19,771 | ||||
Balance at Sep. 30, 2018 | 1,916,377 | $ 617 | 1,671,673 | 260,764 | (16,677) |
Balance (in shares) at Sep. 30, 2018 | 62,472,721 | ||||
Balance at Dec. 31, 2018 | $ 1,969,697 | $ 617 | 1,674,274 | 300,407 | (5,601) |
Balance (in shares) at Dec. 31, 2018 | 62,480,755 | 62,480,755 | |||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | $ 118,620 | 118,620 | |||
Other comprehensive income | 35,796 | 35,796 | |||
Repurchase and retirement of common stock | (100,000) | $ (33) | (89,887) | (10,080) | |
Repurchase and retirement of common stock (in shares) | (3,364,761) | ||||
Cash dividends declared | (40,807) | (40,807) | |||
Dividend equivalents declared | 0 | 89 | (89) | ||
Share-based compensation expense | 7,927 | 7,927 | |||
Issuance of restricted stock, net | 0 | ||||
Issuance of restricted stock, net (in shares) | 316,254 | ||||
Restricted stock surrendered and canceled | (2,629) | (2,629) | |||
Restricted stock surrendered and canceled (in shares) | (111,456) | ||||
Exercise of stock options | 394 | 394 | |||
Exercise of stock options (in shares) | 43,548 | ||||
Balance at Sep. 30, 2019 | $ 1,988,998 | $ 584 | 1,590,168 | 368,051 | 30,195 |
Balance (in shares) at Sep. 30, 2019 | 59,364,340 | 59,364,340 | |||
Balance at Jun. 30, 2019 | $ 1,984,456 | $ 595 | 1,618,137 | 343,366 | 22,358 |
Balance (in shares) at Jun. 30, 2019 | 60,509,994 | ||||
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 41,375 | 41,375 | |||
Other comprehensive income | 7,837 | 7,837 | |||
Repurchase and retirement of common stock | (34,031) | $ (11) | (30,634) | (3,386) | |
Repurchase and retirement of common stock (in shares) | (1,145,515) | ||||
Cash dividends declared | (13,266) | (13,266) | |||
Dividend equivalents declared | 0 | 38 | (38) | ||
Share-based compensation expense | 2,614 | 2,614 | |||
Issuance of restricted stock, net | 0 | ||||
Issuance of restricted stock, net (in shares) | 11,500 | ||||
Restricted stock surrendered and canceled | 0 | 0 | |||
Restricted stock surrendered and canceled (in shares) | (12,250) | ||||
Exercise of stock options | 13 | 13 | |||
Exercise of stock options (in shares) | 611 | ||||
Balance at Sep. 30, 2019 | $ 1,988,998 | $ 584 | $ 1,590,168 | $ 368,051 | $ 30,195 |
Balance (in shares) at Sep. 30, 2019 | 59,364,340 | 59,364,340 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends declared (in dollars per share) | $ 0.22 | $ 0.66 |
Dividend equivalents declared (in dollars per share) | $ 0.22 | $ 0.66 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 118,620 | $ 83,697 |
Adjustments to net income: | ||
Depreciation and amortization expense | 7,007 | 5,487 |
Provision for credit losses | 3,422 | 5,995 |
Share-based compensation expense | 7,927 | 6,362 |
(Gain) loss on sale and disposal of premises and equipment | (152) | 52 |
(Gain) loss on sale of or write down of other real estate owned | (55) | 21 |
Net amortization on securities | 3,591 | 5,326 |
Net accretion of discounts/premiums for acquired loans and deferred loan fees/costs | (19,982) | (13,362) |
Gain on sale of investment securities available-for-sale | (4,900) | (1,399) |
Originations of loans held for sale | (83,521) | (82,766) |
Proceeds from the sales of and principal payments from loans held for sale | 88,683 | 104,773 |
Gain on sale of loans | (4,944) | (8,830) |
Deferred income tax expense | 1,365 | (564) |
Change in accrued expenses and other liabilities, net | (4,855) | 16,343 |
Income from bank owned life insurance, net | (2,029) | (2,038) |
Amortization of core deposit intangible | 12,998 | 8,963 |
Change in accrued interest receivable and other assets, net | 7,858 | 11,265 |
Net cash provided by operating activities | 131,033 | 139,325 |
Cash flows from investing activities: | ||
Net decrease in interest-bearing time deposits with financial institutions | 3,432 | 247 |
Proceeds from sale of other real estate owned | 405 | 496 |
Loan originations and payments, net | 197,995 | (201,021) |
Proceeds from loans held for sale previously classified as portfolio loans | 76,579 | 21,556 |
Purchase of loans held for investment | (182,504) | (61,562) |
Purchase of held-to-maturity securities | 0 | (29,002) |
Principal payments on held-to-maturity securities | 4,741 | 839 |
Purchase of securities available-for-sale | (603,457) | (390,459) |
Principal payments on securities available-for-sale | 85,330 | 103,179 |
Proceeds from sale or maturity of securities available-for-sale | 418,471 | 394,536 |
Proceeds from the sale of premises and equipment | 11,139 | 0 |
Proceeds from bank owned life insurance death benefit | 405 | 0 |
Purchases of premises and equipment | (16,154) | (9,365) |
Change in FHLB, FRB, and other stock, at cost | 2,381 | (20,954) |
Funding of CRA investments | (7,295) | (13,703) |
Change in cash acquired in acquisitions, net | 0 | 146,571 |
Net cash used in investing activities | (8,532) | (58,642) |
Cash flows from financing activities: | ||
Net increase in deposit accounts | 200,937 | (90,671) |
Net change in short-term borrowings | (53,075) | 86,211 |
Repayment of long-term FHLB borrowings | (10,000) | (10,500) |
Redemption of junior subordinated debt securities | (15,465) | 0 |
Proceeds from issuance of subordinated debt, net | 122,453 | 0 |
Cash dividends paid | (40,807) | 0 |
Repurchase and retirement of common stock | (100,000) | 0 |
Proceeds from exercise of stock options | 394 | 1,911 |
Restricted stock surrendered and canceled | (2,629) | (1,586) |
Net cash provided by (used in) financing activities | 101,808 | (14,635) |
Net increase in cash and cash equivalents | 224,309 | 66,048 |
Cash and cash equivalents, beginning of period | 203,406 | 197,164 |
Cash and cash equivalents, end of period | 427,715 | 263,212 |
Supplemental cash flow disclosures: | ||
Interest paid | 58,591 | 33,290 |
Income taxes paid | 33,469 | 27,806 |
Noncash investing activities during the period: | ||
Transfers from portfolio loans to loans held for sale | 78,085 | 64,187 |
Transfers from loans to other real estate owned | 329 | 15 |
Recognition of operating lease right-of-use assets | (49,542) | 0 |
Recognition of operating lease liabilities | 49,542 | 0 |
Due on unsettled security purchases | (2,034) | (9,988) |
Assets acquired (liabilities assumed and capital created) in acquisitions (See Note 4): | ||
Investment securities | 0 | 392,858 |
FHLB and other stock | 0 | 16,768 |
Loans | 0 | 2,352,388 |
Core deposit intangible | 0 | 71,943 |
Deferred income tax | 0 | 4,536 |
Goodwill | 0 | 312,239 |
Fixed assets | 0 | 9,122 |
Other assets | 0 | 80,478 |
Deposits | 0 | (2,506,929) |
Other borrowings | 0 | (254,923) |
Other liabilities | 0 | (24,859) |
Common stock and additional paid-in capital | $ 0 | $ (601,172) |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The consolidated financial statements include the accounts of Pacific Premier Bancorp, Inc. (the “Corporation”) and its wholly owned subsidiaries, including Pacific Premier Bank (the “Bank”) (collectively, the “Company,” “we,” “our” or “us”). All significant intercompany accounts and transactions have been eliminated in consolidation. In the opinion of management, the unaudited consolidated financial statements reflect all normal recurring adjustments that are necessary for a fair presentation of the results for the interim periods presented. The results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for any other interim period or the full year ending December 31, 2019 . Certain items in the prior year financial statements were reclassified to conform to the current year presentation. Reclassification had no effect on prior year net income or stockholders’ equity. Certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “ 2018 Annual Report”). The Company accounts for its investments in its wholly owned special purpose entities, PPBI Trust I, Heritage Oaks Capital Trust II, Mission Community Capital Trust I, Santa Lucia Bancorp (CA) Capital Trust and First Commerce Bancorp Trust I, under the equity method whereby the subsidiary’s net earnings are recognized in the Company’s statement of income. During the three months ended September 30, 2019, the Company redeemed all outstanding principal amount of junior subordinated debt securities associated with PPBI Trust I and First Commerce Bancorp Trust I. The two unconsolidated statutory trust subsidiaries were subsequently dissolved. See Note 8 to the Consolidated Financial Statements in this Form 10-Q for additional information. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Standards Adopted in 2019 In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . This Update amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on purchased callable debt securities to the earliest call date. This Update should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The effective date of ASU 2017-08 is for interim and annual reporting periods beginning after December 15, 2018. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This Update was issued to increase the transparency and comparability around lease obligations. Previously unrecorded off-balance sheet obligations and corresponding rights to use underlying leased assets are now recorded in the consolidated financial statements, accompanied by enhanced qualitative and quantitative disclosures in the notes to the consolidated financial statements. The Update is generally effective for public business entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements . ASU 2018-10 provides improvements related to ASU 2016-02 to increase stakeholders’ awareness of the amendments to Topic 842 and to expedite the improvements. The amendments affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows entities adopting ASU 2016-02 to choose an additional transition method, under which an entity initially applies the accounting guidance for leases under Topic 842 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, ASU 2018-11 allows an entity electing this additional transition method to continue to present comparative period financial statements in accordance with Topic 840 (current U.S. GAAP). ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The amendments in these updates became effective for annual periods as well as interim periods within those annual periods beginning after December 15, 2018. The Company elected to apply the transition provisions of Topic 842 using the alternative transition method whereby comparative periods are not restated. The Company also elected to adopt the “package” of practical expedients in its transition to Topic 842, as specified in Accounting Standard Codification (“ASC”) 842-10-65. The results of this policy election are that the Company reflected the provisions of Topic 842 in its consolidated financial statements for the first time as of and for the period ended March 31, 2019 (the period of adoption). The Company measured and recorded liabilities to make lease payments as well as right-of-use assets in the period of adoption for leases that existed as of the transition date, and will continue to present all comparative periods under Topic 840. Under this elected transition method, the Company is not required to reassess the following as part of its transition to Topic 842: (1) whether any expired or existing contracts contain leases, (2) lease classifications for any existing or expired leases and (3) initial direct costs for any existing leases. Additionally, the Company elected to apply the use of hindsight in its assessment of the term for its leases upon transition, which allows for consideration of the Company’s option to extend or terminate a lease. The Company adopted the provisions of Topic 842 on January 1, 2019, and in its transition to Topic 842, the Company initially recorded a liability to make future lease payments of approximately $45.7 million and right-of-use assets of approximately $43.8 million . The difference of $1.9 million is the accounting adjustments previously recorded under Topic 840 and Topic 805, as required by transition guidance in ASC 842-10-65. The Company was not required to record a cumulative effect adjustment to the opening balance of retained earnings as part of its transition to Topic 842. The Company’s evaluation of lease obligations and service agreements under the new standard included an assessment of the appropriate classification and related accounting of each lease agreement, a review of applicability of the new standard to existing service agreements and gathering all essential lease data to facilitate the application of the new standard. The Company’s review indicated that all of its leases are classified as operating leases or short-term leases. In accordance with the provisions of Topic 842, liabilities to make future lease payments and right-of-use assets are only recorded for leases that are not considered short-term (leases with an original term of greater than 12 months). The Company records expense for its leases on a straight-line basis in accordance with the requirements under Topic 842 for operating leases. The Company’s expense recognition for its operating leases (including short-term leases) under Topic 842 has not differed significantly from that recorded under Topic 840. Right-of-use assets for operating leases are amortized over the lease term, and liabilities to make future lease payments are accounted for using the interest method, both in accordance with Topic 842. Please also refer to Note 13 - Leases for additional information related to the Company’s leases. Recent Accounting Guidance Not Yet Effective In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326) - Targeted Transition Relief . This Update was issued to allow entities that have certain financial instruments within the scope of ASC 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost , to make an irrevocable election to elect the fair value option for those instruments in ASC 825-10, Financial Instruments - Overall upon the adoption of ASC 326, which for the Company is January 1, 2020. The fair value option is not applicable to held-to-maturity debt securities. The Company currently does not anticipate it will make this election upon the adoption of ASC 326. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . This Update was issued as part of an ongoing project on the FASB’s agenda for improving the Codification or correcting for its unintended application. The FASB issued this Update, which is specific to Updates: 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , and 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Improvements within this Update include: (1) Allow the measurement of credit losses on accrued interest receivable balances to be determined separately from the other components of the amortized cost basis of associated financial assets. (2) Allow entities to make an accounting policy election to not measure credit losses on accrued interest receivable balances if the entity writes off the uncollectable accrued interest balances in a timely manner through a reversal of interest income or through the recognition of credit loss expense, or both. (3) Allow entities to make an accounting policy election to present accrued interest receivable balances and any related allowance for credit losses separately from the associated financial assets on the balance sheet (not including them as part of the associated financial asset’s amortized cost). (4) Allow entities to elect a practical expedient to disclose separately the total amount of accrued interest included in the amortized cost basis as a single balance to meet certain disclosure requirements. (5) Require that entities reverse from earnings any allowance for credit losses or valuation allowance previously measured on a loan or debt security upon the reclassification of the loan or debt security from one classification or category to another (such as from held for investment to held for sale), and apply the applicable measurement guidance with the new classification or category. (6) Clarify that an entity should include an estimate for recoveries of amounts previously written off in its estimation of the allowance for credit losses. (7) Allow entities to use future interest rate environment projections in the determination of the allowance for credit losses under the discounted cash flow method. (8) Allow an entity to make an accounting policy election to adjust the effective interest rate used to discount expected future cash flows for expected prepayments on financial assets within the scope of ASC 326-20 and on available for sale debt securities within the scope of ASC 326-30 to appropriately isolate credit risk in the determination of the allowance for credit losses. (9) Clarify that an entity should consider, when determining the contractual term of a financial asset, extension or renewal options that are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the entity. (10) Clarify the guidance by specifically requiring that an entity re-measure an equity security without readily determinable fair value at fair value when an orderly transaction is identified for an identical or similar investment of the same issuer in accordance with Topic 820. That is, the amendments clarify that the measurement alternative is a nonrecurring fair value measurement. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the effects of this Update on its financial statements and disclosures. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements. This Update provides clarification on certain aspects of an entity’s implementation of Topic 842 including those that relate to: (1) Determining the fair value of the underlying asset by lessors that are not manufacturers or dealers. The amendments related to this item carry forward from Topic 840 to Topic 842 an exception that allows lessors who are not manufacturers or dealers to use the cost of the underlying asset as its fair value. (2) Presentation on the statement of cash flows - sales-type and direct financing leases. The amendments related to this item clarify that all principal payments received on leases by lessors in sales-type or direct financing lease transactions should be reflected in investing activities for entities such as depository and lending institutions within in the scope of Topic 942. (3) Transition disclosures related to Topic 250, Accounting Changes and Error Corrections. The amendments related to this item clarify the FASB’s original intent by explicitly providing an exception to the paragraph 250-10-50-3 interim disclosure requirements in the Topic 842 transition disclosure requirements, which would otherwise require interim disclosures after the date of adoption of Topic 842 related to the impacts of the change on: (a) income from continuing operations, (b) net income, (c) any other financial statement line item and (d) any affected per-share amounts. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company does not believe the effects of this ASU will have a material effect on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . The following disclosure requirements for public companies were removed from Topic 820: • The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy • The policy for timing of transfers between levels • The valuation processes for Level 3 fair value measurements The following disclosure requirements for public companies were modified in Topic 820: • The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date The following disclosure requirements for public companies were added to Topic 820: • The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period • The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. In addition, an entity may early adopt any of the removed or modified disclosures immediately and delay adoption of the new disclosures until the effective date. The Company is currently evaluating the effects of ASU 2018-13 on its financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This Update replaces the incurred loss impairment model in current U.S. GAAP with a model that reflects current expected credit losses (“CECL”). The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. CECL also requires credit losses on available-for-sale debt securities be measured through an allowance for credit losses when the fair value is less than the amortized cost basis. It also applies to off-balance sheet credit exposures. The Update requires that all expected credit losses for financial assets held at the reporting date be measured based on historical experience, current conditions and reasonable and supportable forecasts. The Update also requires enhanced disclosure, including qualitative and quantitative disclosures that provide additional information about significant estimates and judgments used in estimating credit losses. For public business entities, the Update is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326 - Credit Losses, Topic 815 - Derivatives and Hedging and Topic 825 - Financial Instruments . Certain provisions within this Update are applicable to the Company’s CECL implementation, including the ability to make an accounting policy election not to measure an allowance for credit losses on accrued interest receivable when an entity writes off uncollectable amounts of accrued interest in a timely manner. Additionally, this Update allows an entity to make an accounting policy election not to include accrued interest receivable as part of the amortized cost of loans, but rather to report accrued interest receivable on a separate line in the consolidated balance sheets. The effective date will be the same as the effective date in ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326):Targeted Transition Relief, to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that (1) were previously recorded at amortized cost, (2) are within the scope of the credit losses guidance in ASC 326-20, (3) are eligible for the fair value option under ASC 825-10 and (4) are not held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. The effective date will be the same as the effective date in ASU 2016-13. The Company has developed a new expected credit loss estimation model in accordance with ASU 2016-13. The Company’s CECL Committee and related sub-committees and working groups, which collectively are comprised of senior management and staff members from our finance, credit, lending, internal audit, risk management and IT functional areas, continue to make progress in accordance with the Company’s implementation plan for adoption. Early implementation activities focused on data capture, model development and portfolio segmentation, and were substantially completed during the third quarter of 2019. We have completed our primary model, which we are continuing to review, analyze and refine. During the third quarter, we have initiated validation of our primary model and documentation review of our end-to-end processes, which we expect to complete during the fourth quarter of 2019. To date, we have completed numerous iterations of model output utilizing data from interim periods starting with the fourth quarter of 2018 to test and refine our model, and we will continue to refine and validate our model during the fourth quarter of 2019. Depending on the nature of each identified pool of financial assets with similar risk characteristics, the Company is implementing a probability of default (“PD”) and loss given default (“LGD”) discounted cash flow method and a loss-rate method to estimate expected future credit losses. Additionally, the Company is incorporating reasonable and supportable economic forecasts into the estimate of expected credit losses which will require significant judgment, such as selecting forecast scenarios and related weighting, as well as determining the appropriate length of the forecast horizon. Management intends to leverage economic projections from a reputable and independent third party to inform its reasonable and supportable economic forecasts. Other internal and external indicators of economic forecasts may also be considered by management when developing the forecast metrics. The duration of the forecast horizon, the reversion period and the economic forecasts that management utilizes, as well as additional internal and external indicators of economic forecasts that management considers, may change over time depending on the nature and composition of our portfolio of financial assets. The ultimate impact of ASU 2016-13 will depend on the composition of the portfolio and economic conditions and forecasts at the time of adoption and at future measurement dates . It could also be subject to further regulatory or accounting guidance and other management judgments. Based on our loan portfolio at September 30, 2019 and management’s current expectation of future economic conditions and certain qualitative adjustments, the Company believes that adoption of the new standard will result in an increase in the allowance for credit losses by an amount within a range of $40 million and $60 million ; however, there is no assurance that the ultimate increase in the allowance for credit losses will be within the foregoing range . The Company currently anticipates the majority of the increase in the allowance for credit losses for loans will be attributable to the application of multiple-scenario economic forecasts to our commercial real estate and commercial owner-occupied loan portfolios, which have commercial real estate as the primary collateral source and longer contractual maturities relative to our loan portfolio as a whole. The Company currently does not anticipate it will record a material allowance for credit losses for its held-to-maturity and available-for-sale investment securities upon the adoption of ASU 2016-13; however, the ultimate impact will depend upon the nature and characteristics of our securities portfolios (including issuer specific matters) at the adoption date, the macroeconomic conditions and forecasts at that date, and other management judgments. In February 2019, the U.S. federal bank regulatory agencies approved a final rule modifying their regulatory capital rules and providing an option to phase in over a three-year period the day-one regulatory capital effects of ASU 2016-13. Although the Company does not currently anticipate utilizing the three-year phase-in period, the Company will not make a final determination on the issue until the Company finalizes its model validation activities. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Our accounting policies are described in Note 1. Description of Business and Summary of Significant Accounting Policies , of our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2018 as filed with the Securities and Exchange Commission (“Form 10-K”). Select policies have been reiterated below that have a particular affiliation to our interim financial statements. Revenue Recognition – The Company accounts for certain of its revenue streams in accordance with ASC 606 - Revenue from Contracts with Customers . Revenue streams within the scope of and accounted for under ASC 606 include: service charges and fees on deposit accounts, debit card interchange fees, fees from other services the Bank provides its customers and gains and losses from the sale of other real estate owned and property, premises and equipment. ASC 606 requires revenue to be recognized when the Company satisfies related performance obligations by transferring to the customer a good or service. The recognition of revenue under ASC 606 requires the Company to first identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and finally recognize revenue when the performance obligations have been satisfied and the good or service has been transferred. The majority of the Company’s contracts with customers associated with revenue streams that are within the scope of ASC 606 are considered short-term in nature and can be canceled at any time by the customer or the Bank, such as a deposit account agreement. Other more significant revenue streams for the Company such as interest income on loans and investment securities are specifically excluded from the scope of ASC 606 and are accounted for under other applicable U.S. GAAP. Goodwill and Core Deposit Intangible – Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has selected the fourth quarter as the period to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. Core deposit intangible assets arising from whole bank acquisitions are amortized on either an accelerated basis, reflecting the pattern in which the economic benefits of the intangible assets is consumed or otherwise used up, or on a straight-line amortization method over their estimated useful lives, which range from 6 to 10 years . Leases – The Company accounts for its leases in accordance with ASC 842, which requires the Company to record liabilities for future lease obligations as well as assets representing the right to use the underlying leased asset. Leases with a term of 12 months or less are accounted for using straight-line expense recognition with no liability or asset being recorded for such leases. Other than short-term leases, the Company classifies its leases as either finance leases or operating leases. Leases are classified as finance leases when any of the following are met: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, (b) the lease contains an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the term of the lease represents a major part of the remaining life of the underlying asset, (d) the present value of the future lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underling leased asset is expected to have no alternative use to the lessor at the end of the lease term due to its specialized nature. When the Company’s assessment of a lease does not meet the foregoing criteria, and the term of the lease is in excess of 12 months, the lease is classified as an operating lease. Liabilities to make lease payments and right-of-use assets are determined based on the total contractual base rents for each lease, discounted at the rate implicit in the lease or at the Company’s estimated incremental borrowing rate if the rate is not implicit in the lease. The Company measures future base rents based on the minimum payments specified in the lease agreement, giving consideration for periodic contractual rent increases which are based on an escalation rate or a specified index. When future rent payments are based on an index, the Company uses the index rate observed at the time of lease commencement to measure future lease payments. Liabilities to make lease payments are accounted for using the interest method, which are reduced by periodic rent payments, net of interest accretion. Right-of-use assets for finance leases are amortized on a straight-line basis over the term of the lease, while right-of-use assets for operating leases are amortized over the term of the lease by amounts that represent the difference between periodic straight-line lease expense and periodic interest accretion on the related liability to make lease payments. Expense recognition for finance leases is representative of the sum of periodic amortization of the associated right-of-use asset as well as the periodic interest accretion on the liability to make lease payments. Expense recognition for operating leases is recorded on a straight-line basis. As of September 30, 2019, all of the Company’s leases were classified as either operating leases or short-term leases. From time to time the Company leases portions of the space it leases to other parties