Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
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 $0.01 per share | |
Trading Symbol | PPBI | |
Security Exchange Name | NASDAQ | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 94,385,662 | |
Entity Central Index Key | 0001028918 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and due from banks | $ 641,739 | $ 135,847 |
Interest-bearing deposits with financial institutions | 461,338 | 191,003 |
Cash and cash equivalents | 1,103,077 | 326,850 |
Interest-bearing time deposits with financial institutions | 2,845 | 2,708 |
Investments held-to-maturity, at amortized cost (fair value of $29,399 and $38,760 as of September 30, 2020 and December 31, 2019, respectively) | 27,980 | 37,838 |
Investment securities available-for-sale, at fair value | 3,600,731 | 1,368,384 |
FHLB, FRB, and other stock, at cost | 116,819 | 93,061 |
Loans held for sale, at lower of cost or fair value | 1,032 | 1,672 |
Loans held for investment | 13,450,840 | 8,722,311 |
Allowance for credit losses | (282,503) | (35,698) |
Loans held for investment, net | 13,168,337 | 8,686,613 |
Accrued interest receivable | 73,112 | 39,442 |
Other real estate owned | 334 | 441 |
Premises and equipment | 80,326 | 59,001 |
Deferred income taxes, net | 108,050 | 0 |
Bank owned life insurance | 290,875 | 113,376 |
Intangible assets | 90,012 | 83,312 |
Goodwill | 898,434 | 808,322 |
Other assets | 282,276 | 154,992 |
Total assets | 19,844,240 | 11,776,012 |
Deposit accounts: | ||
Noninterest-bearing checking | 5,895,744 | 3,857,660 |
Interest-bearing: | ||
Checking | 2,937,910 | 586,019 |
Money market/savings | 5,778,688 | 3,406,988 |
Retail certificates of deposit | 1,542,029 | 973,465 |
Wholesale/brokered certificates of deposit | 176,436 | 74,377 |
Total interest-bearing | 10,435,063 | 5,040,849 |
Total deposits | 16,330,807 | 8,898,509 |
FHLB advances and other borrowings | 41,000 | 517,026 |
Subordinated debentures | 501,443 | 215,145 |
Deferred income taxes, net | 0 | 1,371 |
Accrued expenses and other liabilities | 282,905 | 131,367 |
Total liabilities | 17,156,155 | 9,763,418 |
STOCKHOLDERS’ EQUITY | ||
Preferred stock, $0.01 par value; 1,000,000 authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value; 150,000,000 shares authorized at September 30, 2020 and December 31, 2019; 94,375,521 shares and 59,506,057 shares issued and outstanding, respectively. | 930 | 586 |
Additional paid-in capital | 2,351,532 | 1,594,434 |
Retained earnings | 289,960 | 396,051 |
Accumulated other comprehensive income | 45,663 | 21,523 |
Total stockholders’ equity | 2,688,085 | 2,012,594 |
Total liabilities and stockholders’ equity | $ 19,844,240 | $ 11,776,012 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Investments held-to-maturity, fair value | $ 29,399 | $ 38,760 |
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 issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (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) | 94,375,521 | 59,506,057 |
Common stock, shares outstanding (in shares) | 94,375,521 | 59,506,057 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME/(LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
INTEREST INCOME | |||||
Loans | $ 167,455 | $ 133,339 | $ 122,974 | $ 414,059 | $ 366,310 |
Investment securities and other interest-earning assets | 14,536 | 10,783 | 9,630 | 35,843 | 29,951 |
Total interest income | 181,991 | 144,122 | 132,604 | 449,902 | 396,261 |
INTEREST EXPENSE | |||||
Deposits | 8,509 | 9,655 | 15,878 | 28,651 | 45,153 |
FHLB advances and other borrowings | 113 | 217 | 1,214 | 1,411 | 9,099 |
Subordinated debentures | 6,823 | 3,958 | 3,177 | 13,827 | 7,627 |
Total interest expense | 15,445 | 13,830 | 20,269 | 43,889 | 61,879 |
Net interest income before provision for credit losses | 166,546 | 130,292 | 112,335 | 406,013 | 334,382 |
Provision for credit losses | 4,210 | 160,635 | 1,562 | 190,299 | 3,422 |
Net interest income (loss) after provision for credit losses | 162,336 | (30,343) | 110,773 | 215,714 | 330,960 |
NONINTEREST INCOME | |||||
Loan servicing fees | 481 | 434 | 546 | 1,395 | 1,353 |
Earnings on bank-owned life insurance | 2,270 | 1,314 | 861 | 4,920 | 2,622 |
Net gain (loss) from sales of loans | 9,542 | (2,032) | 2,313 | 8,281 | 4,944 |
Net gain (loss) from sales of investment securities | 1,141 | (21) | 4,261 | 8,880 | 4,900 |
Other income | 3,340 | 2,653 | 1,228 | 7,747 | 3,689 |
Total noninterest income | 26,758 | 6,898 | 11,430 | 48,131 | 25,435 |
NONINTEREST EXPENSE | |||||
Compensation and benefits | 51,021 | 43,011 | 35,543 | 128,408 | 102,778 |
Premises and occupancy | 12,373 | 9,487 | 7,593 | 30,028 | 22,645 |
Data processing | 6,783 | 4,465 | 3,094 | 14,501 | 9,060 |
Other real estate owned operations, net | (17) | 9 | 64 | 6 | 129 |
FDIC insurance premiums | 1,145 | 846 | (10) | 2,358 | 1,530 |
Legal, audit and professional expense | 5,108 | 3,094 | 3,058 | 11,328 | 9,601 |
Marketing expense | 1,718 | 1,319 | 1,767 | 4,449 | 4,689 |
Office, telecommunications and postage expense | 2,389 | 1,533 | 1,200 | 5,025 | 3,721 |
Loan expense | 802 | 823 | 1,137 | 2,447 | 3,015 |
Deposit expense | 4,728 | 4,958 | 3,478 | 14,674 | 10,729 |
Merger-related expense | 2,988 | 39,346 | (4) | 44,058 | 656 |
Amortization of intangible assets | 4,538 | 4,066 | 4,281 | 12,567 | 12,998 |
Other expense | 5,003 | 3,013 | 4,135 | 11,331 | 11,298 |
Total noninterest expense | 98,579 | 115,970 | 65,336 | 281,180 | 192,849 |
Net income (loss) before income taxes | 90,515 | (139,415) | 56,867 | (17,335) | 163,546 |
Income tax expense (benefit) | 23,949 | (40,324) | 15,492 | (10,550) | 44,926 |
Net income (loss) | $ 66,566 | $ (99,091) | $ 41,375 | $ (6,785) | $ 118,620 |
EARNINGS (LOSS) PER SHARE | |||||
Basic (in dollars per share) | $ 0.71 | $ (1.41) | $ 0.69 | $ (0.10) | $ 1.93 |
Diluted (in dollars per share) | $ 0.70 | $ (1.41) | $ 0.69 | $ (0.10) | $ 1.92 |
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||
Basic (in shares) | 93,529,967 | 70,425,027 | 59,293,218 | 74,391,688 | 60,853,081 |
Diluted (in shares) | 93,719,167 | 70,425,027 | 59,670,855 | 74,391,688 | 61,201,858 |
Service charges on deposit accounts | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 1,593 | $ 1,399 | $ 1,440 | $ 4,707 | $ 4,211 |
Other service fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | 487 | 297 | 360 | 1,095 | 1,079 |
Debit card interchange fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | 944 | 457 | 421 | 1,749 | 2,637 |
Custodial account fees | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 6,960 | $ 2,397 | $ 0 | $ 9,357 | $ 0 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Statement of Comprehensive Income [Abstract] | ||||||
Net income (loss) | $ 66,566 | $ (99,091) | $ 41,375 | $ (6,785) | $ 118,620 | |
Other comprehensive income, net of tax: | ||||||
Unrealized holding (loss) gain on securities available-for-sale arising during the period, net of income taxes | [1] | (11,747) | 13,800 | 10,864 | 30,473 | 39,280 |
Reclassification adjustment for net (loss) gain on sales of securities included in net income, net of income taxes | [2] | (814) | 15 | (3,027) | (6,333) | (3,484) |
Other comprehensive (loss) income, net of tax | (12,561) | 13,815 | 7,837 | 24,140 | 35,796 | |
Comprehensive income (loss), net of tax | 54,005 | (85,276) | 49,212 | 17,355 | 154,416 | |
Unrealized holding gain (loss) on securities arising during the period, income tax expense (benefit) | (4,700) | 5,500 | 4,400 | 12,300 | 16,000 | |
Reclassification adjustment for net (gains) losses on sale of securities included in net income, income tax expense (benefit) | $ 327 | $ (6) | $ 1,200 | $ 2,500 | $ 1,400 | |
[1] | Income tax (benefit) expense on the unrealized gain on securities was $(4.7) million for the three months ended September 30, 2020, $5.5 million for the three months ended June 30, 2020, $4.4 million for the three months ended September 30, 2019, $12.3 million for the nine months ended September 30, 2020, and $16.0 million for the nine months ended September 30, 2019. | |||||
[2] | Income tax expense (benefit) on the reclassification adjustment for net gain (loss) on sales of securities included in net income was $327,000 for the three months ended September 30, 2020, $(6,000) for the three months ended June 30, 2020, $1.2 million for the three months ended September 30, 2019, $2.5 million for the nine months ended September 30, 2020, and $1.4 million for the nine months ended September 30, 2019. |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Impact of CECL Adoption | [1] | Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | Accumulated Retained EarningsImpact of CECL Adoption | [1] | Accumulated Other Comprehensive Income (Loss) |
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 | ||||||||
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 | ||||||||
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 | ||||||||
Balance at Dec. 31, 2019 | $ 2,012,594 | $ (45,625) | $ 586 | 1,594,434 | 396,051 | $ (45,625) | 21,523 | ||
Balance (in shares) at Dec. 31, 2019 | 59,506,057 | 59,506,057 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||
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 | ||||||||
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 | ||||||||
Balance at Dec. 31, 2019 | $ 2,012,594 | $ (45,625) | $ 586 | 1,594,434 | 396,051 | $ (45,625) | 21,523 | ||
Balance (in shares) at Dec. 31, 2019 | 59,506,057 | 59,506,057 | |||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | $ (6,785) | (6,785) | |||||||
Other comprehensive income | 24,140 | 24,140 | |||||||
Cash dividends declared | (53,464) | (53,464) | |||||||
Dividend equivalents declared | 0 | 217 | (217) | ||||||
Share-based compensation expense | 7,747 | 7,747 | |||||||
Issuance of restricted stock, net | 0 | ||||||||
Issuance of restricted stock, net (in shares) | 493,411 | ||||||||
Issuance of common stock - acquisition | 749,603 | $ 344 | 749,259 | ||||||
Issuance of common stock - acquisition (in shares) | 34,407,403 | ||||||||
Restricted stock surrendered and canceled | (1,372) | (1,372) | |||||||
Restricted stock surrendered and canceled (in shares) | (102,486) | ||||||||
Exercise of stock options | 1,247 | 1,247 | |||||||
Exercise of stock options (in shares) | 71,136 | ||||||||
Balance at Sep. 30, 2020 | $ 2,688,085 | $ 930 | 2,351,532 | 289,960 | 45,663 | ||||
Balance (in shares) at Sep. 30, 2020 | 94,375,521 | 94,375,521 | |||||||
Balance at Jun. 30, 2020 | $ 2,654,647 | $ 930 | 2,348,415 | 247,078 | 58,224 | ||||
Balance (in shares) at Jun. 30, 2020 | 94,350,902 | ||||||||
Increase (Decrease) in Stockholders' Equity | |||||||||
Net income | 66,566 | 66,566 | |||||||
Other comprehensive income | (12,561) | (12,561) | |||||||
Cash dividends declared | (23,590) | (23,590) | |||||||
Dividend equivalents declared | 0 | 94 | (94) | ||||||
Share-based compensation expense | 2,899 | 2,899 | |||||||
Issuance of restricted stock, net | 0 | ||||||||
Issuance of restricted stock, net (in shares) | 19,902 | ||||||||
Issuance of common stock - acquisition | 0 | ||||||||
Issuance of common stock - acquisition (in shares) | 0 | ||||||||
Restricted stock surrendered and canceled | (99) | (99) | |||||||
Restricted stock surrendered and canceled (in shares) | (8,180) | ||||||||
Exercise of stock options | 223 | 223 | |||||||
Exercise of stock options (in shares) | 12,897 | ||||||||
Balance at Sep. 30, 2020 | $ 2,688,085 | $ 930 | $ 2,351,532 | $ 289,960 | $ 45,663 | ||||
Balance (in shares) at Sep. 30, 2020 | 94,375,521 | 94,375,521 | |||||||
[1] | Related to the adoption of Accounting Standards Update 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . See Note 2 - Recently Issue Accounting Pronouncements for further discussion. |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.25 | $ 0.22 | $ 0.75 | $ 0.66 |
Dividend equivalents declared (in dollars per share) | $ 0.25 | $ 0.22 | $ 0.75 | $ 0.66 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (6,785) | $ 118,620 |
Adjustments to net income (loss): | ||
Depreciation and amortization expense | 9,186 | 7,007 |
Provision for credit losses | 190,299 | 3,422 |
Share-based compensation expense | 7,747 | 7,927 |
Loss (gain) on sales and disposals of premises and equipment | 255 | (152) |
Loss (gain) on sale of or write down of other real estate owned | 42 | (55) |
Net amortization on securities | 9,417 | 3,591 |
Net (accretion) of discounts/premiums for acquired loans and deferred loan fees/costs | (28,317) | (19,982) |
Gain on sales of investment securities available-for-sale | (8,880) | (4,900) |
Originations of loans held for sale | (12,217) | (83,521) |
Proceeds from the sales of and principal payments from loans held for sale | 14,201 | 88,683 |
Gain on sales of loans | (8,281) | (4,944) |
Deferred income tax (benefit) expense | (52,471) | 1,365 |
Change in accrued expenses and other liabilities, net | 19,770 | (4,855) |
Income from bank owned life insurance, net | (3,849) | (2,029) |
Amortization of intangible assets | 12,567 | 12,998 |
Change in accrued interest receivable and other assets, net | 28,426 | 7,858 |
Net cash provided by operating activities | 171,110 | 131,033 |
Cash flows from investing activities: | ||
Net increase in interest-bearing time deposits with financial institutions | 0 | 3,432 |
Proceeds from sale of other real estate owned | 273 | 405 |
Loan originations and payments, net | (111,334) | 197,995 |
Proceeds from loans held for sale previously classified as portfolio loans | 1,283,214 | 76,579 |
Purchase of loans held for investment | (66,470) | (182,504) |
Proceeds from prepayments and maturities of securities held-to-maturity | 9,782 | 4,741 |
Purchase of securities available-for-sale | (2,057,690) | (603,457) |
Proceeds from prepayments and maturities of securities available-for-sale | 149,720 | 85,330 |
Proceeds from sale of securities available-for-sale | 558,899 | 418,471 |
Proceeds from the sales of premises and equipment | 42 | 11,139 |
Proceeds from bank owned insurance death benefit | 17,799 | 405 |
Purchases of premises and equipment | (8,687) | (16,154) |
Change in FHLB, FRB, and other stock, at cost | (22,584) | 2,381 |
Funding of CRA investments | (9,025) | (7,295) |
Change in cash acquired in acquisitions, net | 937,100 | 0 |
Net cash provided by (used in) investing activities | 681,039 | (8,532) |
Cash flows from financing activities: | ||
Net increase in deposit accounts | 516,308 | 200,937 |
Net change in short-term borrowings | (681,000) | (53,075) |
Repayment of long-term FHLB borrowings | (5,000) | (10,000) |
Proceeds from issuance of subordinated debt, net | 147,359 | 122,453 |
Redemption of junior subordinated debt securities | 0 | (15,465) |
Cash dividends paid | (53,464) | (40,807) |
Repurchase and retirement of common stock | 0 | (100,000) |
Proceeds from exercise of stock options | 1,247 | 394 |
Restricted stock surrendered and canceled | (1,372) | (2,629) |
Net cash (used in) provided by financing activities | (75,922) | 101,808 |
Net increase in cash and cash equivalents | 776,227 | 224,309 |
Cash and cash equivalents, beginning of period | 326,850 | 203,406 |
Cash and cash equivalents, end of period | 1,103,077 | 427,715 |
Supplemental cash flow disclosures: | ||
Interest paid | 43,188 | 58,591 |
Income taxes paid | 26,151 | 33,469 |
Noncash investing activities during the period: | ||
Transfers from portfolio loans to loans held for sale | 1,276,277 | 78,085 |
Transfers from loans to other real estate owned | 208 | 329 |
Recognition of operating lease right-of-use assets | (11,118) | (49,542) |
Recognition of operating lease liabilities | 11,118 | 49,542 |
Due on unsettled security purchases | (20,000) | (2,034) |
Acquisitions (See Note 4): | ||
Fair value of stock and equity award consideration | 749,603 | 0 |
Cash consideration | 2 | 0 |
Fair value of assets acquired | 8,102,281 | 0 |
Liabilities assumed | $ 7,352,676 | $ 0 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
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 nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or the full year ending December 31, 2020. 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, 2019 (the “2019 Form 10-K”). We consolidate voting entities in which we have control through voting interests or entities through which we have a controlling financial interest in a variable interest entity (“VIE”). The Company evaluates its interests in these entities to determine whether they meet the definition of a VIE and whether the Company is required to consolidate these entities. A VIE is consolidated by its primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) a variable interest that could potentially be significant to the VIE. To determine whether or not a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE. See Note 16 - Variable Interest Entities for additional information. Effective June 1, 2020, the Corporation completed the acquisition of Opus Bank (“Opus”), a California-chartered state bank headquartered in Irvine, California, for a total consideration of approximately $749.6 million, payable primarily in Corporation common stock, pursuant to the definitive agreement dated as of January 31, 2020. At closing, Opus had $8.32 billion in total assets, $5.94 billion in gross loans, and $6.91 billion in total deposits and operated 46 banking offices located throughout California, Washington, Oregon, and Arizona. See further discussion in Note 4 – Acquisitions |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Standards Adopted in 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 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. The provisions of this Update became effective for the Company for all annual and interim periods beginning January 1, 2020. 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. The amendments in this Update became effective for all interim and annual reporting periods for the Company on January 1, 2020. The Company adopted the provisions within this Update in conjunction with the implementation of Accounting Standard Codification (“ASC”) 326, Financial Instruments - Credit Losses , as discussed below, including: (i) the election to not measure credit losses on accrued interest receivable when such balances are written-off in a timely manner when deemed uncollectable and (ii) the election to not include the balance of accrued interest receivable as part of the amortized cost of a loan, but rather to present it separately in the consolidated statements of financial position. 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 was January 1, 2020. The fair value option is not applicable to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. The Company did not elect the fair value option for any of its financial assets upon the adoption of ASC 326 on January 1, 2020. The Company has developed an expected credit loss estimation model in accordance with ASC 326. The Company implemented the model through a cross-functional effort steered by a CECL Committee, related sub-committees and working groups. These committees, sub-committees and working groups, collectively, were primarily comprised of senior management and staff members from our finance, credit, lending, internal audit, risk management, and IT functional areas. Depending on the nature of each identified pool of financial assets with similar risk characteristics, the Company employs the use of a probability of default (“PD”) and loss given default (“LGD”) discounted cash flow methodology for commercial real estate and commercial loans, and a loss-rate methodology for retail loans, in order to estimate expected future credit losses. The Company’s model incorporates reasonable and supportable economic forecasts into the estimate of expected credit losses, which requires significant judgment. Management leverages economic projections from a reputable and independent third party to inform its reasonable and supportable economic forecasts. Effective January 1, 2020, the Company adopted the provisions of ASC 326 and recorded a net decrease of $45.6 million to the beginning balance of retained earnings as of January 1, 2020 for the cumulative effect adjustment, reflecting an initial adjustment to the allowance for credit losses (“ACL”) of $64.0 million, net of related deferred tax assets arising from temporary differences of $18.3 million, commonly referred to as the “Day 1” adjustment. The Day 1 adjustment to the ACL is reflective of expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2020, which is comprised of loans held for investment and off-balance sheet credit exposures at January 1, 2020, as well as management’s current expectation of future economic conditions. Management did not have any qualitative adjustments as of January 1, 2020. The Day 1 adjustment was comprised of $55.7 million for loans held for investment and $8.3 million for off-balance sheet commitments for a total of $64.0 million . The Day 1 adjustment to the ACL for loans held for investment consists of $16.1 million for investor loans secured by real estate, $27.6 million for business real estate secured loans, $9.5 million for commercial loans, and $2.5 million for retail loans. The majority of the Day 1 increase in the ACL for loans held for investment is attributable primarily to the life of loan loss impact and addition of an allowance on acquired loans based on the methodology discussed above and secondarily to the incorporation of reasonable and supportable economic forecasts into the estimate of expected future credit losses 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. Please also see Note 3 - Significant Accounting Policies , for a discussion on the Company’s accounting policy for the ACL, Note 6 - Loans Held for Investment and Note 7 - Allowance for Credit Losses , for additional information on the Company’s ACL, as well as other related disclosures. The Company’s assessment of held-to-maturity and available-for-sale investment securities as of January 1, 2020 indicated that an ACL was not required. The Company determined the likelihood of default on held-to-maturity investment securities was remote, and the amount of expected non-repayment on those investments was zero. The Company also analyzed available-for-sale investment securities that were in an unrealized loss position as of January 1, 2020 and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no ACL was recorded for held-to-maturity and available-for-sale securities as of January 1, 2020. In accordance with ASC 326-10-65, upon the adoption of ASC 326, the Company did not reassess purchased loans with credit deterioration (previously classified as purchased credit impaired (“PCI”) loans under ASC 310-30), as there were no such loans on January 1, 2020. Additionally, there were no investment securities with previously recorded other-than-temporary impairment as of January 1, 2020. As previously mentioned, in conjunction with the adoption of ASC 326, the Company made an accounting policy election not to measure an ACL on accrued interest receivables in accordance with ASC 326-20-30-5A. When accrued interest receivable is deemed to be uncollectable, the Company promptly reverses such balances through current period interest income in the period deemed uncollectable. Additionally, the Company has also elected not to include the balance of accrued interest receivable in the amortized cost basis of financial assets within the scope of ASC 326. Accrued interest receivable will continue to be presented separately in the consolidated financial statements. 