through sublease transactions. Income received from these transactions is recorded on a straight-line basis over the term of the sublease. Use of Estimates |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Grandpoint Capital, Inc. Acquisition Effective as of July 1, 2018, the Company completed the acquisition of Grandpoint Capital, Inc. (“Grandpoint”), the holding company of Grandpoint Bank, a California-chartered bank, with $3.1 billion in total assets, $2.4 billion in gross loans and $2.5 billion in total deposits at June 30, 2018. Pursuant to the terms of the merger agreement, each outstanding share of Grandpoint voting common stock and Grandpoint non-voting common stock was converted into the right to receive 0.4750 shares of the Corporation’s common stock. The final value of the total transaction consideration was approximately $602.2 million , after approximately $28.1 million in aggregate cash consideration payable to holders of Grandpoint share-based compensation awards by Grandpoint. The transaction consideration represented the issuance of 15,758,089 shares of the Corporation’s common stock, valued at $38.15 per share, which was the closing price of the Corporation’s common stock on June 29, 2018, the last trading day prior to the consummation of the Merger. Goodwill in the amount of $312.6 million was recognized in the Grandpoint acquisition. Goodwill represents the future economic benefits arising from net assets acquired that are not individually identified and separately recognized and is attributable to synergies expected to be derived from the combination of the two entities. Goodwill recognized in this transaction is not deductible for income tax purposes. The following table represents the assets acquired and liabilities assumed of Grandpoint as of July 1, 2018 and the fair value adjustments and amounts recorded by the Company in 2018 under the acquisition method of accounting: Grandpoint Book Value Fair Value Adjustments Fair Value ASSETS ACQUIRED (dollars in thousands) Cash and cash equivalents $ 147,551 $ — $ 147,551 Investment securities 395,905 (3,047 ) 392,858 Loans, gross 2,404,042 (51,325 ) 2,352,717 Allowance for loan losses (18,665 ) 18,665 — Fixed assets 6,015 3,107 9,122 Core deposit intangible 5,093 66,850 71,943 Deferred tax assets 14,185 (9,157 ) 5,028 Other assets 97,441 (436 ) 97,005 Total assets acquired $ 3,051,567 $ 24,657 $ 3,076,224 LIABILITIES ASSUMED Deposits $ 2,506,663 $ 266 $ 2,506,929 Borrowings 255,155 (232 ) 254,923 Other liabilities 23,687 1,172 24,859 Total liabilities assumed 2,785,505 1,206 2,786,711 Excess of assets acquired over liabilities assumed $ 266,062 $ 23,451 289,513 Consideration paid 602,152 Goodwill recognized $ 312,639 Such fair values are estimates and subject to refinement for up to one year after the closing date of acquisition as additional information relative to the closing date fair values becomes available and such information is considered final, whichever is earlier. Since the acquisition, the Company has made a net adjustment of $580,000 related to loans, deferred tax assets and other assets. During the second quarter of 2019, the Company finalized its fair values with this acquisition. The Company accounted for this transaction under the acquisition method of accounting in accordance with ASC 805, Business Combinations , which requires purchased assets and liabilities assumed to be recorded at their respective fair values at the date of acquisition. Grandpoint’s loan portfolio was recorded at fair value at the date of acquisition. A valuation of Grandpoint’s loan portfolio was performed by a third party as of the acquisition date to assess the fair value of the loan portfolio. The loan portfolio was segmented into two groups; loan with credit deterioration and loans without credit deterioration, and then split further by loan type. The fair value was calculated on an individual loan basis using a discounted cash flow analysis. The discount rate utilized was based on a weighted average cost of capital, considering the cost of equity and cost of debt. Also factored into the fair value estimates were loss rates, recovery periods and prepayment rates, all of which were based on industry standards. The Company also determined the fair value of the core deposit intangible, securities, real property, leases, deposits and long-term borrowings with the assistance of third-party valuations. The fair value of other real estate owned (“OREO”) was based on recent appraisals of the properties less estimated costs to sell. The core deposit intangible on non-maturing deposits was determined by evaluating the underlying characteristics of the deposit relationships, including customer attrition, deposit interest rates, service charge income, overhead expense and costs of alternative funding. Since the fair value of intangible assets are calculated as if they were stand-alone assets, the presumption is that a hypothetical buyer of the intangible asset would be able to take advantage of potential tax benefits resulting from the asset purchase. The value of the benefit is the present value over the period of the tax benefit, using the discount rate applicable to the asset. In determining the fair value of certificates of deposit, a discounted cash flow analysis was used, which involved present valuing the contractual payments over the remaining life of the certificates of deposit at market-based interest rates. For loans acquired from Grandpoint, the contractual amounts due, expected cash flows to be collected, interest component and fair value as of acquisition date were as follows: Grandpoint Acquired Loans (dollars in thousands) Contractual amounts due $ 3,496,905 Cash flows not expected to be collected 39,071 Expected cash flows 3,457,834 Interest component of expected cash flows 1,105,117 Fair value of acquired loans $ 2,352,717 In accordance with U.S. GAAP, there was no carryover of the allowance for loan losses that had been previously recorded by Grandpoint. The operating results of the Company for the nine months ended September 30, 2018 include the operating results of Grandpoint. The following table presents the unaudited pro forma information for the net interest and other income, net income and earnings per share as if the acquisition was effective as of January 1, 2018 for the periods indicated and includes certain nonrecurring adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. Nine Months Ended September 30, 2018 (dollars in thousands, except share data) Net interest and other income $ 363,538 Net income 120,400 Basic earnings per share 1.95 Diluted earnings per share 1.93 |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The amortized cost and estimated fair value of securities were as follows: September 30, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 60,457 $ 3,733 $ — $ 64,190 Agency 251,329 10,778 (549 ) 261,558 Corporate 125,564 2,255 (17 ) 127,802 Municipal bonds 279,593 14,562 (56 ) 294,099 Collateralized mortgage obligation: residential 10,514 132 (4 ) 10,642 Mortgage-backed securities: residential 486,746 12,570 (952 ) 498,364 Total investment securities available-for-sale 1,214,203 44,030 (1,578 ) 1,256,655 Investment securities held-to-maturity: Mortgage-backed securities: residential 38,686 967 (98 ) 39,555 Other 1,747 — — 1,747 Total investment securities held-to-maturity 40,433 967 (98 ) 41,302 Total investment securities $ 1,254,636 $ 44,997 $ (1,676 ) $ 1,297,957 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 59,688 $ 1,224 $ — $ 60,912 Agency 128,958 1,631 (519 ) 130,070 Corporate 104,158 291 (906 ) 103,543 Municipal bonds 238,914 1,941 (2,225 ) 238,630 Collateralized mortgage obligation: residential 24,699 64 (425 ) 24,338 Mortgage-backed securities: residential 554,751 1,112 (10,134 ) 545,729 Total investment securities available-for-sale 1,111,168 6,263 (14,209 ) 1,103,222 Investment securities held-to-maturity: Mortgage-backed securities: residential 43,381 148 (686 ) 42,843 Other 1,829 — — 1,829 Total investment securities held-to-maturity 45,210 148 (686 ) 44,672 Total investment securities $ 1,156,378 $ 6,411 $ (14,895 ) $ 1,147,894 Unrealized gains and losses on investment securities available-for-sale are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At September 30, 2019 , the Company had accumulated other comprehensive income of $42.5 million , or $30.2 million net of tax, compared to an accumulated other comprehensive loss of $7.9 million , or $5.6 million net of tax, at December 31, 2018 . Beginning the first quarter of 2019, the Bank no longer had HOA reverse repurchase agreements and unpledged all the supporting mortgage-backed securities. At December 31, 2018 , mortgage-backed securities with an estimated par value of $20.3 million and a fair value of $20.9 million were pledged as collateral for the Bank’s HOA reverse repurchase agreements, which totaled $75,000 . The average balance of repurchase agreement facilities was $15.0 million during the year ended December 31, 2018 . At September 30, 2019 and December 31, 2018 , 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 stockholders’ equity. The Company reviews individual securities classified as available-for-sale to determine whether a decline in fair value below the amortized cost basis is temporary because (i) those declines were due to interest rate changes and not to a deterioration in the creditworthiness of the issuers of those investment securities, and (ii) we have the ability to hold those securities until there is a recovery in their values or until their maturity. If it is probable that the Company will be unable to collect all amounts due according to contractual terms of the debt security not impaired at acquisition, an other-than-temporary impairment (“OTTI”) shall be considered to have occurred. If an OTTI occurs, the cost basis of the security will be written down to its fair value as the new cost basis and the write down accounted for as a realized loss. There was no OTTI for the nine months ended September 30, 2019 or September 30, 2018 . The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position. September 30, 2019 Less than 12 Months 12 Months or Longer Total Number Fair Value Gross Unrealized Holding Losses Number Fair Value Gross Unrealized Holding Losses Number Fair Value Gross Unrealized Holding Losses (dollars in thousands) Investment securities available-for-sale: Agency 4 $ 30,761 $ (207 ) 11 $ 15,789 $ (342 ) 15 $ 46,550 $ (549 ) Corporate 1 1,022 (13 ) 1 1,526 (4 ) 2 2,548 (17 ) Municipal bonds 10 9,809 (56 ) — — — 10 9,809 (56 ) Collateralized mortgage obligation: residential — — — 1 652 (4 ) 1 652 (4 ) Mortgage-backed securities: residential 6 47,359 (216 ) 19 35,853 (736 ) 25 83,212 (952 ) Total investment securities available-for-sale 21 88,951 (492 ) 32 53,820 (1,086 ) 53 142,771 (1,578 ) Investment securities held-to-maturity: Mortgage-backed securities: residential — — — 3 13,953 (98 ) 3 13,953 (98 ) Total investment securities held-to-maturity — — — 3 13,953 (98 ) 3 13,953 (98 ) Total investment securities 21 $ 88,951 $ (492 ) 35 $ 67,773 $ (1,184 ) 56 $ 156,724 $ (1,676 ) December 31, 2018 Less than 12 Months 12 Months or Longer Total Number Fair Gross Number Fair Gross Number Fair Gross (dollars in thousands) Investment securities available-for-sale: Agency 15 $ 26,229 $ (333 ) 6 $ 10,434 $ (186 ) 21 $ 36,663 $ (519 ) Corporate 9 47,805 (471 ) 8 19,369 (435 ) 17 67,174 (906 ) Municipal bonds 60 45,083 (369 ) 102 69,693 (1,856 ) 162 114,776 (2,225 ) Collateralized mortgage obligation: residential 1 814 (1 ) 8 18,104 (424 ) 9 18,918 (425 ) Mortgage-backed securities: residential 20 70,839 (435 ) 120 324,864 (9,699 ) 140 395,703 (10,134 ) Total investment securities available-for-sale 105 190,770 (1,609 ) 244 442,464 (12,600 ) 349 633,234 (14,209 ) Investment securities held-to-maturity: Mortgage-backed securities: residential 3 11,256 (81 ) 3 15,741 (605 ) 6 26,997 (686 ) Total investment securities held-to-maturity 3 11,256 (81 ) 3 15,741 (605 ) 6 26,997 (686 ) Total investment securities 108 $ 202,026 $ (1,690 ) 247 $ 458,205 $ (13,205 ) 355 $ 660,231 $ (14,895 ) The amortized cost and estimated fair value of investment securities at September 30, 2019 , by contractual maturity are shown in the table below. Due in One Year or Less Due after One Year through Five Years Due after Five Years through Ten Years Due after Ten Years Total Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 498 $ 499 $ 20,171 $ 20,702 $ 39,788 $ 42,989 $ — $ — $ 60,457 $ 64,190 Agency — — 42,658 44,453 165,240 171,635 43,431 45,470 251,329 261,558 Corporate — — — — 125,564 127,802 — — 125,564 127,802 Municipal bonds — — 3,569 3,710 34,911 36,057 241,113 254,332 279,593 294,099 Collateralized mortgage obligation: residential — — — — 657 652 9,857 9,990 10,514 10,642 Mortgage-backed securities: residential — — 2,576 2,652 168,693 172,752 315,477 322,960 486,746 498,364 Total investment securities available-for-sale 498 499 68,974 71,517 534,853 551,887 609,878 632,752 1,214,203 1,256,655 Investment securities held-to-maturity: Mortgage-backed securities: residential — — 913 953 — — 37,773 38,602 38,686 39,555 Other — — — — — — 1,747 1,747 1,747 1,747 Total investment securities held-to-maturity — — 913 953 — — 39,520 40,349 40,433 41,302 Total investment securities $ 498 $ 499 $ 69,887 $ 72,470 $ 534,853 $ 551,887 $ 649,398 $ 673,101 $ 1,254,636 $ 1,297,957 During the three months ended September 30, 2019 , June 30, 2019 and September 30, 2018 , the Company recognized gross gains on sales of available-for-sale securities in the amount of $5.1 million , $406,000 and $1.3 million , respectively. During the three months ended September 30, 2019 , June 30, 2019 and September 30, 2018 , the Company recognized gross losses on sales of available-for-sale securities in the amount of $811,000 , $194,000 and $208,000 , respectively. The Company had net proceeds from the sales of available-for-sale securities of $191.3 million , $57.2 million and $378.5 million during the three months ended September 30, 2019 , June 30, 2019 and September 30, 2018 . During the nine months ended September 30, 2019 and 2018 , the Company recognized gross gains on sales of available-for-sale securities in the amount of $6.5 million and $1.6 million , respectively. During the nine months ended September 30, 2019 , the Company recognized gross losses on the sales of available-for sale securities in the amount of $1.6 million and $208,000 , respectively. The Company had net proceeds from the sales of available-for-sale securities of $418.5 million and $394.5 million during the nine months ended September 30, 2019 and 2018 , respectively. FHLB, FRB and Other Stock At September 30, 2019 , the Company had $17.3 million in Federal Home Loan Bank of San Francisco (“FHLB”) stock, $51.6 million in Federal Reserve Bank of San Francisco (“FRB”) stock, and $24.0 million in other stock, all carried at cost. During the three months ended June 30, 2019 and September 30, 2018 , the FHLB repurchased $5.4 million and $15.0 million , respectively, of the Company’s excess FHLB stock through its stock repurchase program. During the three months ended September 30, 2019 , the FHLB did no t repurchase any of the Company’s excess FHLB stock through its stock repurchase program. The Company evaluates its investments in FHLB, FRB and other stock for impairment periodically, including their capital adequacy and overall financial condition. No impairment loss has been recorded through September 30, 2019 |
Loans Held for Investment
Loans Held for Investment | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Loans Held for Investment | Loans Held for Investment The following table sets forth the composition of our loan portfolio in dollar amounts at the dates indicated: September 30, 2019 December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,233,938 $ 1,364,423 Franchise 894,023 765,416 Commercial owner occupied (1) 1,678,888 1,679,122 SBA 179,965 193,882 Agribusiness 119,633 138,519 Total business loans 4,106,447 4,141,362 Real estate loans Commercial non-owner occupied 2,053,590 2,003,174 Multi-family 1,611,904 1,535,289 One-to-four family (2) 273,182 356,264 Construction 478,961 523,643 Farmland 171,667 150,502 Land 30,717 46,628 Total real estate loans 4,620,021 4,615,500 Consumer loans Consumer loans 40,548 89,424 Gross loans held for investment (3) 8,767,016 8,846,286 Deferred loan origination (fees)/costs and (discounts)/premiums, net (9,540 ) (9,468 ) Loans held for investment 8,757,476 8,836,818 Allowance for loan losses (35,000 ) (36,072 ) Loans held for investment, net $ 8,722,476 $ 8,800,746 Loans held for sale, at lower of cost or fair value $ 7,092 $ 5,719 ______________________________ (1) Secured by real estate. (2) Includes second trust deeds. (3) Total gross loans held for investment for September 30, 2019 and December 31, 2018 are net of the unaccreted fair value net purchase discounts of $46.8 million and $61.0 million , respectively. Loans Serviced for Others The Company generally retains the servicing rights of the guaranteed portion of Small Business Administration (“SBA”) loans sold, for which the Company records a servicing asset at fair value within its other assets category. At September 30, 2019 and December 31, 2018 , the servicing asset totaled $7.9 million and $8.5 million , respectively, and was included in other assets in the Company’s consolidated balance sheets. Servicing rights are evaluated for impairment based upon the fair value of the rights as compared to the carrying amount. Impairment is recognized through a valuation allowance, to the extent the fair value is less than the carrying amount. At September 30, 2019 and December 31, 2018 , the Company determined that no valuation allowance was necessary. Loans serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balance of loans and participations serviced for others were $646.7 million at September 30, 2019 and $635.3 million at December 31, 2018 , including SBA participations serviced for others totaling $492.8 million at September 30, 2019 and $519.8 million at December 31, 2018 . Concentration of Credit Risk As of September 30, 2019 , the Company’s loan portfolio was primarily collateralized by various forms of real estate and business assets located predominately in California. The Company’s loan portfolio contains concentrations of credit in multi-family real estate, commercial non-owner occupied real estate, commercial owner occupied real estate loans and commercial and industrial business loans. The Bank maintains policies approved by the Bank’s Board of Directors (the “Bank Board”) that address these concentrations and diversifies its loan portfolio through loan originations, purchases and sales to meet approved concentration levels. While management believes that the collateral presently securing these loans is adequate, there can be no assurances that a significant deterioration in the California real estate market or economy would not expose the Company to significantly greater credit risk. Under applicable laws and regulations, the Bank may not make secured loans to one borrower in excess of 25% of the Bank’s unimpaired capital plus surplus and likewise in excess of 15% of the Bank’s unimpaired capital plus surplus for unsecured loans. These loans-to-one borrower limitations result in a dollar limitation of $557.5 million for secured loans and $334.5 million for unsecured loans at September 30, 2019 . In order to manage concentration risk, the Bank maintains a house lending limit well below these statutory maximums. At September 30, 2019 , the Bank’s largest aggregate outstanding balance of loans to one borrower was $125.3 million comprised of $101.5 million and $23.8 million of secured and unsecured credit, respectively. Credit Quality and Credit Risk Management The Company’s credit quality and credit risk are controlled in two distinct areas. The first is the loan origination process, wherein the Bank underwrites credit quality and chooses which risks it is willing to accept. The Company maintains a comprehensive credit policy, which sets forth maximum tolerances for key elements of loan risk. The policy identifies and sets forth specific guidelines for analyzing each of the loan products the Company offers from both an individual and portfolio-wide basis. The credit policy is reviewed annually by the Bank’s Board. The Bank’s underwriters ensure key risk factors are analyzed with nearly all underwriting including a comprehensive global cash flow analysis of the prospective borrowers. The second is in the ongoing oversight of the loan portfolio, where existing credit risk is measured and monitored, and where performance issues are dealt with in a timely and comprehensive fashion. Credit risk is managed within the loan portfolio by the Company’s portfolio managers based on a comprehensive credit and portfolio review policy. This policy requires a program of financial data collection and analysis, comprehensive loan reviews, property and/or business inspections and monitoring of portfolio concentrations and trends. The portfolio managers also monitor borrowing bases under asset-based lines of credit, loan covenants, and other conditions associated with the Company’s business loans as a means to help identify potential credit risk. Individual loans, excluding the homogeneous loan portfolio, are reviewed at least every two years and in most cases, more often, including the assignment or confirmation of a risk grade. Risk grades are based on a six -grade Pass scale, along with Special Mention, Substandard, Doubtful and Loss classifications, as such classifications are defined by the regulatory agencies. The assignment of risk grades allows the Company to, among other things, identify the risk associated with each credit in the portfolio, and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are reviewed regularly with the Company’s Credit and Portfolio Review Committee, and the portfolio management and risk grading process is reviewed on an ongoing basis by an independent loan review function, as well as by regulatory agencies during scheduled examinations. The following provides brief definitions for risk grades assigned to loans in the portfolio: • Pass classifications represent assets with a level of credit quality, in which no well-defined deficiency or weakness exists. • Special Mention assets do not currently expose the Bank to a sufficient risk to warrant classification in one of the adverse categories, but possess correctable deficiencies or potential weaknesses deserving management’s close attention. • Substandard assets are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. These assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. OREO acquired from foreclosure is also classified as Substandard. • Doubtful credits have all the weaknesses inherent in Substandard credits, 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. • Loss assets are those that are considered uncollectible and of such little value that their continuance as assets is not warranted. Amounts classified as loss are promptly charged off. The Bank’s portfolio managers also manage loan performance risks, collections, workouts, bankruptcies and foreclosures. A special department, whose portfolio managers have professional expertise in these areas, typically handles or advises on these types of matters. Loan performance risks are mitigated by our portfolio managers acting promptly and assertively to address problem credits when they are identified. Collection efforts commence immediately upon non-payment, and the portfolio managers seek to promptly determine the appropriate steps to minimize the Company’s risk of loss. When foreclosure will maximize the Company’s recovery for a non-performing loan, the portfolio managers will take appropriate action to initiate the foreclosure process. When a loan is graded as Special Mention, Substandard or Doubtful, the Company obtains an updated valuation of the underlying collateral. If the credit in question is also identified as impaired, a valuation allowance, if necessary, is established against such loan or a loss is recognized by a charge to the allowance for loan losses (“ALLL”) if management believes that some or all of the full amount of the Company’s recorded investment in the loan is no longer collectable. The Company typically obtains or confirms updated valuations of underlying collateral for Special Mention and classified loans on an annual basis in order to have the most current indication of fair value. Once a loan is identified as impaired, an analysis of the underlying collateral is performed at least quarterly, and corresponding changes in any related valuation allowance are made or balances deemed to be fully uncollectable are charged-off. The following tables stratify the loan portfolio by the Company’s internal risk grading as of the periods indicated: Credit Risk Grades Pass Special Mention Substandard Doubtful Total Gross Loans September 30, 2019 (dollars in thousands) Business loans Commercial and industrial $ 1,219,358 $ 4,438 $ 10,142 $ — $ 1,233,938 Franchise 880,632 13,375 16 — 894,023 Commercial owner occupied 1,669,152 1,321 8,415 — 1,678,888 SBA 171,393 1,881 6,691 — 179,965 Agribusiness 107,551 — 12,082 — 119,633 Real estate loans Commercial non-owner occupied 2,052,813 — 777 — 2,053,590 Multi-family 1,611,686 — 218 — 1,611,904 One-to-four family 272,555 — 627 — 273,182 Construction 478,961 — — — 478,961 Farmland 171,667 — — — 171,667 Land 30,585 — 132 — 30,717 Consumer loans Consumer loans 40,494 — 54 — 40,548 Totals $ 8,706,847 $ 21,015 $ 39,154 $ — $ 8,767,016 Credit Risk Grades Pass Special Substandard Doubtful Total Gross December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,340,284 $ 12,005 $ 12,134 $ — $ 1,364,423 Franchise 760,795 4,431 190 — 765,416 Commercial owner occupied 1,660,994 1,580 16,548 — 1,679,122 SBA 184,687 2,289 6,906 — 193,882 Agribusiness 125,355 — 13,164 — 138,519 Real estate loans Commercial non-owner occupied 1,996,756 731 5,687 — 2,003,174 Multi-family 1,530,567 4,060 662 — 1,535,289 One-to-four family 350,083 728 5,453 — 356,264 Construction 523,643 — — — 523,643 Farmland 150,381 — 121 — 150,502 Land 46,008 132 488 — 46,628 Consumer loans Consumer loans 89,321 — 103 — 89,424 Totals $ 8,758,874 $ 25,956 $ 61,456 $ — $ 8,846,286 The following tables set forth delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due Current 30-59 60-89 90+ Total Gross Loans Non-accruing September 30, 2019 (dollars in thousands) Business loans Commercial and industrial $ 1,229,223 $ 101 $ 3,105 $ 1,509 $ 1,233,938 $ 2,950 Franchise 893,999 8 — 16 894,023 16 Commercial owner occupied 1,677,101 382 — 1,405 1,678,888 1,405 SBA 176,541 731 107 2,586 179,965 2,586 Agribusiness 119,633 — — — 119,633 — Real estate loans Commercial non-owner occupied 2,052,813 — — 777 2,053,590 777 Multi-family 1,611,904 — — — 1,611,904 — One-to-four family 272,679 503 — — 273,182 371 Construction 478,961 — — — 478,961 — Farmland 171,667 — — — 171,667 — Land 30,717 — — — 30,717 — Consumer loans Consumer loans 40,548 — — — 40,548 — Totals $ 8,755,786 $ 1,725 $ 3,212 $ 6,293 $ 8,767,016 $ 8,105 Days Past Due Current 30-59 60-89 90+ Total Gross Loans Non-accruing December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,361,979 $ 309 $ 1,204 $ 931 $ 1,364,423 $ 931 Franchise 759,546 5,680 — 190 765,416 190 Commercial owner occupied 1,677,967 343 — 812 1,679,122 599 SBA 190,732 524 — 2,626 193,882 2,739 Agribusiness 138,519 — — — 138,519 — Real estate loans Commercial non-owner occupied 2,003,174 — — — 2,003,174 — Multi-family 1,535,275 14 — — 1,535,289 — One-to-four family 356,219 30 9 6 356,264 398 Construction 523,643 — — — 523,643 — Farmland 150,502 — — — 150,502 — Land 46,628 — — — 46,628 — Consumer loans Consumer loans 89,249 146 29 — 89,424 — Totals $ 8,833,433 $ 7,046 $ 1,242 $ 4,565 $ 8,846,286 $ 4,857 Impaired Loans The Company considers a loan to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or it is determined that the likelihood of the Company receiving all scheduled payments, including interest, when due is remote. The Company has no commitments to lend additional funds to debtors whose loans have been impaired. The Company reviews loans for impairment when the loan is classified as Substandard or worse, delinquent 90 days, determined by management to be collateral dependent, or when the borrower files bankruptcy or is granted a troubled debt restructuring (“TDR”). Measurement of impairment is based on the loan’s expected future cash flows discounted at the loan’s effective interest rate, measured by reference to an observable market value, if one exists, or the fair value of the collateral if the loan is deemed collateral dependent. Loans are generally charged-off at the time the loan is classified as a loss. Valuation allowances are determined on a loan-by-loan basis or by aggregating loans with similar risk characteristics. The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated: Impaired Loans Unpaid Principal Balance Recorded Investment With Specific Allowance Without Specific Allowance Specific Allowance for Impaired Loans (dollars in thousands) September 30, 2019 Business loans Commercial and industrial $ 3,099 $ 2,950 $ — $ 2,950 $ — Franchise 697 16 — 16 — Commercial owner occupied 1,427 1,406 — 1,406 — SBA 3,320 2,586 — 2,586 — Agribusiness 6,903 6,903 — 6,903 — Real estate loans Commercial non-owner occupied 1,351 777 — 777 — One-to-four family 413 371 — 371 — Totals $ 17,210 $ 15,009 $ — $ 15,009 $ — Impaired Loans Unpaid Principal Balance Recorded Investment With Specific Allowance Without Specific Allowance Specific Allowance for Impaired Loans (dollars in thousands) December 31, 2018 Business loans Commercial and industrial $ 1,071 $ 1,023 $ 550 $ 473 $ 118 Franchise 190 189 — 189 — Commercial owner occupied 628 599 — 599 — SBA 7,598 2,739 488 2,251 466 Agribusiness 7,500 7,500 — 7,500 — Real estate loans One-to-four family 453 408 — 408 — Totals $ 17,440 $ 12,458 $ 1,038 $ 11,420 $ 584 The following table presents information on impaired loans and leases, disaggregated by class, for the periods indicated: Impaired Loans Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (dollars in thousands) Business loans Commercial and industrial $ 3,078 $ — $ 2,614 $ — $ 1,030 $ — Franchise 679 — 4,047 — 209 — Commercial owner occupied 845 — 564 — — — SBA 2,488 — 3,139 — 1,914 — Agribusiness 7,092 104 7,489 109 — — Real estate loans Commercial non-owner occupied 421 — 162 — 1,290 — Multi-family — — — — 589 — One-to-four family 373 — 383 — 1,406 — Land 320 — 160 — 5 — Consumer loans Consumer loans — $ — 17 — 13 — Totals $ 15,296 $ 104 $ 18,575 $ 109 $ 6,456 $ — (1) Interest income recognized represents interest on accruing loans. Impaired Loans Nine Months Ended September 30, 2019 2018 Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (dollars in thousands) Business loans: Commercial and industrial $ 2,565 $ — $ 1,161 $ — Franchise 2,901 — 93 — Commercial owner occupied 662 — 1,931 — SBA 2,969 — 1,505 — Agribusiness 7,360 303 — — Real estate loans: Commercial non-owner occupied 194 — 573 — Multi-family — — 666 — One-to-four family 383 — 1,258 — Land 160 — 6 — Consumer loans: Consumer loans 25 — 41 — Totals $ 17,219 $ 303 $ 7,234 $ — (1) Interest income recognized represents interest on accruing loans. The following table provides additional detail on the components of impaired loans at the period end indicated: September 30, 2019 December 31, 2018 (dollars in thousands) Nonaccrual loans $ 8,105 $ 4,857 Accruing loans 6,904 7,601 Total impaired loans $ 15,009 $ 12,458 When loans are placed on nonaccrual status, previously accrued but unpaid interest is reversed from earnings. Payments received on nonaccrual loans are generally applied as a reduction to the loan principal balance. If the likelihood of further loss is remote, the Company will recognize interest on a cash basis only. Loans may be returned to accruing status if the Company believes that all remaining principal and interest is fully collectible and there has been at least three months of sustained repayment performance since the loan was placed on nonaccrual. The Company typically does not accrue interest on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the timely collection of principal or interest. The Company had impaired loans on nonaccrual status of $8.1 million at September 30, 2019 and $4.9 million at December 31, 2018 . The Company had no loans 90 days or more past due and still accruing at September 30, 2019 . Income recognition for purchased credit impaired (“PCI”) loans is accounted for in accordance with ASC Subtopic 310-30 Receivables-Loans and Debt Securities Acquired with Deteriorated Credit Quality. The Company had $213,000 in loans 90 days or more past due and still accruing at December 31, 2018 , all of which were PCI loans. There were no TDRs at September 30, 2019 and December 31, 2018 . The Company had no consumer mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings were in process as of September 30, 2019 or December 31, 2018 . Purchased Credit Impaired Loans The Company has purchased loans that have experienced deterioration of credit quality between origination and acquisition and for which it was probable, at acquisition, that not all contractually required payments would be collected. The carrying amount of those loans is as follows: September 30, 2019 December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ — $ 10 Commercial owner occupied 577 632 SBA 1,154 1,265 Real estate loans Commercial non-owner occupied — 275 Total purchased credit impaired $ 1,731 $ 2,182 On each acquisition date, the amount by which the undiscounted expected cash flows of the PCI loans exceed the estimated fair value of the loan is the “accretable yield.” The accretable yield is measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the PCI loan. At September 30, 2019 , the Company had $1.7 million of PCI loans, of which none were placed on nonaccrual status. The following table summarizes the accretable yield on the PCI loans for the periods indicated. Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2019 2019 2018 2019 2018 (dollars in thousands) Balance at the beginning of period $ 296 $ 332 $ 1,473 $ 411 $ 3,019 Additions — — 483 — 483 Accretion (46 ) (45 ) (162 ) (170 ) (668 ) Payoffs — (9 ) (1 ) (9 ) (1,819 ) Sales — — — $ — $ — Reclassification from nonaccretable difference (18 ) 18 195 — 973 Balance at the end of period $ 232 $ 296 $ 1,988 $ 232 $ 1,988 |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2019 | |
Provision for Loan and Lease Losses [Abstract] | |
Allowance for Loan Losses | Allowance for Loan Losses The Company’s ALLL covers estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated probable incurred losses inherent in the remainder of the loan portfolio. The ALLL is prepared using the information provided by the Company’s credit review process together with data from peer institutions and economic information gathered from published sources. The loan portfolio is segmented into groups of loans with similar risk characteristics. Each segment possesses varying degrees of risk based on, among other things, the type of loan, the type of collateral, and the sensitivity of the borrower or industry to changes in external factors such as economic conditions. An estimated loss rate calculated using the Company’s actual historical loss rates adjusted for current portfolio trends, economic conditions and other relevant internal and external factors, is applied to each group’s aggregate loan balances. The Company’s base ALLL factors are determined by management using the Bank’s annualized actual trailing charge-off data over a full credit cycle with the loss emergence period extending from 1 year to 1.6 years . Adjustments to those base factors are made for relevant internal and external factors. Those factors may include: • Changes in national, regional and local economic conditions, including trends in real estate values and the interest rate environment, • Changes in the nature and volume of the loan portfolio, including new types of lending, • Changes in volume and severity of past due loans, the volume of nonaccrual loans and the volume and severity of adversely classified or graded loans and • The existence and effect of concentrations of credit, and changes in the level of such concentrations. For loans risk graded as watch or worse, progressively higher potential loss factors are applied based on a migration analysis of risk grading and net charge-offs. The following tables summarize the allocation of the ALLL as well as the activity in the ALLL attributed to various segments in the loan portfolio as of and for the periods indicated: Three Months Ended September 30, 2019 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, March 31, 2019 $ 11,031 $ 6,765 $ 1,490 $ 3,363 $ 2,765 $ 1,765 $ 705 $ 704 $ 4,750 $ 809 $ 658 $ 221 $ 35,026 Charge-offs (290 ) (995 ) — (143 ) — (86 ) — — — — — (11 ) (1,525 ) Recoveries 54 — 8 62 — — — 1 — — — 9 134 Provisions for (reduction in) loan losses (265 ) 963 228 1,099 (399 ) 199 10 (14 ) (592 ) 29 (25 ) 132 1,365 Balance, June 30, 2019 $ 10,530 $ 6,733 $ 1,726 $ 4,381 $ 2,366 $ 1,878 $ 715 $ 691 $ 4,158 $ 838 $ 633 $ 351 $ 35,000 Nine Months Ended September 30, 2019 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, December 31, 2018 $ 10,821 $ 6,500 $ 1,386 $ 4,288 $ 3,283 $ 1,604 $ 725 $ 805 $ 5,166 $ 503 $ 772 $ 219 $ 36,072 Charge-offs (985 ) (2,531 ) — (1,362 ) — (574 ) — — — — — (16 ) (5,468 ) Recoveries 168 — 31 66 — — — 2 — — — 10 277 Provisions for (reduction in) loan losses 526 2,764 309 1,389 (917 ) 848 (10 ) (116 ) (1,008 ) 335 (139 ) 138 4,119 Balance, September 30, 2019 $ 10,530 $ 6,733 $ 1,726 $ 4,381 $ 2,366 $ 1,878 $ 715 $ 691 $ 4,158 $ 838 $ 633 $ 351 $ 35,000 Amount of allowance attributed to: Specifically evaluated impaired loans $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — General portfolio allocation 10,530 6,733 1,726 4,381 2,366 1,878 715 691 4,158 838 633 351 35,000 Loans individually evaluated for impairment 2,950 16 1,406 2,586 6,903 777 — 371 — — — — 15,009 Specific reserves to total loans individually evaluated for impairment — % — % — % — % — % — % — % — % — % — % — % — % — % Loans collectively evaluated for impairment $ 1,230,988 $ 894,007 $ 1,677,482 $ 177,379 $ 112,730 $ 2,052,813 $ 1,611,904 $ 272,811 $ 478,961 $ 171,667 $ 30,717 $ 40,548 $ 8,752,007 General reserves to total loans collectively evaluated for impairment 0.86 % 0.75 % 0.10 % 2.47 % 2.10 % 0.09 % 0.04 % 0.25 % 0.87 % 0.49 % 2.06 % 0.87 % 0.40 % Total gross loans held for investment $ 1,233,938 $ 894,023 $ 1,678,888 $ 179,965 $ 119,633 $ 2,053,590 $ 1,611,904 $ 273,182 $ 478,961 $ 171,667 $ 30,717 $ 40,548 $ 8,767,016 Total allowance to gross loans held for investment 0.85 % 0.75 % 0.10 % 2.43 % 1.98 % 0.09 % 0.04 % 0.25 % 0.87 % 0.49 % 2.06 % 0.87 % 0.40 % Three Months Ended September 30, 2018 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, March 31, 2018 $ 10,164 $ 6,181 $ 1,137 $ 2,575 $ 2,694 $ 1,450 $ 563 $ 698 $ 4,809 $ 405 $ 972 $ 99 $ 31,747 Charge-offs (100 ) — — (44 ) — — — — — — — (85 ) (229 ) Recoveries 120 — 8 8 — — — — — — — 6 142 Provisions for (reduction in) loan losses 200 151 68 288 871 33 60 21 11 (30 ) (104 ) 77 1,646 Balance, June 30, 2018 $ 10,384 $ 6,332 $ 1,213 $ 2,827 $ 3,565 $ 1,483 $ 623 $ 719 $ 4,820 $ 375 $ 868 $ 97 $ 33,306 Nine Months Ended September 30, 2018 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, December 31, 2017 $ 9,721 $ 5,797 $ 767 $ 2,890 $ 1,291 $ 1,266 $ 607 $ 803 $ 4,569 $ 137 $ 993 $ 95 $ 28,936 Charge-offs (1,011 ) — — (100 ) — — — — — — — (137 ) (1,248 ) Recoveries 283 — 32 43 — — — 1 — — — 7 366 Provisions for (reduction in) loan losses 1,391 535 414 (6 ) 2,274 217 16 (85 ) 251 238 (125 ) 132 5,252 Balance, September 30, 2018 $ 10,384 $ 6,332 $ 1,213 $ 2,827 $ 3,565 $ 1,483 $ 623 $ 719 $ 4,820 $ 375 $ 868 $ 97 $ 33,306 Amount of allowance attributed to: Specifically evaluated impaired loans $ — $ — $ — $ 250 $ — $ — $ — $ — $ — $ — $ — $ — $ 250 General portfolio allocation 10,384 6,332 1,213 2,577 3,565 1,483 623 719 4,820 375 868 97 33,056 Loans individually evaluated for impairment 1,027 209 — 2,748 — 1,290 589 1,388 — — 4 13 7,268 Specific reserves to total loans individually evaluated for impairment — % — % — % 9.10 % — % — % — % — % — % — % — % — % 3.44 % Loans collectively evaluated for impairment $ 1,358,814 $ 735,157 $ 1,675,528 $ 190,739 $ 133,241 $ 1,929,875 $ 1,554,103 $ 375,229 $ 504,708 138,479 $ 49,988 $ 114,723 $ 8,760,584 General reserves to total loans collectively evaluated for impairment 0.76 % 0.86 % 0.07 % 1.35 % 2.68 % 0.08 % 0.04 % 0.19 % 0.96 % 0.27 % 1.74 % 0.08 % 0.38 % Total gross loans held for investment $ 1,359,841 $ 735,366 $ 1,675,528 $ 193,487 $ 133,241 $ 1,931,165 $ 1,554,692 $ 376,617 $ 504,708 138,479 $ 49,992 $ 114,736 $ 8,767,852 Total allowance to gross loans held for investment 0.76 % 0.86 % 0.07 % 1.46 % 2.68 % 0.08 % 0.04 % 0.19 % 0.96 % 0.27 % 1.74 % 0.08 % 0.38 % |
Subordinated Debentures
Subordinated Debentures | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Subordinated Debentures | Subordinated Debentures In August 2014, the Corporation issued $60.0 million in aggregate principal amount of 5.75% Subordinated Notes Due 2024 (the “Notes I”) in a private placement transaction to institutional accredited investors (the “Private Placement”). The Notes I bear interest at an annual fixed rate of 5.75% , with the first interest payment on the Notes occurring on March 3, 2015, and interest to be paid semiannually each March 3rd and September 3rd until September 3, 2024. At September 30, 2019 , the carrying value of the Notes I was $59.4 million , net of unamortized debt issuance cost of $598,000 . As of September 30, 2019 , the Notes I qualify as Tier 2 Capital. Principal and interest are due upon early redemption. In May 2019, the Corporation issued $125.0 million in aggregate principal amount of 4.875% Fixed-to-Floating Rate Subordinated Notes due May 15, 2029 (the “Notes II”), at a public offering price equal to 100% of the aggregate principal amount of the Notes II. The Company may redeem the Notes II on or after May 15, 2024. From and including the issue date, but excluding May 15, 2024, the Notes II will bear interest at an initial fixed rate of 4.875% per annum, payable semi-annually. From and including May 15, 2024, but excluding the maturity date or the date of earlier redemption, the Notes II will bear interest at a floating rate equal to the then-current three-month LIBOR plus a spread of 2.50% per annum, payable quarterly in arrears. At September 30, 2019 , the carrying value of the Notes II was $122.6 million , net of unamortized debt issuance cost of $2.4 million . At September 30, 2019 , the Notes II qualify as Tier 2 Capital. Principal and interest are due upon early redemption at any time, including prior to May 15, 2024 at our option, in whole but not in part, under the occurrence of special events defined within the trust indenture. In connection with the Private Placement, the Corporation obtained ratings from Kroll Bond Rating Agency (“KBRA”). KBRA assigned investment grade ratings of BBB+ and BBB for the Corporation’s senior unsecured debt and subordinated debt, respectively, and a senior deposit rating of A- for the Bank. KBRA reaffirmed these ratings in April 2019. In March 2004, the Corporation issued $10.3 million of Floating Rate Junior Subordinated Deferrable Interest Debentures (the “Subordinated Debentures”), due and payable on April 6, 2034, to PPBI Trust I, a statutory trust created under the laws of the State of Delaware. The Subordinated Debentures were subject to early redemption, in part or whole, on or after April 7, 2009 at the option of the Corporation, at par. The Corporation also purchased a 3% minority interest totaling $310,000 in PPBI Trust I. The balance of equity of PPBI Trust I was comprised of mandatorily redeemable securities (“Trust Preferred Securities”) and was included in the Corporation’s other assets category. PPBI Trust I sold $10.0 million of Trust Preferred Securities to investors in a private offering. On July 8, 2019, the Company used a portion of the proceeds from the issuance of the Notes II to redeem all $10.3 million outstanding principal amount of Subordinated Debentures. Prior to redemption, the Subordinated Debentures carried an interest rate of three-month LIBOR plus 2.75% per annum, for an effective rate of 5.35% per annum. The Subordinated Debentures were called at par, plus accrued and unpaid interest thereon through the date of redemption, for an aggregate amount of $10.4 million , and PPBI Trust I was dissolved. On April 1, 2017, as part of the Heritage Oaks Bancorp (“HEOP”) acquisition, the Corporation assumed $5.2 million of floating rate junior subordinated debt securities associated with Heritage Oaks Capital Trust II. Interest is payable quarterly at three-month LIBOR plus 1.72% per annum, for an effective rate of 4.04% per annum as of September 30, 2019 . At September 30, 2019 , the carrying value of these debentures was $4.0 million , which reflects purchase accounting fair value adjustments of $1.2 million . The Corporation also assumed $3.1 million and $5.2 million of floating rate junior subordinated debt associated with Mission Community Capital Trust I and Santa Lucia Bancorp (CA) Capital Trust, respectively. At September 30, 2019 , the carrying value of these debentures of Mission Community Capital Trust I and Santa Lucia Bancorp (CA) Capital Trust were $2.8 million and $3.9 million , respectively, which reflects purchase accounting fair value adjustments of $290,000 and $1.3 million , respectively. Interest is payable quarterly at three-month LIBOR plus 2.95% per annum, for an effective rate of 5.25% per annum as of September 30, 2019 for Mission Community Capital Trust I. Interest is payable quarterly at three-month LIBOR plus 1.48% per annum, for an effective rate of 3.78% per annum as of September 30, 2019 for Santa Lucia Bancorp (CA) Capital Trust. These three debentures are callable by the Corporation at par. On November 1, 2017, as part of the Plaza acquisition, the Corporation assumed three subordinated notes totaling $25 million at a fixed interest rate of 7.125% payable in arrears on a quarterly basis. The notes have a maturity date of June 26, 2025 and are also redeemable in whole or in part beginning on June 26, 2020 at an amount equal to 103.0% of principal plus accrued unpaid interest. The redemption price decreases 50 basis points each subsequent year. At September 30, 2019 , the carrying value of these subordinated notes was $25.1 million , which reflects purchase accounting fair value adjustments of $139,000 . On July 1, 2018, as part of the Grandpoint acquisition, the Corporation assumed $5.2 million of floating rate junior subordinated debt securities, due and payable on September 17, 2033, associated with First Commerce Bancorp Statutory Trust I, a statutory business trust created under the laws of the State of Connecticut. On September 17, 2019, the Company used a portion of the proceeds from the issuance of the Notes II in May 2019 to redeem all $5.2 million outstanding principal amount of these floating rate junior subordinated debt securities at par, plus accrued and unpaid interest thereon through the date of redemption, for an aggregate amount of $5.2 million . Prior to redemption, the junior subordinated debt securities carried an interest rate of three-month LIBOR plus 2.95% per annum, for an effective rate of 5.36% per annum. The Company recorded a loss on early debt extinguishment of $214,000 related to purchase accounting fair value adjustments, and First Commerce Bancorp Statutory Trust I was dissolved. The Corporation is not allowed to consolidate any trust preferred securities into the Company’s consolidated financial statements. The resulting effect on the Company’s consolidated financial statements is to report only the subordinated debentures relating to trust preferred securities as a component of the Company’s liabilities. The redemption of Tier 1 capital instruments associated with PPBI Trust I and First Commerce Bancorp Statutory Trust I during the three months ended September 30, 2019 reduced the Company’s Tier 1 capital by a total of $14.7 million . The Company’s regulatory capital ratios continued to exceed regulatory minimums to be well-capitalized and the fully phased-in capital conservation buffer, upon these redemptions. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share In February 2019, the Company’s Compensation Committee of Board of Directors reviewed the various forms of outstanding equity awards, including restricted stock and restrict stock units (“RSUs”), and approved that unvested restricted stock awards will be considered participating securities. As a result of the different treatment of unvested restricted stock and unvested RSUs, beginning in 2019, earnings per common share is computed using the two-class method. Under the two-class method, distributed and undistributed earnings allocable to participating securities are deducted from net income to determine net income allocable to common shareholders, which is then used in the numerator of both basic and diluted earnings per share calculations. Basic earnings per common share is computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding for the reporting period, excluding outstanding participating securities. Diluted earnings per common share is computed by dividing net income allocable to common shareholders by the weighted average number of common shares outstanding over the reporting period, adjusted to include the effect of potentially dilutive common shares, but excludes awards considered participating securities. The computation of diluted earnings per common share excludes the impact of the assumed exercise or issuance of securities that would have an anti-dilutive effect. The following tables set forth the Company’s earnings per share calculations for the periods indicated: Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 (dollars in thousands, except per share data) Basic Net income $ 41,375 $ 38,527 $ 28,392 Less: Earnings allocated to participating securities (432 ) (444 ) — Net income allocated to common stockholders $ 40,943 $ 38,083 $ 28,392 Weighted average common shares outstanding 59,293,218 61,308,046 61,727,030 Basic earnings per common share $ 0.69 $ 0.62 $ 0.46 Diluted Net income allocated to common stockholders $ 40,943 $ 38,083 $ 28,392 Weighted average common shares outstanding 59,293,218 61,308,046 61,727,030 Diluted effect of share-based compensation 377,637 353,727 634,774 Weighted average diluted common shares 59,670,855 61,661,773 62,361,804 Diluted earnings per common share $ 0.69 $ 0.62 $ 0.46 Nine Months Ended September 30, 2019 September 30, 2018 (dollars in thousands, except per share data) Basic Net income $ 118,620 $ 83,697 Less: Earnings allocated to participating securities (1,223 ) — Net income allocated to common stockholders $ 117,397 $ 83,697 Weighted average common shares outstanding 60,853,081 51,282,533 Basic earnings per common share $ 1.93 $ 1.63 Diluted Net income allocated to common stockholders $ 117,397 $ 83,697 Weighted average common shares outstanding 60,853,081 51,282,533 Diluted effect of share-based compensation 348,777 683,114 Weighted average diluted common shares 61,201,858 51,965,647 Diluted earnings per common share $ 1.92 $ 1.61 For the three and nine months ended September 30, 2019 , there were no RSUs or stock options that were anti-dilutive. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of an asset or liability is the exchange price that would be received to sell that asset or paid to transfer that liability (exit price) in an orderly transaction occurring in the principal market (or most advantageous market in the absence of a principal market) for such asset or liability. In estimating fair value, the Company utilizes valuation techniques that are consistent with the market approach, the income approach, and/or the cost approach. Such valuation techniques are consistently applied. Inputs to valuation techniques include the assumptions that market participants would use in pricing an asset or liability. ASC Topic 825 requires disclosure of the fair value of financial assets and financial liabilities, including both those financial assets and financial liabilities that are not measured and reported at fair value on a recurring basis and a non-recurring basis. The methodologies for estimating the fair value of financial assets and financial liabilities that are measured at fair value are discussed below. In accordance with accounting guidance, the Company groups its financial assets and financial liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows: Level 1 - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, prepayment speeds, volatilities, etc.) or model-based valuation techniques where all significant assumptions are observable, either directly or indirectly, in the market. Level 3 - Valuation is generated from model-based techniques where one or more significant inputs are not observable, either directly or indirectly, in the market. These unobservable assumptions reflect the Company’s own estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques may include use of matrix pricing, discounted cash flow models, and similar techniques. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature, and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the fair values presented. Management uses its best judgment in estimating the fair value of the Company’s financial instruments; however, there are inherent limitations in any estimation technique. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management maximizes the use of observable inputs and attempts to minimize the use of unobservable inputs when determining fair value measurements. Estimated fair values are disclosed for financial instruments for which it is practicable to estimate fair value. These estimates are made at a specific point in time based on relevant market data and information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. Assets and Liabilities Measured at Fair Value on a Recurring Basis The following is a description of both the general and specific valuation methodologies used to measure financial assets and liabilities on a recurring basis, as well as the general classification of these instruments pursuant to the fair value hierarchy. Investment securities – Investment securities are generally valued based upon quotes obtained from independent third-party pricing services, which use evaluated pricing applications and model processes. Observable market inputs, such as, benchmark yields, reported trades, broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers and reference data are considered as part of the evaluation. The inputs are related directly to the security being evaluated, or indirectly to a similarly situated security. Market assumptions and market data are utilized in the valuation models. The Company reviews the market prices provided by the third-party pricing service for reasonableness based on the Company’s understanding of the market place and credit issues related to the securities. The Company has not made any adjustments to the market quotes provided by them and, accordingly, the Company categorized its investment portfolio within Level 2 of the fair value hierarchy. Derivative assets and liabilities – The Company originates a variable rate loan and enters into a variable-to-fixed interest rate swap with the customer. The Company also enters into an offsetting swap with a correspondent bank. These back-to-back swap agreements are intended to offset each other and allow the Company to originate a variable rate loan, while providing a contract for fixed interest payments for the customer. The net cash flow for the Company is equal to the interest income received from a variable rate loan originated with the customer. The fair value of these derivatives is based on a market standard discounted cash flow approach. Due to the observable nature of the inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at the dates indicated: September 30, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 64,190 $ — $ 64,190 Agency — 261,558 — 261,558 Corporate — 127,802 — 127,802 Municipal bonds — 294,099 — 294,099 Collateralized mortgage obligation — 10,642 — 10,642 Mortgage-backed securities — 498,364 — 498,364 Total securities available-for-sale $ — $ 1,256,655 $ — $ 1,256,655 Derivative assets $ — $ 2,853 $ — $ 2,853 Financial liabilities Derivative liabilities $ — $ 2,853 $ — $ 2,853 December 31, 2018 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 60,912 $ — $ 60,912 Agency — 130,070 — 130,070 Corporate — 103,543 — 103,543 Municipal bonds — 238,630 — 238,630 Collateralized mortgage obligation — 24,338 — 24,338 Mortgage-backed securities — 545,729 — 545,729 Total securities available-for-sale $ — $ 1,103,222 $ — $ 1,103,222 Derivative assets $ — $ 1,681 $ — $ 1,681 Financial liabilities Derivative liabilities $ — $ 1,681 $ — $ 1,681 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Impaired Loans and Other Real Estate Owned – A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral or the discounted expected future cash flows. The Company measures impairment on all nonaccrual loans for which it has reduced the principal balance to the value of the underlying collateral less the anticipated selling cost. OREO are recorded at estimated fair value less the costs to sell at the time of foreclosure or at the lower of cost or estimated fair value less the costs to sell subsequent to acquisition. The fair value of impaired loans and other real estate owned were determined using Level 3 assumptions, and represents impaired loan and other real estate owned balances for which a specific reserve has been established or on which a write down has been taken. Generally, the Company obtains third party appraisals (or property valuations) and/or collateral audits in conjunction with internal analysis based on historical experience on its impaired loans and other real estate owned to determine fair value. In determining the net realizable value of the underlying collateral for impaired loans, the Company will then discount the valuation to cover both market price fluctuations and selling costs the Company expected would be incurred in the event of foreclosure. In addition to the discounts taken, the Company’s calculation of net realizable value considered any other senior liens in place on the underlying collateral. At September 30, 2019 and December 31, 2018, substantially all the Company’s impaired loans were evaluated based on the fair value of their underlying collateral based upon the most recent appraisal available to management. The Company completed partial charge-offs on certain impaired loans individually evaluated for impairment based on recent real estate appraisals and released the related specific reserves during the nine months ended September 30, 2019 . The Company has recorded no specific reserve on loans deemed impaired at September 30, 2019 . The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018. September 30, 2019 Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Impaired loans $ — $ — $ 16 $ 16 December 31, 2018 Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Impaired loans $ — $ — $ 1,445 $ 1,445 Fair Values of Financial Instruments The fair value estimates presented herein are based on pertinent information available to management as of the dates indicated, representing an exit price. At September 30, 2019 Carrying Amount Level 1 Level 2 Level 3 Estimated Fair Value (dollars in thousands) Assets: Cash and cash equivalents $ 427,715 $ 427,715 $ — $ — $ 427,715 Interest-bearing time deposits with financial institutions 2,711 2,711 — — 2,711 Investments held-to-maturity 40,433 — 41,302 — 41,302 Investment securities available-for-sale 1,256,655 — 1,256,655 — 1,256,655 Loans held for sale 7,092 — 7,637 — 7,637 Loans held for investment, net 8,757,476 — — 8,758,265 8,758,265 Derivative asset 2,853 — 2,853 — 2,853 Accrued interest receivable 38,603 38,603 — — 38,603 Liabilities: Deposit accounts 8,859,288 7,515,400 1,345,436 — 8,860,836 FHLB advances 604,558 — 604,980 — 604,980 Subordinated debentures 217,825 — 237,624 — 237,624 Derivative liability 2,853 — 2,853 — 2,853 Accrued interest payable 6,537 6,537 — — 6,537 At December 31, 2018 Carrying Amount Level 1 Level 2 Level 3 Estimated Fair Value (dollars in thousands) Assets: Cash and cash equivalents $ 203,406 $ 203,406 $ — $ — $ 203,406 Interest-bearing time deposits with financial institutions 6,143 6,143 — — 6,143 Investments held-to-maturity 45,210 — 44,672 — 44,672 Investment securities available-for-sale 1,103,222 — 1,103,222 — 1,103,222 Loans held for sale 5,719 — 6,072 — 6,072 Loans held for investment, net 8,836,818 — — 8,697,594 8,697,594 Derivative asset 1,929 — 1,681 — 1,681 Accrued interest receivable 37,837 37,837 — — 37,837 Liabilities: Deposit accounts 8,658,351 7,247,673 1,403,524 — 8,651,197 FHLB advances 667,606 — 666,864 — 666,864 Other borrowings 75 — 75 — 75 Subordinated debentures 110,313 — 115,613 — 115,613 Derivative liability 1,929 — 1,681 — 1,681 Accrued interest payable 3,255 3,255 — — 3,255 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments From time to time, the Company enters into interest rate swap agreements with certain borrowers to assist them in mitigating their interest rate risk exposure associated with the loans they have with the Company. At the same time, the Company enters into identical interest rate swap agreements with another financial institution to mitigate the Company’s interest rate risk exposure associated with the swap agreements it enters into with its borrowers. The Company had swaps with matched terms with an aggregate notional amount of $48.9 million and a fair value of $2.9 million at September 30, 2019 compared with an aggregate notional amount of $57.5 million and a fair value of $1.7 million at December 31, 2018 . The fair value of these agreements are determined through a third party valuation model used by the Company’s counterparty bank, which uses observable market data such as cash LIBOR rates, prices of Eurodollar future contracts and market swap rates. The fair values of these swaps are recorded as components of other assets and other liabilities in the Company’s condensed consolidated balance sheet. Changes in the fair value of these swaps, which occur due to changes in interest rates, are recorded in the Company’s income statement as a component of noninterest income. Since the terms of the swap agreements between the Company and its borrowers have been matched with the terms of swap agreements with another financial institution, the adjustments for the change in their fair value offset each other in noninterest income. Although changes in the fair value of swap agreements between the Company and borrowers and the Company and other financial institutions offset each other, changes in the credit risk of these counterparties may result in a difference in the fair value of these swap agreements. Offsetting swap agreements the Company has with other financial institutions are collateralized with cash, and swap agreements with borrowers are secured by the collateral arrangements for the underlying loans these borrowers have with the Company. During the nine months ended September 30, 2019 and 2018 , there were no losses recorded on swap agreements attributable to the change in credit risk associated with a counterparty. All interest rate swap agreements entered into by the Company as of September 30, 2019 and December 31, 2018 are not designated as hedging instruments. The following tables summarize the Company's derivative instruments, included in “other assets” and “other liabilities” in the consolidated statements of financial condition: September 30, 2019 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swap contracts $ 48,932 $ 2,853 $ 48,932 $ 2,853 Total derivative instruments $ 48,932 $ 2,853 $ 48,932 $ 2,853 December 31, 2018 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swap contracts $ 57,502 $ 1,681 $ 57,502 $ 1,681 Total derivative instruments $ 57,502 $ 1,681 $ 57,502 $ 1,681 |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2019 | |