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 1 adverse regulatory capital effects of ASU 2016-13. Additionally, in March 2020, the U.S. federal bank regulatory agencies issued an interim final rule that provides banking organizations an option to delay the estimated CECL impact on regulatory capital for an additional two years for a total transition period of up to five years to provide regulatory relief to banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the COVID-19 pandemic. The final rule was adopted and became effective in September 2020. As a result, entities have the option to gradually phase in the full effect of CECL on regulatory capital over a five-year transition period. The Company implemented its CECL model commencing January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. The following table illustrates the impact of the adoption of the CECL model under ASC 326 on the Company’s consolidated statements of financial position as of January 1, 2020: January 1, 2020 Pre-CECL Adoption Impact of CECL Adoption As Reported Under CECL (Dollars in thousands) Assets: Allowance for credit losses on debt securities: Held-to-maturity $ — $ — $ — Available-for-sale — — — Allowance for credit losses on loans: Investor loans secured by real estate 9,027 16,072 25,099 Business loans secured by real estate 5,492 27,572 33,064 Commercial loans 20,118 9,519 29,637 Retail loans 1,061 2,523 3,584 Deferred tax (liabilities) assets (1,371) 18,346 16,975 Liabilities: Allowance for credit losses on off-balance sheet credit exposures $ 3,279 $ 8,285 $ 11,564 Stockholders' equity: Retained earnings $ 396,051 $ (45,625) $ 350,426 In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting . In response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The amendments in this Update provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as well as optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this Update are elective and became effective upon issuance for all entities. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company has not yet made a determination on whether it will make this election and is currently tracking the exposure as of each reporting period and assessing the significance of impact towards implementing any necessary modification in consideration of the election of this amendment. An entity may elect to apply the amendments in this Update to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company does not currently engage in hedging related transactions, and as such, the amendments included in this Update have not had an impact 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 became effective for the Company beginning on January 1, 2020. This ASU did not have a material effect on the Company’s financial statements. 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: • 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. • 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. • 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 became effective for the Company beginning on January 1, 2020. This ASU did not have a material effect on the Company’s financial statements. Recent Accounting Guidance Not Yet Effective In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs . The amendments included in this Update are intended to clarify that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. The guidance in paragraph 310-20-35-33 relates to amortization of premiums on individual callable debt securities and the period over which the premium shall be amortized in relation to the date the security is callable. For public business entities, the amendments in this Update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. The Company is evaluating the impact of this Update on its financial statements. The adoption of this accounting guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The FASB issued this Update to address complexities associated with the accounting for certain financial instruments that possess characteristics of liabilities and equity, and to amend guidance for the derivatives scope exception for contracts in an entity’s own equity in an effort to reduce disparate accounting results for certain economically similar contracts. With respect to convertible instruments, this Update eliminates certain accounting models with the intent to simplify the accounting for convertible instruments and reduce the complexity for preparers and users of an entity’s financial statements. Convertible instruments primarily affected by this Update are those issued with beneficial conversion features or cash conversion features, because the accounting models for those specific features are removed. For contracts in an entity’s own equity, the type of contracts primarily affected by this Update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This Update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. This Update also makes targeted improvements to the disclosures for convertible instruments and earnings per share guidance. Entities may adopt the provisions of this Update using either the modified retrospective method or a fully retrospective method. Under the modified retrospective method, entities are required to apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments in this Update are adopted. Any cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the year of adoption for entities applying the modified retrospective method. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company is evaluating the impact of this Update on its financial statements. The adoption of this accounting guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
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 2019 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, custodial account 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 Other Intangible Assets. 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 a policy to test goodwill for impairment annually in the fourth quarter of each year, or more frequently if events or circumstances lead management to believe the value of goodwill may be impaired. Impairment testing is performed at the reporting unit level, which is considered the Company level as management has identified the Company is its sole reporting unit as of the date of the consolidated balance sheets. Management’s assessment of goodwill first consists of a qualitative assessment to determine if it is more likely than not the fair value of the Company’s equity is below its carrying value. Should the results of this analysis indicate it is likely the fair value of the Company’s equity is below its carrying value, the Company performs a quantitative assessment of goodwill to determine the fair value of the reporting unit and compares it to its carrying value. If the fair value of the reporting unit is below its carrying value, the Company would then compare the implied fair value of the reporting unit goodwill to its carrying value to determine the amount of impairment to recognize. Impairment losses are recorded as a charge to noninterest expense. 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. In light of the COVID-19 pandemic and the deterioration of economic conditions as a result, the Company performed a goodwill impairment assessment as of September 30, 2020. The Company’s goodwill impairment assessment consisted of a qualitative analysis to first determine if it is more likely than not the estimated fair value of the Company exceeds its carrying value. The results of this analysis indicated no impairment of goodwill. Additionally, as part of the Company’s qualitative analysis, the Company looked at market related data as additional corroborating evidence in its assessment of whether it was more likely than not the carrying value of the Company exceeds its estimated fair value. This assessment of market related data included an initial assessment of the fair value of the Company’s equity as compared to its carrying value with the assistance from an independent third party. The assessment of market related data included factors such as: the Company’s stock price on an actual, 15-day and 30-day average basis as of September 30, 2020, and an implied market participant acquisition premium, which was based upon control premiums for regional banks during the 2008 and 2009 financial crisis. This initial assessment of the fair value of the Company’s equity through observations of market related data provided additional supporting evidence as of September 30, 2020 that the carrying value of goodwill was not impaired. As of September 30, 2020, the balance of goodwill was $898.4 million. Other intangible assets consist of core deposit intangible (“CDI”) and customer relationship intangible assets associated with PENSCO arising from whole bank acquisitions, and are amortized on either an accelerated basis, reflecting the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, or on a straight-line amortization method over their estimated useful lives, which range from 6 to 11 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, 2020, 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. Securities. The Company has established written guidelines and objectives for its investing activities. At the time of purchase, management designates the security as either held to maturity, available-for-sale or held for trading based on the Company’s investment objectives, operational needs, and intent. The investments are monitored to ensure that those activities are consistent with the established guidelines and objectives. Securities Held-to-Maturity. Investments in debt securities that management has the positive intent and ability to hold to maturity are reported at cost and adjusted for periodic principal payments and the amortization of premiums and accretion of discounts, which are recognized in interest income using the interest method over the period of time remaining to investment’s maturity. Securities Available-for-Sale. Investments in debt securities that management has no immediate plan to sell, but which may be sold in the future, are carried at fair value. Premiums and discounts are amortized using the interest method over the remaining period to the call date for premiums or contractual maturity for discounts and, in the case of mortgage-backed securities, the estimated average life, which can fluctuate based on the anticipated prepayments on the underlying collateral of the securities. Unrealized holding gains and losses, net of tax, are recorded in a separate component of stockholders’ equity as accumulated other comprehensive income. Realized gains and losses on the sales of securities are determined on the specific identification method, recorded on a trade date basis based on the amortized cost basis of the specific security and are included in noninterest income as net gain (loss) on investment securities. Allowance for Credit Losses on Investment Securities. The ACL on investment securities is determined for both the held-to-maturity and available-for-sale classifications of the investment portfolio in accordance with ASC 326. For available-for-sale investment securities, the Company performs a quarterly qualitative evaluation for securities in an unrealized loss position to determine if, for those investments in an unrealized loss position, the decline in fair value is credit related or non-credit related. In determining whether a security’s decline in fair value is credit related, the Company considers a number of factors including, but not limited to: (i) the extent to which the fair value of the investment is less than its amortized cost; (ii) the financial condition and near-term prospects of the issuer; (iii) downgrades in credit ratings; (iv) payment structure of the security, (v) the ability of the issuer of the security to make scheduled principal and interest payments, and (vi) general market conditions which reflect prospects for the economy as a whole, including interest rates and sector credit spreads. If it is determined that the unrealized loss can be attributed to credit loss, the Company records the amount of credit loss through a charge to provision for credit losses in current period earnings. However, the amount of credit loss recorded in current period earnings is limited to the amount of the total unrealized loss on the security, which is measured as the amount by which the security’s fair value is below its amortized cost. If it is likely the Company will be required to sell the security in an unrealized loss position, the total amount of the loss is recognized in current period earnings. Unrealized losses deemed non-credit related are recorded, net of tax, through accumulated other comprehensive income. The Company determines expected credit losses on available-for-sale and held-to-maturity securities through a discounted cash flow approach, using the security’s effective interest rate. However, as previously mentioned, the measurement of credit losses on available-for-sale securities only occurs when, through the Company’s qualitative assessment, it is determined all or a portion of the unrealized loss is deemed to be credit related. The Company’s discounted cash flow approach incorporates assumptions about the collectability of future cash flows. The amount of credit loss is measured as the amount by which the security’s amortized cost exceeds the present value of expected future cash flows. Credit losses on available-for-sale securities are measured on an individual basis, while credit losses on held-to-maturity securities are measured on a collective basis according to shared risk characteristics. Credit losses on held-to-maturity securities are only recognized at the individual security level when the Company determines a security no longer possesses risk characteristics similar to others in the portfolio. The Company does not measure credit losses on an investment’s accrued interest receivable, but rather promptly reverses from current period earnings the amount of accrued interest that is no longer deemed collectable. Accrued interest receivable for investment securities is included in accrued interest receivable balances in the consolidated statements of financial condition. Loans Held for Investment. Loans held for investment are loans the Company has the ability and intent to hold until their maturity. These loans are carried at amortized cost, including discounts and premiums on purchased and acquired loans, and net deferred loan origination fees and costs. Purchase discounts and premiums and net deferred loan origination fees and costs on loans are accreted or amortized as an adjustment of yield, using the interest method, over the expected lives of the loans. Income recognition of deferred loan fees and costs is discontinued for loans placed on nonaccrual. Any remaining discounts, premiums, deferred fees or costs, and prepayment fees associated with loans payoffs prior to contractual maturity are included in loan interest income in the period of payoff. Loan commitment fees received to originate or purchase a loan are deferred and, if the commitment is exercised, recognized over the life of the loan using the interest method as an adjustment of yield or, if the commitment expires unexercised, recognized as income upon expiration of the commitment. The Company accrues interest on loans using the interest method and only if deemed collectible. Loans for which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest is past due 90 days or more based on contractual terms of the loan or when, in the opinion of management, there is reasonable doubt as to collection of principal and or interest. When loans are placed on nonaccrual status, previously accrued and uncollected interest is promptly reversed against current period interest income, and as such an ACL for accrued interest receivable is not established. Interest income generally is not recognized on nonaccrual loans unless the likelihood of further loss is remote. Interest payments received on nonaccrual loans are applied as a reduction to the loan principal balance. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to all principal and interest. Allowance for Credit Losses on Loans. The Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination or acquisition. The ACL is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated statements of financial condition. Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company measures the ACL on commercial real estate loans and commercial loans using a discounted cash flow approach, and a historical loss rate methodology is used to determine the ACL on retail loans. The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the probability of default and loss given default model with the use of reasonable and supportable forecasts generate estimates for cash flows expected to be collected over the estimated life of a loan. Estimates of future expected cash flows ultimately reflect assumptions made concerning net credit losses over the life of a loan. The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios and related scenario-weighting, as well as determining the appropriate length of the forecast horizon. Management leverages economic projections from a reputable and independent third party to inform and provide 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 Company’s ACL model reverts to long-term average loss rates for purposes of estimating expected cash flows beyond a period deemed reasonable and supportable. The Company forecasts economic conditions and expected credit losses over a two-year time horizon before reverting to long-term average loss rates. The duration of the forecast horizon, the period over which forecasts revert to long-term averages, 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 loan portfolio. Changes in economic forecasts, in conjunction with changes in loan specific attributes, impact a loan’s probability of default and loss given default, which can drive changes in the determination of the ACL. Expectations of future cash flows are discounted at the loan’s effective interest rate. The resulting ACL represents the amount by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows. The ACL is recorded through a charge to provision for credit losses and is reduced by charge-offs, net of recoveries on loans previously charged-off. It is the Company’s policy to charge-off loan balances at the time they have been deemed uncollectable. Please also see Note 7 - Allowance for Credit Losses , of these consolidated financial statements for additional discussion concerning the Company’s ACL methodology. The Company’s ACL model also includes adjustments for qualitative factors, where appropriate. Since historical information (such as historical net losses and economic cycles) may not always, by itself, provide a sufficient basis for determining future expected credit losses, the Company periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not limited to factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of model data inputs used to determine the ACL. The Company has a credit portfolio review process designed to detect problem loans. Problem loans are typically those of a substandard or worse internal risk grade, and may consist of loans on nonaccrual status, troubled debt restructurings (“TDRs”), loans where the likelihood of foreclosure on underlying collateral has increased, collateral dependent loans and other loans where concern or doubt over the ultimate collectability of all contractual amounts due has become elevated. Such loans may, in the opinion of management, be deemed to no longer possess risk characteristics similar to other loans in the loan portfolio, and as such may require individual evaluation to determine an appropriate ACL for the loan. When a loan is individually evaluated, the Company typically measures the expected credit loss for the loan based on a discounted cash flow approach, unless the loan has been deemed collateral dependent. Collateral dependent loans are loans where the repayment of the loan is expected to come from the operation of and/or eventual liquidation of the underlying collateral. The ACL for collateral dependent loans is determined using estimates for the fair value of the underlying collateral, less costs to sell. Although management uses the best information available to derive estimates necessary to measure an appropriate level of ACL, future adjustments to the ACL may be necessary due to economic, operating, regulatory, and other conditions that may extend beyond the Company’s control. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL and credit review process. Such agencies may require the Company to recognize additions to the allowance based on judgments different from those of management. The Company has segmented the loan portfolio according to loans that share similar attributes and 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. These segment groupings are: investor loans secured by real estate, business loans secured by real estate, commercial loans, and retail loans. Within each segment grouping there are various classes of loans as disclosed below. The Company determines the ACL for loans based on this more detailed loan segmentation and classification. At September 30, 2020, the Company had the following detailed segmentation on classes of loans: Investor Loans Secured by Real Estate: • Commercial real estate non-owner-occupied - Commercial real estate (“CRE”) non-owner-occupied includes loans for which the Company holds real property as collateral, but where the borrower does not occupy the underlying property. The primary risks associated with these loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, significant increases in interest rates, which may make the real e state loan unprofitable to the borrower, changes in market rents, and vacancy of the underlying property. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. • Multifamily - Multifamily loans are secured by multi-tenant (5 or more units) residential real properties. Payments on multifamily loans are dependent on the successful operation or management of the properties, and repayment of these loans may be subject to adverse conditions in the real estate market or the economy. • Construction and land - We originate loans for the construction of one-to-four family and multifamily residences and CRE properties in our primary market area. We concentrate our efforts on single homes and small infill projects in established neighborhoods where there is not abundant land available for development. Construction loans are considered to have higher risks due to construction completion and timing risk, and the ultimate repayment being sensitive to interest rate changes, government regulation of real property, and the availability of long-term financing. Additionally, economic conditions may impact the Company’s ability to recover its investment in construction loans, as adverse economic conditions may negatively impact the real estate market, which could affect the borrower’s ability to complete and sell the project. Additionally, the fair value of the underlying collateral may fluctuate as market conditions change. We occasionally originate land loans located predominantly in California for the purpose of facilitating the ultimate construction of a home or commercial building. The primary risks include the borrower’s inability to pay and the inability of the Company to recover its investment due to a decline in the fair value of the underlying collateral. Business Loans Secured by Real Estate: • Commercial real estate owner-occupied - CRE owner-occupied includes loans for which the Company holds real property as collateral and where the underlying property is occupied by the borrower, such as with a place of business. These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. The primary risks associated with CRE owner-occupied loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases in interest rates, which may make the real estate loan unprofitable to the borrower. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. • Franchise secured by real estate - Franchise real estate secured loans are business loans secured by real property occupied by franchised restaurants, generally quick-service restaurants . These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. • Small Business Administration (“SBA”) - We are approved to originate loans under the SBA’s Preferred Lenders Program (“PLP”). The PLP lending status affords us a higher level of delegated credit autonomy, translating to a significantly shorter turnaround time from application to funding, which is critical to our marketing efforts. We originate loans nationwide under the SBA’s 7(a), SBA Express, International Trade and 504(a) loan programs, in conformity with SBA underwriting and documentation standards. SBA loans are similar to commercial business loans, but have additional credit enhancement provided by the U.S. Small Business Administration, for up to 85% of the loan amount for loans up to $150,000 and 75% of the loan amount for loans of more than $150,000. The Company originates SBA loans with the intent to sell the guaranteed portion into the secondary market on a quarterly basis. Certain loans classified as SBA are secured by commercial real estate property. SBA loans secured by hotels are included in the segment investor loans secured by real estate, and SBA loans secured by all other forms of real estate are included in the business loans secured by real estate segment. All other SBA loans are included in the commercial loans segment below, and are secured by business assets. Commercial Loans: • Commercial and industrial (including franchise commercial loans) (“C&I”) - Loans secured by business assets including inventory, receivables, and machinery and equipment to businesses located generally in our primary market area. Loan types includes revolving lines or credit, term loans, seasonal loans, and loans secured by liquid collateral such as cash deposits or marketable securities. Franchise credit facilities not secured by real estate and Home Owners’ Association (“HOA”) credit facilities are included in C&I loans. We also issue letters of credit on behalf of our customers. Risk arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans. The fair value of the collateral securing these loans may fluctua te as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its customers. • SBA Paycheck Protection Program (“PPP”) loans - Federally guaranteed loans designed to assist small and medium sized businesses through the disruptions in business brought on by the COVID-19 pandemic. The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that was signed into law in March 2020. The loans are designed to help businesses meet the on-going costs associated with running and maintaining a business through the COVID-19 pandemic and provide the potential for forgiveness of the loan if the borrower uses the funds for certain purposes, such as maintaining employees on payroll for a specified period of time. Additionally, the PPP allows for a deferral period until the date when the amount of loan forgiveness is determined and remitted to the lender. For borrowers who do not apply for forgiveness, the loan deferral period is 10 months after the applicable forgiveness period ends. In July 2020, the Company sold its entire SBA PPP loan portfolio with an aggregate amortized cost of $1.13 billion to a seasoned and experienced non-bank lender and servicer of SBA loans, resulting in improved balance sheet liquidity and a gain on sale of approximately of $18.9 million, net of net deferred origination fees and purchase discounts. As of September 30, 2020, the Company had no SBA PPP loans. Retail Loans: • One-to-four family - Although we do not originate, we have acquired first lien single family loans through bank acquisitions. The primary risks of one-to-four family loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral and significant increases in interest rates, which may make loans unprofitable to the borrower. • Consumer loans - In addition to consumer loans acquired through our various bank acquisitions, we originate a limited number of consumer loans, generally for banking clients only, which consist primarily of home equity lines of credit, savings account secured loans and auto loans. Repayment of these loans is dependent on the borrower’s ability to pay and the fair value of the underlying collateral. Troubled Debt Restructurings (“TDRs”). From time-to-time, the Company makes modifications to certain loans when a borrower is experiencing financial difficulty. These modifications are made to alleviate temporary impairments in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company. Modifications typically include: changes in the amortization terms of the loan, reductions in interest rates, acceptance of interest only payments, and, in limited cases, reductions to the outstanding loan balance. Such loans are typically placed on nonaccrual status and are returned to accrual status when all contractual amounts past due have been brought current, the loan has performed under the modified terms of the loan agreement for a period of at least six months, and the ultimate collectability of all contractual amounts due under the modified terms of the loan agreement is no longer in doubt. The Company typically measures the ACL for TDRs on an individual basis when the loans are deemed to no longer share similar risk char |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Acquisition of Opus Effective as of June 1, 2020, the Corporation completed the acquisition of Opus, a California-chartered state bank headquartered in Irvine, California, pursuant to a definitive agreement dated as of January 31, 2020. At closing, Opus had $8.32 billion in total assets, $5.94 billion in gross loans, and $6.91 billion in total deposits and operated 46 banking offices located throughout California, Washington, Oregon, and Arizona. As a result of the Opus acquisition, the Corporation acquired specialty lines of business, including trust and escrow services. Prior to the Opus acquisition, PENSCO Trust Company LLC, a Colorado-chartered non-depository trust company (“PENSCO”), operated as an indirect, wholly-owned subsidiary of Opus and served as a custodian for self-directed IRAs, the funds of which account owners used for self-directed investments in various alternative asset classes. Immediately following the Opus acquisition, PENSCO merged with and into the Bank and operates its custodial business under the name of Pacific Premier Trust as a division of the Bank. As of May 31, 2020, PENSCO had approximately $14.48 billion of custodial assets and approximately 44,000 client accounts. Prior to the Opus acquisition, Commerce Escrow operated as a division of Opus, offering commercial escrow services and facilitating tax-deferred commercial exchanges under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). Following the acquisition of Opus, Commerce Escrow operates as a division of the Bank, which created synergies with the Company’s existing escrow deposit business. The acquisition of Opus expands the Company’s presence in major metropolitan markets with greater operational scale, diversifies business lines, banking products and services, as well as deposit base and clients by adding a new channel of stable, low-cost deposits and fee income from Opus’s trust and escrow businesses, improves revenue, and accelerates the Company’s ability to invest in technology solutions and increase efficiencies. Pursuant to the terms of the merger agreement, the consideration paid to Opus shareholders consisted of whole shares of the Corporation’s common stock and cash in lieu of fractional shares of the Corporation’s common stock. Upon consummation of the transaction, (i) each share of Opus common stock issued and outstanding immediately prior to the effective time of the acquisition was canceled and exchanged for the right to receive 0.900 shares of the Corporation’s common stock, with cash to be paid in lieu of fractional shares at a rate of $19.31 per share, and (ii) each share of Opus Series A non-cumulative, non-voting preferred stock issued and outstanding immediately prior to the effective time of the acquisition was converted into and canceled in exchange for the right to receive that number of shares of the Corporation’s common stock equal to the product of (X) the number of shares of Opus common stock into which such share of Opus preferred stock was convertible in connection with, and as a result of, the acquisition, and (Y) 0.900, in each case, plus cash in lieu of fractional shares of the Corporation’s common stock. The Corporation issued 34,407,403 shares, net of 165,136 shares for tax withholding from Opus equity award holders, of the Corporation’s common stock valued at $21.62 per share, which was the closing price of the Corporation’s common stock on May 29, 2020, the last trading day prior to the consummation of the acquisition, and paid cash in lieu of fractional shares. The Corporation assumed Opus’s warrants and options, which represented the issuance of up to approximately 406,778 and 9,538 additional shares of the Corporation’s common stock, valued at approximately $1.8 million and $46,000, respectively, and issued substitute restricted stock units in an aggregate amount of $328,000. The value of the total transaction consideration paid amounted to approximately $749.6 million. The Opus warrants assumed by the Corporation expired unexercised as of September 30, 2020 and no longer remain outstanding. The Opus options assumed by the Corporation have been fully exercised as of September 30, 2020. May 29, 2020 Merger consideration (Dollars in thousands) Value of stock consideration paid to shareholders $ 747,458 Cash paid in lieu of fractional shares 2 Value of restricted stock awards 328 Value of options and warrants (1) 1,817 Total merger consideration $ 749,605 ______________________________ (1) The Opus warrants assumed by the Corporation expired unexercised as of September 30, 2020 and no longer remain outstanding. The Opus options assumed by the Corporation have been fully exercised as of September 30, 2020. CDI of $16.1 million, customer relationship intangible of $3.2 million, and goodwill of $90.1 million were recognized as a result of the 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 summarizes the estimated fair value of assets acquired and liabilities assumed of Opus as of June 1, 2020 under the acquisition method of accounting: Identifiable net assets acquired, at fair value June 1, 2020 (Dollars in thousands) Assets acquired Cash and cash equivalents $ 937,102 Interest bearing time deposits with financial institutions 137 Investment securities 829,891 Loans 5,809,451 Allowance for credit losses (21,242) Premises and equipment 22,121 Intangible assets 19,267 Deferred tax assets 48,312 Other assets 367,130 Total assets acquired $ 8,012,169 Liabilities assumed Deposits $ 6,915,990 FHLB advances and other borrowings 213,491 Subordinated debt 138,653 Other liabilities 84,542 Total liabilities assumed 7,352,676 Total fair value of identifiable net assets 659,493 Total merger consideration 749,605 Goodwill recognized $ 90,112 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 and consideration exchanged to be recorded at their respective estimated fair values at the date of acquisition. The determination of estimated fair values required management to make certain estimates about discount rates, future expected cash flows, market conditions at the time of the acquisition, and other future events that are highly subjective in nature 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 $2.7 million related to loans, deferred tax assets, other assets, and other liabilities. As of September 30, 2020, the final purchase price remains subject to final adjustments and fair value measurements remain preliminary due to the timing of the acquisition. The Company continues to review information relating to events or circumstances existing at the acquisition date and expects to finalize its analysis of the acquired assets and assumed liabilities over the next few months, but not later than one year after the acquisition. Management anticipates that this review could result in adjustments to the acquisition date valuation amounts presented herein but does not anticipate that these adjustments, if any, would be material. The Company determined the fair value of loans, intangible assets, investment securities, real property, leases, deposits, and borrowings with the assistance of third-party valuations. Loans Opus’s loan portfolio was recorded at fair value at the date of acquisition. A valuation of Opus’s loan portfolio was performed by a third party as of the acquisition date in accordance with ASC 820 to assess the fair value of the loan portfolio, considering adjustments for interest rate risk, required equity return, servicing, credit, and liquidity risk. The loan portfolio was segmented into two groups: non-PCD loans and PCD loans. The non-PCD loans were pooled based on similar characteristics, such as loan type, fixed or adjustable interest rates, payment type, index rate and caps/floors, and non-accrual status. The PCD loans were valued at the loan level with similar characteristics noted above. The fair value was calculated using a discounted cash flow analysis. The discount rate utilized to analyze fair value considered the cost of funds rate, capital charge, servicing costs, and liquidity premium, mostly based on industry standards. At the acquisition date, non-PCD loans and PCD loans had a fair value of $4.94 billion and $841.2 million, respectively, and a contractual balance of $5.05 billion and $896.5 million, respectively. In accordance with U.S. GAAP, there was no carryover of the allowance for credit losses that had been previously recorded by Opus. The Company recorded an ACL of $75.9 million through an increase to the provision for credit losses. The initial ACL for PCD loans of $21.2 million is established through an adjustment to the acquired loan balance and goodwill. Core deposit intangible The CDI on non-maturing deposits was determined by evaluating the underlying characteristics of the deposit relationships, including customer attrition, deposit interest rates and maintenance costs, and costs of alternative funding using the discounted cash flow approach. The core deposit intangibles represent the costs saved by the Company between maintaining the existing deposits and obtaining alternative funds over the life of the deposit base. Customer relationship intangible PENSCO operated as the legal trustee for its clients to provide recurring trust services over the life of client’s trust. PENSCO could separately identify each of its customer relationships through the trustee agreement between each customer and PENSCO, as well as account-level specific information, and has a history and pattern of conducting business with them as their legal trustee. In the event that PENSCO (or its successor trust division within the Bank) were to merge, reorganize, get acquired, or change its name, the surviving entity will become the trustee or custodian of the IRAs provided that the surviving entity is authorized to serve in that capacity pursuant to the Internal Revenue Code. Accordingly, such PENSCO client relationships met the contractual or other legal rights criterion for identification as a recognizable intangible asset separate from goodwill. The fair value of the customer relationship intangible asset was determined through the use of an excess earnings model associated with the expected fee income associated with underlying client relationships. Fixed maturity deposits In determining the fair value of certificates of deposit, the cash flows of the contractual interest payments during the specific period of the certificates of deposit and scheduled principal payout were discounted to present value at market-based interest rates. FHLB advances The fair value of fixed rate Federal Home Loan Bank of San Francisco (“FHLB”) advances was determined using a discounted cash flow approach. The cash flows of the advances were projected based on scheduled payments of the fixed rate advances, factoring in prepayment fee. The cash flows were then discounted to present value using the FHLB rates as of May 29, 2020. Subordinated debt The fair value of subordinated debt was determined by using a discounted cash flow method using a market participant discount rate for similar instruments. The Company incurred $44.1 million of expenses in connection with the Opus acquisition during the nine months ended September 30, 2020. Merger-related expenses are included in other expense in the Company's consolidated statements of income. The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2020 and 2019 as if Opus had been acquired on January 1, 2019. This unaudited pro forma information combines the historical results of Opus with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value, cost savings, or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant. Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollar in thousands, except per share data) Net interest and other income $ 193,304 $ 197,866 $ 577,779 $ 579,353 Net income (loss) 66,566 70,835 (78,570) 181,087 Basic earnings (loss) per share 0.71 0.79 (0.84) 1.97 Diluted earnings (loss) per share 0.70 0.78 (0.84) 1.94 |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The amortized cost and estimated fair value of securities were as follows: September 30, 2020 Amortized Gross Unrealized Gross Unrealized Estimated (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 30,161 $ 2,578 $ — $ 32,739 Agency 577,627 26,109 (691) 603,045 Corporate 397,670 2,035 (2,169) 397,536 Municipal bonds 1,305,389 23,581 (15,062) 1,313,908 Collateralized mortgage obligations 357,615 1,130 (465) 358,280 Mortgage-backed securities 868,298 27,121 (196) 895,223 Total investment securities available-for-sale 3,536,760 82,554 (18,583) 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities 26,357 1,419 — 27,776 Other 1,623 — — 1,623 Total investment securities held-to-maturity 27,980 1,419 — 29,399 Total investment securities $ 3,564,740 $ 83,973 $ (18,583) $ 3,630,130 December 31, 2019 Amortized Gross Unrealized Gross Unrealized Estimated (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 60,457 $ 3,137 $ (39) $ 63,555 Agency 240,348 7,686 (1,676) 246,358 Corporate 149,150 2,217 (14) 151,353 Municipal bonds 384,032 13,450 (184) 397,298 Collateralized mortgage obligations 9,869 123 (8) 9,984 Mortgage-backed securities 494,404 7,603 (2,171) 499,836 Total investment securities available-for-sale 1,338,260 34,216 (4,092) 1,368,384 Investment securities held-to-maturity: Mortgage-backed securities 36,114 922 — 37,036 Other 1,724 — — 1,724 Total investment securities held-to-maturity 37,838 922 — 38,760 Total investment securities $ 1,376,098 $ 35,138 $ (4,092) $ 1,407,144 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, 2020, the Company had accumulated other comprehensive income of $64.0 million, or $45.7 million net of tax, compared to an accumulated other comprehensive income of $30.1 million, or $21.5 million net of tax, at December 31, 2019. At September 30, 2020 and December 31, 2019, 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 deemed credit related or due to other factors such as changes in interest rates and general market conditions. The Company recognizes credit losses in current period earnings, through a change to provision for credit losses, when declines in the fair value of individual available-for-sale securities are below their amortized cost, and the decline in fair value is deemed to be credit related. Declines in fair value below amortized cost not deemed credit related are recorded net of tax in accumulated other comprehensive income. In the event the Company is required to sell or has the intent to sell an available-for-sale security that has experienced a decline in fair value below its amortized cost, the Company writes the amortized cost of the security down to fair value in the current period. During the second quarter of 2020, the Company acquired $829.9 million of available-for-sale securities in connection with the acquisition of Opus. Such securities were evaluated and it was determined that there were no investment securities classified as purchase credit deteriorated upon acquisition and, as a result, no allowance for credit losses was recorded. As of September 30, 2020, the Company has not recorded credit losses on certain available-for-sale securities that were in an unrealized loss position due to the high quality of the investments, with investment grade ratings, and many of them are issued by U.S. government agencies. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company performed a qualitative assessment of these investments as of September 30, 2020, and does not believe the declines in fair value are credit related. There were no provision for credit losses recognized for investment securities during the nine months ended September 30, 2020. There were no other than temporary impairment losses recognized for investment securities during the nine months ended September 30, 2019. At September 30, 2020, there were no available-for-sale or held-to-maturity securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At September 30, 2020 and December 31, 2019, there were no securities purchased with deterioration in credit quality since their origination. At September 30, 2020, there were no collateral dependent available-for-sale or held-to-maturity securities. 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, 2020 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: U.S. Treasury — $ — $ — — $ — $ — — $ — $ — Agency 3 57,720 (370) 9 11,179 (321) 12 68,899 (691) Corporate 17 145,419 (2,169) — — — 17 145,419 (2,169) Municipal bonds 141 776,203 (15,062) — — — 141 776,203 (15,062) Collateralized mortgage obligations 11 129,496 (463) 1 476 (2) 12 129,972 (465) Mortgage-backed securities. 8 98,253 (196) — — — 8 98,253 (196) Total investment securities available-for-sale 180 $ 1,207,091 $ (18,260) 10 $ 11,655 $ (323) 190 $ 1,218,746 $ (18,583) December 31, 2019 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: U.S. Treasury 1 $ 10,194 $ (39) — $ — $ — 1 $ 10,194 $ (39) Agency 13 102,874 (1,340) 9 13,514 (336) 22 116,388 (1,676) Corporate 1 1,017 (14) — — — 1 1,017 (14) Municipal bonds 12 30,541 (184) — — — 12 30,541 (184) Collateralized mortgage obligations — — — 1 603 (8) 1 603 (8) Mortgage-backed securities 18 130,014 (1,681) 11 26,886 (490) 29 156,900 (2,171) Total investment securities available-for-sale 45 $ 274,640 $ (3,258) 21 $ 41,003 $ (834) 66 $ 315,643 $ (4,092) The amortized cost and estimated fair value of investment securities at September 30, 2020, by contractual maturity are shown in the table below. Due in One Year Due after One Year Due after Five Years Due after Total Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ — $ — $ 30,161 $ 32,739 $ — $ — $ — $ — $ 30,161 $ 32,739 Agency 1,000 1,006 266,255 272,144 234,070 247,806 76,302 82,089 577,627 603,045 Corporate 159,949 160,420 26,391 26,363 156,824 156,934 54,506 53,819 397,670 397,536 Municipal bonds 9,921 10,263 1,458 1,586 36,895 39,849 1,257,115 1,262,210 1,305,389 1,313,908 Collateralized mortgage obligations — — 3,620 3,622 135,863 136,445 218,132 218,213 357,615 358,280 Mortgage-backed securities — — 2,190 2,335 197,517 212,743 668,591 680,145 868,298 895,223 Total investment securities available-for-sale 170,870 171,689 330,075 338,789 761,169 793,777 2,274,646 2,296,476 3,536,760 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities — — — — — — 26,357 27,776 26,357 27,776 Other — — — — — — 1,623 1,623 1,623 1,623 Total investment securities held-to-maturity — — — — — — 27,980 29,399 27,980 29,399 Total investment securities $ 170,870 $ 171,689 $ 330,075 $ 338,789 $ 761,169 $ 793,777 $ 2,302,626 $ 2,325,875 $ 3,564,740 $ 3,630,130 During the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, the Company recognized gross gains on sales of available-for-sale securities in the amount of $1.2 million, $1.3 million, and $5.1 million, respectively. During the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, the Company recognized gross losses on sales of available-for-sale securities in the amount of $12,000, $1.3 million, and $811,000, respectively. The Company had net proceeds from the sales of available-for-sale securities of $212.5 million, $191.1 million, and $191.3 million during the three months ended September 30, 2020, June 30, 2020, and September 30, 2019, respectively. The net proceeds from the sales of available-for-sale securities during the three months ended June 30, 2020 included $6.5 million of receivables for security sales which settled during the three months ended September 30, 2020. During the nine months ended September 30, 2020 and 2019, the Company recognized gross gains on sales of available-for-sale securities in the amount of $10.4 million and $6.5 million, respectively. During the nine months ended September 30, 2020 and 2019, the Company recognized gross losses on the sales of available-for sale securities in the amount of $1.5 million and $1.6 million, respectively. The Company had net proceeds from the sales of available-for-sale securities of $558.9 million and $418.5 million during the nine months ended September 30, 2020 and 2019, respectively. Investment securities with carrying values of $149.0 million and $125.7 million as of September 30, 2020 and December 31, 2019, respectively, were pledged to secure public deposits, other borrowings, and for other purposes as required or permitted by law. FHLB, FRB and Other Stock At September 30, 2020, the Company had $17.3 million in FHLB stock, $51.7 million in Federal Reserve Bank of San Francisco (“FRB”) stock and $25.7 million in other stock, all carried at cost. During the three months ended June 30, 2020 and September 30, 2019, the FHLB repurchased $17.3 million and $5.4 million, respectively, of the Company’s excess FHLB stock through its stock repurchase program. During the three months ended September 30, 2020, the FHLB did not 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, 2020. Allowance for Credit Losses on Investment Securities The Company accounts for credit losses on debt securities in accordance with ASC 326, which requires the Company to record an ACL on held-to-maturity investment securities at the time of purchase or acquisition. The ACL for held-to-maturity investment securities represents the Company’s current estimate of expected credit losses that may be incurred over the life of the investment. An ACL on available-for-sale investment securities is recorded when the fair value of the investment is below its amortized cost and the decline in fair value has been deemed to be credit related through the Company’s qualitative assessment. Non-credit related declines in fair value of available-for-sale investment securities are not recorded through an ACL, but rather recorded as an adjustment to accumulated other comprehensive income, net of tax. The Company determines credit losses on both available-for-sale investment securities through the use of a discounted cash flow approach using the security’s effective interest rate. The ACL is measured as the amount by which an investment security’s amortized cost exceeds the net present value of expected future cash flows. However, the amount of credit losses for available-for-sale investment securities is limited to the amount of a security’s unrealized loss. The ACL is established through a charge to provision for credit losses in current period earnings. The Company did not record an ACL for available-for-sale or held-to-maturity investment securities during the nine months ended September 30, 2020. For available-for-sale securities where estimated fair value was below amortized cost, such declines were deemed non-credit related and recorded as an adjustment to accumulated other comprehensive income, net of tax. Non-credit related decline in fair value of available-for-sale investment securities can be attributed to changes in interest rates and other market related factors. The Company did not record an ACL for held-to maturity securities during the nine months ended September 30, 2020, because the likelihood of non-repayment is remote. The following table summarizes the Company’s investment securities portfolio by Moody’s external rating equivalent and by vintage as of September 30, 2020: Vintage 2020 2019 2018 2017 2016 Prior Total (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury Aaa - Aa3 $ — $ — $ 22,006 $ 10,733 $ — $ — $ 32,739 Agency Aaa - Aa3 284,262 44,884 159,319 9,869 21,246 83,465 603,045 Corporate debt A1 - A3 59,797 19,922 — — 119,221 9,256 208,196 Baa1 - Baa3 80,417 41,866 5,074 18,029 8,801 35,153 189,340 Municipal bonds Aaa - Aa3 904,523 284,555 32,497 50,942 15,238 25,296 1,313,051 A1 - A3 — — — — — 857 857 Collateralized mortgage obligations Aaa - Aa3 119,689 86,130 14,500 3,975 114,460 19,526 358,280 Mortgage-backed securities Aaa - Aa3 305,534 182,206 43,802 187,996 85,510 90,175 895,223 Total investment securities available-for-sale 1,754,222 659,563 277,198 281,544 364,476 263,728 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities Aaa - Aa3 — — 7,291 6,908 4,613 7,545 26,357 Other Baa1 - Baa3 — — 628 — — 995 1,623 Total investment securities held-to-maturity — — 7,919 6,908 4,613 8,540 27,980 Total investment securities $ 1,754,222 $ 659,563 $ 285,117 $ 288,452 $ 369,089 $ 272,268 $ 3,628,711 |
Loans Held for Investment
Loans Held for Investment | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans Held for Investment | Loans Held for Investment The company’s loan portfolio is segmented according to loans that share similar attributes and risk characteristics. Investor loans secured by real estate includes CRE non-owner-occupied, multifamily, construction, and land, as well as SBA loans secured by real estate, which are loans collateralized by hotel/motel real property. Business loans secured by real estate are loans to businesses that are collateralized by real estate where the operating cash flow of the business is the primary source of repayment. This loan portfolio includes CRE owner-occupied, franchise loans secured by real estate, and SBA loans secured by real estate, which are collateralized by real property other than hotel/motel real property. Commercial loans are loans to businesses where the operating cash flow of the business is the primary source of repayment without the additional benefit of real estate collateral. This loan portfolio includes commercial and industrial, franchise loans non-real estate secured, and SBA loans non-real estate secured. Retail loans portfolio includes single family residential and consumer loans. Single family residential includes home equity lines of credit, as well as second trust deeds. The following table presents the composition of the loan portfolio for the period indicated: September 30, December 31, 2020 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,707,930 $ 2,070,141 Multifamily 5,142,069 1,575,726 Construction and land 337,872 438,786 SBA secured by real estate 57,610 68,431 Total investor loans secured by real estate 8,245,481 4,153,084 Business loans secured by real estate CRE owner-occupied 2,119,788 1,846,554 Franchise real estate secured 359,329 353,240 SBA secured by real estate 84,126 88,381 Total business loans secured by real estate 2,563,243 2,288,175 Commercial loans Commercial and industrial 1,820,995 1,393,270 Franchise non-real estate secured 515,980 564,357 SBA non-real estate secured 16,748 17,426 Total commercial loans 2,353,723 1,975,053 Retail loans Single family residential 243,359 255,024 Consumer 45,034 50,975 Total retail loans 288,393 305,999 Gross loans held for investment (1) 13,450,840 8,722,311 Allowance for credit losses for loans held for investment (2) (282,503) (35,698) Loans held for investment, net $ 13,168,337 $ 8,686,613 Loans held for sale, at lower of cost or fair value $ 1,032 $ 1,672 ______________________________ (1) Includes unaccreted fair value net purchase discounts of $126.3 million and $40.7 million as of September 30, 2020 and December 31, 2019, respectively. (2) The allowance for credit losses as of December 31, 2019 was the allowance for loan and lease losses (“ALLL”) accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The allowance for credit losses at September 30, 2020 is accounted for under ASC 326, which is reflective of estimated expected lifetime credit losses. The Company participated in the SBA PPP program under the CARES Act during the second quarter of 2020 and originated SBA PPP loans. At June 30, 2020, the Company’s SBA PPP loan balance was $1.13 billion. In July 2020, the Company concluded the sale of its entire SBA PPP loan portfolio with an aggregate amortized cost of $1.13 billion to a seasoned and experienced non-bank lender and servicer of SBA loans, resulting in improved balance sheet liquidity and a gain on sale of approximately of $18.9 million, net of net deferred origination fees and net purchase discounts. Loans Serviced for Others and Loan Securitization The Company generally retains the servicing rights of the guaranteed portion of SBA loans sold, for which the Company records a servicing asset initially at fair value within its other assets category. Servicing assets are subsequently measured using the amortization method and amortized to noninterest income. Servicing assets are evaluated for impairment based on the fair value of the assets as compared to carrying amount. At September 30, 2020 and December 31, 2019, the servicing asset totaled $5.9 million and $7.7 million, respectively, and was included in other assets in the Company’s consolidated statement of financial condition. 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, 2020 and December 31, 2019, the Company determined that no valuation allowance was necessary. Opus entered into securitization sales on December 23, 2016 with the Federal Home Loan Mortgage Corporation (“Freddie Mac”). The transaction involved the sale of $509 million in originated multifamily loans through a Freddie Mac-sponsored transaction. One class of Freddie Mac guaranteed structured pass-through certificates was issued and purchased entirely by Opus. In connection with the Opus acquisition, the Company's continuing involvement includes sub-servicing responsibilities, general representations and warranties, and reimbursement obligations. Servicing responsibilities on loan sales generally include obligations to collect and remit payments of principal and interest, provide foreclosure services, manage payments of taxes and insurance premiums, and otherwise administer the underlying loans. In connection with the securitization transaction, Freddie Mac was designated as the master servicer and appointed the Company to perform sub-servicing responsibilities, which generally include the servicing responsibilities described above with the exception of the servicing of foreclosed or defaulted loans. The overall management, servicing, and resolution of defaulted loans and foreclosed loans are separately designated to the special servicer, a third-party institution that is independent of the master servicer and the Company. The master servicer has the right to terminate the Company in its role as sub-servicer and direct such responsibilities accordingly. General representations and warranties associated with loan sales and securitization sales require the Company to uphold various assertions that pertain to the underlying loans at the time of the transaction, including, but not limited to, compliance with relevant laws and regulations, absence of fraud, enforcement of liens, no environmental damages, and maintenance of relevant environmental insurance. Such representations and warranties are limited to those that do not meet the quality represented at the transaction date and do not pertain to a decline in value or future payment defaults. In circumstances where the Company breaches its representations and warranties, the Company would generally be required to cure such instances through a repurchase or substitution of the subject loan(s). To the extent the ultimate resolution of defaulted loans results in contractual principal and interest payments that are deficient, the Company is obligated to reimburse Freddie Mac for such amounts, not to exceed 10% of the original principal amount of the loans comprising the securitization pool at the closing date of December 23, 2016. The liability recorded for Company’s exposure to the reimbursement agreement with Freddie Mac was $540,000 as of September 30, 2020. Loans sold and 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 $727.2 million at September 30, 2020 and $633.8 million at December 31, 2019, including loans transferred through securitization with Freddie Mac of $111.1 million and SBA participations serviced for others of $437.4 million at September 30, 2020, and SBA participations serviced for others of $475.3 million at December 31, 2019, respectively. Concentration of Credit Risk As of September 30, 2020, 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 multifamily 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 $800.1 million for secured loans and $480.1 million for unsecured loans at September 30, 2020. In order to manage concentration risk, the Bank maintains a house lending limit well below these statutory maximums. At September 30, 2020, the Bank’s largest aggregate outstanding balance of loans to one borrower was $126.4 million comprised of $101.5 million and $24.9 million of secured CRE non-owner-occupied and unsecured C&I credit, respectively. Credit Quality and Credit Risk Management The Company’s credit quality and credit risk are controlled in two distinct management processes. 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 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 measurement and 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, through the Company’s credit risk management process, it is determined the ultimate repayment of a loan will come from the foreclosure upon and ultimate sale of the underlying collateral, the loan is deemed collateral dependent and evaluated individually to determine an appropriate ACL for the loan. The ACL for such loans is measured as the amount by which the fair value of the underlying collateral, less estimated costs to sell, is less than the amortized cost of the loan. The Company typically continues to obtain or confirm updated valuations of underlying collateral for special mention and classified loans on an annual or biennial basis in order to have the most current indication of fair value of the underlying collateral securing the loan. Additionally, once a loan is identified as collateral dependent, due to the likelihood of foreclosure, and repayment of the loan is expected to come from the eventual sale of the underlying collateral, an analysis of the underlying collateral is performed at least quarterly. Changes in the estimated fair value of the collateral are reflected in the lifetime ACL for the loan. Balances deemed to be uncollectable are promptly charged-off. The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of September 30, 2020: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied Pass $ 190,701 $ 566,855 $ 475,363 $ 314,190 $ 290,179 $ 852,044 $ 11,031 $ — $ 2,700,363 Special mention — — 1,839 435 — 1,816 — — 4,090 Substandard — — 202 — 517 2,199 559 — 3,477 Multifamily Pass 638,349 1,735,235 964,740 750,548 412,893 639,171 574 — 5,141,510 Substandard — — — 559 — — — — 559 Construction and land Pass 25,240 145,709 104,702 33,023 19,932 7,997 374 — 336,977 Substandard — — 895 — — — — — 895 SBA secured by real estate Pass 494 10,412 11,058 14,842 6,712 9,037 — — 52,555 Substandard — 163 2,117 698 399 1,678 — — 5,055 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied Pass $ 210,662 $ 412,186 $ 358,157 $ 346,906 $ 235,040 $ 505,999 $ 4,593 $ — $ 2,073,543 Special mention — 15,827 — 10,268 4,186 2,008 — — 32,289 Substandard — — 3,636 725 2,666 6,679 250 — 13,956 Franchise real estate secured Pass 20,507 87,749 74,459 102,756 31,512 42,346 — — 359,329 SBA secured by real estate Pass 2,643 7,658 14,054 17,110 9,643 26,768 95 — 77,971 Substandard — — 22 1,994 914 3,225 — — 6,155 Total loans secured by business real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial Pass $ 98,656 $ 339,144 $ 183,259 $ 232,648 $ 71,414 $ 94,220 $ 682,523 $ 6,311 $ 1,708,175 Special mention — 43 17,231 15,810 1,398 — 7,886 — 42,368 Substandard — 4,902 22,763 1,111 1,265 4,393 34,271 1,747 70,452 Franchise non-real estate secured Pass 20,205 201,621 117,113 53,160 47,290 43,239 1,361 511 484,500 Substandard — 2,050 957 28,473 — — — — 31,480 SBA non-real estate secured Pass 355 2,299 1,700 2,254 623 3,881 — 268 11,380 Special mention — — — 1,661 — — — — 1,661 Substandard — 85 369 820 275 1,424 734 — 3,707 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 Retail Loans Single family residential Pass $ 4,469 $ 8,385 $ 14,972 $ 14,884 $ 35,074 $ 133,137 $ 31,452 — $ 242,373 Special mention — — — — — 57 — — 57 Substandard — — — — — 929 — — 929 Consumer loans Pass 63 142 60 38,037 12 3,255 3,422 — 44,991 Substandard — — — — — 43 — — 43 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 Totals gross loans $ 1,212,344 $ 3,540,465 $ 2,369,668 $ 1,982,912 $ 1,171,944 $ 2,385,545 $ 779,125 $ 8,837 $ 13,450,840 The following tables stratify the loan portfolio by the Company’s internal risk grading as of December 31, 2019: Credit Risk Grades Pass Special Substandard Total Gross December 31, 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,067,875 $ 1,178 $ 1,088 $ 2,070,141 Multifamily 1,575,510 — 216 1,575,726 Construction and land 438,769 — 17 438,786 SBA secured by real estate 65,835 973 1,623 68,431 Total investor loans secured by real estate 4,147,989 2,151 2,944 4,153,084 Business loans secured by real estate