Offsetting [Abstract] | |
Balance Sheet Offsetting | Balance Sheet Offsetting Derivative financial instruments may be eligible for offset in the consolidated balance sheets, such as those subject to enforceable master netting arrangements or a similar agreement. Under these agreements, the Company has the right to net settle multiple contracts with the same counterparty. The Company offers an interest rate swap product to qualified customers, which are then paired with derivative contracts the Company enters into with a counterparty bank. While derivative contracts entered into with counterparty banks may be subject to enforceable master netting agreements, derivative contracts with customers may not be subject to enforceable master netting arrangements. Financial instruments that are eligible for offset in the consolidated statements of financial condition as of September 30, 2019 are presented in the table below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral (1) Net Amount (dollars in thousands) September 30, 2019 Financial assets: Derivatives not designated as hedging instruments $ 2,853 $ — $ 2,853 $ — $ — $ 2,853 Total $ 2,853 $ — $ 2,853 $ — $ — $ 2,853 Financial liabilities: Derivatives not designated as hedging instruments $ 2,853 $ — $ 2,853 $ — $ (2,750 ) $ 103 Total $ 2,853 $ — $ 2,853 $ — $ (2,750 ) $ 103 (1) Represents cash collateral pledged with counterparty bank. Financial instruments that are eligible for offset in the consolidated statements of financial condition as of December 31, 2018 are presented in the table below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral (1) Net Amount (dollars in thousands) December 31, 2018 Financial assets: Derivatives not designated as hedging instruments $ 2,177 $ (496 ) $ 1,681 $ — $ — $ 1,681 Total $ 2,177 $ (496 ) $ 1,681 $ — $ — $ 1,681 Financial liabilities: Derivatives not designated as hedging instruments $ 1,681 $ — $ 1,681 $ — $ — $ 1,681 Total $ 1,681 $ — $ 1,681 $ — $ — $ 1,681 (1) Represents cash collateral held with counterparty bank. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company accounts for its leases in accordance with ASC 842, which was implemented on January 1, 2019, and requires the Company to record liabilities for future lease obligations as well as assets representing the right to use the underlying leased asset. The Company’s leases primarily represent future obligations to make payments for the use of buildings or space for its operations. Liabilities to make future lease payments are recorded in accrued expenses and other liabilities, while right-of-use assets are recorded in other assets in the Company’s consolidated balance sheets. At September 30, 2019 , all of the Company’s leases were classified as operating leases or short-term leases. Liabilities to make future lease payments and right of use assets are recorded for operating leases and not short-term leases. These liabilities and right-of-use assets are determined based on the total contractual base rents for each lease, which include options to extend or renew each lease, where applicable, and where the Company believes it has an economic incentive to extend or renew the lease. Future contractual base rents are discounted using the rate implicit in the lease or using the Company’s estimated incremental borrowing rate if the rate implicit in the lease is not readily determinable. For leases that contain variable lease payments, the Company assumes future lease payment escalations based on a lease payment escalation rate specified in the lease or the specified index rate observed at the time of lease commencement. Liabilities to make future lease payments are accounted for using the interest method, being reduced by periodic contractual lease payments net of periodic interest accretion. Right-of-use assets for operating leases are amortized over the term of the associated lease by amounts that represent the difference between periodic straight-line lease expense and periodic interest accretion in the related liability to make future lease payments. For the three and nine months ended September 30, 2019 , lease expense totaled $3.5 million and $10.3 million , respectively, and was recorded in premises and occupancy expense in the consolidated statements of income. For the three and nine months ended September 30, 2019 , lease expense attributable to operating leases totaled approximately $2.9 million and $8.4 million , respectively. Lease expense attributable to short-term leases for the three and nine ended September 30, 2019 totaled approximately $575,000 and $1.9 million , respectively. Short-term leases are leases that have a term of 12 months or less at commencement. The following table presents supplemental information related to operating leases as of the period indicated: September 30, 2019 (dollars in thousands) Balance Sheet: Operating lease right of use assets $ 42,065 Operating lease liabilities 44,973 Cash Flows: Operating cash flows from operating leases 8,786 The following table provides information related to minimum contractual lease payments and other information associated with the Company’s leases as of September 30, 2019 : 2019 2020 2021 2022 2023 Thereafter Total (dollars in thousands) Contractual base rents (1) : Operating leases $ 2,798 $ 9,354 $ 9,773 $ 9,327 $ 8,346 $ 13,619 $ 53,217 Short-term leases 218 79 — — — — 297 Total contractual base rents $ 3,016 $ 9,433 $ 9,773 $ 9,327 $ 8,346 $ 13,619 $ 53,514 Total liability to make lease payments $ 44,973 Difference in undiscounted and discounted future lease payments $ 8,541 Weighted average discount rate 6.26 % Weighted average remaining lease term (years) 5.5 (1) Contractual base rents reflect options to extend and renewals, and do not include property taxes and other operating expenses due under respective lease agreements. The Company from time to time leases portions of space it owns to other parties. Income received from these transactions is recorded on a straight-line basis over the term of the sublease. For the three months ended September 30, 2019 and 2018 , rental income totaled $25,000 and $140,000 , respectively. For the nine months ended September 30, 2019 and 2018 , rental income totaled $116,000 and $389,000 , respectively. The following table provides information related to minimum contractual lease payments for the periods indicated below as of December 31, 2018 (1) : 2019 2020 2021 2022 2023 Thereafter Total (dollars in thousands) Minimum contractual lease payments $ 11,468 $ 10,869 $ 10,133 $ 9,296 $ 8,124 $ 10,518 $ 60,408 (1) Contractual base rents in the table above are reflective of future lease obligations under ASC 840, prior to the implementation of ASC 842. The amounts in the table above do not reflect extensions or renewals and do not include property taxes and other operating expenses due under respective lease agreements. The amounts in the table above also reflect future lease obligations for certain leases that had not yet commenced as of December 31, 2018. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company earns revenue from a variety of sources. The Company’s principal source of revenue is interest income on loans, investment securities and other interest earning assets, while the remainder of the Company’s revenue is earned from a variety of fees, service charges, gains and losses, and other income, all of which are classified as noninterest income. Revenue from interest on loans and investment securities is accounted for on an accrual basis using the interest method, while revenue from other sources is accounted for under other applicable U.S. GAAP as well as ASC 606 - Revenue from Contracts with Customers . Revenue streams within the scope of and accounted for under ASC 606 include: service charges and fees on deposit accounts, debit card interchange fees, fees from other services the Company provides its customers and gains and losses from the sale of other real estate owned and property, premises and equipment. ASC 606 requires revenue to be recognized when the Company satisfies the related performance obligations by transferring to the customer a good or service. The recognition of revenue under ASC 606 requires the Company to first identify the contract with the customer, identify the associated performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and finally recognize revenue when the performance obligations have been satisfied and the good or service has been transferred. The majority of the Company’s contracts with customers associated with revenue streams that are within the scope of ASC 606 are considered short-term in nature, can be canceled at any time by the customer or the Company without penalty, such as a deposit account agreement, and are satisfied at a point in time. These revenue streams are included in noninterest income. The following tables provide a summary of the Company’s revenue streams, including those that are within the scope of ASC 606 and those that are accounted for under other applicable U.S. GAAP: Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (dollars in thousands) Interest income: Loans $ — $ 122,974 $ — $ 121,860 $ — $ 119,271 Investment securities and other interest-earning assets — 9,630 — 10,554 — 9,605 Total interest income — 132,604 — 132,414 — 128,876 Noninterest income: Loan servicing fees — 546 — 409 — 400 Service charges on deposit accounts 1,440 — 1,441 — 1,570 — Other service fee income 360 — 363 — 317 — Debit card interchange income 421 — 1,145 — 1,061 — Earnings on bank-owned life insurance — 861 — 851 — 1,270 Net gain from sales of loans — 2,313 — 902 — 2,029 Net gain from sales of investment securities — 4,261 — 212 — 1,063 Other income 592 636 544 457 (446 ) 976 Total noninterest income 2,813 8,617 3,493 2,831 2,502 5,738 Total revenues $ 2,813 $ 141,221 $ 3,493 $ 135,245 $ 2,502 $ 134,614 (1) Revenues from contracts with customers accounted for under ASC 606. (2) Revenues not within the scope of ASC 606 and accounted for under other applicable U.S. GAAP requirements. Nine Months Ended September 30, 2019 September 30, 2018 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (dollars in thousands) Interest income: Loans $ — $ 366,310 $ — $ 289,069 Investment securities and other interest-earning assets — 29,951 — 23,333 Total interest income — 396,261 — 312,402 Noninterest income: Loan servicing fees — 1,353 — 1,037 Service charges on deposit accounts 4,211 — 3,777 — Other service fee income 1,079 — 632 — Debit card interchange income 2,637 — 3,187 — Earnings on bank-owned life insurance — 2,622 — 2,498 Net gain from sales of loans — 4,944 — 8,830 Net gain from sales of investment securities — 4,900 — 1,399 Other income 1,328 2,361 84 2,613 Total noninterest income 9,255 16,180 7,680 16,377 Total revenues $ 9,255 $ 412,441 $ 7,680 $ 328,779 (1) Revenues from contracts with customers accounted for under ASC 606. (2) Revenues not within the scope of ASC 606 and accounted for under other applicable U.S. GAAP requirements. The following provides information concerning the major components of the Company’s revenue: Interest Income Interest income is comprised of interest on loans, investment securities and other interest-earning assets. Interest is recognized using the interest method, which reflects the contractual yield on loans and coupon yield for investment securities. These yields are adjusted for purchase discounts, premiums and net deferred loan origination fees/costs for newly originated loans. Loan Servicing Fees Loan servicing fees generally consist of fees related to servicing of loans for others, as well as the net impact of related serving asset amortization. ASC 606 stipulates that income streams generated through the transfer and servicing of financial instruments shall be accounted for under ASC 860 - Transfers and Servicing and is therefore excluded from the scope of ASC 606. Service Charges on Deposit Accounts and Other Service Fee Income Service charges on deposit accounts and other service fee income consists of periodic service charges on deposit accounts and transaction based fees such as those related to overdrafts, ATM charges and wire transfer fees. The majority of these revenues are accounted for under ASC 606. Performance obligations for periodic service charges on deposit accounts are typically short-term in nature and are generally satisfied on a monthly basis, while performance obligations for other transaction based fees are typically satisfied at a point in time (which may consist of only a few moments to perform the service or transaction) with no further obligations on behalf of the Company to the customer. Periodic service charges are generally collected monthly directly from the customer's deposit account, and at the end of a statement cycle, while transaction based service charges are typically collected at the time of or soon after the service is performed. Debit Card Interchange Income Debit card interchange fee income consists of transaction processing fees associated with customer debit card transactions processed through a payment network and are accounted for under ASC 606. These fees are earned each time a request for payment is originated by a customer debit cardholder at a merchant. In these transactions, the Company transfers funds from the debit cardholder’s account to a merchant through a payment network at the request of the debit cardholder by way of the debit card transaction. The related performance obligations are generally satisfied when the transfer of funds is complete, which is generally a point in time when the debit card transaction is processed. Debit card interchange fees are typically received and recorded as revenue on a daily basis. Earnings on Bank-Owned Life Insurance Earnings on bank-owned life insurance relates to the periodic increase in the cash surrender value of bank-owned life insurance policies on certain key employees of the Company for which the Company is the owner and beneficiary of the related policies. This revenue stream is excluded from the scope of ASC 606, and is accounted for under other applicable U.S. GAAP provisions (ASC 325-30). Gains and (Losses) from Sales of Loans and Investment Securities ASC 606 stipulates that gains and (losses) from the periodic sale of loans and investment securities are excluded from ASC 606 and are accounted for under other applicable U.S. GAAP provisions. Other Income Other income generally consists of recoveries on acquired loans, which were fully charged off and had no book value prior to their acquisition, and gains and (losses) on debt extinguishment. These revenue streams are excluded from the scope of ASC 606 and is accounted for under other applicable U.S. GAAP provisions. Other income also consists of other miscellaneous fees, which are accounted for under ASC 606; however, much like service charges on deposit accounts, these fees have performance obligations that are very short-term in nature and are typically satisfied at a point in time. Revenue is typically recorded at the time these fees are collected, which is generally upon the completion the related transaction or service provided. Other revenue streams that may be applicable to the Company include gains and losses from the sale of non-financial assets such as other real estate owned and property premises and equipment. The Company accounts for these revenue streams in accordance with ASC 610-20, which requires the Company to look to guidance in ASC 606 in the application of certain measurement and recognition concepts. The Company records gains and losses on the sale of non-financial assets when control of the asset has been surrendered to the buyer, which generally occurs at a specific point in time. Practical Expedient The Company also employs a practical expedient with respect to contract acquisition costs, which are generally capitalized and amortized into expense. These costs relate to expenses incurred directly attributable to the efforts to obtain a contract. The practical expedient allows the Company to immediately recognize contract acquisition costs in current period earnings when these costs would have been amortized over a period of one year or less. At September 30, 2019 , the Company did not have any material contract assets or liabilities in its consolidated financial statements related to revenue streams within the scope of ASC 606, and there were no material changes in those balances during the reporting period. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Quarterly Cash Dividend On October 18, 2019, the Corporation’s Board of Directors declared a cash dividend of $0.22 per share, payable on November 15, 2019 to shareholders of record on November 1, 2019. Redemption of Subordinated Notes On October 7, 2019, the Company used a portion of the proceeds from the issuance of the Notes II in May 2019 to redeem all $3.1 million outstanding principal amount of floating rate junior subordinated debt securities associated with Mission Community Capital Trust I, a statutory business trust created under the laws of the State of Delaware, assumed as part of the HEOP acquisition. Prior to redemption, the junior subordinated debt securities carried an interest rate of three-month LIBOR plus 2.95% per annum, for an effective rate of 5.25% per annum, and were scheduled to mature on October 7, 2033. The junior subordinated debt securities were called at par, plus accrued and unpaid interest, for an aggregate amount of $3.1 million , and the associated business trust was dissolved. The Company recorded a loss on early debt extinguishment of $290,000 related to purchase accounting fair value adjustments. For further detail on junior subordinated debt securities, see Note 8 to the Consolidated Financial Statements in this Form 10-Q. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Accounting Standards Adopted in 2019 In March 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 2017-08, Receivables - Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities . This Update amends guidance on the amortization period of premiums on certain purchased callable debt securities. The amendments shorten the amortization period of premiums on purchased callable debt securities to the earliest call date. This Update should be applied on a modified retrospective basis through a cumulative-effect adjustment to beginning retained earnings. The effective date of ASU 2017-08 is for interim and annual reporting periods beginning after December 15, 2018. The adoption of this standard did not have a material effect on the Company’s operating results or financial condition. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This Update was issued to increase the transparency and comparability around lease obligations. Previously unrecorded off-balance sheet obligations and corresponding rights to use underlying leased assets are now recorded in the consolidated financial statements, accompanied by enhanced qualitative and quantitative disclosures in the notes to the consolidated financial statements. The Update is generally effective for public business entities in fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842, Leases and ASU 2018-11, Leases (Topic 842): Targeted Improvements . ASU 2018-10 provides improvements related to ASU 2016-02 to increase stakeholders’ awareness of the amendments to Topic 842 and to expedite the improvements. The amendments affect narrow aspects of the guidance issued in ASU 2016-02. ASU 2018-11 allows entities adopting ASU 2016-02 to choose an additional transition method, under which an entity initially applies the accounting guidance for leases under Topic 842 at the adoption date and recognizes a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. Additionally, ASU 2018-11 allows an entity electing this additional transition method to continue to present comparative period financial statements in accordance with Topic 840 (current U.S. GAAP). ASU 2018-11 also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The amendments in these updates became effective for annual periods as well as interim periods within those annual periods beginning after December 15, 2018. The Company elected to apply the transition provisions of Topic 842 using the alternative transition method whereby comparative periods are not restated. The Company also elected to adopt the “package” of practical expedients in its transition to Topic 842, as specified in Accounting Standard Codification (“ASC”) 842-10-65. The results of this policy election are that the Company reflected the provisions of Topic 842 in its consolidated financial statements for the first time as of and for the period ended March 31, 2019 (the period of adoption). The Company measured and recorded liabilities to make lease payments as well as right-of-use assets in the period of adoption for leases that existed as of the transition date, and will continue to present all comparative periods under Topic 840. Under this elected transition method, the Company is not required to reassess the following as part of its transition to Topic 842: (1) whether any expired or existing contracts contain leases, (2) lease classifications for any existing or expired leases and (3) initial direct costs for any existing leases. Additionally, the Company elected to apply the use of hindsight in its assessment of the term for its leases upon transition, which allows for consideration of the Company’s option to extend or terminate a lease. The Company adopted the provisions of Topic 842 on January 1, 2019, and in its transition to Topic 842, the Company initially recorded a liability to make future lease payments of approximately $45.7 million and right-of-use assets of approximately $43.8 million . The difference of $1.9 million is the accounting adjustments previously recorded under Topic 840 and Topic 805, as required by transition guidance in ASC 842-10-65. The Company was not required to record a cumulative effect adjustment to the opening balance of retained earnings as part of its transition to Topic 842. The Company’s evaluation of lease obligations and service agreements under the new standard included an assessment of the appropriate classification and related accounting of each lease agreement, a review of applicability of the new standard to existing service agreements and gathering all essential lease data to facilitate the application of the new standard. The Company’s review indicated that all of its leases are classified as operating leases or short-term leases. In accordance with the provisions of Topic 842, liabilities to make future lease payments and right-of-use assets are only recorded for leases that are not considered short-term (leases with an original term of greater than 12 months). The Company records expense for its leases on a straight-line basis in accordance with the requirements under Topic 842 for operating leases. The Company’s expense recognition for its operating leases (including short-term leases) under Topic 842 has not differed significantly from that recorded under Topic 840. Right-of-use assets for operating leases are amortized over the lease term, and liabilities to make future lease payments are accounted for using the interest method, both in accordance with Topic 842. Please also refer to Note 13 - Leases for additional information related to the Company’s leases. Recent Accounting Guidance Not Yet Effective In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326) - Targeted Transition Relief . This Update was issued to allow entities that have certain financial instruments within the scope of ASC 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost , to make an irrevocable election to elect the fair value option for those instruments in ASC 825-10, Financial Instruments - Overall upon the adoption of ASC 326, which for the Company is January 1, 2020. The fair value option is not applicable to held-to-maturity debt securities. The Company currently does not anticipate it will make this election upon the adoption of ASC 326. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments . This Update was issued as part of an ongoing project on the FASB’s agenda for improving the Codification or correcting for its unintended application. The FASB issued this Update, which is specific to Updates: 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , 2016-01, Financial Instruments - Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities , and 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. Improvements within this Update include: (1) Allow the measurement of credit losses on accrued interest receivable balances to be determined separately from the other components of the amortized cost basis of associated financial assets. (2) Allow entities to make an accounting policy election to not measure credit losses on accrued interest receivable balances if the entity writes off the uncollectable accrued interest balances in a timely manner through a reversal of interest income or through the recognition of credit loss expense, or both. (3) Allow entities to make an accounting policy election to present accrued interest receivable balances and any related allowance for credit losses separately from the associated financial assets on the balance sheet (not including them as part of the associated financial asset’s amortized cost). (4) Allow entities to elect a practical expedient to disclose separately the total amount of accrued interest included in the amortized cost basis as a single balance to meet certain disclosure requirements. (5) Require that entities reverse from earnings any allowance for credit losses or valuation allowance previously measured on a loan or debt security upon the reclassification of the loan or debt security from one classification or category to another (such as from held for investment to held for sale), and apply the applicable measurement guidance with the new classification or category. (6) Clarify that an entity should include an estimate for recoveries of amounts previously written off in its estimation of the allowance for credit losses. (7) Allow entities to use future interest rate environment projections in the determination of the allowance for credit losses under the discounted cash flow method. (8) Allow an entity to make an accounting policy election to adjust the effective interest rate used to discount expected future cash flows for expected prepayments on financial assets within the scope of ASC 326-20 and on available for sale debt securities within the scope of ASC 326-30 to appropriately isolate credit risk in the determination of the allowance for credit losses. (9) Clarify that an entity should consider, when determining the contractual term of a financial asset, extension or renewal options that are included in the original or modified contract at the reporting date and are not unconditionally cancellable by the entity. (10) Clarify the guidance by specifically requiring that an entity re-measure an equity security without readily determinable fair value at fair value when an orderly transaction is identified for an identical or similar investment of the same issuer in accordance with Topic 820. That is, the amendments clarify that the measurement alternative is a nonrecurring fair value measurement. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company is currently evaluating the effects of this Update on its financial statements and disclosures. In March 2019, the FASB issued ASU 2019-01, Leases (Topic 842): Codification Improvements. This Update provides clarification on certain aspects of an entity’s implementation of Topic 842 including those that relate to: (1) Determining the fair value of the underlying asset by lessors that are not manufacturers or dealers. The amendments related to this item carry forward from Topic 840 to Topic 842 an exception that allows lessors who are not manufacturers or dealers to use the cost of the underlying asset as its fair value. (2) Presentation on the statement of cash flows - sales-type and direct financing leases. The amendments related to this item clarify that all principal payments received on leases by lessors in sales-type or direct financing lease transactions should be reflected in investing activities for entities such as depository and lending institutions within in the scope of Topic 942. (3) Transition disclosures related to Topic 250, Accounting Changes and Error Corrections. The amendments related to this item clarify the FASB’s original intent by explicitly providing an exception to the paragraph 250-10-50-3 interim disclosure requirements in the Topic 842 transition disclosure requirements, which would otherwise require interim disclosures after the date of adoption of Topic 842 related to the impacts of the change on: (a) income from continuing operations, (b) net income, (c) any other financial statement line item and (d) any affected per-share amounts. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company does not believe the effects of this ASU will have a material effect on the Company’s financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement . The amendments in this Update modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . The following disclosure requirements for public companies were removed from Topic 820: • The amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy • The policy for timing of transfers between levels • The valuation processes for Level 3 fair value measurements The following disclosure requirements for public companies were modified in Topic 820: • The amendments clarify that the measurement uncertainty disclosure is to communicate information about the uncertainty in measurement as of the reporting date The following disclosure requirements for public companies were added to Topic 820: • The changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period • The range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. For certain unobservable inputs, an entity may disclose other quantitative information (such as the median or arithmetic average) in lieu of the weighted average if the entity determines that other quantitative information would be a more reasonable and rational method to reflect the distribution of unobservable inputs used to develop Level 3 fair value measurements The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. Early adoption is permitted. In addition, an entity may early adopt any of the removed or modified disclosures immediately and delay adoption of the new disclosures until the effective date. The Company is currently evaluating the effects of ASU 2018-13 on its financial statements and disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . This Update replaces the incurred loss impairment model in current U.S. GAAP with a model that reflects current expected credit losses (“CECL”). The CECL model is applicable to the measurement of credit losses on financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities. CECL also requires credit losses on available-for-sale debt securities be measured through an allowance for credit losses when the fair value is less than the amortized cost basis. It also applies to off-balance sheet credit exposures. The Update requires that all expected credit losses for financial assets held at the reporting date be measured based on historical experience, current conditions and reasonable and supportable forecasts. The Update also requires enhanced disclosure, including qualitative and quantitative disclosures that provide additional information about significant estimates and judgments used in estimating credit losses. For public business entities, the Update is effective for annual periods beginning after December 15, 2019 and interim periods within those annual periods. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326 - Credit Losses, Topic 815 - Derivatives and Hedging and Topic 825 - Financial Instruments . Certain provisions within this Update are applicable to the Company’s CECL implementation, including the ability to make an accounting policy election not to measure an allowance for credit losses on accrued interest receivable when an entity writes off uncollectable amounts of accrued interest in a timely manner. Additionally, this Update allows an entity to make an accounting policy election not to include accrued interest receivable as part of the amortized cost of loans, but rather to report accrued interest receivable on a separate line in the consolidated balance sheets. The effective date will be the same as the effective date in ASU 2016-13. In May 2019, the FASB issued ASU 2019-05, Financial Instruments - Credit Losses (Topic 326):Targeted Transition Relief, to allow companies to irrevocably elect, upon adoption of ASU 2016-13, the fair value option for financial instruments that (1) were previously recorded at amortized cost, (2) are within the scope of the credit losses guidance in ASC 326-20, (3) are eligible for the fair value option under ASC 825-10 and (4) are not held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. The effective date will be the same as the effective date in ASU 2016-13. The Company has developed a new expected credit loss estimation model in accordance with ASU 2016-13. The Company’s CECL Committee and related sub-committees and working groups, which collectively are comprised of senior management and staff members from our finance, credit, lending, internal audit, risk management and IT functional areas, continue to make progress in accordance with the Company’s implementation plan for adoption. Early implementation activities focused on data capture, model development and portfolio segmentation, and were substantially completed during the third quarter of 2019. We have completed our primary model, which we are continuing to review, analyze and refine. During the third quarter, we have initiated validation of our primary model and documentation review of our end-to-end processes, which we expect to complete during the fourth quarter of 2019. To date, we have completed numerous iterations of model output utilizing data from interim periods starting with the fourth quarter of 2018 to test and refine our model, and we will continue to refine and validate our model during the fourth quarter of 2019. Depending on the nature of each identified pool of financial assets with similar risk characteristics, the Company is implementing a probability of default (“PD”) and loss given default (“LGD”) discounted cash flow method and a loss-rate method to estimate expected future credit losses. Additionally, the Company is incorporating reasonable and supportable economic forecasts into the estimate of expected credit losses which will require significant judgment, such as selecting forecast scenarios and related weighting, as well as determining the appropriate length of the forecast horizon. Management intends to leverage economic projections from a reputable and independent third party to inform its reasonable and supportable economic forecasts. Other internal and external indicators of economic forecasts may also be considered by management when developing the forecast metrics. The duration of the forecast horizon, the reversion period and the economic forecasts that management utilizes, as well as additional internal and external indicators of economic forecasts that management considers, may change over time depending on the nature and composition of our portfolio of financial assets. The ultimate impact of ASU 2016-13 will depend on the composition of the portfolio and economic conditions and forecasts at the time of adoption and at future measurement dates . It could also be subject to further regulatory or accounting guidance and other management judgments. Based on our loan portfolio at September 30, 2019 and management’s current expectation of future economic conditions and certain qualitative adjustments, the Company believes that adoption of the new standard will result in an increase in the allowance for credit losses by an amount within a range of $40 million and $60 million ; however, there is no assurance that the ultimate increase in the allowance for credit losses will be within the foregoing range . The Company currently anticipates the majority of the increase in the allowance for credit losses for loans will be attributable to the application of multiple-scenario economic forecasts to our commercial real estate and commercial owner-occupied loan portfolios, which have commercial real estate as the primary collateral source and longer contractual maturities relative to our loan portfolio as a whole. The Company currently does not anticipate it will record a material allowance for credit losses for its held-to-maturity and available-for-sale investment securities upon the adoption of ASU 2016-13; however, the ultimate impact will depend upon the nature and characteristics of our securities portfolios (including issuer specific matters) at the adoption date, the macroeconomic conditions and forecasts at that date, and other management judgments. In February 2019, the U.S. federal bank regulatory agencies approved a final rule modifying their regulatory capital rules and providing an option to phase in over a three-year period the day-one regulatory capital effects of ASU 2016-13. Although the Company does not currently anticipate utilizing the three-year phase-in period, the Company will not make a final determination on the issue until the Company finalizes its model validation activities. |
Revenue Recognition | Revenue Recognition – The Company accounts for certain of its revenue streams in accordance with ASC 606 - Revenue from Contracts with Customers . Revenue streams within the scope of and accounted for under ASC 606 include: service charges and fees on deposit accounts, debit card interchange fees, fees from other services the Bank provides its customers and gains and losses from the sale of other real estate owned and property, premises and equipment. ASC 606 requires revenue to be recognized when the Company satisfies related performance obligations by transferring to the customer a good or service. The recognition of revenue under ASC 606 requires the Company to first identify the contract with the customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and finally recognize revenue when the performance obligations have been satisfied and the good or service has been transferred. The majority of the Company’s contracts with customers associated with revenue streams that are within the scope of ASC 606 are considered short-term in nature and can be canceled at any time by the customer or the Bank, such as a deposit account agreement. Other more significant revenue streams for the Company such as interest income on loans and investment securities are specifically excluded from the scope of ASC 606 and are accounted for under other applicable U.S. GAAP. |
Goodwill and Core Deposit Intangible | Goodwill and Core Deposit Intangible – Goodwill is generally determined as the excess of the fair value of the consideration transferred, plus the fair value of any noncontrolling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill and intangible assets acquired in a purchase business combination and determined to have an indefinite useful life are not amortized, but tested for impairment at least annually or more frequently if events and circumstances exist that indicate the necessity for such impairment tests to be performed. The Company has selected the fourth quarter as the period to perform the annual impairment test. Intangible assets with definite useful lives are amortized over their estimated useful lives to their estimated residual values. Goodwill is the only intangible asset with an indefinite life on our balance sheet. Core deposit intangible assets arising from whole bank acquisitions are amortized on either an accelerated basis, reflecting the pattern in which the economic benefits of the intangible assets is consumed or otherwise used up, or on a straight-line amortization method over their estimated useful lives, which range from 6 to 10 years |
Leases | Leases – The Company accounts for its leases in accordance with ASC 842, which requires the Company to record liabilities for future lease obligations as well as assets representing the right to use the underlying leased asset. Leases with a term of 12 months or less are accounted for using straight-line expense recognition with no liability or asset being recorded for such leases. Other than short-term leases, the Company classifies its leases as either finance leases or operating leases. Leases are classified as finance leases when any of the following are met: (a) the lease transfers ownership of the underlying asset to the lessee by the end of the lease term, (b) the lease contains an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (c) the term of the lease represents a major part of the remaining life of the underlying asset, (d) the present value of the future lease payments equals or exceeds substantially all of the fair value of the underlying asset or (e) the underling leased asset is expected to have no alternative use to the lessor at the end of the lease term due to its specialized nature. When the Company’s assessment of a lease does not meet the foregoing criteria, and the term of the lease is in excess of 12 months, the lease is classified as an operating lease. Liabilities to make lease payments and right-of-use assets are determined based on the total contractual base rents for each lease, discounted at the rate implicit in the lease or at the Company’s estimated incremental borrowing rate if the rate is not implicit in the lease. The Company measures future base rents based on the minimum payments specified in the lease agreement, giving consideration for periodic contractual rent increases which are based on an escalation rate or a specified index. When future rent payments are based on an index, the Company uses the index rate observed at the time of lease commencement to measure future lease payments. Liabilities to make lease payments are accounted for using the interest method, which are reduced by periodic rent payments, net of interest accretion. Right-of-use assets for finance leases are amortized on a straight-line basis over the term of the lease, while right-of-use assets for operating leases are amortized over the term of the lease by amounts that represent the difference between periodic straight-line lease expense and periodic interest accretion on the related liability to make lease payments. Expense recognition for finance leases is representative of the sum of periodic amortization of the associated right-of-use asset as well as the periodic interest accretion on the liability to make lease payments. Expense recognition for operating leases is recorded on a straight-line basis. As of September 30, 2019, all of the Company’s leases were classified as either operating leases or short-term leases. From time to time the Company leases portions of the space it leases to other parties through sublease transactions. Income received from these transactions is recorded on a straight-line basis over the term of the sublease. |
Use of Estimates | Use of Estimates |
Fair Value Measurement | Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Impaired Loans and Other Real Estate Owned – A loan is considered impaired when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Impairment is measured based on the fair value of the underlying collateral or the discounted expected future cash flows. The Company measures impairment on all nonaccrual loans for which it has reduced the principal balance to the value of the underlying collateral less the anticipated selling cost. OREO are recorded at estimated fair value less the costs to sell at the time of foreclosure or at the lower of cost or estimated fair value less the costs to sell subsequent to acquisition. The fair value of impaired loans and other real estate owned were determined using Level 3 assumptions, and represents impaired loan and other real estate owned balances for which a specific reserve has been established or on which a write down has been taken. Generally, the Company obtains third party appraisals (or property valuations) and/or collateral audits in conjunction with internal analysis based on historical experience on its impaired loans and other real estate owned to determine fair value. In determining the net realizable value of the underlying collateral for impaired loans, the Company will then discount the valuation to cover both market price fluctuations and selling costs the Company expected would be incurred in the event of foreclosure. In addition to the discounts taken, the Company’s calculation of net realizable value considered any other senior liens in place on the underlying collateral. |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of assets acquired and liabilities assumed and the provisional fair value adjustments and amounts recorded | The following table represents the assets acquired and liabilities assumed of Grandpoint as of July 1, 2018 and the fair value adjustments and amounts recorded by the Company in 2018 under the acquisition method of accounting: Grandpoint Book Value Fair Value Adjustments Fair Value ASSETS ACQUIRED (dollars in thousands) Cash and cash equivalents $ 147,551 $ — $ 147,551 Investment securities 395,905 (3,047 ) 392,858 Loans, gross 2,404,042 (51,325 ) 2,352,717 Allowance for loan losses (18,665 ) 18,665 — Fixed assets 6,015 3,107 9,122 Core deposit intangible 5,093 66,850 71,943 Deferred tax assets 14,185 (9,157 ) 5,028 Other assets 97,441 (436 ) 97,005 Total assets acquired $ 3,051,567 $ 24,657 $ 3,076,224 LIABILITIES ASSUMED Deposits $ 2,506,663 $ 266 $ 2,506,929 Borrowings 255,155 (232 ) 254,923 Other liabilities 23,687 1,172 24,859 Total liabilities assumed 2,785,505 1,206 2,786,711 Excess of assets acquired over liabilities assumed $ 266,062 $ 23,451 289,513 Consideration paid 602,152 Goodwill recognized $ 312,639 |
Schedule of contractual amounts due, expected cash flows to be collected, interest component and fair value as of the respective acquisition dates | For loans acquired from Grandpoint, the contractual amounts due, expected cash flows to be collected, interest component and fair value as of acquisition date were as follows: Grandpoint Acquired Loans (dollars in thousands) Contractual amounts due $ 3,496,905 Cash flows not expected to be collected 39,071 Expected cash flows 3,457,834 Interest component of expected cash flows 1,105,117 Fair value of acquired loans $ 2,352,717 |
Summary of pro forma net interest and other income, net income and earnings per share | The following table presents the unaudited pro forma information for the net interest and other income, net income and earnings per share as if the acquisition was effective as of January 1, 2018 for the periods indicated and includes certain nonrecurring adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. Nine Months Ended September 30, 2018 (dollars in thousands, except share data) Net interest and other income $ 363,538 Net income 120,400 Basic earnings per share 1.95 Diluted earnings per share 1.93 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of amortized cost and estimated fair value of securities | The amortized cost and estimated fair value of securities were as follows: September 30, 2019 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 60,457 $ 3,733 $ — $ 64,190 Agency 251,329 10,778 (549 ) 261,558 Corporate 125,564 2,255 (17 ) 127,802 Municipal bonds 279,593 14,562 (56 ) 294,099 Collateralized mortgage obligation: residential 10,514 132 (4 ) 10,642 Mortgage-backed securities: residential 486,746 12,570 (952 ) 498,364 Total investment securities available-for-sale 1,214,203 44,030 (1,578 ) 1,256,655 Investment securities held-to-maturity: Mortgage-backed securities: residential 38,686 967 (98 ) 39,555 Other 1,747 — — 1,747 Total investment securities held-to-maturity 40,433 967 (98 ) 41,302 Total investment securities $ 1,254,636 $ 44,997 $ (1,676 ) $ 1,297,957 December 31, 2018 Amortized Cost Unrealized Gain Unrealized Loss Estimated Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 59,688 $ 1,224 $ — $ 60,912 Agency 128,958 1,631 (519 ) 130,070 Corporate 104,158 291 (906 ) 103,543 Municipal bonds 238,914 1,941 (2,225 ) 238,630 Collateralized mortgage obligation: residential 24,699 64 (425 ) 24,338 Mortgage-backed securities: residential 554,751 1,112 (10,134 ) 545,729 Total investment securities available-for-sale 1,111,168 6,263 (14,209 ) 1,103,222 Investment securities held-to-maturity: Mortgage-backed securities: residential 43,381 148 (686 ) 42,843 Other 1,829 — — 1,829 Total investment securities held-to-maturity 45,210 148 (686 ) 44,672 Total investment securities $ 1,156,378 $ 6,411 $ (14,895 ) $ 1,147,894 |
Schedule of number, fair value and gross unrealized holding losses of the Company's investment securities by investment category and length of time that the securities have been in a continuous loss position | The table below shows the number, fair value and gross unrealized holding losses of the Company’s investment securities by investment category and length of time that the securities have been in a continuous loss position. September 30, 2019 Less than 12 Months 12 Months or Longer Total Number Fair Value Gross Unrealized Holding Losses Number Fair Value Gross Unrealized Holding Losses Number Fair Value Gross Unrealized Holding Losses (dollars in thousands) Investment securities available-for-sale: Agency 4 $ 30,761 $ (207 ) 11 $ 15,789 $ (342 ) 15 $ 46,550 $ (549 ) Corporate 1 1,022 (13 ) 1 1,526 (4 ) 2 2,548 (17 ) Municipal bonds 10 9,809 (56 ) — — — 10 9,809 (56 ) Collateralized mortgage obligation: residential — — — 1 652 (4 ) 1 652 (4 ) Mortgage-backed securities: residential 6 47,359 (216 ) 19 35,853 (736 ) 25 83,212 (952 ) Total investment securities available-for-sale 21 88,951 (492 ) 32 53,820 (1,086 ) 53 142,771 (1,578 ) Investment securities held-to-maturity: Mortgage-backed securities: residential — — — 3 13,953 (98 ) 3 13,953 (98 ) Total investment securities held-to-maturity — — — 3 13,953 (98 ) 3 13,953 (98 ) Total investment securities 21 $ 88,951 $ (492 ) 35 $ 67,773 $ (1,184 ) 56 $ 156,724 $ (1,676 ) December 31, 2018 Less than 12 Months 12 Months or Longer Total Number Fair Gross Number Fair Gross Number Fair Gross (dollars in thousands) Investment securities available-for-sale: Agency 15 $ 26,229 $ (333 ) 6 $ 10,434 $ (186 ) 21 $ 36,663 $ (519 ) Corporate 9 47,805 (471 ) 8 19,369 (435 ) 17 67,174 (906 ) Municipal bonds 60 45,083 (369 ) 102 69,693 (1,856 ) 162 114,776 (2,225 ) Collateralized mortgage obligation: residential 1 814 (1 ) 8 18,104 (424 ) 9 18,918 (425 ) Mortgage-backed securities: residential 20 70,839 (435 ) 120 324,864 (9,699 ) 140 395,703 (10,134 ) Total investment securities available-for-sale 105 190,770 (1,609 ) 244 442,464 (12,600 ) 349 633,234 (14,209 ) Investment securities held-to-maturity: Mortgage-backed securities: residential 3 11,256 (81 ) 3 15,741 (605 ) 6 26,997 (686 ) Total investment securities held-to-maturity 3 11,256 (81 ) 3 15,741 (605 ) 6 26,997 (686 ) Total investment securities 108 $ 202,026 $ (1,690 ) 247 $ 458,205 $ (13,205 ) 355 $ 660,231 $ (14,895 ) |
Schedule of amortized cost and estimated fair value of investment securities available for sale by contractual maturity | The amortized cost and estimated fair value of investment securities at September 30, 2019 , by contractual maturity are shown in the table below. Due in One Year or Less Due after One Year through Five Years Due after Five Years through Ten Years Due after Ten Years Total Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value Amortized Cost Fair Value (dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 498 $ 499 $ 20,171 $ 20,702 $ 39,788 $ 42,989 $ — $ — $ 60,457 $ 64,190 Agency — — 42,658 44,453 165,240 171,635 43,431 45,470 251,329 261,558 Corporate — — — — 125,564 127,802 — — 125,564 127,802 Municipal bonds — — 3,569 3,710 34,911 36,057 241,113 254,332 279,593 294,099 Collateralized mortgage obligation: residential — — — — 657 652 9,857 9,990 10,514 10,642 Mortgage-backed securities: residential — — 2,576 2,652 168,693 172,752 315,477 322,960 486,746 498,364 Total investment securities available-for-sale 498 499 68,974 71,517 534,853 551,887 609,878 632,752 1,214,203 1,256,655 Investment securities held-to-maturity: Mortgage-backed securities: residential — — 913 953 — — 37,773 38,602 38,686 39,555 Other — — — — — — 1,747 1,747 1,747 1,747 Total investment securities held-to-maturity — — 913 953 — — 39,520 40,349 40,433 41,302 Total investment securities $ 498 $ 499 $ 69,887 $ 72,470 $ 534,853 $ 551,887 $ 649,398 $ 673,101 $ 1,254,636 $ 1,297,957 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Receivables [Abstract] | |
Schedule of components of loans held for investment | The following table sets forth the composition of our loan portfolio in dollar amounts at the dates indicated: September 30, 2019 December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,233,938 $ 1,364,423 Franchise 894,023 765,416 Commercial owner occupied (1) 1,678,888 1,679,122 SBA 179,965 193,882 Agribusiness 119,633 138,519 Total business loans 4,106,447 4,141,362 Real estate loans Commercial non-owner occupied 2,053,590 2,003,174 Multi-family 1,611,904 1,535,289 One-to-four family (2) 273,182 356,264 Construction 478,961 523,643 Farmland 171,667 150,502 Land 30,717 46,628 Total real estate loans 4,620,021 4,615,500 Consumer loans Consumer loans 40,548 89,424 Gross loans held for investment (3) 8,767,016 8,846,286 Deferred loan origination (fees)/costs and (discounts)/premiums, net (9,540 ) (9,468 ) Loans held for investment 8,757,476 8,836,818 Allowance for loan losses (35,000 ) (36,072 ) Loans held for investment, net $ 8,722,476 $ 8,800,746 Loans held for sale, at lower of cost or fair value $ 7,092 $ 5,719 ______________________________ (1) Secured by real estate. (2) Includes second trust deeds. (3) Total gross loans held for investment for September 30, 2019 and December 31, 2018 are net of the unaccreted fair value net purchase discounts of $46.8 million and $61.0 million , respectively. |
Summary of loan portfolio by the Company's internal risk grading system | The following tables stratify the loan portfolio by the Company’s internal risk grading as of the periods indicated: Credit Risk Grades Pass Special Mention Substandard Doubtful Total Gross Loans September 30, 2019 (dollars in thousands) Business loans Commercial and industrial $ 1,219,358 $ 4,438 $ 10,142 $ — $ 1,233,938 Franchise 880,632 13,375 16 — 894,023 Commercial owner occupied 1,669,152 1,321 8,415 — 1,678,888 SBA 171,393 1,881 6,691 — 179,965 Agribusiness 107,551 — 12,082 — 119,633 Real estate loans Commercial non-owner occupied 2,052,813 — 777 — 2,053,590 Multi-family 1,611,686 — 218 — 1,611,904 One-to-four family 272,555 — 627 — 273,182 Construction 478,961 — — — 478,961 Farmland 171,667 — — — 171,667 Land 30,585 — 132 — 30,717 Consumer loans Consumer loans 40,494 — 54 — 40,548 Totals $ 8,706,847 $ 21,015 $ 39,154 $ — $ 8,767,016 Credit Risk Grades Pass Special Substandard Doubtful Total Gross December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,340,284 $ 12,005 $ 12,134 $ — $ 1,364,423 Franchise 760,795 4,431 190 — 765,416 Commercial owner occupied 1,660,994 1,580 16,548 — 1,679,122 SBA 184,687 2,289 6,906 — 193,882 Agribusiness 125,355 — 13,164 — 138,519 Real estate loans Commercial non-owner occupied 1,996,756 731 5,687 — 2,003,174 Multi-family 1,530,567 4,060 662 — 1,535,289 One-to-four family 350,083 728 5,453 — 356,264 Construction 523,643 — — — 523,643 Farmland 150,381 — 121 — 150,502 Land 46,008 132 488 — 46,628 Consumer loans Consumer loans 89,321 — 103 — 89,424 Totals $ 8,758,874 $ 25,956 $ 61,456 $ — $ 8,846,286 |
Schedule of delinquencies in the Company's loan portfolio | The following tables set forth delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due Current 30-59 60-89 90+ Total Gross Loans Non-accruing September 30, 2019 (dollars in thousands) Business loans Commercial and industrial $ 1,229,223 $ 101 $ 3,105 $ 1,509 $ 1,233,938 $ 2,950 Franchise 893,999 8 — 16 894,023 16 Commercial owner occupied 1,677,101 382 — 1,405 1,678,888 1,405 SBA 176,541 731 107 2,586 179,965 2,586 Agribusiness 119,633 — — — 119,633 — Real estate loans Commercial non-owner occupied 2,052,813 — — 777 2,053,590 777 Multi-family 1,611,904 — — — 1,611,904 — One-to-four family 272,679 503 — — 273,182 371 Construction 478,961 — — — 478,961 — Farmland 171,667 — — — 171,667 — Land 30,717 — — — 30,717 — Consumer loans Consumer loans 40,548 — — — 40,548 — Totals $ 8,755,786 $ 1,725 $ 3,212 $ 6,293 $ 8,767,016 $ 8,105 Days Past Due Current 30-59 60-89 90+ Total Gross Loans Non-accruing December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ 1,361,979 $ 309 $ 1,204 $ 931 $ 1,364,423 $ 931 Franchise 759,546 5,680 — 190 765,416 190 Commercial owner occupied 1,677,967 343 — 812 1,679,122 599 SBA 190,732 524 — 2,626 193,882 2,739 Agribusiness 138,519 — — — 138,519 — Real estate loans Commercial non-owner occupied 2,003,174 — — — 2,003,174 — Multi-family 1,535,275 14 — — 1,535,289 — One-to-four family 356,219 30 9 6 356,264 398 Construction 523,643 — — — 523,643 — Farmland 150,502 — — — 150,502 — Land 46,628 — — — 46,628 — Consumer loans Consumer loans 89,249 146 29 — 89,424 — Totals $ 8,833,433 $ 7,046 $ 1,242 $ 4,565 $ 8,846,286 $ 4,857 |
Summary of Company's investment in impaired loans | The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated: Impaired Loans Unpaid Principal Balance Recorded Investment With Specific Allowance Without Specific Allowance Specific Allowance for Impaired Loans (dollars in thousands) September 30, 2019 Business loans Commercial and industrial $ 3,099 $ 2,950 $ — $ 2,950 $ — Franchise 697 16 — 16 — Commercial owner occupied 1,427 1,406 — 1,406 — SBA 3,320 2,586 — 2,586 — Agribusiness 6,903 6,903 — 6,903 — Real estate loans Commercial non-owner occupied 1,351 777 — 777 — One-to-four family 413 371 — 371 — Totals $ 17,210 $ 15,009 $ — $ 15,009 $ — Impaired Loans Unpaid Principal Balance Recorded Investment With Specific Allowance Without Specific Allowance Specific Allowance for Impaired Loans (dollars in thousands) December 31, 2018 Business loans Commercial and industrial $ 1,071 $ 1,023 $ 550 $ 473 $ 118 Franchise 190 189 — 189 — Commercial owner occupied 628 599 — 599 — SBA 7,598 2,739 488 2,251 466 Agribusiness 7,500 7,500 — 7,500 — Real estate loans One-to-four family 453 408 — 408 — Totals $ 17,440 $ 12,458 $ 1,038 $ 11,420 $ 584 The following table presents information on impaired loans and leases, disaggregated by class, for the periods indicated: Impaired Loans Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (dollars in thousands) Business loans Commercial and industrial $ 3,078 $ — $ 2,614 $ — $ 1,030 $ — Franchise 679 — 4,047 — 209 — Commercial owner occupied 845 — 564 — — — SBA 2,488 — 3,139 — 1,914 — Agribusiness 7,092 104 7,489 109 — — Real estate loans Commercial non-owner occupied 421 — 162 — 1,290 — Multi-family — — — — 589 — One-to-four family 373 — 383 — 1,406 — Land 320 — 160 — 5 — Consumer loans Consumer loans — $ — 17 — 13 — Totals $ 15,296 $ 104 $ 18,575 $ 109 $ 6,456 $ — (1) Interest income recognized represents interest on accruing loans. Impaired Loans Nine Months Ended September 30, 2019 2018 Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (dollars in thousands) Business loans: Commercial and industrial $ 2,565 $ — $ 1,161 $ — Franchise 2,901 — 93 — Commercial owner occupied 662 — 1,931 — SBA 2,969 — 1,505 — Agribusiness 7,360 303 — — Real estate loans: Commercial non-owner occupied 194 — 573 — Multi-family — — 666 — One-to-four family 383 — 1,258 — Land 160 — 6 — Consumer loans: Consumer loans 25 — 41 — Totals $ 17,219 $ 303 $ 7,234 $ — (1) Interest income recognized represents interest on accruing loans. |
Summary of additional detail on components of impaired loans | The following table provides additional detail on the components of impaired loans at the period end indicated: September 30, 2019 December 31, 2018 (dollars in thousands) Nonaccrual loans $ 8,105 $ 4,857 Accruing loans 6,904 7,601 Total impaired loans $ 15,009 $ 12,458 |
Summary of Company's investment in purchased credit impaired loans | The Company has purchased loans that have experienced deterioration of credit quality between origination and acquisition and for which it was probable, at acquisition, that not all contractually required payments would be collected. The carrying amount of those loans is as follows: September 30, 2019 December 31, 2018 (dollars in thousands) Business loans Commercial and industrial $ — $ 10 Commercial owner occupied 577 632 SBA 1,154 1,265 Real estate loans Commercial non-owner occupied — 275 Total purchased credit impaired $ 1,731 $ 2,182 |
Summary of accretable yield on purchased credit impaired | The following table summarizes the accretable yield on the PCI loans for the periods indicated. Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, 2019 2019 2018 2019 2018 (dollars in thousands) Balance at the beginning of period $ 296 $ 332 $ 1,473 $ 411 $ 3,019 Additions — — 483 — 483 Accretion (46 ) (45 ) (162 ) (170 ) (668 ) Payoffs — (9 ) (1 ) (9 ) (1,819 ) Sales — — — $ — $ — Reclassification from nonaccretable difference (18 ) 18 195 — 973 Balance at the end of period $ 232 $ 296 $ 1,988 $ 232 $ 1,988 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Provision for Loan and Lease Losses [Abstract] | |