CRE owner-occupied 1,831,853 11,167 3,534 1,846,554 Franchise real estate secured 352,319 921 — 353,240 SBA secured by real estate 83,106 1,842 3,433 88,381 Total business loans secured by real estate 2,267,278 13,930 6,967 2,288,175 Commercial loans Commercial and industrial 1,359,662 13,226 20,382 1,393,270 Franchise non-real estate secured 546,594 6,930 10,833 564,357 SBA not secured by real estate 13,933 485 3,008 17,426 Total commercial loans 1,920,189 20,641 34,223 1,975,053 Retail loans Single family residential 254,463 — 561 255,024 Consumer loans 50,921 — 54 50,975 Total retail loans 305,384 — 615 305,999 Total gross loans $ 8,640,840 $ 36,722 $ 44,749 $ 8,722,311 The following tables stratify loans held by investment by delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due Current 30-59 60-89 90+ Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,707,169 $ — $ — $ 761 $ 2,707,930 Multifamily 5,142,069 — — — 5,142,069 Construction and land 336,977 — — 895 337,872 SBA secured by real estate 56,346 673 — 591 57,610 Total investor loans secured by real estate 8,242,561 673 — 2,247 8,245,481 Business loans secured by real estate CRE owner-occupied 2,114,484 — 250 5,054 2,119,788 Franchise real estate secured 359,329 — — — 359,329 SBA secured by real estate 83,116 — — 1,010 84,126 Total business loans secured by real estate 2,556,929 — 250 6,064 2,563,243 Commercial loans Commercial and industrial 1,810,027 5,717 836 4,415 1,820,995 Franchise non-real estate secured 508,237 — — 7,743 515,980 SBA not secured by real estate 15,691 320 — 737 16,748 Total commercial loans 2,333,955 6,037 836 12,895 2,353,723 Retail loans Single family residential 242,985 374 — — 243,359 Consumer loans 45,034 — — — 45,034 Total retail loans 288,019 374 — — 288,393 Totals $ 13,421,464 $ 7,084 $ 1,086 $ 21,206 $ 13,450,840 Days Past Due Current 30-59 60-89 90+ Total Gross Loans December 31, 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,067,874 $ 1,179 $ — $ 1,088 $ 2,070,141 Multifamily 1,575,726 — — — 1,575,726 Construction and land 438,786 — — — 438,786 SBA secured by real estate 68,041 — — 390 68,431 Total investor loans secured by real estate 4,150,427 1,179 — 1,478 4,153,084 Business loans secured by real estate CRE owner-occupied 1,846,223 331 — — 1,846,554 Franchise real estate secured 353,240 — — — 353,240 SBA secured by real estate 86,946 — 589 846 88,381 Total business loans secured by real estate 2,286,409 331 589 846 2,288,175 Commercial loans Commercial and industrial 1,389,026 422 826 2,996 1,393,270 Franchise non-real estate secured 555,215 — 9,142 — 564,357 SBA not secured by real estate 16,141 167 — 1,118 17,426 Total commercial loans 1,960,382 589 9,968 4,114 1,975,053 Retail loans Single family residential 255,024 — — — 255,024 Consumer loans 50,967 5 2 1 50,975 Total retail loans 305,991 5 2 1 305,999 Totals loans $ 8,703,209 $ 2,104 $ 10,559 $ 6,439 $ 8,722,311 Individually Evaluated Loans Beginning on January 1, 2020, the Company evaluates loans collectively for purposes of determining the ACL in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the portfolio. These loans are typically identified from a substandard or worse internal risk grade, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, modified through a TDR, and/or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to no longer possess risk characteristics similar to other loans in the portfolio are evaluated individually for purposes of determining an appropriate lifetime ACL. The Company uses a discounted cash flow approach, using the loan’s effective interest rate, for determining the ACL on individually evaluated loans, unless the loan is deemed collateral dependent, which requires evaluation based on the estimated fair value of the underlying collateral, less estimated costs to sell. The Company may increase or decrease the ACL for collateral dependent individually evaluated loans based on changes in the estimated fair value of the collateral. Changes in the ACL for all other individually evaluated loans is based substantially on the Company’s evaluation of cash flows expected to be received from such loans. As of September 30, 2020, $26.5 million of loans were individually evaluated, and the ACL attributed to such loans was $2.0 million. At September 30, 2020, $8.8 million of individually evaluated loans were evaluated using a discounted cash flow approach and $17.7 million of individually evaluated loans were evaluated based on the underlying value of the collateral. The Company had individually evaluated loans on nonaccrual status of $26.5 million at September 30, 2020 . Impaired Loans Prior to the adoption of ASC 326 on January 1, 2020, the Company classified loans as impaired when, based on current information and events, it was probable that the Company would be unable to collect all amounts due according to the contractual terms of the loan agreement or it was determined that the likelihood of the Company receiving all scheduled payments, including interest, when due was remote. Credit losses on impaired loans were determined separately based on the guidance in ASC 310. Beginning January 1, 2020, the Company accounts for credit losses on all loans in accordance with ASC 326, which eliminates the concept of an impaired loan within the context of determining credit losses, and requires all loans to be evaluated for credit losses collectively. Loans are only evaluated individually when they are deemed to no longer possess similar risk characteristics with other loans within the portfolio. Prior to the adoption of ASC 326, the Company reviewed loans for impairment when the loan was classified as substandard or worse, delinquent 90 days, determined by management to be collateral dependent, or when the borrower filed bankruptcy or was granted a loan modification in a TDR. Measurement of impairment was 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 existed, or the fair value of the collateral if the loan was deemed collateral dependent. Valuation allowances were determined on a loan-by-loan basis or by aggregating loans with similar risk characteristics. Charge-offs were recorded when amounts were no longer deemed collectable. 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) December 31, 2019 Investor loans secured by real estate CRE non-owner-occupied $ 1,184 $ 1,088 $ — $ 1,088 $ — SBA secured by real estate 772 390 — 390 — Business loans secured by real estate SBA secured by real estate 1,743 1,517 — 1,517 — Commercial loans Commercial and industrial 7,755 7,529 — 7,529 — Franchise non-real estate secured 10,835 10,834 — 10,834 — SBA non-real estate secured 1,555 1,118 — 1,118 — Retail loans Single family residential 412 366 — 366 — Totals $ 24,256 $ 22,842 $ — $ 22,842 $ — The following table presents information on impaired loans and leases, disaggregated by loan segment, for the periods indicated: Impaired Loans September 30, 2019 Three Months Ended Nine Months Ended Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 421 $ — $ 194 $ — Construction and land 320 — 160 — SBA secured by real estate 406 — 1,196 — Business loans secured by real estate CRE owner-occupied 845 — 662 — Franchise real estate secured — — 2,516 — SBA secured by real estate 969 — 692 — Commercial loans Commercial and industrial 10,170 104 9,925 303 Franchise non-real estate secured 679 — 385 — SBA non-real estate secured 1,113 — 1,081 — Retail loans Single family residential 373 — 383 — Consumer loans — — 25 — Totals $ 15,296 $ 104 $ 17,219 $ 303 ______________________________ (1) Interest income recognized represents interest on accruing loans. The Company had impaired loans on nonaccrual status of $8.5 million at December 31, 2019. The Company had no loans 90 days or more past due and still accruing at December 31, 2019. Troubled Debt Restructurings We sometimes modify or restructure loans when the borrower is experiencing financial difficulties by making a concession to the borrower in the form of changes in the amortization terms, reductions in the interest rates, the acceptance of interest only payments and, in limited cases, concessions to the outstanding loan balances. These loans are classified as TDRs. TDRs are loans modified for the purpose of alleviating temporary impairments to the borrower’s financial condition or cash flows. A workout plan between us and the borrower is designed to provide a bridge for borrower cash flow shortfalls in the near term. A TDR loan may be returned to accrual status when the loan is brought current, has performed in accordance with the contractual restructured terms for a time frame of at least six months, and the ultimate collectability of the total contractual restructured principal and interest in no longer in doubt. At September 30, 2020, there were no loans modified as TDRs. At December 31, 2019, TDRs consisted of two loans aggregating $3.0 million, both of which were current and on accrual status. During the three months and nine months ended September 30, 2020 and 2019, there were no loans modified as TDRs. During the three months and nine months ended September 30, 2020 and 2019, there were no TDRs that experienced payment defaults after modifications within the previous 12 months. The CARES Act, signed into law on March 27, 2020, permits financial institutions to suspend requirements under U.S. GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDRs and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. On April 7, 2020, federal bank regulators issued a joint interagency statement that allows lenders to conclude that a borrower is not experiencing financial difficulty if short-term (e.g., six months or less) modifications are made in response to the COVID-19 pandemic, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant related to loans in which the borrower is less than 30 days past due on its contractual payments at the time a modification program is implemented. For COVID-19 related loan modifications in the form of payment deferrals, the delinquency status will not advance and loans that were accruing at the time that the relief is provided will generally not be placed on nonaccrual status during the deferral period. Interest income will continue to be recognized over the contractual life of the loan. However, the Company, through its credit portfolio management activities, has continued to monitor facts and circumstances associated with the underlying credit quality of loans modified under the provisions of the CARES Act in an effort to identify any loans where the accrual of interest during the modification period is no longer appropriate. In such cases, the Company ceases the accrual of interest and all previously accrued and uncollected interest is promptly reversed against current period interest income. The Company has determined none of the COVID-19 related loan modifications need to be characterized as TDRs. As of September 30, 2020, 54 loans with an aggregate amortized cost of $118.3 million, of which 12 loans totaling $24.5 million were acquired in connection with the acquisition of Opus, were modified due to COVID-19 hardship under the CARES Act, which represent 0.9% of total loans held for investment as of that date. See Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Financial Condition - Troubled Debt Restructurings for additional information. Purchased Credit Deteriorated and Purchased Credit Impaired Loans Prior to the adoption of ASC 326 , the Company accounted for PCI loans and income recognition thereof in accordance with ASC Subtopic 310-30 Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality . PCI loans are loans that as of the date of their acquisition have experienced deterioration in credit quality between origination and acquisition and for which it was probable, at acquisition, that not all contractually required payments would be collected. Following the adoption of ASC 326 on January 1, 2020, the Company analyzes acquired loans for more-than-insignificant deterioration in credit quality since their origination. Such loans are classified as purchased credit deteriorated loans. Please also see Note 3 - Significant Accounting Policies for more information concer |
Allowance for Credit Losses
Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2020 | |
Provision for Loan and Lease Losses [Abstract] | |
Allowance for Credit Losses | Allowance for Credit Losses The Company accounts for credit losses on loans in accordance with ASC 326 - Financial Instruments - Credit Losses , to determine the ACL. ASC 326 requires the Company to recognize estimates for lifetime losses on loans and unfunded loan commitments at the time of origination or acquisition. The recognition of losses at origination or acquisition represents the Company’s best estimate of the lifetime expected credit loss associated with a loan given the facts and circumstances associated with the particular loan, and involves the use of significant management judgement and estimates, which are subject to change based on management’s on-going assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the model. The Company uses a discounted cash flow model when determining estimates for the ACL for commercial real estate loans and commercial loans, which comprise the majority of the loan portfolio, and uses a historical loss rate model for retail loans. The Company also utilizes proxy loan data in its ACL model where the Company’s own historical data is not sufficiently available. The discounted cash flow model is applied on an instrument-by-instrument basis, and for loans with similar risk characteristics, to derive estimates for the lifetime ACL for each loan. The discounted cash flow methodology relies on several significant components essential to the development of estimates for future cash flows on loans and unfunded commitments. These components consist of: (i) the estimated probability of default, (ii) the estimated loss given default, which represents the estimated severity of the loss when a loan is in default, (iii) estimates for prepayment activity on loans, and (iv) the estimated exposure to the Company at default (“EAD”). These components are also heavily influenced by changes in economic forecasts employed in the model over a reasonable and supportable period. The Company’s ACL methodology for unfunded loan commitments also includes assumptions concerning the probability an unfunded commitment will be drawn upon by the borrower. These assumptions are based on the Company’s historical experience. The Company’s discounted cash flow ACL model for commercial real estate and commercial loans uses internally derived estimates for prepayments in determining the amount and timing of future contractual cash flows to be collected. The estimate of future cash flows also incorporates estimates for contractual amounts the Company believes may not be collected, which are based on assumptions for PD, LGD, and EAD. EAD is the estimated outstanding balance of the loan at the time of default. It is determined by the contractual payment schedule and expected payment profile of the loan, incorporating estimates for expected prepayments and future draws on revolving credit facilities. The Company discounts cash flows using the effective interest rate on the loan. The effective interest rate represents the contractual rate on the loan; adjusted for any purchase premiums, purchase discounts, and deferred fees and costs associated with the origination of the loan. The Company has made an accounting policy election to adjust the effective interest rate to take into consideration the effects of estimated prepayments. The ACL for loans is determined by measuring the amount by which a loan’s amortized cost exceeds its discounted cash flows. Probability of Default The PD for commercial real estate loans is based largely on a model provided by a third party, using proxy loan information. The PDs generated by this model are reflective of current and expected changes in economic conditions and conditions in the commercial real estate market, and how they are expected to impact loan level and property level attributes, and ultimately the likelihood of a default event occurring. Significant loan and property level attributes include: loan to value ratios, debt service coverage, loan size, loan vintage and property types. The PD for commercial loans is based on an internally developed PD rating scale that assigns PDs based on the Company’s internal risk grades for loans. This internally developed PD rating scale is based on a combination of the Company’s own historical data and observed historical data from the Company’s peers, which consist of banks that management believes align with our business profile. As credit risk grades change for loans in the commercial segment, the PD assigned to them also changes. As with commercial real estate loans, the PD for commercial loans is also impacted by current and expected economic conditions. The Company considers loans to be in default when they are 90 days or more past due and still accruing or placed on nonaccrual status. Loss Given Default LGDs for commercial real estate loans are derived from a third party, using proxy loan information, and are based on loan and property level characteristics in the Company’s loan portfolio, such as: loan to values, estimated time to resolution, property size, and current and estimated future market price changes for underlying collateral. The LGD is highly dependent upon loan to value ratios, and incorporates estimates for the expense associated with managing the loan through to resolution. LGDs also incorporate an estimate for the loss severity associated with loans where the borrower fails to meet their debt obligation at maturity, such as through a balloon payment or the refinancing of the loan through another lender. External factors that have an impact on LGDs include: changes in the CRE Price Index, GDP growth rate, unemployment rates and the Moody’s Baa rating corporate debt interest rate spread. LGDs are applied to each loan in the commercial real estate portfolio, and in conjunction with the PD, produce estimates for net cash flows not expected to be collected over the estimated term of the loan. LGDs for commercial loans are also derived from a third party that has a considerable database of credit related information specific to the financial services industry and the type of loans within this segment, and is used to generate annual default information for commercial loans. These proxy LGDs are dependent upon data inputs such as: credit quality, borrower industry, region, borrower size, and debt seniority. LGDs are then applied to each loan in the commercial portfolio, and in conjunction with the PD, produce estimates for net cash flows not expected to be collected over the estimated term of the loan. Historical Loss Rates for Retail Loans The historical loss rate model for retail loans are derived from a third party that has a considerable database of credit related information for retail loans. Key loan level attributes and economic drivers in determining the loss rate for retail loans include FICO scores, vintage, as well as geography, unemployment rates, and changes in consumer real estate prices. Forecasts U.S. GAAP requires the Company to develop reasonable and supportable forecasts of future conditions, and estimate how those forecasts are expected to impact a borrower’s ability to satisfy their obligation to the Bank and the ultimate collectability of future cash flows over the life of the loan. The Company uses economic scenarios from an independent third party, Moody’s Analytics, in its estimation of a borrower’s ability to repay a loan in future periods. These scenarios are based on past events, current conditions, and the likelihood of future events occurring. These scenarios typically are comprised of: (1) a base-case scenario, (2) an upside scenario, representing slightly better economic conditions than currently experienced and, (3) a downside scenario, representing recessionary conditions. Management periodically evaluates economic scenarios and may decide that a particular economic scenario or a combination of probability-weighted economic scenarios should be used in the Company’s ACL model. The economic scenarios chosen for the model, the extent to which more than one scenario is used, and the weights that are assigned to them, are based on the Company’s estimate of the probability of each scenario occurring, which is based in part on analysis performed by an independent third-party. Economic scenarios chosen, as well as the assumptions within those scenarios, and whether to use a probability-weighted multiple scenario approach, can vary from one period to the next based on changes in current and expected economic conditions, and due to the occurrence of specific events such as the on-going COVID-19 pandemic. The Company recognizes the non-linearity of credit losses relative to economic performance and thus the Company believes consideration of and, if appropriate under the circumstances, use of multiple probability-weighted economic scenarios is appropriate in estimating credit losses over the forecast period. This approach is based on certain assumptions. The first assumption is that no single forecast of the economy, however detailed or complex, is completely accurate over a reasonable forecast time-frame, and is subject to revisions over time. By considering multiple scenario outcomes and assigning reasonable probability weightings to them, some of the uncertainty associated with a single scenario approach, the Company believes, is mitigated. As of January 1, 2020, upon the adoption of ASC 326, the Company’s ACL model used three probability-weighted scenarios representing a base-case scenario, an upside scenario, and a downside scenario. The weightings assigned to each scenario were as follows: the base-case scenario, or most likely scenario, was assigned a weighting of 40%, while the upside and downside scenarios were each assigned weightings of 30%. As of September 30, 2020, the Company’s ACL model used the same three probability weighted scenarios, updated for current expected economic conditions, including the current and estimated future impact associated with the on-going COVID-19 pandemic. The use of three probability-weighted scenarios in the third quarter of 2020 is consistent with the approach used in the Company’s ACL model during the second quarter of 2020. The Company