Summary of allocation of the allowance as well as the activity in the allowance attributed to various segments in the loan portfolio | The following tables summarize the allocation of the ALLL as well as the activity in the ALLL attributed to various segments in the loan portfolio as of and for the periods indicated: Three Months Ended September 30, 2019 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, March 31, 2019 $ 11,031 $ 6,765 $ 1,490 $ 3,363 $ 2,765 $ 1,765 $ 705 $ 704 $ 4,750 $ 809 $ 658 $ 221 $ 35,026 Charge-offs (290 ) (995 ) — (143 ) — (86 ) — — — — — (11 ) (1,525 ) Recoveries 54 — 8 62 — — — 1 — — — 9 134 Provisions for (reduction in) loan losses (265 ) 963 228 1,099 (399 ) 199 10 (14 ) (592 ) 29 (25 ) 132 1,365 Balance, June 30, 2019 $ 10,530 $ 6,733 $ 1,726 $ 4,381 $ 2,366 $ 1,878 $ 715 $ 691 $ 4,158 $ 838 $ 633 $ 351 $ 35,000 Nine Months Ended September 30, 2019 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, December 31, 2018 $ 10,821 $ 6,500 $ 1,386 $ 4,288 $ 3,283 $ 1,604 $ 725 $ 805 $ 5,166 $ 503 $ 772 $ 219 $ 36,072 Charge-offs (985 ) (2,531 ) — (1,362 ) — (574 ) — — — — — (16 ) (5,468 ) Recoveries 168 — 31 66 — — — 2 — — — 10 277 Provisions for (reduction in) loan losses 526 2,764 309 1,389 (917 ) 848 (10 ) (116 ) (1,008 ) 335 (139 ) 138 4,119 Balance, September 30, 2019 $ 10,530 $ 6,733 $ 1,726 $ 4,381 $ 2,366 $ 1,878 $ 715 $ 691 $ 4,158 $ 838 $ 633 $ 351 $ 35,000 Amount of allowance attributed to: Specifically evaluated impaired loans $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — General portfolio allocation 10,530 6,733 1,726 4,381 2,366 1,878 715 691 4,158 838 633 351 35,000 Loans individually evaluated for impairment 2,950 16 1,406 2,586 6,903 777 — 371 — — — — 15,009 Specific reserves to total loans individually evaluated for impairment — % — % — % — % — % — % — % — % — % — % — % — % — % Loans collectively evaluated for impairment $ 1,230,988 $ 894,007 $ 1,677,482 $ 177,379 $ 112,730 $ 2,052,813 $ 1,611,904 $ 272,811 $ 478,961 $ 171,667 $ 30,717 $ 40,548 $ 8,752,007 General reserves to total loans collectively evaluated for impairment 0.86 % 0.75 % 0.10 % 2.47 % 2.10 % 0.09 % 0.04 % 0.25 % 0.87 % 0.49 % 2.06 % 0.87 % 0.40 % Total gross loans held for investment $ 1,233,938 $ 894,023 $ 1,678,888 $ 179,965 $ 119,633 $ 2,053,590 $ 1,611,904 $ 273,182 $ 478,961 $ 171,667 $ 30,717 $ 40,548 $ 8,767,016 Total allowance to gross loans held for investment 0.85 % 0.75 % 0.10 % 2.43 % 1.98 % 0.09 % 0.04 % 0.25 % 0.87 % 0.49 % 2.06 % 0.87 % 0.40 % Three Months Ended September 30, 2018 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, March 31, 2018 $ 10,164 $ 6,181 $ 1,137 $ 2,575 $ 2,694 $ 1,450 $ 563 $ 698 $ 4,809 $ 405 $ 972 $ 99 $ 31,747 Charge-offs (100 ) — — (44 ) — — — — — — — (85 ) (229 ) Recoveries 120 — 8 8 — — — — — — — 6 142 Provisions for (reduction in) loan losses 200 151 68 288 871 33 60 21 11 (30 ) (104 ) 77 1,646 Balance, June 30, 2018 $ 10,384 $ 6,332 $ 1,213 $ 2,827 $ 3,565 $ 1,483 $ 623 $ 719 $ 4,820 $ 375 $ 868 $ 97 $ 33,306 Nine Months Ended September 30, 2018 Commercial and industrial Franchise Commercial owner occupied SBA Agribusiness Commercial non-owner occupied Multi-family One-to-four family Construction Farmland Land Consumer loans Total (dollars in thousands) Balance, December 31, 2017 $ 9,721 $ 5,797 $ 767 $ 2,890 $ 1,291 $ 1,266 $ 607 $ 803 $ 4,569 $ 137 $ 993 $ 95 $ 28,936 Charge-offs (1,011 ) — — (100 ) — — — — — — — (137 ) (1,248 ) Recoveries 283 — 32 43 — — — 1 — — — 7 366 Provisions for (reduction in) loan losses 1,391 535 414 (6 ) 2,274 217 16 (85 ) 251 238 (125 ) 132 5,252 Balance, September 30, 2018 $ 10,384 $ 6,332 $ 1,213 $ 2,827 $ 3,565 $ 1,483 $ 623 $ 719 $ 4,820 $ 375 $ 868 $ 97 $ 33,306 Amount of allowance attributed to: Specifically evaluated impaired loans $ — $ — $ — $ 250 $ — $ — $ — $ — $ — $ — $ — $ — $ 250 General portfolio allocation 10,384 6,332 1,213 2,577 3,565 1,483 623 719 4,820 375 868 97 33,056 Loans individually evaluated for impairment 1,027 209 — 2,748 — 1,290 589 1,388 — — 4 13 7,268 Specific reserves to total loans individually evaluated for impairment — % — % — % 9.10 % — % — % — % — % — % — % — % — % 3.44 % Loans collectively evaluated for impairment $ 1,358,814 $ 735,157 $ 1,675,528 $ 190,739 $ 133,241 $ 1,929,875 $ 1,554,103 $ 375,229 $ 504,708 138,479 $ 49,988 $ 114,723 $ 8,760,584 General reserves to total loans collectively evaluated for impairment 0.76 % 0.86 % 0.07 % 1.35 % 2.68 % 0.08 % 0.04 % 0.19 % 0.96 % 0.27 % 1.74 % 0.08 % 0.38 % Total gross loans held for investment $ 1,359,841 $ 735,366 $ 1,675,528 $ 193,487 $ 133,241 $ 1,931,165 $ 1,554,692 $ 376,617 $ 504,708 138,479 $ 49,992 $ 114,736 $ 8,767,852 Total allowance to gross loans held for investment 0.76 % 0.86 % 0.07 % 1.46 % 2.68 % 0.08 % 0.04 % 0.19 % 0.96 % 0.27 % 1.74 % 0.08 % 0.38 % |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Company's unaudited earnings per share calculations | The following tables set forth the Company’s earnings per share calculations for the periods indicated: Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 (dollars in thousands, except per share data) Basic Net income $ 41,375 $ 38,527 $ 28,392 Less: Earnings allocated to participating securities (432 ) (444 ) — Net income allocated to common stockholders $ 40,943 $ 38,083 $ 28,392 Weighted average common shares outstanding 59,293,218 61,308,046 61,727,030 Basic earnings per common share $ 0.69 $ 0.62 $ 0.46 Diluted Net income allocated to common stockholders $ 40,943 $ 38,083 $ 28,392 Weighted average common shares outstanding 59,293,218 61,308,046 61,727,030 Diluted effect of share-based compensation 377,637 353,727 634,774 Weighted average diluted common shares 59,670,855 61,661,773 62,361,804 Diluted earnings per common share $ 0.69 $ 0.62 $ 0.46 Nine Months Ended September 30, 2019 September 30, 2018 (dollars in thousands, except per share data) Basic Net income $ 118,620 $ 83,697 Less: Earnings allocated to participating securities (1,223 ) — Net income allocated to common stockholders $ 117,397 $ 83,697 Weighted average common shares outstanding 60,853,081 51,282,533 Basic earnings per common share $ 1.93 $ 1.63 Diluted Net income allocated to common stockholders $ 117,397 $ 83,697 Weighted average common shares outstanding 60,853,081 51,282,533 Diluted effect of share-based compensation 348,777 683,114 Weighted average diluted common shares 61,201,858 51,965,647 Diluted earnings per common share $ 1.92 $ 1.61 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Company's financial instruments measured at fair value on a recurring basis | The following fair value hierarchy table presents information about the Company’s financial assets and liabilities measured at fair value on a recurring basis at the dates indicated: September 30, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 64,190 $ — $ 64,190 Agency — 261,558 — 261,558 Corporate — 127,802 — 127,802 Municipal bonds — 294,099 — 294,099 Collateralized mortgage obligation — 10,642 — 10,642 Mortgage-backed securities — 498,364 — 498,364 Total securities available-for-sale $ — $ 1,256,655 $ — $ 1,256,655 Derivative assets $ — $ 2,853 $ — $ 2,853 Financial liabilities Derivative liabilities $ — $ 2,853 $ — $ 2,853 December 31, 2018 Fair Value Measurement Using Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 60,912 $ — $ 60,912 Agency — 130,070 — 130,070 Corporate — 103,543 — 103,543 Municipal bonds — 238,630 — 238,630 Collateralized mortgage obligation — 24,338 — 24,338 Mortgage-backed securities — 545,729 — 545,729 Total securities available-for-sale $ — $ 1,103,222 $ — $ 1,103,222 Derivative assets $ — $ 1,681 $ — $ 1,681 Financial liabilities Derivative liabilities $ — $ 1,681 $ — $ 1,681 |
Schedule of Company's financial instruments measured at fair value on a nonrecuring basis | The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2019 and December 31, 2018. September 30, 2019 Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Impaired loans $ — $ — $ 16 $ 16 December 31, 2018 Level 1 Level 2 Level 3 Total Fair Value (dollars in thousands) Financial assets Impaired loans $ — $ — $ 1,445 $ 1,445 |
Schedule of carrying amount and estimated fair value of financial instruments | The fair value estimates presented herein are based on pertinent information available to management as of the dates indicated, representing an exit price. At September 30, 2019 Carrying Amount Level 1 Level 2 Level 3 Estimated Fair Value (dollars in thousands) Assets: Cash and cash equivalents $ 427,715 $ 427,715 $ — $ — $ 427,715 Interest-bearing time deposits with financial institutions 2,711 2,711 — — 2,711 Investments held-to-maturity 40,433 — 41,302 — 41,302 Investment securities available-for-sale 1,256,655 — 1,256,655 — 1,256,655 Loans held for sale 7,092 — 7,637 — 7,637 Loans held for investment, net 8,757,476 — — 8,758,265 8,758,265 Derivative asset 2,853 — 2,853 — 2,853 Accrued interest receivable 38,603 38,603 — — 38,603 Liabilities: Deposit accounts 8,859,288 7,515,400 1,345,436 — 8,860,836 FHLB advances 604,558 — 604,980 — 604,980 Subordinated debentures 217,825 — 237,624 — 237,624 Derivative liability 2,853 — 2,853 — 2,853 Accrued interest payable 6,537 6,537 — — 6,537 At December 31, 2018 Carrying Amount Level 1 Level 2 Level 3 Estimated Fair Value (dollars in thousands) Assets: Cash and cash equivalents $ 203,406 $ 203,406 $ — $ — $ 203,406 Interest-bearing time deposits with financial institutions 6,143 6,143 — — 6,143 Investments held-to-maturity 45,210 — 44,672 — 44,672 Investment securities available-for-sale 1,103,222 — 1,103,222 — 1,103,222 Loans held for sale 5,719 — 6,072 — 6,072 Loans held for investment, net 8,836,818 — — 8,697,594 8,697,594 Derivative asset 1,929 — 1,681 — 1,681 Accrued interest receivable 37,837 37,837 — — 37,837 Liabilities: Deposit accounts 8,658,351 7,247,673 1,403,524 — 8,651,197 FHLB advances 667,606 — 666,864 — 666,864 Other borrowings 75 — 75 — 75 Subordinated debentures 110,313 — 115,613 — 115,613 Derivative liability 1,929 — 1,681 — 1,681 Accrued interest payable 3,255 3,255 — — 3,255 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of derivative instruments | The following tables summarize the Company's derivative instruments, included in “other assets” and “other liabilities” in the consolidated statements of financial condition: September 30, 2019 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swap contracts $ 48,932 $ 2,853 $ 48,932 $ 2,853 Total derivative instruments $ 48,932 $ 2,853 $ 48,932 $ 2,853 December 31, 2018 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swap contracts $ 57,502 $ 1,681 $ 57,502 $ 1,681 Total derivative instruments $ 57,502 $ 1,681 $ 57,502 $ 1,681 |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Offsetting [Abstract] | |
Schedule of financial instruments eligible for offset in consolidated statements of financial condition | Financial instruments that are eligible for offset in the consolidated statements of financial condition as of September 30, 2019 are presented in the table below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral (1) Net Amount (dollars in thousands) September 30, 2019 Financial assets: Derivatives not designated as hedging instruments $ 2,853 $ — $ 2,853 $ — $ — $ 2,853 Total $ 2,853 $ — $ 2,853 $ — $ — $ 2,853 Financial liabilities: Derivatives not designated as hedging instruments $ 2,853 $ — $ 2,853 $ — $ (2,750 ) $ 103 Total $ 2,853 $ — $ 2,853 $ — $ (2,750 ) $ 103 (1) Represents cash collateral pledged with counterparty bank. Financial instruments that are eligible for offset in the consolidated statements of financial condition as of December 31, 2018 are presented in the table below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Balance Sheets Net Amounts Presented in the Consolidated Balance Sheets Financial Instruments Cash Collateral (1) Net Amount (dollars in thousands) December 31, 2018 Financial assets: Derivatives not designated as hedging instruments $ 2,177 $ (496 ) $ 1,681 $ — $ — $ 1,681 Total $ 2,177 $ (496 ) $ 1,681 $ — $ — $ 1,681 Financial liabilities: Derivatives not designated as hedging instruments $ 1,681 $ — $ 1,681 $ — $ — $ 1,681 Total $ 1,681 $ — $ 1,681 $ — $ — $ 1,681 (1) Represents cash collateral held with counterparty bank. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of supplemental information | The following table presents supplemental information related to operating leases as of the period indicated: September 30, 2019 (dollars in thousands) Balance Sheet: Operating lease right of use assets $ 42,065 Operating lease liabilities 44,973 Cash Flows: Operating cash flows from operating leases 8,786 |
Schedule of minimum contractual lease payments and other information | The following table provides information related to minimum contractual lease payments and other information associated with the Company’s leases as of September 30, 2019 : 2019 2020 2021 2022 2023 Thereafter Total (dollars in thousands) Contractual base rents (1) : Operating leases $ 2,798 $ 9,354 $ 9,773 $ 9,327 $ 8,346 $ 13,619 $ 53,217 Short-term leases 218 79 — — — — 297 Total contractual base rents $ 3,016 $ 9,433 $ 9,773 $ 9,327 $ 8,346 $ 13,619 $ 53,514 Total liability to make lease payments $ 44,973 Difference in undiscounted and discounted future lease payments $ 8,541 Weighted average discount rate 6.26 % Weighted average remaining lease term (years) 5.5 (1) Contractual base rents reflect options to extend and renewals, and do not include property taxes and other operating expenses due under respective lease agreements. |
Schedule of information related to minimum contractual lease payments | The following table provides information related to minimum contractual lease payments for the periods indicated below as of December 31, 2018 (1) : 2019 2020 2021 2022 2023 Thereafter Total (dollars in thousands) Minimum contractual lease payments $ 11,468 $ 10,869 $ 10,133 $ 9,296 $ 8,124 $ 10,518 $ 60,408 (1) Contractual base rents in the table above are reflective of future lease obligations under ASC 840, prior to the implementation of ASC 842. The amounts in the table above do not reflect extensions or renewals and do not include property taxes and other operating expenses due under respective lease agreements. The amounts in the table above also reflect future lease obligations for certain leases that had not yet commenced as of December 31, 2018. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Company's revenue streams | The following tables provide a summary of the Company’s revenue streams, including those that are within the scope of ASC 606 and those that are accounted for under other applicable U.S. GAAP: Three Months Ended September 30, 2019 June 30, 2019 September 30, 2018 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (dollars in thousands) Interest income: Loans $ — $ 122,974 $ — $ 121,860 $ — $ 119,271 Investment securities and other interest-earning assets — 9,630 — 10,554 — 9,605 Total interest income — 132,604 — 132,414 — 128,876 Noninterest income: Loan servicing fees — 546 — 409 — 400 Service charges on deposit accounts 1,440 — 1,441 — 1,570 — Other service fee income 360 — 363 — 317 — Debit card interchange income 421 — 1,145 — 1,061 — Earnings on bank-owned life insurance — 861 — 851 — 1,270 Net gain from sales of loans — 2,313 — 902 — 2,029 Net gain from sales of investment securities — 4,261 — 212 — 1,063 Other income 592 636 544 457 (446 ) 976 Total noninterest income 2,813 8,617 3,493 2,831 2,502 5,738 Total revenues $ 2,813 $ 141,221 $ 3,493 $ 135,245 $ 2,502 $ 134,614 (1) Revenues from contracts with customers accounted for under ASC 606. (2) Revenues not within the scope of ASC 606 and accounted for under other applicable U.S. GAAP requirements. Nine Months Ended September 30, 2019 September 30, 2018 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (dollars in thousands) Interest income: Loans $ — $ 366,310 $ — $ 289,069 Investment securities and other interest-earning assets — 29,951 — 23,333 Total interest income — 396,261 — 312,402 Noninterest income: Loan servicing fees — 1,353 — 1,037 Service charges on deposit accounts 4,211 — 3,777 — Other service fee income 1,079 — 632 — Debit card interchange income 2,637 — 3,187 — Earnings on bank-owned life insurance — 2,622 — 2,498 Net gain from sales of loans — 4,944 — 8,830 Net gain from sales of investment securities — 4,900 — 1,399 Other income 1,328 2,361 84 2,613 Total noninterest income 9,255 16,180 7,680 16,377 Total revenues $ 9,255 $ 412,441 $ 7,680 $ 328,779 (1) Revenues from contracts with customers accounted for under ASC 606. (2) Revenues not within the scope of ASC 606 and accounted for under other applicable U.S. GAAP requirements. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 44,973 | |
Operating lease right of use assets | 42,065 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liabilities | $ 45,700 | |
Operating lease right of use assets | 43,800 | |
Cumulative adjustment not recorded | $ 1,900 | |
Accounting Standards Update 2016-13 | Minimum | Pro Forma | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increase in the allowance for credit losses | 40,000 | |
Accounting Standards Update 2016-13 | Maximum | Pro Forma | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Increase in the allowance for credit losses | $ 60,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - Core Deposits | 9 Months Ended |
Sep. 30, 2019 | |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Weighted average useful life | 6 years |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Weighted average useful life | 10 years |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 30, 2019USD ($) | Jul. 01, 2018USD ($)shares | Jun. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 29, 2018$ / shares |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 808,322 | $ 808,726 | ||||
Grandpoint Capital, Inc. | ||||||
Business Acquisition [Line Items] | ||||||
Total assets acquired | $ 3,076,224 | $ 3,051,567 | $ 3,076,224 | |||
Gross loans acquired | 2,400,000 | |||||
Total deposits acquired | 2,506,929 | $ 2,506,663 | 2,506,929 | |||
Equity issued, ratio | 0.4750 | |||||
Consideration paid | 602,152 | $ 602,200 | ||||
Aggregate cash consideration payable | 28,100 | |||||
Company's common stock value (usd per share) | $ / shares | $ 38.15 | |||||
Goodwill | $ 312,639 | $ 312,600 | 312,639 | |||
Net adjustment to loans, deferred tax assets and other assets since acquisition | $ 580 | |||||
Grandpoint Capital, Inc. | Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Common stock issued as consideration (in shares) | shares | 15,758,089 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed - (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jul. 01, 2018 | Jun. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
LIABILITIES ASSUMED | |||||
Goodwill recognized | $ 808,322 | $ 808,726 | |||
Grandpoint Capital, Inc. | |||||
ASSETS ACQUIRED | |||||
Cash and cash equivalents | $ 147,551 | $ 147,551 | $ 147,551 | ||
Investment securities | 392,858 | 395,905 | 392,858 | ||
Loans, gross | 2,352,717 | 2,404,042 | 2,352,717 | ||
Allowance for loan losses | 0 | (18,665) | 0 | ||
Fixed assets | 9,122 | 6,015 | 9,122 | ||
Core deposit intangible | 71,943 | 5,093 | 71,943 | ||
Deferred tax assets | 5,028 | 14,185 | 5,028 | ||
Other assets | 97,005 | 97,441 | 97,005 | ||
Total assets acquired | 3,076,224 | 3,051,567 | 3,076,224 | ||
LIABILITIES ASSUMED | |||||
Deposits | 2,506,929 | 2,506,663 | 2,506,929 | ||
Borrowings | 254,923 | 255,155 | 254,923 | ||
Other Liabilities | 24,859 | 23,687 | 24,859 | ||
Total liabilities assumed | 2,786,711 | 2,785,505 | 2,786,711 | ||
Excess of assets acquired over liabilities assumed | 289,513 | 266,062 | 289,513 | ||
Consideration paid | 602,152 | 602,200 | |||
Goodwill recognized | $ 312,639 | $ 312,600 | 312,639 | ||
Fair Value Adjustments | |||||
Cash and cash equivalents | 0 | ||||
Investment securities | (3,047) | ||||
Loans, gross | (51,325) | ||||
Allowance for loan losses | 18,665 | ||||
Fixed assets | 3,107 | ||||
Core deposit intangible | 66,850 | ||||
Deferred tax assets | (9,157) | ||||
Other assets | (436) | ||||
Total assets acquired | 24,657 | ||||
Deposits | 266 | ||||
Borrowings | (232) | ||||
Other Liabilities | 1,172 | ||||
Total liabilities assumed | 1,206 | ||||
Excess of assets acquired over liabilities assumed | $ 23,451 |
Acquisitions - Loan Information
Acquisitions - Loan Information (Details) - Acquired Loans - Grandpoint Capital, Inc. $ in Thousands | Jul. 01, 2018USD ($) |
Business Acquisition [Line Items] | |
Contractual amounts due | $ 3,496,905 |
Cash flows not expected to be collected | 39,071 |
Expected cash flows | 3,457,834 |
Interest component of expected cash flows | 1,105,117 |
Fair value of acquired loans | $ 2,352,717 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($)$ / shares | |
Business Combinations [Abstract] | |
Net interest and other income | $ | $ 363,538 |
Net income | $ | $ 120,400 |
Basic earnings per share (in dollars per share) | $ / shares | $ 1.95 |
Diluted earnings per share (in dollars per share) | $ / shares | $ 1.93 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Investment securities available-for-sale: | ||
Total | $ 1,214,203 | $ 1,111,168 |
Unrealized Gain | 44,030 | 6,263 |
Unrealized Loss | (1,578) | (14,209) |
Estimated Fair Value | 1,256,655 | 1,103,222 |
Investment securities held-to-maturity: | ||
Amortized Cost | 40,433 | 45,210 |
Unrealized Gain | 967 | 148 |
Unrealized Loss | (98) | (686) |
Estimated Fair Value | 41,302 | 44,672 |
Total investment securities | ||
Amortized Cost | 1,254,636 | 1,156,378 |
Unrealized Gain | 44,997 | 6,411 |
Unrealized Loss | (1,676) | (14,895) |
Estimated Fair Value | 1,297,957 | 1,147,894 |
U.S. Treasury | ||
Investment securities available-for-sale: | ||
Total | 60,457 | 59,688 |
Unrealized Gain | 3,733 | 1,224 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | 64,190 | 60,912 |
Agency | ||
Investment securities available-for-sale: | ||
Total | 251,329 | 128,958 |
Unrealized Gain | 10,778 | 1,631 |
Unrealized Loss | (549) | (519) |
Estimated Fair Value | 261,558 | 130,070 |
Corporate | ||
Investment securities available-for-sale: | ||
Total | 125,564 | 104,158 |
Unrealized Gain | 2,255 | 291 |
Unrealized Loss | (17) | (906) |
Estimated Fair Value | 127,802 | 103,543 |
Municipal bonds | ||
Investment securities available-for-sale: | ||
Total | 279,593 | 238,914 |
Unrealized Gain | 14,562 | 1,941 |
Unrealized Loss | (56) | (2,225) |
Estimated Fair Value | 294,099 | 238,630 |
Collateralized mortgage obligation: residential | ||
Investment securities available-for-sale: | ||
Total | 10,514 | 24,699 |
Unrealized Gain | 132 | 64 |
Unrealized Loss | (4) | (425) |
Estimated Fair Value | 10,642 | 24,338 |
Mortgage-backed securities: residential | ||
Investment securities available-for-sale: | ||
Total | 486,746 | 554,751 |
Unrealized Gain | 12,570 | 1,112 |
Unrealized Loss | (952) | (10,134) |
Estimated Fair Value | 498,364 | 545,729 |
Investment securities held-to-maturity: | ||
Amortized Cost | 38,686 | 43,381 |
Unrealized Gain | 967 | 148 |
Unrealized Loss | (98) | (686) |
Estimated Fair Value | 39,555 | 42,843 |
Other | ||
Investment securities held-to-maturity: | ||
Amortized Cost | 1,747 | 1,829 |
Unrealized Gain | 0 | 0 |
Unrealized Loss | 0 | 0 |
Estimated Fair Value | $ 1,747 | $ 1,829 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Investment Securities | ||||||
Accumulated other comprehensive income (loss) before tax amount | $ 42,500,000 | $ 42,500,000 | $ (7,900,000) | |||
Accumulated other comprehensive income (loss), net of tax | 30,195,000 | 30,195,000 | (5,601,000) | |||
Average balance of repurchase agreement facilities | 15,000,000 | |||||
Other than temporary impairment losses | 0 | $ 0 | ||||
Gross gains | 5,100,000 | $ 406,000 | $ 1,300,000 | 6,500,000 | 1,600,000 | |
Gross losses | 811,000 | 194,000 | 208,000 | 1,600,000 | 208,000 | |
Proceeds from available-for-sale securities | 191,300,000 | 57,200,000 | 378,500,000 | 418,500,000 | $ 394,500,000 | |
FHLB stock | 17,300,000 | 17,300,000 | ||||
FRB stock | 51,600,000 | 51,600,000 | ||||
Other stock | $ 24,000,000 | 24,000,000 | ||||
Amount of stock repurchased by FHLB | $ 5,400,000 | $ 15,000,000 | ||||
Impairment loss on investments in FHLB, FRB and other stock | $ 0 | |||||
HOA | ||||||
Investment Securities | ||||||
Value of inverse putable reverse repurchases secured by collateral | 75,000 | |||||
Mortgage-backed securities: residential | ||||||
Investment Securities | ||||||
Estimated par value of securities pledged as collateral for the Bank's inverse putable reverse repurchases | 20,300,000 | |||||
Fair value of securities pledged as collateral for the Bank's inverse putable reverse repurchases | $ 20,900,000 |
Investment Securities - Investm
Investment Securities - Investment Category and Length of Time (Details) $ in Thousands | Sep. 30, 2019USD ($)investment_security | Dec. 31, 2018USD ($)investment_security |
Less than 12 Months | ||
Number | investment_security | 21 | 105 |
Fair Value | $ 88,951 | $ 190,770 |
Gross Unrealized Holding Losses | $ (492) | $ (1,609) |
12 Months or Longer | ||
Number | investment_security | 32 | 244 |
Fair Value | $ 53,820 | $ 442,464 |
Gross Unrealized Holding Losses | $ (1,086) | $ (12,600) |
Total | ||
Number | investment_security | 53 | 349 |
Fair Value | $ 142,771 | $ 633,234 |
Gross Unrealized Holding Losses | $ (1,578) | $ (14,209) |
Held-to-maturity, less than 12 months, number of securities | investment_security | 0 | 3 |
Held-to-maturity, less than 12 months, fair value | $ 0 | $ 11,256 |
Held-to-maturity, less than 12 months, gross unrealized holding losses | $ 0 | $ (81) |
Held-to-maturity, 12 months or longer, number of securities | investment_security | 3 | 3 |
Held-to-maturity, 12 months or longer, fair value | $ 13,953 | $ 15,741 |
Held-to-maturity, 12 months or longer, gross unrealized holding losses | $ (98) | $ (605) |
Held-to-maturity, number of securities | investment_security | 3 | 6 |
Held-to-maturity securities, fair value | $ 13,953 | $ 26,997 |
Unrealized Loss | $ (98) | $ (686) |
Total securities, less than 12 months, number of securities | investment_security | 21 | 108 |
Total securities, less than 12 months, fair value | $ 88,951 | $ 202,026 |
Total securities, less than 12 months, gross unrealized holding losses | $ (492) | $ (1,690) |
Total securities, 12 months or longer, number of securities | investment_security | 35 | 247 |
Total securities, 12 months or longer, fair value | $ 67,773 | $ 458,205 |
Total securities, 12 months or longer, gross unrealized holding losses | $ (1,184) | $ (13,205) |
Total securities, number of securities | investment_security | 56 | 355 |
Total securities, fair value | $ 156,724 | $ 660,231 |
Total securities, gross unrealized holding losses | $ (1,676) | $ (14,895) |
Agency | ||
Less than 12 Months | ||
Number | investment_security | 4 | 15 |
Fair Value | $ 30,761 | $ 26,229 |
Gross Unrealized Holding Losses | $ (207) | $ (333) |
12 Months or Longer | ||
Number | investment_security | 11 | 6 |
Fair Value | $ 15,789 | $ 10,434 |
Gross Unrealized Holding Losses | $ (342) | $ (186) |
Total | ||
Number | investment_security | 15 | 21 |
Fair Value | $ 46,550 | $ 36,663 |
Gross Unrealized Holding Losses | $ (549) | $ (519) |
Corporate | ||
Less than 12 Months | ||
Number | investment_security | 1 | 9 |
Fair Value | $ 1,022 | $ 47,805 |
Gross Unrealized Holding Losses | $ (13) | $ (471) |
12 Months or Longer | ||
Number | investment_security | 1 | 8 |
Fair Value | $ 1,526 | $ 19,369 |
Gross Unrealized Holding Losses | $ (4) | $ (435) |
Total | ||
Number | investment_security | 2 | 17 |
Fair Value | $ 2,548 | $ 67,174 |
Gross Unrealized Holding Losses | $ (17) | $ (906) |
Municipal bonds | ||
Less than 12 Months | ||
Number | investment_security | 10 | 60 |
Fair Value | $ 9,809 | $ 45,083 |
Gross Unrealized Holding Losses | $ (56) | $ (369) |
12 Months or Longer | ||
Number | investment_security | 0 | 102 |
Fair Value | $ 0 | $ 69,693 |
Gross Unrealized Holding Losses | $ 0 | $ (1,856) |
Total | ||
Number | investment_security | 10 | 162 |
Fair Value | $ 9,809 | $ 114,776 |
Gross Unrealized Holding Losses | $ (56) | $ (2,225) |
Collateralized mortgage obligation: residential | ||
Less than 12 Months | ||
Number | investment_security | 0 | 1 |
Fair Value | $ 0 | $ 814 |
Gross Unrealized Holding Losses | $ 0 | $ (1) |
12 Months or Longer | ||
Number | investment_security | 1 | 8 |
Fair Value | $ 652 | $ 18,104 |
Gross Unrealized Holding Losses | $ (4) | $ (424) |
Total | ||
Number | investment_security | 1 | 9 |
Fair Value | $ 652 | $ 18,918 |
Gross Unrealized Holding Losses | $ (4) | $ (425) |
Mortgage-backed securities: residential | ||
Less than 12 Months | ||
Number | investment_security | 6 | 20 |
Fair Value | $ 47,359 | $ 70,839 |
Gross Unrealized Holding Losses | $ (216) | $ (435) |
12 Months or Longer | ||
Number | investment_security | 19 | 120 |
Fair Value | $ 35,853 | $ 324,864 |
Gross Unrealized Holding Losses | $ (736) | $ (9,699) |
Total | ||
Number | investment_security | 25 | 140 |
Fair Value | $ 83,212 | $ 395,703 |
Gross Unrealized Holding Losses | $ (952) | $ (10,134) |
Held-to-maturity, less than 12 months, number of securities | investment_security | 0 | 3 |
Held-to-maturity, less than 12 months, fair value | $ 0 | $ 11,256 |
Held-to-maturity, less than 12 months, gross unrealized holding losses | $ 0 | $ (81) |
Held-to-maturity, 12 months or longer, number of securities | investment_security | 3 | 3 |
Held-to-maturity, 12 months or longer, fair value | $ 13,953 | $ 15,741 |
Held-to-maturity, 12 months or longer, gross unrealized holding losses | $ (98) | $ (605) |
Held-to-maturity, number of securities | investment_security | 3 | 6 |
Held-to-maturity securities, fair value | $ 13,953 | $ 26,997 |
Unrealized Loss | $ (98) | $ (686) |
Investment Securities - By Cont
Investment Securities - By Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in One Year or Less | $ 498 | |
Due after One Year through Five Years | 68,974 | |
Due after Five Years through Ten Years | 534,853 | |
Due after Ten Years | 609,878 | |
Total | 1,214,203 | $ 1,111,168 |
Fair Value | ||
Due in One Year or Less | 499 | |
Due after One Year through Five Years | 71,517 | |
Due after Five Years through Ten Years | 551,887 | |
Due after Ten Years | 632,752 | |
Total | 1,256,655 | 1,103,222 |
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 913 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 39,520 | |
Amortized Cost | 40,433 | 45,210 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 953 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 40,349 | |
Total | 41,302 | 44,672 |
Amortized Cost | ||
Due in One Year or Less | 498 | |
Due after One Year through Five Years | 69,887 | |
Due after Five Years through Ten Years | 534,853 | |
Due after Ten Years | 649,398 | |
Total | 1,254,636 | |
Fair Value | ||
Due in One Year or Less | 499 | |
Due after One Year through Five Years | 72,470 | |
Due after Five Years through Ten Years | 551,887 | |
Due after Ten Years | 673,101 | |
Total | 1,297,957 | |
U.S. Treasury | ||
Amortized Cost | ||
Due in One Year or Less | 498 | |
Due after One Year through Five Years | 20,171 | |
Due after Five Years through Ten Years | 39,788 | |
Due after Ten Years | 0 | |
Total | 60,457 | 59,688 |
Fair Value | ||
Due in One Year or Less | 499 | |
Due after One Year through Five Years | 20,702 | |
Due after Five Years through Ten Years | 42,989 | |
Due after Ten Years | 0 | |
Total | 64,190 | 60,912 |
Agency | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 42,658 | |
Due after Five Years through Ten Years | 165,240 | |