evaluated the weightings of each economic scenario in the current period with the assistance of Moody's Analytics, and determined the current weightings of 40% for the base-case scenario, and 30% for each of the upside and downside scenarios appropriately reflect the likelihood of outcomes for each scenario given the current economic environment. The Company currently forecasts economic conditions over a two-year period, which we believe is a reasonable and supportable period. Beyond the point which the Company can provide for a reasonable and supportable forecast, economic variables revert to their long-term averages. The Company has reflected this reversion over a period of three years in each of its economic scenarios used to generate the overall probability-weighted forecast. Changes in economic forecasts impact the PD, LGD, and EAD for each loan, and therefore influence the amount of future cash flows for each loan the Company does not expect to collect. The Company derives the economic forecasts it uses in its ACL model from Moody's Analytics that has a large team of economists, data-base managers and operational engineers with a history of producing monthly economic forecasts for over 25 years. The forecasts produced by this third party have been widely used by banks, credit unions, government agencies and real estate developers. These economic forecasts cover all states and metropolitan areas in the Unites States, and reflect changes in economic variables such as: GDP growth, interest rates, employment rates, changes in wages, retail sales, industrial production, metrics associated with the single-family and multifamily housing markets, vacancy rates, changes in equity market prices, and energy markets. It is important to note that the Company’s ACL model relies on multiple economic variables, which are used under several economic scenarios. Although no one economic variable can fully demonstrate the sensitivity of the ACL calculation to changes in the economic variables used in the model, the Company has identified certain economic variables that have significant influence in the Company’s model for determining the ACL. As of September 30, 2020, the Company’s ACL model incorporated the following assumptions for key economic variables in the base-case and downside scenarios: Base-case Scenario: • CRE Price Index decreases by an approximate annualized rate of 16% through the remainder of 2020 with the rate of decline slowing in Q1 2021 to 10%, before returning to growth by the second quarter of 2021. • A modest increase in real GDP of an approximate 3% annualized rate in Q4 2020, followed by increasing levels of real GDP growth between 3-6% during 2021. • Elevated levels of U.S. unemployment at approximately 9% in Q4 2020, followed by modest declines throughout 2021 to an approximate level of 8% by the end of 2021. Upside Scenario: • CRE Price Index annualized growth rate is unchanged in Q4 2020, before returning to growth by the second quarter of 2021. • An approximate annualized increase in real GDP of 8% in Q4 2020, followed by decelerating levels of growth in 2021 from approximately 7% to 5% by the end of 2021. • Elevated levels of U.S. unemployment at approximately 9% for Q4 2020, followed by declines in unemployment throughout 2021 to an approximate level of 6% by the end of 2021. Downside Scenario: • CRE Price Index decreases by an approximate annualized rate of 25% in Q4 2020, with the rate of decline decreasing throughout 2021, before returning to modest growth by Q4 2021. • A decrease in real GDP of an approximate annualized rate of 4% in Q4 2020, followed by declines of 3% and 2% in Q1 and Q2 2021, respectively, before returning to growth in Q3 2021. • Elevated levels of U.S. unemployment at approximately 10% for Q4 2020, followed by unemployment of approximately 11% throughout 2021. Qualitative Adjustments The Company recognizes that historical information used as the basis for determining future expected credit losses may not always, by themselves, provide a sufficient basis for determining future expected credit losses. The Company, therefore, periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization specific risks such as credit concentrations, collateral specific risks, regulatory risks and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of model data inputs used to determine the ACL. As of September 30, 2020, qualitative adjustments included in the ACL totaled $15.0 million. These adjustments relate to potential limitations in the model. Management determined through additional review that certain key model drivers are potentially underestimating the impact of the on-going COVID-19 pandemic may have on small and medium sized businesses, and may not be fully reflecting the potential for a more turbulent economic recovery. In addition, the qualitative adjustment relates to, in part, the lack of additional economic stimulus from the federal government as of September 30, 2020. Many economists point to the need for additional stimulus to help ensure the recovery in economic conditions, as a whole, does not begin to wane. Management reviews the need for and appropriate level of qualitative adjustments on a quarterly basis, and as such, the amount and allocation of qualitative adjustments may change in future periods. The following table provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of, and for the period indicated: Three Months Ended September 30, 2020 Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 63,007 $ (443) $ — $ (8,459) $ 54,105 Multifamily 63,511 — — 3,825 67,336 Construction and land 18,804 (377) — (2,870) 15,557 SBA secured by real estate 2,010 (145) 34 3,428 5,327 Business loans secured by real estate CRE owner-occupied 48,213 (1,739) 21 2,171 48,666 Franchise real estate secured 13,060 — — (1,072) 11,988 SBA secured by real estate 4,368 — 76 1,716 6,160 Commercial loans Commercial and industrial 41,967 (2,437) 10 8,374 47,914 Franchise non-real estate secured 21,676 (207) 865 (2,185) 20,149 SBA non-real estate secured 600 (10) 8 353 951 Retail loans Single family residential 1,479 — 2 (238) 1,243 Consumer loans 3,576 (129) 1 (341) 3,107 Totals $ 282,271 $ (5,487) $ 1,017 $ 4,702 $ 282,503 Nine Months Ended September 30, 2020 Beginning ACL Balance (1) Adoption of ASC 326 Initial ACL Recorded for PCD Loans Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 1,899 $ 8,423 $ 3,025 $ (830) $ — $ 41,588 $ 54,105 Multifamily 729 9,174 8,710 — — 48,723 67,336 Construction and land 4,484 (124) 2,051 (377) — 9,523 15,557 SBA secured by real estate 1,915 (1,401) — (699) 34 5,478 5,327 Business loans secured by real estate CRE owner-occupied 2,781 20,166 3,766 (1,739) 44 23,648 48,666 Franchise real estate secured 592 5,199 — — — 6,197 11,988 SBA secured by real estate 2,119 2,207 235 (315) 147 1,767 6,160 Commercial loans Commercial and industrial 13,857 87 2,325 (5,213) 37 36,821 47,914 Franchise non-real estate secured 5,816 9,214 — (1,434) 865 5,688 20,149 SBA non-real estate secured 445 218 924 (803) 13 154 951 Retail loans Single family residential 655 541 206 (62) 3 (100) 1,243 Consumer loans 406 1,982 — (137) 2 854 3,107 Totals $ 35,698 $ 55,686 $ 21,242 $ (11,609) $ 1,145 $ 180,341 $ 282,503 ______________________________ (1) Beginning ACL balance represents the ALLL accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The following table provides the allocation of the ALLL for loans held for investment as well as the activity attributed to various segments in the loan portfolio as of, and for the period indicated, as determined in accordance with ASC 450 and ASC 310, prior to the adoption of ASC 326: For the Three Months Ended September 30, 2019 Beginning ALLL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,765 $ (86) $ — $ 199 $ 1,878 Multifamily 705 — — 10 715 Construction and land 5,408 — — (617) 4,791 SBA secured by real estate 1,322 — — 468 1,790 Business loans secured by real estate CRE owner-occupied 2,299 — 8 257 2,564 Franchise real estate secured 579 — — (12) 567 SBA secured by real estate 1,611 (61) 21 539 2,110 Commercial loans Commercial and industrial 13,796 (290) 54 (664) 12,896 Franchise non-real estate secured 6,186 (995) — 975 6,166 SBA non-real estate secured 430 (82) 41 92 481 Retail loans Single family residential 704 — 1 (14) 691 Consumer loans 221 (11) 9 132 351 Totals $ 35,026 $ (1,525) $ 134 $ 1,365 $ 35,000 For the Nine Months Ended September 30, 2019 Beginning ALLL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,624 $ (574) $ — $ 828 $ 1,878 Multifamily 740 — — (25) 715 Construction and land 5,964 — — (1,173) 4,791 SBA secured by real estate 1,827 (721) — 684 1,790 Business loans secured by real estate CRE owner-occupied 1,908 — 31 625 2,564 Franchise real estate secured 743 (1,376) — 1,200 567 SBA secured by real estate 1,824 (315) 21 580 2,110 Commercial loans Commercial and industrial 13,695 (985) 168 18 12,896 Franchise non-real estate secured 6,066 (1,155) — 1,255 6,166 SBA non-real estate secured 654 (326) 45 108 481 Retail loans Single family residential 808 — 2 (119) 691 Consumer loans 219 (16) 10 138 351 Totals $ 36,072 $ (5,468) $ 277 $ 4,119 $ 35,000 The increase in the ACL for loans held for investment during the three months ended September 30, 2020 of $232,000 is reflective of a $4.7 million in provision for credit losses and $4.5 million in net charge-offs. The provision for credit losses for the three months ended September 30, 2020 is reflective of unfavorable, but improving economic forecasts used in the Company’s ACL model. The change in the ACL for the nine months ended September 30, 2020 of $246.8 million is reflective of a $55.7 million addition associated with the Company’s adoption of ASC 326 on January 1, 2020, which was recorded through a cumulative effect adjustment to retained earnings, as well as a $180.3 million provision for credit losses on loans, net charge-offs of $10.5 million, and the establishment of $21.2 million in net ACL for PCD loans previously mentioned. The provision for credit losses of $180.3 million during the nine months ended September 30, 2020 is inclusive of $75.9 million related to the initial ACL required for the acquisition of non-PCD loans in the Opus acquisition. Under ASC 326, the Company is required to record an ACL for estimates of life-time credit losses on loans at the time of acquisition. For non-PCD loans, the initial ACL is established through a charge to provision for credit losses at the time of acquisition. However, the ACL for PCD loans is established through an adjustment to the loan’s purchase price (or initial fair value). Excluding the impact of the Opus acquisition, the provision for credit losses for the nine months ended September 30, 2020 is also reflective of unfavorable economic forecasts used in the Company’s ACL model driven by the COVID-19 pandemic. Allowance for Credit Losses for Off-Balance Sheet Commitments The Company maintains an allowance for credit losses on off-balance sheet commitments related to unfunded loans and lines of credit, which is included in other liabilities of the consolidated balance sheets. The allowance for off-balance sheet commitments was $21.5 million at September 30, 2020 and $3.3 million at December 31, 2019. The change in the allowance for off-balance sheet commitments can be attributed to several factors, including: (i) an $8.3 million increase in the first quarter of 2020 attributed to the Company’s adoption of ASC 326, (ii) a $8.6 million provision for credit losses in the second quarter of 2020 related to the initial ACL on off-balance sheet loan commitments that the Company was required to establish at the time of acquisition of Opus, and (iii) a $1.4 million in provision for credit losses for the first nine months of 2020 related primarily to the deterioration in economic forecasts, primarily in the second quarter of 2020, used in the Company’s CECL model. The total provision for credit losses for off-balance sheet commitments reflected a recapture of $492,000 and a provision of $10.0 million for the three and nine months ended September 30, 2020, respectively. The reversal of provision for credit losses for off-balance sheet commitments for the three months ended September 30, 2020 can be attributed to lower outstanding unfunded balance in certain loan segments where a higher reserve allocation has been assigned. The Company applies an expected credit loss estimation methodology for off-balance sheet commitments that is commensurate with the methodology applied to each respective segment of the loan portfolio in determining the ACL for loans held-for-investment. The loss estimation process includes assumptions for the probability that a loan will fund, as well as the expected amount of funding. These assumptions are based on the Company’s own historical internal loan data. The following table presents loans individually and collectively evaluated for impairment and their respective ALLL allocation at December 31, 2019 as determined in accordance with ASC 450 and ASC 310, prior to the adoption of ASC 326: December 31, 2019 Loans Evaluated Individually for Impairment ALLL Attributed to Individually Evaluated Loans Loans Evaluated Collectively for Impairment ALLL Attributed to Collectively Evaluated Loans (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,088 $ — $ 2,069,053 $ 1,899 Multifamily — — 1,575,726 729 Construction and land — — 438,786 4,484 SBA secured by real estate 390 — 68,041 1,915 Business loans secured by real estate CRE owner-occupied — — 1,846,554 2,781 Franchise real estate secured — — 353,240 592 SBA secured by real estate 1,517 — 86,864 2,119 Commercial loans Commercial and industrial 7,529 — 1,385,741 13,857 Franchise non-real estate secured 10,834 — 553,523 5,816 SBA non-real estate secured 1,118 — 16,308 445 Retail loans Single family residential 366 — 254,658 655 Consumer loans — — 50,975 406 Totals $ 22,842 $ — $ 8,699,469 $ 35,698 The following table presents PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the date indicated. Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 0% - 5.00% $ 188,404 $ 543,940 $ 374,636 $ 265,887 $ 266,967 $ 792,295 $ 10,788 $ — $ 2,442,917 >5.00% - 10.00% — 7,015 102,566 10,874 17,282 25,791 243 — 163,771 Greater than 10% 2,297 15,900 202 37,864 6,447 37,973 559 — 101,242 Multifamily 0% - 5.00% 630,900 1,709,927 935,659 723,886 399,890 618,503 574 — 5,019,339 >5.00% - 10.00% 4,251 11,286 14,944 14,708 2,836 2,102 — — 50,127 Greater than 10% 3,198 14,022 14,137 12,513 10,167 18,566 — — 72,603 Construction and Land 0% - 5.00% 24,862 56,858 12,550 22,362 — 6,448 — — 123,080 >5.00% - 10.00% — 36,289 10,750 466 — — — — 47,505 Greater than 10% 378 52,562 82,297 10,195 19,932 1,549 374 — 167,287 SBA secured by real estate 0% - 5.00% 494 10,412 12,584 15,540 7,111 10,204 — — 56,345 >5.00% - 10.00% — — — — — — — — — Greater than 10% — 163 591 — — 511 — — 1,265 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied 0% - 5.00% $ 202,228 $ 368,034 $ 299,843 $ 296,647 $ 197,043 $ 426,513 $ 520 $ — $ 1,790,828 >5.00% - 10.00% 8,434 37,617 58,314 53,967 39,056 78,666 3,826 — 279,880 Greater than 10% — 22,362 3,636 7,285 5,793 9,507 497 — 49,080 Franchise real estate secured 0% - 5.00% 19,753 85,363 73,100 102,756 31,512 42,346 — — 354,830 >5.00% - 10.00% 754 — 631 — — — — — 1,385 Greater than 10% — 2,386 728 — — — — — 3,114 SBA secured by real estate 0% - 5.00% 2,643 7,658 13,375 15,993 6,150 22,077 95 — 67,991 >5.00% - 10.00% — — 679 1,117 3,493 4,679 — — 9,968 Greater than 10% — — 22 1,994 914 3,237 — — 6,167 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial 0% - 5.00% $ 90,745 $ 289,250 $ 141,811 $ 206,524 $ 49,843 $ 76,628 $ 343,482 $ 4,024 $ 1,202,307 >5.00% - 10.00% 7,911 48,778 39,716 19,950 18,894 14,807 302,843 2,037 454,936 Greater than 10% — 6,061 41,726 23,095 5,340 7,178 78,355 1,997 163,752 Franchise non-real estate secured 0% - 5.00% 14,547 193,899 112,760 48,916 45,265 40,753 1,361 511 458,012 >5.00% - 10.00% 5,658 7,722 4,353 4,245 2,025 2,486 — — 26,489 Greater than 10% — 2,050 957 28,472 — — — — 31,479 SBA not secured by real estate 0% - 5.00% 355 2,299 1,392 1,460 499 2,571 — 268 8,844 >5.00% - 10.00% — — 308 796 124 1,285 — — 2,513 Greater than 10% — 85 369 2,479 275 1,449 734 — 5,391 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 A significant driver in the ACL for loans in the investor real estate secured and business real estate secured segments is loan to value (“LTV”). The following table summarizes the amortized cost of loans in these segments by current estimated LTV and by year of origination as of the date indicated: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 55% and below $ 100,859 $ 238,182 $ 190,263 $ 156,791 $ 192,044 $ 602,788 $ 11,031 — $ 1,491,958 >55-65% 71,824 220,089 110,830 136,117 84,644 217,812 559 — 841,875 >65-75% 18,018 105,825 171,532 18,946 13,796 30,887 — — 359,004 Greater than 75% — 2,759 4,779 2,771 212 4,572 — — 15,093 Multifamily 55% and below 147,694 347,848 303,801 252,662 90,318 294,211 574 — 1,437,108 >55-65% 233,564 742,570 406,271 234,044 169,033 242,603 — — 2,028,085 >65-75% 257,091 628,393 244,007 262,512 153,542 96,542 — — 1,642,087 Greater than 75% — 16,424 10,661 1,889 — 5,815 — — 34,789 Construction and land 55% and below 24,116 129,160 66,830 26,261 19,932 7,997 374 — 274,670 >55-65% 1,124 13,254 23,699 6,762 — — — — 44,839 >65-75% — 3,295 15,068 — — — — — 18,363 Greater than 75% — — — — — — — — — SBA secured by real estate 55% and below — 2,070 653 673 330 785 — — 4,511 >55-65% — 2,433 1,643 4,017 621 4,482 — — 13,196 >65-75% — 3,905 5,075 4,185 4,795 1,897 — — 19,857 Greater than 75% 494 2,167 5,804 6,665 1,365 3,551 — — 20,046 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loan secured by real estate CRE owner-occupied 55% and below $ 56,954 $ 156,880 $ 171,740 $ 203,875 $ 133,740 $ 357,734 $ 4,843 — $ 1,085,766 >55-65% 56,139 93,895 97,245 94,359 73,389 80,933 — — 495,960 >65-75% 55,932 155,872 80,898 46,241 32,547 50,458 — — 421,948 Greater than 75% 41,637 21,366 11,910 13,424 2,216 25,561 — — 116,114 Franchise real estate secured 55% and below 7,462 13,322 14,407 21,162 11,592 20,549 — — 88,494 >55-65% — 9,981 15,893 23,658 7,784 5,862 — — 63,178 >65-75% 3,972 53,584 21,750 9,768 11,017 14,697 — — 114,788 Greater than 75% 9,073 10,862 22,409 48,168 1,119 1,238 — — 92,869 SBA secured by real estate 55% and below 1,355 1,633 5,376 5,683 3,175 15,281 95 — 32,598 >55-65% 104 513 1,802 1,719 3,706 5,665 — — 13,509 >65-75% 264 3,148 751 4,193 2,340 5,401 — — 16,097 Greater than 75% 920 2,364 6,147 7,509 1,336 3,646 — — 21,922 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 The following table presents FICO bands for the retail segment of the loan portfolio as of the date indicated: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Retail Loans Single family residential Greater than 740 $ 4,469 $ 7,198 $ 12,719 $ 9,658 $ 29,291 $ 91,460 $ 22,566 — $ 177,361 >680 - 740 — 1,187 2,253 4,763 2,641 28,625 7,919 — 47,388 >580 - 680 — — — 463 3,142 11,113 932 — 15,650 Less than 580 — — — — — 2,925 35 — 2,960 Consumer loans Greater than 740 63 85 54 46 10 2,648 1,670 — 4,576 >680 - 740 — 40 6 37,991 — 480 1,665 — 40,182 >580 - 680 — 17 — — 2 144 59 — 222 Less than 580 — — — — — 26 28 — 54 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The Company had goodwill of $898.4 million and $808.3 million at September 30, 2020 and December 31, 2019, respectively. During the nine months ended September 30, 2020, the additions to goodwill included $92.8 million associated with the acquisition of Opus and adjustments to goodwill in the amount of $2.7 million during the third quarter of 2020, within the one-year measurement period subsequent to the acquisition date. During the nine months ended September 30, 2019, adjustments to goodwill in the amount of $404,000 for Grandpoint Capital, Inc. were recorded during the one-year measurement period subsequent to the acquisition date. September 30, September 30, 2020 2019 (Dollars in thousands) Balance, beginning of year $ 808,322 $ 808,726 Goodwill acquired during the year 92,844 — Purchase accounting adjustments (2,732) (404) Balance, end of year $ 898,434 $ 808,322 Accumulated impairment losses at end of year $ — $ — The amount of goodwill is subject to change, as the Company’s fair value estimates associated with the Opus acquisition are considered preliminary estimates and are subject to refinement for a period of one year after the closing date of the acquisition. Acquisition date fair values of assets acquired and liabilities assumed in the Opus acquisition may be further refined as additional information related to those fair value estimates becomes available and such information is considered final. The Company’s policy is to assess goodwill for impairment on an annual basis during the fourth quarter of each year, and more frequently if events or circumstances lead management to believe the value of goodwill may be impaired. Given the volatility observed during 2020 in economic conditions as well as in the equity markets, triggered by the outbreak of the COVID-19 pandemic, the Company has performed an analysis of goodwill each quarter commencing with the quarter ended March 31, 2020. No impairment of goodwill was determined to exist as of the quarters ended March 31, 2020 and June 30, 2020. The Company performed an analysis of goodwill during the third quarter of 2020 that consisted of a qualitative assessment to first determine if it is more likely than not that the estimated fair value of the Company exceeds its carrying value. The results of this analysis indicated no impairment of goodwill as of September 30, 2020. Additionally, as part of the Company’s qualitative analysis, the Company analyzed market related data as additional corroborative evidence in its assessment of whether it was more likely than not the estimated fair value of the Company exceeds its carrying value. This assessment of market related data included an initial assessment of the fair value of the Company’s equity as compared to its carrying value with the assistance from an independent third party. The assessment of market related data included factors such as: the Company’s stock price on an actual, 15-day and 30-day average basis as of September 30, 2020, and an implied market participant acquisition premium, which was based upon control premiums for regional banks during the 2008 and 2009 financial crisis. This assessment provided additional supporting evidence as of September 30, 2020 that the carrying value of goodwill was not impaired. The Company had other intangible assets of $90.0 million at September 30, 2020, consisting of $86.9 million in core deposit intangibles and $3.1 million in customer relationship intangibles. The Company had core deposit intangibles of $83.3 million at December 31, 2019. The additions of $16.1 million of core deposit intangibles and $3.2 million of customer relationship intangibles during the second quarter of 2020 was the result of the acquisition of Opus. The change in the gross balance of core deposit intangibles and customer relationship intangibles, and the related accumulated amortization consisted of the following for the periods indicated: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2020 2020 2019 2020 2019 (Dollars in thousands) Gross amount of intangible assets: Beginning balance $ 145,212 $ 125,945 $ 125,945 $ 125,945 $ 125,945 Additions due to acquisitions — 19,267 — 19,267 — Ending balance 145,212 145,212 125,945 145,212 125,945 Accumulated amortization: Beginning balance (50,662) (46,596) (34,104) (42,633) (25,387) Amortization (4,538) (4,066) (4,281) (12,567) (12,998) Ending balance (55,200) (50,662) (38,385) (55,200) (38,385) Net intangible assets $ 90,012 $ 94,550 $ 87,560 $ 90,012 $ 87,560 The Company amortizes core deposit intangibles and customer relationship intangibles based on the projected useful lives of the related deposits in the case of core deposit intangibles, and over the projected useful lives of the related client relationships in the case of customer relationship intangibles. The amortization periods typically range from six |
Subordinated Debentures
Subordinated Debentures | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Subordinated Debentures | Subordinated Debentures On June 1, 2020, in connection with the Opus acquisition, the Bank assumed $135.0 million of fixed-to-variable rate subordinated notes due July 1, 2026. The notes bear interest at a fixed rate of 5.5% per year until June 2021. After this date and for the remaining five years of the notes' term, interest will accrue at a variable rate of three-month London Interbank Offering Rate (“LIBOR”) plus 4.285%. The Bank may redeem the subordinated notes, in whole or in part, on or after July 1, 2021. At September 30, 2020, the subordinated notes qualified as Tier 2 capital for the Bank. At September 30, 2020, the carrying value of these subordinated notes was $138.5 million, which reflects purchase accounting fair value adjustments of $3.5 million. In June 2020, the Corporation issued $150.0 million aggregate principal amount of its 5.375% fixed-to-floating rate subordinated notes due 2030 (the “Notes III”) at a public offering price equal to 100% of the aggregate principal amount of the Notes III. The Corporation may redeem the Notes III on or after June 14, 2025. Interest on the Notes III accrue at a rate equal to 5.375% per annum from and including June 15, 2020 to, but excluding, June 15, 2025, payable semiannually in arrears. From and including June 15, 2025 to, but excluding, June 15, 2030 or the earlier redemption date, interest will accrue at a floating rate per annum equal to a benchmark rate, which is expected to be Three-Month Term Secured Overnight Financing Rate (“SOFR”), plus a spread of 517 basis points, payable quarterly in arrears. Principal and interest are due upon early redemption at any time, including prior to June 15, 2025 at our option, in whole but not in part, under the occurrence of special events defined within the trust indenture. At September 30, 2020, the Notes III qualified as Tier 2 capital. At September 30, 2020, the carrying value of the Notes III was $147.4 million, net of unamortized debt issuance cost of $2.2 million. As of September 30, 2020, the Company had five issuances of subordinated notes and two issuances of junior subordinated debt securities, with an aggregate carrying value of $501.4 million and a weighted interest rate of 5.39%, compared with an aggregate carrying value of $215.1 million and a weighted interest rate of 5.37% at December 31, 2019. The following table summarizes our outstanding subordinated debentures as of the dates indicated: September 30, 2020 December 31, 2019 Stated Maturity Current Interest Rate Current Principal Balance Carrying Value (Dollars in thousands) Subordinated notes Subordinated notes due 2024, 5.75% per annum September 3, 2024 5.75 % $ 60,000 $ 59,522 $ 59,432 Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter May 15, 2029 4.875 % 125,000 122,813 122,622 Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter June 15, 2030 5.375 % 150,000 147,435 — Subordinated notes due 2025, 7.125% per annum June 26, 2025 7.125 % 25,000 25,115 25,133 Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter July 1, 2026 5.50 % 135,000 138,492 — Total subordinated notes 495,000 493,377 207,187 Subordinated debt Heritage Oaks Capital Trust II (junior subordinated debt), 3-month LIBOR+1.72% January 1, 2037 2.02 % 5,248 4,105 4,054 Santa Lucia Bancorp (CA) Capital Trust (junior subordinated debt), 3-month LIBOR+1.48% July 7, 2036 1.76 % 5,155 3,961 3,904 Total subordinated debt 10,403 8,066 7,958 Total subordinated debentures $ 505,403 $ 501,443 $ 215,145 In connection with the various issuances of subordinated notes, 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 deposit rating of A- and subordinated debt of BBB+ for the Bank. The Corporation’s and Bank’s ratings were reaffirmed in June 2020 by KBRA following the announcement of the consummated acquisition of Opus. As of September 30, 2020, the Corporation has two unconsolidated Delaware statutory trust subsidiaries, Heritage Oaks Capital Trust II and Santa Lucia Bancorp (CA) Capital Trust. Both are used as business trusts for the purpose of issuing trust preferred securities to third party investors. The junior subordinated debt was issued in connection with the trust preferred securities offerings. 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 the subordinated debentures as a component of the Company’s liabilities, and its ownership interest in the trusts as a component of other assets. For additional information on the Company’s subordinated debentures, see “ Note 13 — Subordinated Debentures ” to the Consolidated Financial Statements of the Company’s 2019 Form 10-K. For regulatory capital purposes, the trust preferred securities are included in Tier 2 capital at September 30, 2020. Provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 require that if a depository institution holding company exceeds $15 billion in total consolidated assets due to an acquisition, then trust preferred securities are to be excluded from Tier 1 capital beginning in the period in which the transaction occurred. During the second quarter of 2020, the Company’s acquisition of Opus resulted in total consolidated assets exceeding $15 billion; accordingly, trust preferred securities are now excluded from the Company’s Tier 1 capital. The Company and the Bank also has subordinated debt that qualifies as Tier 2 capital. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per Share In February 2019, the Compensation Committee of the Corporation’s Board of Directors reviewed the various forms of outstanding equity awards, including restricted stock and restricted 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 Corporation’s earnings per share calculations for the periods indicated: Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 (Dollars in thousands, except per share data) Basic Net income (loss) $ 66,566 $ (99,091) $ 41,375 Less: Dividends and undistributed earnings allocated to participating securities (612) (222) (432) Net income (loss) allocated to common stockholders $ 65,954 $ (99,313) $ 40,943 Weighted average common shares outstanding 93,529,967 70,425,027 59,293,218 Basic earnings (loss) per common share $ 0.71 $ (1.41) $ 0.69 Diluted Net income (loss) allocated to common stockholders $ 65,954 $ (99,313) $ 40,943 Weighted average common shares outstanding 93,529,967 70,425,027 59,293,218 Diluted effect of share-based compensation 189,200 — 377,637 Weighted average diluted common shares 93,719,167 70,425,027 59,670,855 Diluted earnings (loss) per common share $ 0.70 $ (1.41) $ 0.69 Nine Months Ended September 30, 2020 September 30, 2019 (Dollars in thousands, except per share data) Basic Net income (loss) $ (6,785) $ 118,620 Less: Dividends and undistributed earnings allocated to participating securities (564) (1,223) Net income (loss) allocated to common stockholders $ (7,349) $ 117,397 Weighted average common shares outstanding 74,391,688 60,853,081 Basic earnings (loss) per common share $ (0.10) $ 1.93 Diluted Net income (loss) allocated to common stockholders $ (7,349) $ 117,397 Weighted average common shares outstanding 74,391,688 60,853,081 Diluted effect of share-based compensation — 348,777 Weighted average diluted common shares 74,391,688 61,201,858 Diluted earnings (loss) per common share $ (0.10) $ 1.92 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
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. Interest rate swaps – 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 majority of inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. Equity warrant assets – The Company acquired equity warrant assets as a result of acquisition of Opus. Opus received equity warrant assets through its lending activities as part of loan origination fees. The warrants provide the Bank the right to purchase a specific number of equity shares of the underlying company’s equity at a certain price before expiration and contain net settlement terms qualifying as derivatives under ASC Topic 815. The fair value of equity warrant assets is determined using a Black-Scholes option pricing model and are classified as Level 3 with the fair value hierarchy due to the extent of unobservable inputs. The key assumptions used in determining the fair value include the exercise price of the warrants, valuation of the underlying entity's outstanding stock, expected term, risk-free interest rate, marketability discount for private company warrants, and price volatility. 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, 2020 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 $ — $ 32,739 $ — $ 32,739 Agency — 603,045 — 603,045 Corporate — 397,536 — 397,536 Municipal bonds — 1,313,908 — 1,313,908 Collateralized mortgage obligations — 358,280 — 358,280 Mortgage-backed securities — 895,223 — 895,223 Total securities available-for-sale $ — $ 3,600,731 $ — $ 3,600,731 Derivative assets: Interest rate swaps $ — $ 14,697 $ — $ 14,697 Equity warrants — — 1,920 1,920 Total derivative assets $ — $ 14,697 $ 1,920 $ 16,617 Financial liabilities Derivative liabilities $ — $ 14,789 $ — $ 14,789 December 31, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 63,555 $ — $ 63,555 Agency — 246,358 — 246,358 Corporate — 151,353 — 151,353 Municipal bonds — 397,298 — 397,298 Collateralized mortgage obligations — 9,984 — 9,984 Mortgage-backed securities — 499,836 — 499,836 Total securities available-for-sale $ — $ 1,368,384 $ — $ 1,368,384 Derivative assets $ — $ 2,103 $ — $ 2,103 Financial liabilities Derivative liabilities $ — $ 2,103 $ — $ 2,103 The following table is a reconciliation of the fair value of the equity warrants that are classified as Level 3 and measured on a recurring basis as of : September 30, 2020 Three Months Ended Nine Months Ended (Dollars in thousands) Beginning Balance $ 1,952 $ 5,162 Change in fair value (1) (32) (35) Sales — (3,207) Ending balance $ 1,920 $ 1,920 ______________________________ (1) The changes in fair value are included in other income on the consolidated statement of income. The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a recurring basis at September 30, 2020. September 30, 2020 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Equity warrants $ 1,920 Black-Scholes Volatility 30.00% 0.13% 6.00% 35.00% 0.28% 16.00% 31.20% 0.17% 13.48% Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Individually evaluated Loans (impaired loans prior to adoption of ASC 326) – A loan is individually evaluated for expected credit losses when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Individually evaluated loans are measured based on the fair value of the underlying collateral or the discounted expected future cash flows. Collateral generally consists of accounts receivable, inventory, fixed assets, real estate, and cash. 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. Other Real Estate Owned – OREO is initially recorded at the fair value less estimated costs to sell at the date of transfer. This amount becomes the property’s new basis. Any fair value adjustments based on the property’s fair value less estimated costs to sell at the date of acquisition are charged to the allowance for credit losses. The fair value of individually evaluated loans and other real estate owned were determined using Level 3 assumptions, and represents individually evaluated loan and other real estate owned balances for which a specific reserve has been established or on which a write down has been taken. For real estate loans, 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 individually evaluated loans and other real estate owned to determine fair value. In determining the net realizable value of the underlying collateral for individually evaluated loans, the Company will then discount the valuation to cover both market price fluctuations and selling costs, typically ranging from 7% to 10% of the collateral value, that 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. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions and management’s expertise and knowledge of the client and client’s business. At September 30, 2020, the Company’s individually evaluated collateral dependent loans were evaluated based on the fair value of their underlying collateral based upon the most recent appraisals available to management. The Company completed partial charge-offs on certain individually evaluated loans based on recent real estate or property appraisals and released the related reserves during the nine months ended September 30, 2020. The following table presents our assets measured at fair value on a nonrecurring basis at September 30, 2020 and December 31, 2019. September 30, 2020 Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Collateral dependent loans $ — $ — $ 4,749 $ 4,749 December 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Impaired loans $ — $ — $ 2,257 $ 2,257 The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a nonrecurring basis at September 30, 2020 and December 31, 2019. September 30, 2020 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 591 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% SBA secured by real estate (1) 202 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Business loans secured by real estate SBA secured by real estate (2) 230 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Commercial loans Commercial and industrial 22 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Franchise non-real estate secured 2,844 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 9.11% SBA non-real estate secured 860 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 8.19% Total individually evaluated loans 4,749 Total assets $ 4,749 December 31, 2019 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 569 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% SBA secured by real estate (1) 408 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Business loans secured by real estate SBA secured by real estate (2) 140 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 7.81% Commercial loans SBA non-real estate secured 1,140 Fair value of collateral Collateral discount and cost to sell 7.00% 63.00% 15.33% Total individually evaluated loans $ 2,257 ______________________________ (1) SBA loans that are collateralized by hotel/motel real property. (2) SBA loans that are collateralized by real property other than hotel/motel real property. 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, 2020 Carrying Level 1 Level 2 Level 3 Estimated (Dollars in thousands) Assets Cash and cash equivalents $ 1,103,077 $ 1,103,077 $ — $ — $ 1,103,077 Interest-bearing time deposits with financial institutions 2,845 2,845 — — 2,845 Investments held-to-maturity 27,980 — 29,399 — 29,399 Investment securities available-for-sale 3,600,731 — 3,600,731 — 3,600,731 Loans held for sale 1,032 — 1,091 — 1,091 Loans held for investment, net 13,450,840 — — 13,578,530 13,578,530 Derivative assets 16,617 — 14,697 1,920 16,617 Accrued interest receivable 73,112 73,112 — — 73,112 Liabilities Deposit accounts $ 16,330,807 $ 14,612,343 $ 1,724,569 $ — $ 16,336,912 FHLB advances 41,000 — 41,652 — 41,652 Subordinated debentures 501,443 — 515,729 — 515,729 Derivative liabilities 14,789 — 14,789 — 14,789 Accrued interest payable 7,638 7,638 — — 7,638 At December 31, 2019 Carrying Level 1 Level 2 Level 3 Estimated (Dollars in thousands) Assets Cash and cash equivalents $ 326,850 $ 326,850 $ — $ — $ 326,850 Interest-bearing time deposits with financial institutions 2,708 2,708 — — 2,708 Investments held-to-maturity 37,838 — 38,760 — 38,760 Investment securities available-for-sale 1,368,384 — 1,368,384 — 1,368,384 Loans held for sale 1,672 — 1,821 — 1,821 Loans held for investment, net 8,722,311 — — 8,691,019 8,691,019 Derivative assets 2,103 — 2,103 — 2,103 Accrued interest receivable 39,442 39,442 — — 39,442 Liabilities Deposit accounts $ 8,898,509 $ 7,850,667 $ 1,048,583 $ — $ 8,899,250 FHLB advances 517,026 — 517,291 — 517,291 Subordinated debentures 215,145 — 237,001 — 237,001 Derivative liabilities 2,103 — 2,103 — 2,103 Accrued interest payable 2,686 2,686 — — 2,686 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2020 | |
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. At September 30, 2020, the Company had over-the-counter derivative instruments and centrally-cleared derivative instruments with matched terms with an aggregate notional amount of $146.8 million and a fair value of $16.6 million compared with an aggregate notional amount of $76.3 million and a fair value of $2.1 million at December 31, 2019. 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 futures 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. Over-the-counter contracts are tailored to meet the needs of the counterparties involved and, therefore, generally contain a greater degree of credit risk and liquidity risk than centrally-cleared contracts, which have standardized terms. 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 over-the-counter 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, 2020 and 2019, 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, 2020 and December 31, 2019 are free-standing derivatives and are not designated as hedging instruments. The Company’s credit derivatives result from entering into credit risk participation agreements (“RPAs”) with a counterparty bank (Opus) during the first quarter of 2020 to accept a portion of the credit risk on interest rate swaps related to loans. RPAs provide credit protection to the financial institution should the borrower fail to perform on its interest rate swap derivative contract with the financial institution. The credit risk related to these credit derivatives is managed through the Company’s loan underwriting process. RPAs are derivative financial instruments not designated as hedging and are recorded at fair value. Changes in fair value are recognized as a component of noninterest income with a corresponding offset within other assets or other liabilities. As the result of the acquisition of Opus, the RPAs were terminated in the second quarter 2020. The Company acquired equity warrant assets as a result of acquisition of the Opus. Opus received equity warrant assets through its lending activities, which were accounted for as loan origination fees. The warrants provide the Bank the right to purchase a specific number of equity shares of the underlying company’s equity at a certain price before expiration and contain net settlement terms qualifying as derivatives under ASC Topic 815. The Company no longer has loans associated with these borrowers. Changes in fair value are recognized as a component of noninterest income with a corresponding offset within other assets. The total fair value of the warrants held in private companies was $1.9 million in other assets as of September 30, 2020. 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, 2020 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (Dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swaps $ 146,760 $ 14,697 $ 146,760 $ 14,789 Equity warrants — 1,920 — — Total derivative instruments $ 146,760 $ 16,617 $ 146,760 $ 14,789 December 31, 2019 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (Dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swaps $ 76,314 $ 2,103 $ 76,314 $ 2,103 Total derivative instruments $ 76,314 $ 2,103 $ 76,314 $ 2,103 The following table summarizes the effect of the derivative financial instruments in the consolidated statements of income. Three Months Ended Nine Months Ended Derivative Not Designated as Hedging Instruments: Location of Gain Recognized in Income on Derivative Instruments September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollars in thousands) Other contracts Other income $ 218 $ — $ 415 $ — Equity warrants Other income (31) — (35) — Total $ 187 $ — $ 380 $ — |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2020 | |
Offsetting [Abstract] | |