Due after Ten Years | 43,431 | |
Total | 251,329 | 128,958 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 44,453 | |
Due after Five Years through Ten Years | 171,635 | |
Due after Ten Years | 45,470 | |
Total | 261,558 | 130,070 |
Corporate | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 125,564 | |
Due after Ten Years | 0 | |
Total | 125,564 | 104,158 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 127,802 | |
Due after Ten Years | 0 | |
Total | 127,802 | 103,543 |
Municipal bonds | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 3,569 | |
Due after Five Years through Ten Years | 34,911 | |
Due after Ten Years | 241,113 | |
Total | 279,593 | 238,914 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 3,710 | |
Due after Five Years through Ten Years | 36,057 | |
Due after Ten Years | 254,332 | |
Total | 294,099 | 238,630 |
Collateralized mortgage obligation: residential | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 657 | |
Due after Ten Years | 9,857 | |
Total | 10,514 | 24,699 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 652 | |
Due after Ten Years | 9,990 | |
Total | 10,642 | 24,338 |
Mortgage-backed securities: residential | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 2,576 | |
Due after Five Years through Ten Years | 168,693 | |
Due after Ten Years | 315,477 | |
Total | 486,746 | 554,751 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 2,652 | |
Due after Five Years through Ten Years | 172,752 | |
Due after Ten Years | 322,960 | |
Total | 498,364 | 545,729 |
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 913 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 37,773 | |
Amortized Cost | 38,686 | 43,381 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 953 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 38,602 | |
Total | 39,555 | $ 42,843 |
Other | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 1,747 | |
Amortized Cost | 1,747 | |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 0 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 1,747 | |
Total | $ 1,747 |
Loans Held for Investment - Com
Loans Held for Investment - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Loans Held for Investment | ||||||
Gross loans held for investment | $ 8,767,016 | $ 8,846,286 | ||||
Deferred loan origination (fees)/costs and (discounts)/premiums, net | (9,540) | (9,468) | ||||
Loans held for investment | 8,757,476 | 8,836,818 | ||||
Allowance for loan losses | (35,000) | $ (35,026) | (36,072) | $ (33,306) | $ (31,747) | $ (28,936) |
Loans held for investment, net | 8,722,476 | 8,800,746 | ||||
Loans held for sale, at lower of cost or fair value | 7,092 | 5,719 | ||||
Unaccreted mark-to-market discount | 46,800 | 61,000 | ||||
Business loans | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 4,106,447 | 4,141,362 | ||||
Business loans | Commercial and industrial | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 1,233,938 | 1,364,423 | ||||
Allowance for loan losses | (10,530) | (11,031) | (10,821) | (10,384) | (10,164) | (9,721) |
Business loans | Franchise | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 894,023 | 765,416 | ||||
Allowance for loan losses | (6,733) | (6,765) | (6,500) | (6,332) | (6,181) | (5,797) |
Business loans | Commercial owner occupied | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 1,678,888 | 1,679,122 | ||||
Allowance for loan losses | (1,726) | (1,490) | (1,386) | (1,213) | (1,137) | (767) |
Business loans | SBA | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 179,965 | 193,882 | ||||
Allowance for loan losses | (4,381) | (3,363) | (4,288) | (2,827) | (2,575) | (2,890) |
Business loans | Agribusiness | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 119,633 | 138,519 | ||||
Allowance for loan losses | (2,366) | (2,765) | (3,283) | (3,565) | (2,694) | (1,291) |
Real estate loans | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 4,620,021 | 4,615,500 | ||||
Real estate loans | Commercial non-owner occupied | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 2,053,590 | 2,003,174 | ||||
Allowance for loan losses | (1,878) | (1,765) | (1,604) | (1,483) | (1,450) | (1,266) |
Real estate loans | Multi-family | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 1,611,904 | 1,535,289 | ||||
Allowance for loan losses | (715) | (705) | (725) | (623) | (563) | (607) |
Real estate loans | One-to-four family | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 273,182 | 356,264 | ||||
Allowance for loan losses | (691) | (704) | (805) | (719) | (698) | (803) |
Real estate loans | Construction | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 478,961 | 523,643 | ||||
Allowance for loan losses | (4,158) | (4,750) | (5,166) | (4,820) | (4,809) | (4,569) |
Real estate loans | Farmland | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 171,667 | 150,502 | ||||
Allowance for loan losses | (838) | (809) | (503) | (375) | (405) | (137) |
Real estate loans | Land | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 30,717 | 46,628 | ||||
Allowance for loan losses | (633) | (658) | (772) | (868) | (972) | (993) |
Consumer loans | Consumer loans | ||||||
Loans Held for Investment | ||||||
Gross loans held for investment | 40,548 | 89,424 | ||||
Allowance for loan losses | $ (351) | $ (221) | $ (219) | $ (97) | $ (99) | $ (95) |
Loans Held for Investment - Nar
Loans Held for Investment - Narrative (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019USD ($)areagrade | Dec. 31, 2018USD ($) | |
Loans Held for Investment | ||
Servicing rights retained from guaranteed portion of SBA loans sold | $ 7,900,000 | $ 8,500,000 |
Unpaid principal balance for loans and participations serviced for others | 646,700,000 | 635,300,000 |
Secured loans limit to one borrower | 557,500,000 | |
Unsecured loans limit to one borrower | 334,500,000 | |
Aggregate outstanding balance of loans to one borrower of secured credit | $ 125,300,000 | |
Number of areas where the entity's credit quality is maintained and credit risk managed | area | 2 | |
Number of Pass scale grades | grade | 6 | |
Nonaccrual loans | $ 8,105,000 | 4,857,000 |
Loans 90 days or more past due and still accruing | 0 | 213,000 |
Investment in TDR | 0 | 0 |
Consumer mortgage loans collateralized by residential real estate, foreclosure proceedings in process | 0 | 0 |
Outstanding balance | 1,700,000 | |
Purchased credit impaired loans, nonaccrual status | 0 | |
Secured Debt | ||
Loans Held for Investment | ||
Aggregate outstanding balance of loans to one borrower of secured credit | 101,500,000 | |
Unsecured Debt | ||
Loans Held for Investment | ||
Aggregate outstanding balance of loans to one borrower of secured credit | 23,800,000 | |
SBA | ||
Loans Held for Investment | ||
Unpaid principal balance for loans and participations serviced for others | $ 492,800,000 | $ 519,800,000 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grading System (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Credit Risk Grades | ||
Gross loans | $ 8,767,016 | $ 8,846,286 |
Pass | ||
Credit Risk Grades | ||
Gross loans | 8,706,847 | 8,758,874 |
Special Mention | ||
Credit Risk Grades | ||
Gross loans | 21,015 | 25,956 |
Substandard | ||
Credit Risk Grades | ||
Gross loans | 39,154 | 61,456 |
Doubtful | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Commercial and industrial | ||
Credit Risk Grades | ||
Gross loans | 1,233,938 | 1,364,423 |
Business loans | Franchise | ||
Credit Risk Grades | ||
Gross loans | 894,023 | 765,416 |
Business loans | Commercial owner occupied | ||
Credit Risk Grades | ||
Gross loans | 1,678,888 | 1,679,122 |
Business loans | SBA | ||
Credit Risk Grades | ||
Gross loans | 179,965 | 193,882 |
Business loans | Agribusiness | ||
Credit Risk Grades | ||
Gross loans | 119,633 | 138,519 |
Business loans | Pass | Commercial and industrial | ||
Credit Risk Grades | ||
Gross loans | 1,219,358 | 1,340,284 |
Business loans | Pass | Franchise | ||
Credit Risk Grades | ||
Gross loans | 880,632 | 760,795 |
Business loans | Pass | Commercial owner occupied | ||
Credit Risk Grades | ||
Gross loans | 1,669,152 | 1,660,994 |
Business loans | Pass | SBA | ||
Credit Risk Grades | ||
Gross loans | 171,393 | 184,687 |
Business loans | Pass | Agribusiness | ||
Credit Risk Grades | ||
Gross loans | 107,551 | 125,355 |
Business loans | Special Mention | Commercial and industrial | ||
Credit Risk Grades | ||
Gross loans | 4,438 | 12,005 |
Business loans | Special Mention | Franchise | ||
Credit Risk Grades | ||
Gross loans | 13,375 | 4,431 |
Business loans | Special Mention | Commercial owner occupied | ||
Credit Risk Grades | ||
Gross loans | 1,321 | 1,580 |
Business loans | Special Mention | SBA | ||
Credit Risk Grades | ||
Gross loans | 1,881 | 2,289 |
Business loans | Special Mention | Agribusiness | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Substandard | Commercial and industrial | ||
Credit Risk Grades | ||
Gross loans | 10,142 | 12,134 |
Business loans | Substandard | Franchise | ||
Credit Risk Grades | ||
Gross loans | 16 | 190 |
Business loans | Substandard | Commercial owner occupied | ||
Credit Risk Grades | ||
Gross loans | 8,415 | 16,548 |
Business loans | Substandard | SBA | ||
Credit Risk Grades | ||
Gross loans | 6,691 | 6,906 |
Business loans | Substandard | Agribusiness | ||
Credit Risk Grades | ||
Gross loans | 12,082 | 13,164 |
Business loans | Doubtful | Commercial and industrial | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Doubtful | Franchise | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Doubtful | Commercial owner occupied | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Doubtful | SBA | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Business loans | Doubtful | Agribusiness | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Commercial non-owner occupied | ||
Credit Risk Grades | ||
Gross loans | 2,053,590 | 2,003,174 |
Real estate loans | Multi-family | ||
Credit Risk Grades | ||
Gross loans | 1,611,904 | 1,535,289 |
Real estate loans | One-to-four family | ||
Credit Risk Grades | ||
Gross loans | 273,182 | 356,264 |
Real estate loans | Construction | ||
Credit Risk Grades | ||
Gross loans | 478,961 | 523,643 |
Real estate loans | Farmland | ||
Credit Risk Grades | ||
Gross loans | 171,667 | 150,502 |
Real estate loans | Land | ||
Credit Risk Grades | ||
Gross loans | 30,717 | 46,628 |
Real estate loans | Pass | Commercial non-owner occupied | ||
Credit Risk Grades | ||
Gross loans | 2,052,813 | 1,996,756 |
Real estate loans | Pass | Multi-family | ||
Credit Risk Grades | ||
Gross loans | 1,611,686 | 1,530,567 |
Real estate loans | Pass | One-to-four family | ||
Credit Risk Grades | ||
Gross loans | 272,555 | 350,083 |
Real estate loans | Pass | Construction | ||
Credit Risk Grades | ||
Gross loans | 478,961 | 523,643 |
Real estate loans | Pass | Farmland | ||
Credit Risk Grades | ||
Gross loans | 171,667 | 150,381 |
Real estate loans | Pass | Land | ||
Credit Risk Grades | ||
Gross loans | 30,585 | 46,008 |
Real estate loans | Special Mention | Commercial non-owner occupied | ||
Credit Risk Grades | ||
Gross loans | 0 | 731 |
Real estate loans | Special Mention | Multi-family | ||
Credit Risk Grades | ||
Gross loans | 0 | 4,060 |
Real estate loans | Special Mention | One-to-four family | ||
Credit Risk Grades | ||
Gross loans | 0 | 728 |
Real estate loans | Special Mention | Construction | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Special Mention | Farmland | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Special Mention | Land | ||
Credit Risk Grades | ||
Gross loans | 0 | 132 |
Real estate loans | Substandard | Commercial non-owner occupied | ||
Credit Risk Grades | ||
Gross loans | 777 | 5,687 |
Real estate loans | Substandard | Multi-family | ||
Credit Risk Grades | ||
Gross loans | 218 | 662 |
Real estate loans | Substandard | One-to-four family | ||
Credit Risk Grades | ||
Gross loans | 627 | 5,453 |
Real estate loans | Substandard | Construction | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Substandard | Farmland | ||
Credit Risk Grades | ||
Gross loans | 0 | 121 |
Real estate loans | Substandard | Land | ||
Credit Risk Grades | ||
Gross loans | 132 | 488 |
Real estate loans | Doubtful | Commercial non-owner occupied | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Doubtful | Multi-family | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Doubtful | One-to-four family | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Doubtful | Construction | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Doubtful | Farmland | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Real estate loans | Doubtful | Land | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Consumer loans | Consumer loans | ||
Credit Risk Grades | ||
Gross loans | 40,548 | 89,424 |
Consumer loans | Pass | Consumer loans | ||
Credit Risk Grades | ||
Gross loans | 40,494 | 89,321 |
Consumer loans | Special Mention | Consumer loans | ||
Credit Risk Grades | ||
Gross loans | 0 | 0 |
Consumer loans | Substandard | Consumer loans | ||
Credit Risk Grades | ||
Gross loans | 54 | 103 |
Consumer loans | Doubtful | Consumer loans | ||
Credit Risk Grades | ||
Gross loans | $ 0 | $ 0 |
Loans Held for Investment - Del
Loans Held for Investment - Delinquencies (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Other information concerning the credit quality | ||
Total Gross Loans | $ 8,767,016 | $ 8,846,286 |
Non-accruing | 8,105 | 4,857 |
Current | ||
Other information concerning the credit quality | ||
Current | 8,755,786 | 8,833,433 |
30-59 | ||
Other information concerning the credit quality | ||
Days Past Due | 1,725 | 7,046 |
60-89 | ||
Other information concerning the credit quality | ||
Days Past Due | 3,212 | 1,242 |
90 | ||
Other information concerning the credit quality | ||
Days Past Due | 6,293 | 4,565 |
Business loans | Commercial and industrial | ||
Other information concerning the credit quality | ||
Total Gross Loans | 1,233,938 | 1,364,423 |
Non-accruing | 2,950 | 931 |
Business loans | Franchise | ||
Other information concerning the credit quality | ||
Total Gross Loans | 894,023 | 765,416 |
Non-accruing | 16 | 190 |
Business loans | Commercial owner occupied | ||
Other information concerning the credit quality | ||
Total Gross Loans | 1,678,888 | 1,679,122 |
Non-accruing | 1,405 | 599 |
Business loans | SBA | ||
Other information concerning the credit quality | ||
Total Gross Loans | 179,965 | 193,882 |
Non-accruing | 2,586 | 2,739 |
Business loans | Agribusiness | ||
Other information concerning the credit quality | ||
Total Gross Loans | 119,633 | 138,519 |
Non-accruing | 0 | 0 |
Business loans | Current | Commercial and industrial | ||
Other information concerning the credit quality | ||
Current | 1,229,223 | 1,361,979 |
Business loans | Current | Franchise | ||
Other information concerning the credit quality | ||
Current | 893,999 | 759,546 |
Business loans | Current | Commercial owner occupied | ||
Other information concerning the credit quality | ||
Current | 1,677,101 | 1,677,967 |
Business loans | Current | SBA | ||
Other information concerning the credit quality | ||
Current | 176,541 | 190,732 |
Business loans | Current | Agribusiness | ||
Other information concerning the credit quality | ||
Current | 119,633 | 138,519 |
Business loans | 30-59 | Commercial and industrial | ||
Other information concerning the credit quality | ||
Days Past Due | 101 | 309 |
Business loans | 30-59 | Franchise | ||
Other information concerning the credit quality | ||
Days Past Due | 8 | 5,680 |
Business loans | 30-59 | Commercial owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 382 | 343 |
Business loans | 30-59 | SBA | ||
Other information concerning the credit quality | ||
Days Past Due | 731 | 524 |
Business loans | 30-59 | Agribusiness | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Business loans | 60-89 | Commercial and industrial | ||
Other information concerning the credit quality | ||
Days Past Due | 3,105 | 1,204 |
Business loans | 60-89 | Franchise | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Business loans | 60-89 | Commercial owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Business loans | 60-89 | SBA | ||
Other information concerning the credit quality | ||
Days Past Due | 107 | 0 |
Business loans | 60-89 | Agribusiness | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Business loans | 90 | Commercial and industrial | ||
Other information concerning the credit quality | ||
Days Past Due | 1,509 | 931 |
Business loans | 90 | Franchise | ||
Other information concerning the credit quality | ||
Days Past Due | 16 | 190 |
Business loans | 90 | Commercial owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 1,405 | 812 |
Business loans | 90 | SBA | ||
Other information concerning the credit quality | ||
Days Past Due | 2,586 | 2,626 |
Business loans | 90 | Agribusiness | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | Commercial non-owner occupied | ||
Other information concerning the credit quality | ||
Total Gross Loans | 2,053,590 | 2,003,174 |
Non-accruing | 777 | 0 |
Real estate loans | Multi-family | ||
Other information concerning the credit quality | ||
Total Gross Loans | 1,611,904 | 1,535,289 |
Non-accruing | 0 | 0 |
Real estate loans | One-to-four family | ||
Other information concerning the credit quality | ||
Total Gross Loans | 273,182 | 356,264 |
Non-accruing | 371 | 398 |
Real estate loans | Construction | ||
Other information concerning the credit quality | ||
Total Gross Loans | 478,961 | 523,643 |
Non-accruing | 0 | 0 |
Real estate loans | Farmland | ||
Other information concerning the credit quality | ||
Total Gross Loans | 171,667 | 150,502 |
Non-accruing | 0 | 0 |
Real estate loans | Land | ||
Other information concerning the credit quality | ||
Total Gross Loans | 30,717 | 46,628 |
Non-accruing | 0 | 0 |
Real estate loans | Current | Commercial non-owner occupied | ||
Other information concerning the credit quality | ||
Current | 2,052,813 | 2,003,174 |
Real estate loans | Current | Multi-family | ||
Other information concerning the credit quality | ||
Current | 1,611,904 | 1,535,275 |
Real estate loans | Current | One-to-four family | ||
Other information concerning the credit quality | ||
Current | 272,679 | 356,219 |
Real estate loans | Current | Construction | ||
Other information concerning the credit quality | ||
Current | 478,961 | 523,643 |
Real estate loans | Current | Farmland | ||
Other information concerning the credit quality | ||
Current | 171,667 | 150,502 |
Real estate loans | Current | Land | ||
Other information concerning the credit quality | ||
Current | 30,717 | 46,628 |
Real estate loans | 30-59 | Commercial non-owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 30-59 | Multi-family | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 14 |
Real estate loans | 30-59 | One-to-four family | ||
Other information concerning the credit quality | ||
Days Past Due | 503 | 30 |
Real estate loans | 30-59 | Construction | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 30-59 | Farmland | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 30-59 | Land | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 60-89 | Commercial non-owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 60-89 | Multi-family | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 60-89 | One-to-four family | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 9 |
Real estate loans | 60-89 | Construction | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 60-89 | Farmland | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 60-89 | Land | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 90 | Commercial non-owner occupied | ||
Other information concerning the credit quality | ||
Days Past Due | 777 | 0 |
Real estate loans | 90 | Multi-family | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 90 | One-to-four family | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 6 |
Real estate loans | 90 | Construction | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 90 | Farmland | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Real estate loans | 90 | Land | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 0 |
Consumer loans | Consumer loans | ||
Other information concerning the credit quality | ||
Total Gross Loans | 40,548 | 89,424 |
Non-accruing | 0 | 0 |
Consumer loans | Current | Consumer loans | ||
Other information concerning the credit quality | ||
Current | 40,548 | 89,249 |
Consumer loans | 30-59 | Consumer loans | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 146 |
Consumer loans | 60-89 | Consumer loans | ||
Other information concerning the credit quality | ||
Days Past Due | 0 | 29 |
Consumer loans | 90 | Consumer loans | ||
Other information concerning the credit quality | ||
Days Past Due | $ 0 | $ 0 |
Loans Held for Investment - C_2
Loans Held for Investment - Company's Investment in Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Impaired Loans | ||||||
Unpaid Principal Balance | $ 17,210,000 | $ 17,210,000 | $ 17,440,000 | |||
Total impaired loans | 15,009,000 | 15,009,000 | 12,458,000 | |||
With Specific Allowance | 0 | 0 | 1,038,000 | |||
Without Specific Allowance | 15,009,000 | 15,009,000 | 11,420,000 | |||
Specific Allowance for Impaired Loans | 0 | $ 250,000 | 0 | $ 250,000 | 584,000 | |
Average Recorded Investment | 15,296,000 | $ 18,575,000 | 6,456,000 | 17,219,000 | 7,234,000 | |
Interest Income Recognized | 104,000 | 109,000 | 0 | 303,000 | 0 | |
Business loans | Commercial and industrial | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 3,099,000 | 3,099,000 | 1,071,000 | |||
Total impaired loans | 2,950,000 | 2,950,000 | 1,023,000 | |||
With Specific Allowance | 0 | 0 | 550,000 | |||
Without Specific Allowance | 2,950,000 | 2,950,000 | 473,000 | |||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | 118,000 | |
Average Recorded Investment | 3,078,000 | 2,614,000 | 1,030,000 | 2,565,000 | 1,161,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Business loans | Franchise | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 697,000 | 697,000 | 190,000 | |||
Total impaired loans | 16,000 | 16,000 | 189,000 | |||
With Specific Allowance | 0 | 0 | 0 | |||
Without Specific Allowance | 16,000 | 16,000 | 189,000 | |||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | 0 | |
Average Recorded Investment | 679,000 | 4,047,000 | 209,000 | 2,901,000 | 93,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Business loans | Commercial owner occupied | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 1,427,000 | 1,427,000 | 628,000 | |||
Total impaired loans | 1,406,000 | 1,406,000 | 599,000 | |||
With Specific Allowance | 0 | 0 | 0 | |||
Without Specific Allowance | 1,406,000 | 1,406,000 | 599,000 | |||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | 0 | |
Average Recorded Investment | 845,000 | 564,000 | 0 | 662,000 | 1,931,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Business loans | SBA | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 3,320,000 | 3,320,000 | 7,598,000 | |||
Total impaired loans | 2,586,000 | 2,586,000 | 2,739,000 | |||
With Specific Allowance | 0 | 0 | 488,000 | |||
Without Specific Allowance | 2,586,000 | 2,586,000 | 2,251,000 | |||
Specific Allowance for Impaired Loans | 0 | 250,000 | 0 | 250,000 | 466,000 | |
Average Recorded Investment | 2,488,000 | 3,139,000 | 1,914,000 | 7,360,000 | 1,505,000 | |
Interest Income Recognized | 0 | 0 | 0 | 303,000 | 0 | |
Business loans | Agribusiness | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 6,903,000 | 6,903,000 | 7,500,000 | |||
Total impaired loans | 6,903,000 | 6,903,000 | 7,500,000 | |||
With Specific Allowance | 0 | 0 | 0 | |||
Without Specific Allowance | 6,903,000 | 6,903,000 | 7,500,000 | |||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | 0 | |
Average Recorded Investment | 7,092,000 | 7,489,000 | 0 | 2,969,000 | 0 | |
Interest Income Recognized | 104,000 | 109,000 | 0 | 0 | 0 | |
Real estate loans | Commercial non-owner occupied | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 1,351,000 | 1,351,000 | ||||
Total impaired loans | 777,000 | 777,000 | ||||
With Specific Allowance | 0 | 0 | ||||
Without Specific Allowance | 777,000 | 777,000 | ||||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | 421,000 | 162,000 | 1,290,000 | 194,000 | 573,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Real estate loans | Multi-family | ||||||
Impaired Loans | ||||||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 0 | 589,000 | 0 | 666,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Real estate loans | One-to-four family | ||||||
Impaired Loans | ||||||
Unpaid Principal Balance | 413,000 | 413,000 | 453,000 | |||
Total impaired loans | 371,000 | 371,000 | 408,000 | |||
With Specific Allowance | 0 | 0 | 0 | |||
Without Specific Allowance | 371,000 | 371,000 | 408,000 | |||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | $ 0 | |
Average Recorded Investment | 373,000 | 383,000 | 1,406,000 | 383,000 | 1,258,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Real estate loans | Land | ||||||
Impaired Loans | ||||||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | 320,000 | 160,000 | 5,000 | 160,000 | 6,000 | |
Interest Income Recognized | 0 | 0 | 0 | 0 | 0 | |
Consumer loans | Consumer loans | ||||||
Impaired Loans | ||||||
Specific Allowance for Impaired Loans | 0 | 0 | 0 | 0 | ||
Average Recorded Investment | 0 | 17,000 | 13,000 | 25,000 | 41,000 | |
Interest Income Recognized | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 |
Loans Held for Investment - C_3
Loans Held for Investment - Components of Impaired Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Nonaccrual loans | $ 8,105 | $ 4,857 |
Accruing loans | 6,904 | 7,601 |
Total impaired loans | $ 15,009 | $ 12,458 |
Loans Held for Investment - Pur
Loans Held for Investment - Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Loans Held for Investment | ||
Total purchased credit impaired | $ 17,210 | $ 17,440 |
Business loans | Commercial and industrial | ||
Loans Held for Investment | ||
Total purchased credit impaired | 3,099 | 1,071 |
Business loans | Commercial owner occupied | ||
Loans Held for Investment | ||
Total purchased credit impaired | 1,427 | 628 |
Business loans | SBA | ||
Loans Held for Investment | ||
Total purchased credit impaired | 3,320 | 7,598 |
Real estate loans | Commercial non-owner occupied | ||
Loans Held for Investment | ||
Total purchased credit impaired | 1,351 | |
Acquired Banks | ||
Loans Held for Investment | ||
Total purchased credit impaired | 1,731 | 2,182 |
Acquired Banks | Business loans | Commercial and industrial | ||
Loans Held for Investment | ||
Total purchased credit impaired | 0 | 10 |
Acquired Banks | Business loans | Commercial owner occupied | ||
Loans Held for Investment | ||
Total purchased credit impaired | 577 | 632 |
Acquired Banks | Business loans | SBA | ||
Loans Held for Investment | ||
Total purchased credit impaired | 1,154 | 1,265 |
Acquired Banks | Real estate loans | Commercial non-owner occupied | ||
Loans Held for Investment | ||
Total purchased credit impaired | $ 0 | $ 275 |
Loans Held for Investment - Acc
Loans Held for Investment - Accretable Yield Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accretable yield on purchased credit impaired | |||||
Balance at the beginning of period | $ 296 | $ 332 | $ 1,473 | $ 411 | $ 3,019 |
Additions | 0 | 0 | 483 | 0 | 483 |
Accretion | (46) | (45) | (162) | (170) | (668) |
Payoffs | 0 | (9) | (1) | (9) | (1,819) |
Sales | 0 | 0 | 0 | 0 | 0 |
Reclassification from nonaccretable difference | (18) | 18 | 195 | 0 | 973 |
Balance at the end of period | $ 232 | $ 296 | $ 1,988 | $ 232 | $ 1,988 |
Allowance for Loan Losses (Deta
Allowance for Loan Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | $ 35,026,000 | $ 36,072,000 | $ 31,747,000 | $ 36,072,000 | $ 28,936,000 | $ 28,936,000 |
Charge-offs | (1,525,000) | (229,000) | (5,468,000) | (1,248,000) | ||
Recoveries | 134,000 | 142,000 | 277,000 | 366,000 | ||
Provisions for (reduction in) loan losses | 1,365,000 | 1,646,000 | 4,119,000 | 5,252,000 | ||
Balance, at the end of the period | 35,000,000 | 33,306,000 | 35,000,000 | 33,306,000 | 36,072,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 250,000 | 0 | 250,000 | 584,000 | |
Amount of allowance attributed to: General portfolio allocation | 35,000,000 | 33,056,000 | 35,000,000 | 33,056,000 | ||
Loans individually evaluated for impairment | 15,009,000 | 7,268,000 | $ 15,009,000 | $ 7,268,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 3.44% | ||||
Loans collectively evaluated for impairment | 8,752,007,000 | 8,760,584,000 | $ 8,752,007,000 | $ 8,760,584,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.40% | 0.38% | ||||
Gross loans, excluding loan receivable held for sale | 8,767,016,000 | 8,767,852,000 | $ 8,767,016,000 | $ 8,767,852,000 | ||
Total allowance to gross loans | 0.40% | 0.38% | ||||
Business loans | Commercial and industrial | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 11,031,000 | 10,821,000 | 10,164,000 | $ 10,821,000 | $ 9,721,000 | 9,721,000 |
Charge-offs | (290,000) | (100,000) | (985,000) | (1,011,000) | ||
Recoveries | 54,000 | 120,000 | 168,000 | 283,000 | ||
Provisions for (reduction in) loan losses | (265,000) | 200,000 | 526,000 | 1,391,000 | ||
Balance, at the end of the period | 10,530,000 | 10,384,000 | 10,530,000 | 10,384,000 | 10,821,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | 118,000 | |
Amount of allowance attributed to: General portfolio allocation | 10,530,000 | 10,384,000 | 10,530,000 | 10,384,000 | ||
Loans individually evaluated for impairment | 2,950,000 | 1,027,000 | $ 2,950,000 | $ 1,027,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 1,230,988,000 | 1,358,814,000 | $ 1,230,988,000 | $ 1,358,814,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.86% | 0.76% | ||||
Gross loans, excluding loan receivable held for sale | 1,233,938,000 | 1,359,841,000 | $ 1,233,938,000 | $ 1,359,841,000 | ||
Total allowance to gross loans | 0.85% | 0.76% | ||||
Business loans | Franchise | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 6,765,000 | 6,500,000 | 6,181,000 | $ 6,500,000 | $ 5,797,000 | 5,797,000 |
Charge-offs | (995,000) | 0 | (2,531,000) | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | 963,000 | 151,000 | 2,764,000 | 535,000 | ||
Balance, at the end of the period | 6,733,000 | 6,332,000 | 6,733,000 | 6,332,000 | 6,500,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | 0 | |
Amount of allowance attributed to: General portfolio allocation | 6,733,000 | 6,332,000 | 6,733,000 | 6,332,000 | ||
Loans individually evaluated for impairment | 16,000 | 209,000 | $ 16,000 | $ 209,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 894,007,000 | 735,157,000 | $ 894,007,000 | $ 735,157,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.75% | 0.86% | ||||
Gross loans, excluding loan receivable held for sale | 894,023,000 | 735,366,000 | $ 894,023,000 | $ 735,366,000 | ||
Total allowance to gross loans | 0.75% | 0.86% | ||||
Business loans | Commercial owner occupied | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 1,490,000 | 1,386,000 | 1,137,000 | $ 1,386,000 | $ 767,000 | 767,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 8,000 | 8,000 | 31,000 | 32,000 | ||
Provisions for (reduction in) loan losses | 228,000 | 68,000 | 309,000 | 414,000 | ||
Balance, at the end of the period | 1,726,000 | 1,213,000 | 1,726,000 | 1,213,000 | 1,386,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | 0 | |
Amount of allowance attributed to: General portfolio allocation | 1,726,000 | 1,213,000 | 1,726,000 | 1,213,000 | ||
Loans individually evaluated for impairment | 1,406,000 | 0 | $ 1,406,000 | $ 0 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 1,677,482,000 | 1,675,528,000 | $ 1,677,482,000 | $ 1,675,528,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.10% | 0.07% | ||||
Gross loans, excluding loan receivable held for sale | 1,678,888,000 | 1,675,528,000 | $ 1,678,888,000 | $ 1,675,528,000 | ||
Total allowance to gross loans | 0.10% | 0.07% | ||||
Business loans | SBA | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 3,363,000 | 4,288,000 | 2,575,000 | $ 4,288,000 | $ 2,890,000 | 2,890,000 |
Charge-offs | (143,000) | (44,000) | (1,362,000) | (100,000) | ||
Recoveries | 62,000 | 8,000 | 66,000 | 43,000 | ||
Provisions for (reduction in) loan losses | 1,099,000 | 288,000 | 1,389,000 | (6,000) | ||
Balance, at the end of the period | 4,381,000 | 2,827,000 | 4,381,000 | 2,827,000 | 4,288,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 250,000 | 0 | 250,000 | 466,000 | |
Amount of allowance attributed to: General portfolio allocation | 4,381,000 | 2,577,000 | 4,381,000 | 2,577,000 | ||
Loans individually evaluated for impairment | 2,586,000 | 2,748,000 | $ 2,586,000 | $ 2,748,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 9.10% | ||||
Loans collectively evaluated for impairment | 177,379,000 | 190,739,000 | $ 177,379,000 | $ 190,739,000 | ||
General reserves to total loans collectively evaluated for impairment | 2.47% | 1.35% | ||||
Gross loans, excluding loan receivable held for sale | 179,965,000 | 193,487,000 | $ 179,965,000 | $ 193,487,000 | ||
Total allowance to gross loans | 2.43% | 1.46% | ||||
Business loans | Agribusiness | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 2,765,000 | 3,283,000 | 2,694,000 | $ 3,283,000 | $ 1,291,000 | 1,291,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | (399,000) | 871,000 | (917,000) | 2,274,000 | ||
Balance, at the end of the period | 2,366,000 | 3,565,000 | 2,366,000 | 3,565,000 | 3,283,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | 0 | |
Amount of allowance attributed to: General portfolio allocation | 2,366,000 | 3,565,000 | 2,366,000 | 3,565,000 | ||
Loans individually evaluated for impairment | 6,903,000 | 0 | $ 6,903,000 | $ 0 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 112,730,000 | 133,241,000 | $ 112,730,000 | $ 133,241,000 | ||
General reserves to total loans collectively evaluated for impairment | 2.10% | 2.68% | ||||
Gross loans, excluding loan receivable held for sale | 119,633,000 | 133,241,000 | $ 119,633,000 | $ 133,241,000 | ||
Total allowance to gross loans | 1.98% | 2.68% | ||||
Real estate loans | Commercial non-owner occupied | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 1,765,000 | 1,604,000 | 1,450,000 | $ 1,604,000 | $ 1,266,000 | 1,266,000 |
Charge-offs | (86,000) | 0 | (574,000) | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | 199,000 | 33,000 | 848,000 | 217,000 | ||
Balance, at the end of the period | 1,878,000 | 1,483,000 | 1,878,000 | 1,483,000 | 1,604,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 1,878,000 | 1,483,000 | 1,878,000 | 1,483,000 | ||
Loans individually evaluated for impairment | 777,000 | 1,290,000 | $ 777,000 | $ 1,290,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 2,052,813,000 | 1,929,875,000 | $ 2,052,813,000 | $ 1,929,875,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.09% | 0.08% | ||||
Gross loans, excluding loan receivable held for sale | 2,053,590,000 | 1,931,165,000 | $ 2,053,590,000 | $ 1,931,165,000 | ||
Total allowance to gross loans | 0.09% | 0.08% | ||||
Real estate loans | Multi-family | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 705,000 | 725,000 | 563,000 | $ 725,000 | $ 607,000 | 607,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | 10,000 | 60,000 | (10,000) | 16,000 | ||
Balance, at the end of the period | 715,000 | 623,000 | 715,000 | 623,000 | 725,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 715,000 | 623,000 | 715,000 | 623,000 | ||
Loans individually evaluated for impairment | 0 | 589,000 | $ 0 | $ 589,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 1,611,904,000 | 1,554,103,000 | $ 1,611,904,000 | $ 1,554,103,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.04% | 0.04% | ||||
Gross loans, excluding loan receivable held for sale | 1,611,904,000 | 1,554,692,000 | $ 1,611,904,000 | $ 1,554,692,000 | ||
Total allowance to gross loans | 0.04% | 0.04% | ||||
Real estate loans | One-to-four family | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 704,000 | 805,000 | 698,000 | $ 805,000 | $ 803,000 | 803,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 1,000 | 0 | 2,000 | 1,000 | ||
Provisions for (reduction in) loan losses | (14,000) | 21,000 | (116,000) | (85,000) | ||
Balance, at the end of the period | 691,000 | 719,000 | 691,000 | 719,000 | 805,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | 0 | |
Amount of allowance attributed to: General portfolio allocation | 691,000 | 719,000 | 691,000 | 719,000 | ||
Loans individually evaluated for impairment | 371,000 | 1,388,000 | $ 371,000 | $ 1,388,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 272,811,000 | 375,229,000 | $ 272,811,000 | $ 375,229,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.25% | 0.19% | ||||
Gross loans, excluding loan receivable held for sale | 273,182,000 | 376,617,000 | $ 273,182,000 | $ 376,617,000 | ||
Total allowance to gross loans | 0.25% | 0.19% | ||||
Real estate loans | Construction | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 4,750,000 | 5,166,000 | 4,809,000 | $ 5,166,000 | $ 4,569,000 | 4,569,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | (592,000) | 11,000 | (1,008,000) | 251,000 | ||
Balance, at the end of the period | 4,158,000 | 4,820,000 | 4,158,000 | 4,820,000 | 5,166,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 4,158,000 | 4,820,000 | 4,158,000 | 4,820,000 | ||
Loans individually evaluated for impairment | 0 | 0 | $ 0 | $ 0 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 478,961,000 | 504,708,000 | $ 478,961,000 | $ 504,708,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.87% | 0.96% | ||||
Gross loans, excluding loan receivable held for sale | 478,961,000 | 504,708,000 | $ 478,961,000 | $ 504,708,000 | ||
Total allowance to gross loans | 0.87% | 0.96% | ||||
Real estate loans | Farmland | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 809,000 | 503,000 | 405,000 | $ 503,000 | $ 137,000 | 137,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | 29,000 | (30,000) | 335,000 | 238,000 | ||
Balance, at the end of the period | 838,000 | 375,000 | 838,000 | 375,000 | 503,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 838,000 | 375,000 | 838,000 | 375,000 | ||
Loans individually evaluated for impairment | 0 | 0 | $ 0 | $ 0 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 171,667,000 | 138,479,000 | $ 171,667,000 | $ 138,479,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.49% | 0.27% | ||||
Gross loans, excluding loan receivable held for sale | 171,667,000 | 138,479,000 | $ 171,667,000 | $ 138,479,000 | ||
Total allowance to gross loans | 0.49% | 0.27% | ||||
Real estate loans | Land | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 658,000 | 772,000 | 972,000 | $ 772,000 | $ 993,000 | 993,000 |
Charge-offs | 0 | 0 | 0 | 0 | ||
Recoveries | 0 | 0 | 0 | 0 | ||
Provisions for (reduction in) loan losses | (25,000) | (104,000) | (139,000) | (125,000) | ||
Balance, at the end of the period | 633,000 | 868,000 | 633,000 | 868,000 | 772,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 633,000 | 868,000 | 633,000 | 868,000 | ||
Loans individually evaluated for impairment | 0 | 4,000 | $ 0 | $ 4,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 30,717,000 | 49,988,000 | $ 30,717,000 | $ 49,988,000 | ||
General reserves to total loans collectively evaluated for impairment | 2.06% | 1.74% | ||||
Gross loans, excluding loan receivable held for sale | 30,717,000 | 49,992,000 | $ 30,717,000 | $ 49,992,000 | ||
Total allowance to gross loans | 2.06% | 1.74% | ||||
Consumer loans | Consumer loans | ||||||
Allocation of allowance as well as the activity in allowance | ||||||
Balance, at the beginning of the period | 221,000 | $ 219,000 | 99,000 | $ 219,000 | $ 95,000 | 95,000 |
Charge-offs | (11,000) | (85,000) | (16,000) | (137,000) | ||
Recoveries | 9,000 | 6,000 | 10,000 | 7,000 | ||
Provisions for (reduction in) loan losses | 132,000 | 77,000 | 138,000 | 132,000 | ||
Balance, at the end of the period | 351,000 | 97,000 | 351,000 | 97,000 | $ 219,000 | |
Other disclosures | ||||||
Amount of allowance attributed to: Specifically evaluated impaired loans | 0 | 0 | 0 | 0 | ||
Amount of allowance attributed to: General portfolio allocation | 351,000 | 97,000 | 351,000 | 97,000 | ||
Loans individually evaluated for impairment | 0 | 13,000 | $ 0 | $ 13,000 | ||
Specific reserves to total loans individually evaluated for impairment | 0.00% | 0.00% | ||||
Loans collectively evaluated for impairment | 40,548,000 | 114,723,000 | $ 40,548,000 | $ 114,723,000 | ||
General reserves to total loans collectively evaluated for impairment | 0.87% | 0.08% | ||||
Gross loans, excluding loan receivable held for sale | $ 40,548,000 | $ 114,736,000 | $ 40,548,000 | $ 114,736,000 | ||
Total allowance to gross loans | 0.87% | 0.08% | ||||
Owner Occupied Commercial Real Estate Loans Commercial And Industrial Loans And Small Business Administration Loans | ||||||
Allowance for Loan Losses | ||||||
Period considered for comparison of allowance for loan losses factor | 1 year | |||||
Period considered for comparison of entity's allowance for loan losses factor | 1 year 7 months 6 days |
Subordinated Debentures (Detail
Subordinated Debentures (Details) | Oct. 07, 2019USD ($) | Sep. 16, 2019 | Jul. 08, 2019 | Jul. 01, 2018USD ($) | Nov. 01, 2017USD ($)note | Sep. 30, 2019USD ($) | May 31, 2019USD ($) | Mar. 31, 2004USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Apr. 01, 2017USD ($) | Aug. 31, 2014USD ($) |
Subordinated Debentures | ||||||||||||||
Subordinated debentures | $ 217,825,000 | $ 217,825,000 | $ 217,825,000 | $ 110,313,000 | ||||||||||
Aggregate amount called on subordinated debentures | 15,465,000 | $ 0 | ||||||||||||
Reduction of Tier 1 capital associated with redemption of capital instruments | 14,700,000 | |||||||||||||
PPBI Trust I | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating rate trust preferred securities issue amount | $ 10,000,000 | |||||||||||||
Notes | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Debt issued | $ 60,000,000 | |||||||||||||
Fixed interest rate (as a percent) | 5.75% | |||||||||||||
Subordinated debentures | 59,400,000 | 59,400,000 | 59,400,000 | |||||||||||
Unamortized debt issuance cost | 598,000 | 598,000 | 598,000 | |||||||||||
Subordinated Debentures | Mission Community Capital Trust I | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Subordinated debentures | $ 2,800,000 | $ 2,800,000 | $ 2,800,000 | |||||||||||
Floating rate junior subordinated debt | $ 3,100,000 | |||||||||||||
Effective rate (as a percent) | 5.25% | 5.25% | 5.25% | |||||||||||
Purchase accounting fair value adjustments | $ 290,000 | |||||||||||||
Subordinated Debentures | Mission Community Capital Trust I | Subsequent Event | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating rate junior subordinated debt | $ 3,100,000 | |||||||||||||
Effective rate (as a percent) | 5.25% | |||||||||||||
Aggregate amount called on subordinated debentures | $ 3,100,000 | |||||||||||||
Loss on early debt extinguishment | $ 290,000 | |||||||||||||
Subordinated Debentures | Santa Lucia Bancorp (CA) Capital Trust | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Subordinated debentures | $ 3,900,000 | $ 3,900,000 | $ 3,900,000 | |||||||||||
Floating rate junior subordinated debt | 5,200,000 | |||||||||||||
Effective rate (as a percent) | 3.78% | 3.78% | 3.78% | |||||||||||
Purchase accounting fair value adjustments | $ 1,300,000 | |||||||||||||
Subordinated Debentures | Heritage Oaks Bancorp | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating rate junior subordinated debt | $ 4,000,000 | $ 4,000,000 | $ 4,000,000 | $ 5,200,000 | ||||||||||
Effective rate (as a percent) | 4.04% | 4.04% | 4.04% | |||||||||||
Purchase accounting fair value adjustments | $ 1,200,000 | |||||||||||||
Subordinated Debentures | Plaza Bancorp | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating rate junior subordinated debt | $ 25,100,000 | $ 25,100,000 | 25,100,000 | |||||||||||
Purchase accounting fair value adjustments | 139,000 | |||||||||||||
Subordinated Debentures | Grandpoint Capital, Inc. | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Effective rate (as a percent) | 5.36% | |||||||||||||
Aggregate amount called on subordinated debentures | $ 5,200,000 | |||||||||||||
Loss on early debt extinguishment | 214,000 | |||||||||||||
Debt assumed in acquisition | $ 5,200,000 | |||||||||||||
Subordinated Debentures | PPBI Trust I | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Debt issued | $ 10,300,000 | |||||||||||||
Minority interest purchased (as a percent) | 3.00% | |||||||||||||
Amount of minority interest purchased | $ 310,000 | |||||||||||||
Effective rate (as a percent) | 5.35% | |||||||||||||
Aggregate amount called on subordinated debentures | $ 10,400,000 | |||||||||||||
Subordinated Debentures | LIBOR | Mission Community Capital Trust I | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.95% | |||||||||||||
Subordinated Debentures | LIBOR | Mission Community Capital Trust I | Subsequent Event | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.95% | |||||||||||||
Subordinated Debentures | LIBOR | Santa Lucia Bancorp (CA) Capital Trust | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 1.48% | |||||||||||||
Subordinated Debentures | LIBOR | Heritage Oaks Bancorp | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 1.72% | |||||||||||||
Subordinated Debentures | LIBOR | Grandpoint Capital, Inc. | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.95% | |||||||||||||
Subordinated Debentures | LIBOR | PPBI Trust I | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.75% | |||||||||||||
Subordinated Debentures | Notes II | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Debt issued | $ 125,000,000 | |||||||||||||
Fixed interest rate (as a percent) | 4.875% | |||||||||||||
Unamortized debt issuance cost | 2,400,000 | 2,400,000 | $ 2,400,000 | |||||||||||
Public offering price (as a percent) | 100.00% | |||||||||||||
Floating rate junior subordinated debt | $ 122,600,000 | $ 122,600,000 | $ 122,600,000 | |||||||||||
Subordinated Debentures | Notes II | LIBOR | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.50% | |||||||||||||
Subordinated Notes 7.125% | Plaza Bancorp | ||||||||||||||
Subordinated Debentures | ||||||||||||||
Fixed interest rate (as a percent) | 7.125% | |||||||||||||
Number of subordinated notes assumed | note | 3 | |||||||||||||
Debt assumed in acquisition | $ 25,000,000 | |||||||||||||
Redemption price (as a percent) | 103.00% | |||||||||||||
Redemption price, subsequent reduction (as a percent) | 0.50% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Basic | |||||
Net income | $ 41,375 | $ 38,527 | $ 28,392 | $ 118,620 | $ 83,697 |
Less: Earnings allocated to participating securities | (432) | (444) | 0 | (1,223) | 0 |
Net income allocated to common stockholders | $ 40,943 | $ 38,083 | $ 28,392 | $ 117,397 | $ 83,697 |
Weighted average common shares outstanding (in shares) | 59,293,218 | 61,308,046 | 61,727,030 | 60,853,081 | 51,282,533 |
Basic earnings per common share (in dollars per share) | $ 0.69 | $ 0.62 | $ 0.46 | $ 1.93 | $ 1.63 |
Diluted | |||||
Net income allocated to common stockholders | $ 40,943 | $ 38,083 | $ 28,392 | $ 117,397 | $ 83,697 |
Weighted average common shares outstanding (in shares) | 59,293,218 | 61,308,046 | 61,727,030 | 60,853,081 | 51,282,533 |
Diluted effect of share-based compensation (in shares) | 377,637 | 353,727 | 634,774 | 348,777 | 683,114 |
Weighted average diluted common shares (in shares) | 59,670,855 | 61,661,773 | 62,361,804 | 61,201,858 | 51,965,647 |
Diluted earnings per common share (in dollars per share) | $ 0.69 | $ 0.62 | $ 0.46 | $ 1.92 | $ 1.61 |
Anti-Dilutive RSUs | |||||
Diluted | |||||
Weighted-average shares of anti-dilutive RSUs excluded from diluted EPS computation | 0 | 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Hierarchy Table - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial assets | ||
Investment securities available-for-sale, at fair value | $ 1,256,655 | $ 1,103,222 |
U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 64,190 | 60,912 |
Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 261,558 | 130,070 |
Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 127,802 | 103,543 |
Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 294,099 | 238,630 |
Collateralized mortgage obligation: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 10,642 | 24,338 |
Mortgage-backed securities: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 498,364 | 545,729 |
Level 1 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Level 2 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,256,655 | 1,103,222 |
Derivative assets | 2,853 | 1,681 |
Financial liabilities | ||
Derivative liabilities | 2,853 | 1,681 |
Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,256,655 | 1,103,222 |
Derivative assets | 2,853 | 1,681 |
Financial liabilities | ||
Derivative liabilities | 2,853 | 1,681 |
Recurring | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 64,190 | 60,912 |
Recurring | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 261,558 | 130,070 |
Recurring | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 127,802 | 103,543 |
Recurring | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 294,099 | 238,630 |
Recurring | Collateralized mortgage obligation: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 10,642 | 24,338 |
Recurring | Mortgage-backed securities: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 498,364 | 545,729 |
Recurring | Level 1 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 1 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Collateralized mortgage obligation: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Mortgage-backed securities: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 2 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,256,655 | 1,103,222 |
Derivative assets | 2,853 | 1,681 |
Financial liabilities | ||
Derivative liabilities | 2,853 | 1,681 |
Recurring | Level 2 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 64,190 | 60,912 |
Recurring | Level 2 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 261,558 | 130,070 |
Recurring | Level 2 | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 127,802 | 103,543 |
Recurring | Level 2 | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 294,099 | 238,630 |
Recurring | Level 2 | Collateralized mortgage obligation: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 10,642 | 24,338 |
Recurring | Level 2 | Mortgage-backed securities: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 498,364 | 545,729 |
Recurring | Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 0 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Collateralized mortgage obligation: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Mortgage-backed securities: residential | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Narrative (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Fair Value Disclosures [Abstract] | |||
Specific reserve recorded on loan | $ 0 | $ 584,000 | $ 250,000 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Hierarchy Table - Noncrecurring Basis (Details) - Nonrecurring - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value Disclosures | ||
Financial assets, impaired loans | $ 16 | $ 1,445 |
Level 1 | ||
Fair Value Disclosures | ||
Financial assets, impaired loans | 0 | 0 |
Level 2 | ||
Fair Value Disclosures | ||
Financial assets, impaired loans | 0 | 0 |
Level 3 | ||
Fair Value Disclosures | ||
Financial assets, impaired loans | $ 16 | $ 1,445 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Fair Value Estimates (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Investments held-to-maturity | $ 41,302 | $ 44,672 |
Investment securities available-for-sale | 1,256,655 | 1,103,222 |
Accrued interest receivable | 38,603 | 37,837 |
Level 1 | ||
Assets: | ||
Cash and cash equivalents | 427,715 | 203,406 |
Investments held-to-maturity | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans held for investment, net | 0 | 0 |
Derivative asset | 0 | 0 |
Accrued interest receivable | 38,603 | 37,837 |
Liabilities: | ||
Deposit accounts | 7,515,400 | 7,247,673 |
FHLB advances | 0 | 0 |
Other borrowings | 0 | |
Subordinated debentures | 0 | 0 |
Derivative liability | 0 | 0 |
Accrued interest payable | 6,537 | 3,255 |
Level 1 | Interest-bearing time deposits with financial institutions | ||
Assets: | ||
Cash and cash equivalents | 2,711 | 6,143 |
Level 2 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investments held-to-maturity | 41,302 | 44,672 |
Investment securities available-for-sale | 1,256,655 | 1,103,222 |
Loans held for sale | 7,637 | 6,072 |
Loans held for investment, net | 0 | 0 |
Derivative asset | 2,853 | 1,681 |
Accrued interest receivable | 0 | 0 |
Liabilities: | ||
Deposit accounts | 1,345,436 | 1,403,524 |
FHLB advances | 604,980 | 666,864 |
Other borrowings | 75 | |
Subordinated debentures | 237,624 | 115,613 |
Derivative liability | 2,853 | 1,681 |
Accrued interest payable | 0 | 0 |
Level 2 | Interest-bearing time deposits with financial institutions | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Level 3 | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investments held-to-maturity | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Loans held for investment, net | 8,758,265 | 8,697,594 |
Derivative asset | 0 | 0 |
Accrued interest receivable | 0 | 0 |
Liabilities: | ||
Deposit accounts | 0 | 0 |
FHLB advances | 0 | 0 |
Other borrowings | 0 | |
Subordinated debentures | 0 | 0 |
Derivative liability | 0 | 0 |
Accrued interest payable | 0 | 0 |
Level 3 | Interest-bearing time deposits with financial institutions | ||
Assets: | ||
Cash and cash equivalents | 0 | 0 |
Carrying Amount | ||
Assets: | ||
Cash and cash equivalents | 427,715 | 203,406 |
Investments held-to-maturity | 40,433 | 45,210 |
Investment securities available-for-sale | 1,256,655 | 1,103,222 |
Loans held for sale | 7,092 | 5,719 |
Loans held for investment, net | 8,757,476 | 8,836,818 |
Derivative asset | 2,853 | 1,929 |
Accrued interest receivable | 38,603 | 37,837 |
Liabilities: | ||
Deposit accounts | 8,859,288 | 8,658,351 |
FHLB advances | 604,558 | 667,606 |
Other borrowings | 75 | |
Subordinated debentures | 217,825 | 110,313 |
Derivative liability | 2,853 | 1,929 |
Accrued interest payable | 6,537 | 3,255 |
Carrying Amount | Interest-bearing time deposits with financial institutions | ||
Assets: | ||
Cash and cash equivalents | 2,711 | 6,143 |
Estimated Fair Value | ||
Assets: | ||
Cash and cash equivalents | 427,715 | 203,406 |
Investments held-to-maturity | 41,302 | 44,672 |
Investment securities available-for-sale | 1,256,655 | 1,103,222 |
Loans held for sale | 7,637 | 6,072 |
Loans held for investment, net | 8,758,265 | 8,697,594 |
Derivative asset | 2,853 | 1,681 |
Accrued interest receivable | 38,603 | 37,837 |
Liabilities: | ||
Deposit accounts | 8,860,836 | 8,651,197 |
FHLB advances | 604,980 | 666,864 |
Other borrowings | 75 | |
Subordinated debentures | 237,624 | 115,613 |
Derivative liability | 2,853 | 1,681 |
Accrued interest payable | 6,537 | 3,255 |
Estimated Fair Value | Interest-bearing time deposits with financial institutions | ||
Assets: | ||
Cash and cash equivalents | $ 2,711 | $ 6,143 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Derivative assets, Fair value | $ 2,853 | $ 1,681 |
Derivative liabilities, Fair value | 2,853 | 1,681 |
Not Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Derivative assets, Notional | 48,932 | 57,502 |
Derivative assets, Fair value | 2,853 | 1,681 |
Derivative liabilities, Notional | 48,932 | 57,502 |
Derivative liabilities, Fair value | 2,853 | 1,681 |
Not Designated as Hedging Instruments | Interest rate swap contracts | ||
Derivative [Line Items] | ||
Derivative assets, Notional | 48,932 | 57,502 |
Derivative assets, Fair value | 2,853 | 1,681 |
Derivative liabilities, Notional | 48,932 | 57,502 |
Derivative liabilities, Fair value | $ 2,853 | $ 1,681 |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial assets: | ||
Gross Amounts Recognized | $ 2,853 | $ 2,177 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | (496) |
Net Amounts Presented in the Consolidated Balance Sheets | 2,853 | 1,681 |
Financial Instruments | 0 | 0 |
Cash Collateral | 0 | 0 |
Net Amount | 2,853 | 1,681 |
Financial liabilities: | ||
Gross Amounts Recognized | 2,853 | 1,681 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheets | 2,853 | 1,681 |
Financial Instruments | 0 | 0 |
Cash Collateral | (2,750) | 0 |
Net Amount | 103 | 1,681 |
Derivatives not designated as hedging instruments | ||
Financial assets: | ||
Gross Amounts Recognized | 2,853 | 2,177 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | (496) |
Net Amounts Presented in the Consolidated Balance Sheets | 2,853 | 1,681 |
Financial Instruments | 0 | 0 |
Cash Collateral | 0 | 0 |
Net Amount | 2,853 | 1,681 |
Financial liabilities: | ||
Gross Amounts Recognized | 2,853 | 1,681 |
Gross Amounts Offset in the Consolidated Balance Sheets | 0 | 0 |
Net Amounts Presented in the Consolidated Balance Sheets | 2,853 | 1,681 |
Financial Instruments | 0 | 0 |
Cash Collateral | (2,750) | 0 |
Net Amount | $ 103 | $ 1,681 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Leases [Abstract] | ||||
Expense associated with leases | $ 3,500 | $ 10,300 | ||
Operating lease expense | 2,900 | 8,400 | ||
Short-term lease expense | 575 | 1,900 | ||
Rental income | $ 25 | $ 140 | $ 116 | $ 389 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Information (Details) | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Leases [Abstract] | |
Operating lease right of use assets | $ 42,065,000 |
Operating lease liabilities | 44,973,000 |
Operating cash flows from operating leases | $ 8,786 |
Leases - Schedule of Minimum Co
Leases - Schedule of Minimum Contractual Lease Payments and Other Information (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating leases | |
2019 | $ 2,798 |
2020 | 9,354 |
2021 | 9,773 |
2022 | 9,327 |
2023 | 8,346 |
Thereafter | 13,619 |
Total | 53,217 |
Short-term leases | |
2019 | 218 |
2020 | 79 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
Thereafter | 0 |
Total | 297 |
Total contractual base rents | |
2019 | 3,016 |
2020 | 9,433 |
2021 | 9,773 |
2022 | 9,327 |
2023 | 8,346 |
Thereafter | 13,619 |
Total | 53,514 |
Total liability to make lease payments | 44,973 |
Difference in undiscounted and discounted future lease payments | $ 8,541 |
Weighted average discount rate | 6.26% |
Weighted average remaining lease term (years) | 5 years 6 months |
Leases - Schedule of Informatio
Leases - Schedule of Information Related to Minimum Contractual Lease Payments (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 11,468 |
2020 | 10,869 |
2021 | 10,133 |
2022 | 9,296 |
2023 | 8,124 |
Thereafter | 10,518 |
Total | $ 60,408 |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Company's Revenue Streams (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jun. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Interest income: | |||||
Loans | $ 122,974 | $ 121,860 | $ 119,271 | $ 366,310 | $ 289,069 |
Investment securities and other interest-earning assets | 9,630 | 10,554 | 9,605 | 29,951 | 23,333 |
Total interest income | 132,604 | 132,414 | 128,876 | 396,261 | 312,402 |
Noninterest income: | |||||
Loan servicing fees | 546 | 409 | 400 | 1,353 | 1,037 |
Earnings on bank-owned life insurance | 861 | 851 | 1,270 | 2,622 | 2,498 |
Net gain from sales of loans | 2,313 | 902 | 2,029 | 4,944 | 8,830 |
Net gain from sales of investment securities | 4,261 | 212 | 1,063 | 4,900 | 1,399 |
Other income | 1,228 | 1,001 | 530 | 3,689 | 2,697 |
Total noninterest income | 11,430 | 6,324 | 8,240 | 25,435 | 24,057 |
Service charges on deposit accounts | |||||
Noninterest income: | |||||
Noninterest income | 1,440 | 1,441 | 1,570 | 4,211 | 3,777 |
Other service fee income | |||||
Noninterest income: | |||||
Noninterest income | 360 | 363 | 317 | 1,079 | 632 |
Debit card interchange income | |||||
Noninterest income: | |||||
Noninterest income | 421 | 1,145 | 1,061 | 2,637 | 3,187 |
Within Scope | |||||
Noninterest income: | |||||
Other income | 592 | 544 | (446) | 1,328 | 84 |
Total noninterest income | 2,813 | 3,493 | 2,502 | 9,255 | 7,680 |
Total revenues | 2,813 | 3,493 | 2,502 | 9,255 | 7,680 |
Within Scope | Service charges on deposit accounts | |||||
Noninterest income: | |||||
Noninterest income | 1,440 | 1,441 | 1,570 | 4,211 | 3,777 |
Within Scope | Other service fee income | |||||
Noninterest income: | |||||
Noninterest income | 360 | 363 | 317 | 1,079 | 632 |
Within Scope | Debit card interchange income | |||||
Noninterest income: | |||||
Noninterest income | 421 | 1,145 | 1,061 | 2,637 | 3,187 |
Out of Scope | |||||
Interest income: | |||||
Loans | 122,974 | 121,860 | 119,271 | 366,310 | 289,069 |
Investment securities and other interest-earning assets | 9,630 | 10,554 | 9,605 | 29,951 | 23,333 |
Total interest income | 132,604 | 132,414 | 128,876 | 396,261 | 312,402 |
Noninterest income: | |||||
Loan servicing fees | 546 | 409 | 400 | 1,353 | 1,037 |
Earnings on bank-owned life insurance | 861 | 851 | 1,270 | 2,622 | 2,498 |
Net gain from sales of loans | 2,313 | 902 | 2,029 | 4,944 | 8,830 |
Net gain from sales of investment securities | 4,261 | 212 | 1,063 | 4,900 | 1,399 |
Other income | 636 | 457 | 976 | 2,361 | 2,613 |
Total noninterest income | 8,617 | 2,831 | 5,738 | 16,180 | 16,377 |
Total revenues | $ 141,221 | $ 135,245 | $ 134,614 | $ 412,441 | $ 328,779 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Thousands | Oct. 18, 2019 | Oct. 07, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Apr. 01, 2017 |
Subsequent Event [Line Items] | ||||||
Cash dividends declared (in dollars per share) | $ 0.22 | $ 0.66 | ||||
Aggregate amount called on subordinated debentures | $ 15,465 | $ 0 | ||||
Subordinated Debentures | Mission Community Capital Trust I | ||||||
Subsequent Event [Line Items] | ||||||
Floating rate junior subordinated debt | $ 3,100 | |||||
Effective rate (as a percent) | 5.25% | 5.25% | ||||
Subordinated Debentures | Mission Community Capital Trust I | LIBOR | ||||||
Subsequent Event [Line Items] | ||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.95% | |||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Cash dividends declared (in dollars per share) | $ 0.22 | |||||
Subsequent Event | Subordinated Debentures | Mission Community Capital Trust I | ||||||
Subsequent Event [Line Items] | ||||||
Floating rate junior subordinated debt | $ 3,100 | |||||
Effective rate (as a percent) | 5.25% | |||||
Aggregate amount called on subordinated debentures | $ 3,100 | |||||
Loss on early debt extinguishment | $ 290 | |||||
Subsequent Event | Subordinated Debentures | Mission Community Capital Trust I | LIBOR | ||||||
Subsequent Event [Line Items] | ||||||
Floating interest rate, basis points added to base rate (as a percent) | 2.95% |