Balance Sheet Offsetting | Balance Sheet Offsetting Derivative financial instruments may be eligible for offset in the consolidated statements of financial condition, 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. The Company elected to account for centrally-cleared derivative contracts on a gross basis. With regard to derivative contracts not centrally cleared through a clearinghouse, regulations require collateral to be posted by the party with a net liability position. Parties to a centrally cleared over-the-counter derivative exchange daily payments that reflect the daily change in value of the derivative. These payments are commonly referred to as variation margin and are treated as settlements of derivative exposure rather than as collateral. Financial instruments that are eligible for offset in the consolidated statements of financial condition as of the periods indicated are presented below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Statements of Financial Condition Net Amounts Presented in the Consolidated Statements of Financial Condition Financial Instruments (1) Cash Collateral (2) Net Amount (Dollars in thousands) September 30, 2020 Derivative assets: Interest rate swaps $ 14,697 $ — $ 14,697 $ — $ — $ 14,697 Total $ 14,697 $ — $ 14,697 $ — $ — $ 14,697 Derivative liabilities: Interest rate swaps $ 14,789 $ — $ 14,789 $ (5,500) $ (8,568) $ 721 Total $ 14,789 $ — $ 14,789 $ (5,500) $ (8,568) $ 721 December 31, 2019 Derivative assets: Interest rate swaps $ 2,103 $ — $ 2,103 $ — $ — $ 2,103 Total $ 2,103 $ — $ 2,103 $ — $ — $ 2,103 Derivative liabilities: Interest rate swaps $ 2,107 $ (4) $ 2,103 $ — $ (1,678) $ 425 Total $ 2,107 $ (4) $ 2,103 $ — $ (1,678) $ 425 (1) Represents the fair value of securities pledged with counterparty bank. (2) Represents cash collateral pledged with counterparty bank. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
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 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. Short-term leases are leases that have a term of 12 months or less at commencement. The Company’s lease expense is recorded in premises and occupancy expense in the consolidated statements of income. The following table presents the components of lease expense for the periods indicated: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollars in thousands) Operating lease $ 5,618 2,879 $ 12,690 $ 8,403 Short-term lease 495 575 1,425 1,893 Total lease expense $ 6,113 $ 3,454 $ 14,115 $ 10,296 The Company assumed operating leases in the acquisition of Opus on June 1, 2020. The liability and related right-of-use asset recorded for the assumption of these leases was approximately $43.3 million and $42.4 million, respectively. Right-of-use assets related to the Opus acquisition reflect unfavorable lease liability adjustments of approximately $900,000. Lease liabilities for leases assumed from Opus were measured based on the net present value of remaining future lease payments, with consideration given for options to extend or renew each lease. Remaining future lease payments were discounted at the Company’s estimated incremental borrowing rate on the date of acquisition. The following table presents supplemental information related to operating leases as of and for nine months ended: September 30, 2020 December 31, 2019 (Dollars in thousands) Balance Sheet: Operating lease right of use assets $ 81,150 $ 43,177 Operating lease liabilities 91,202 46,498 Nine Months Ended September 30, 2020 September 30, 2019 (Dollars in thousands) Cash Flows: Operating cash flows from operating leases $ 10,946 $ 8,786 The following table provides information related to minimum contractual lease payments and other information associated with the Company’s leases as of the dates indicated: 2020 2021 2022 2023 2024 Thereafter Total (Dollars in thousands) As of September 30, 2020 Operating leases $ 5,559 $ 21,839 $ 20,222 $ 18,667 $ 16,138 $ 23,503 $ 105,928 Short-term leases 74 47 — — — — 121 Total contractual base rents (1) $ 5,633 $ 21,886 $ 20,222 $ 18,667 $ 16,138 $ 23,503 $ 106,049 Total liability to make lease payments $ 91,202 Difference in undiscounted and discounted future lease payments $ 14,847 Weighted average discount rate 5.70 % Weighted average remaining lease term (years) 5.4 2020 2021 2022 2023 2024 Thereafter Total (Dollars in thousands) As of December 31, 2019 Operating leases $ 10,138 $ 10,602 $ 10,137 $ 9,055 $ 7,318 $ 7,265 $ 54,515 Short-term leases 143 7 — — — — 150 Total contractual base rents (1) $ 10,281 $ 10,609 $ 10,137 $ 9,055 $ 7,318 $ 7,265 $ 54,665 Total liability to make lease payments $ 46,498 Difference in undiscounted and discounted future lease payments $ 8,167 Weighted average discount rate 6.13 % Weighted average remaining lease term (years) 5.4 ______________________________ (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 and nine months ended September 30, 2020, rental income totaled $265,000 and $356,000, respectively. For the three and nine months ended September 30, 2019, rental income totaled $25,000 and $116,000, respectively. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2020 | |
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. On January 1, 2018, the Company adopted ASU 2014-09, “Revenue from Contracts with Customers (Topic 606)”, and all subsequent amendments that modified ASC 606, which requires revenue to be recognized when the Company satisfies the related performance obligations by transferring to the customer a good or service. 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 Company without penalty, such as a deposit account agreement. 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, 2020 June 30, 2020 September 30, 2019 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (Dollars in thousands) Noninterest income: Loan servicing fees $ — $ 481 $ — $ 434 $ — $ 546 Service charges on deposit accounts 1,593 — 1,399 — 1,440 — Other service fee income 487 — 297 — 360 — Debit card interchange income 944 — 457 — 421 — Earnings on bank-owned life insurance — 2,270 — 1,314 — 861 Net gain from sales of loans — 9,542 — (2,032) — 2,313 Net gain from sales of investment securities — 1,141 — (21) — 4,261 Custodial account fees 6,960 — 2,397 — — — Other income 1,233 2,107 184 2,469 592 636 Total noninterest income $ 11,217 $ 15,541 $ 4,734 $ 2,164 $ 2,813 $ 8,617 ______________________________ (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, 2020 September 30, 2019 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (Dollars in thousands) Noninterest income: Loan servicing fees $ — $ 1,395 $ — $ 1,353 Service charges on deposit accounts 4,707 — 4,211 — Other service fee income 1,095 — 1,079 — Debit card interchange income 1,749 — 2,637 — Earnings on bank-owned life insurance — 4,920 — 2,622 Net gain from sales of loans — 8,281 — 4,944 Net gain from sales of investment securities — 8,880 — 4,900 Custodial account fees 9,357 — — — Other income 1,634 6,113 1,328 2,361 Total noninterest income $ 18,542 $ 29,589 $ 9,255 $ 16,180 ______________________________ (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 major revenue streams by fee type that are within the scope of ASC 606 presented in the above tables are described in additional detail below: 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. Custodial Account Fees Custodial account fees is a revenue stream acquired in the Opus acquisition and is governed by contracts executed with Pacific Premier Trust clients to perform maintenance and custodial services over their alternative IRA investments. Fees are billed and collected on a quarterly basis and recognized commensurate with completion of the performance obligations required under the contracts. Other Income Other noninterest income includes 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. Also included in other income are escrow and exchange fees from the Commerce Escrow division acquired in the Opus acquisition, which are related to agreements with customers participating in escrow transactions. Transactions under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”) generate exchange fees as well as escrow fees. These fees relate to services that include preparation of closing statements and custody of escrow funds. The fees are received from the sale proceeds of a relinquished property and are recognized as revenue upon closing of the escrow transaction, which is the final performance obligation. These fees totaled approximately $1.1 million during the third quarter of 2020 and $1.4 million for the nine months ended 2020. Other revenue streams that may be applicable to the Company include gains and losses from the sale of nonfinancial 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 nonfinancial 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, 2020, 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. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities The Company is involved with VIEs through its loan securitization activities, affordable housing investments that qualify for the low-income housing tax credit (“LIHTC”), and trust subsidiaries, which have issued trust preferred securities. The Company has determined that its interests in these entities meet the definition of variable interests. As of September 30, 2020 and December 31, 2019, the Company determined it was not the primary beneficiary of the VIEs and did not consolidate its interests in VIEs. The following table provides a summary of the carrying amount of assets and liabilities in the Company’s consolidated balance sheet and maximum loss exposures as of September 30, 2020 and December 31, 2019 that relate to variable interests in non-consolidated VIEs. September 30, 2020 December 31, 2019 Maximum Loss Assets Liabilities Maximum Loss Assets Liabilities (Dollars in thousands) Multifamily loan securitization: Investment securities (1) $ 114,460 $ 114,460 $ — $ — $ — $ — Reimbursement obligation (2) 50,901 — 540 — — — Affordable housing partnership: Other investments (3) 76,057 95,292 — 32,466 53,880 — Unfunded equity commitments (2) — — 19,235 — — 21,414 Total $ 241,418 $ 209,752 $ 19,775 $ 32,466 $ 53,880 $ 21,414 ______________________________ (1) Included in investment securities available-for-sale on the consolidated statement of financial condition. (2) Included in accrued expenses and other liabilities on the consolidated statement of financial condition. (3) Included in other assets on the consolidated statement of financial condition. . Multifamily loan securitization With respect to the securitization transaction with Freddie Mac discussed in Note 6 - Loans Held for Investment , the Company’s variable interests reside with the purchase of the underlying Freddie Mac-issued guaranteed, structured pass-through certificates that were held as investment securities available-for-sale at fair value as of September 30, 2020. Additionally, the Company has variable interests through a reimbursement agreement executed by Freddie Mac that obligates the Company to reimburse Freddie Mac for any defaulted contractual principal and interest payments identified after the ultimate resolution of the defaulted loans. Such reimbursement obligations are not to exceed 10% of the original principal amount of the loans comprising the securitization pool. As part of the securitization transaction, the Company released all servicing obligations and rights to Freddie Mac who was designated as the Master Servicer. In its capacity as Master Servicer, Freddie Mac can terminate the Company’s role as sub-servicer and direct such responsibilities accordingly. In evaluating our variable interests and continuing involvement in the VIE, we determined that we do not have the power to make significant decisions or direct the activities that most significantly impact the economic performance of the VIE’s assets and liabilities. As sub-servicer of the loans, the Company does not have the authority to make significant decisions that influence the value of the VIE’s net assets and, therefore, the Company is not the primary beneficiary of the VIE. As a result, we determined that the VIE associated with the multifamily securitization should not be included in the consolidated financial statements of the Company. We believe that our maximum exposure to loss as a result of our involvement with the VIE associated with the securitization is the carrying value of the investment securities issued by Freddie Mac and purchased by the Company. Additionally, our maximum exposure to loss under the reimbursement agreement executed with Freddie Mac is 10% of the original principal amount of the loans comprising the securitization pool, or $50.9 million. Based upon our analysis of quantitative and qualitative data over the underlying loans included in the securitization pool, as of September 30, 2020, our reserve for estimated losses with respect to the reimbursement obligation was $540,000. Qualified affordable housing project investments The Company has variable interests through its affordable housing partnership investments. These investments are fundamentally designed to provide a return through the generation of income tax credits. The Company has evaluated its involvement with the low-income housing projects and determined it does not have significant influence or decision making capabilities to manage the projects, and therefore, is not the primary beneficiary, and does not consolidate these interests. The Company’s maximum exposure to loss, exclusive of any potential realization of tax credits, is equal to the commitments invested, adjusted for amortization. The amount of unfunded commitments was included in the investments recognized as assets with a corresponding liability. The table above summarizes the amount of tax credit investments held as assets, the amount of unfunded commitments held as liabilities, and the maximum exposure to loss as of September 30, 2020 and December 31, 2019, respectively. Trust preferred securities The Company accounts for its investments in its wholly owned special purpose entities, Heritage Oaks Capital Trust II and Santa Lucia Bancorp (CA) Capital Trust, acquired through bank acquisitions, under the equity method whereby the subsidiary’s net earnings are recognized in the Company’s consolidated statement of income and the investment in these entities is included in other assets in the Company’s consolidated statements of financial condition. The Corporation is not allowed to consolidate the capital trusts as they have been formed for the sole purpose of issuing trust preferred securities, from which the proceeds were invested in the Company’s junior subordinated debt securities and reflected in our consolidated statements of financial condition as subordinated debentures with the corresponding interest distributions reflected as interest expense in the consolidated statements of income. The capital securities are subject to mandatory redemption, in whole or in part, upon repayment of the subordinated debt. The Company has entered into agreements which, taken collectively, fully and unconditionally guarantee the capital securities subject to the terms of each of the guarantees. The capital securities held by the capital trust qualify as Tier 2 capital. See Note 9 - Subordinated Debentures for additional information. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Quarterly Cash Dividend On October 23, 2020, the Corporation’s Board of Directors declared a cash dividend of $0.28 per share, payable on November 13, 2020 to shareholders of record on November 6, 2020. Branch Consolidations |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | 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. |
Basis of Financial Statement Presentation | 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 nine months ended September 30, 2020 are not necessarily indicative of the results that may be expected for any other interim period or the full year ending December 31, 2020. 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, 2019 (the “2019 Form 10-K”). |
Variable Interest Entities | We consolidate voting entities in which we have control through voting interests or entities through which we have a controlling financial interest in a variable interest entity (“VIE”). The Company evaluates its interests in these entities to determine whether they meet the definition of a VIE and whether the Company is required to consolidate these entities. A VIE is consolidated by its primary beneficiary, which is the party that has both (i) the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) a variable interest that could potentially be significant to the VIE. To determine whether or not a variable interest the Company holds could potentially be significant to the VIE, the Company considers both qualitative and quantitative factors regarding the nature, size and form of the Company's involvement with the VIE.The Company is involved with VIEs through its loan securitization activities, affordable housing investments that qualify for the low-income housing tax credit (“LIHTC”), and trust subsidiaries, which have issued trust preferred securities. The Company has determined that its interests in these entities meet the definition of variable interests. |
Recently Issued Accounting Pronouncements | Accounting Standards Adopted in 2020 In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU” or “Update”) 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. The provisions of this Update became effective for the Company for all annual and interim periods beginning January 1, 2020. 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. The amendments in this Update became effective for all interim and annual reporting periods for the Company on January 1, 2020. The Company adopted the provisions within this Update in conjunction with the implementation of Accounting Standard Codification (“ASC”) 326, Financial Instruments - Credit Losses , as discussed below, including: (i) the election to not measure credit losses on accrued interest receivable when such balances are written-off in a timely manner when deemed uncollectable and (ii) the election to not include the balance of accrued interest receivable as part of the amortized cost of a loan, but rather to present it separately in the consolidated statements of financial position. 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 was January 1, 2020. The fair value option is not applicable to held-to-maturity debt securities. Entities are required to make this election on an instrument-by-instrument basis. The Company did not elect the fair value option for any of its financial assets upon the adoption of ASC 326 on January 1, 2020. The Company has developed an expected credit loss estimation model in accordance with ASC 326. The Company implemented the model through a cross-functional effort steered by a CECL Committee, related sub-committees and working groups. These committees, sub-committees and working groups, collectively, were primarily comprised of senior management and staff members from our finance, credit, lending, internal audit, risk management, and IT functional areas. Depending on the nature of each identified pool of financial assets with similar risk characteristics, the Company employs the use of a probability of default (“PD”) and loss given default (“LGD”) discounted cash flow methodology for commercial real estate and commercial loans, and a loss-rate methodology for retail loans, in order to estimate expected future credit losses. The Company’s model incorporates reasonable and supportable economic forecasts into the estimate of expected credit losses, which requires significant judgment. Management leverages economic projections from a reputable and independent third party to inform its reasonable and supportable economic forecasts. Effective January 1, 2020, the Company adopted the provisions of ASC 326 and recorded a net decrease of $45.6 million to the beginning balance of retained earnings as of January 1, 2020 for the cumulative effect adjustment, reflecting an initial adjustment to the allowance for credit losses (“ACL”) of $64.0 million, net of related deferred tax assets arising from temporary differences of $18.3 million, commonly referred to as the “Day 1” adjustment. The Day 1 adjustment to the ACL is reflective of expected lifetime credit losses associated with the composition of financial assets within the scope of ASC 326 as of January 1, 2020, which is comprised of loans held for investment and off-balance sheet credit exposures at January 1, 2020, as well as management’s current expectation of future economic conditions. Management did not have any qualitative adjustments as of January 1, 2020. The Day 1 adjustment was comprised of $55.7 million for loans held for investment and $8.3 million for off-balance sheet commitments for a total of $64.0 million . The Day 1 adjustment to the ACL for loans held for investment consists of $16.1 million for investor loans secured by real estate, $27.6 million for business real estate secured loans, $9.5 million for commercial loans, and $2.5 million for retail loans. The majority of the Day 1 increase in the ACL for loans held for investment is attributable primarily to the life of loan loss impact and addition of an allowance on acquired loans based on the methodology discussed above and secondarily to the incorporation of reasonable and supportable economic forecasts into the estimate of expected future credit losses 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. Please also see Note 3 - Significant Accounting Policies , for a discussion on the Company’s accounting policy for the ACL, Note 6 - Loans Held for Investment and Note 7 - Allowance for Credit Losses , for additional information on the Company’s ACL, as well as other related disclosures. The Company’s assessment of held-to-maturity and available-for-sale investment securities as of January 1, 2020 indicated that an ACL was not required. The Company determined the likelihood of default on held-to-maturity investment securities was remote, and the amount of expected non-repayment on those investments was zero. The Company also analyzed available-for-sale investment securities that were in an unrealized loss position as of January 1, 2020 and determined the decline in fair value for those securities was not related to credit, but rather related to changes in interest rates and general market conditions. As such, no ACL was recorded for held-to-maturity and available-for-sale securities as of January 1, 2020. In accordance with ASC 326-10-65, upon the adoption of ASC 326, the Company did not reassess purchased loans with credit deterioration (previously classified as purchased credit impaired (“PCI”) loans under ASC 310-30), as there were no such loans on January 1, 2020. Additionally, there were no investment securities with previously recorded other-than-temporary impairment as of January 1, 2020. As previously mentioned, in conjunction with the adoption of ASC 326, the Company made an accounting policy election not to measure an ACL on accrued interest receivables in accordance with ASC 326-20-30-5A. When accrued interest receivable is deemed to be uncollectable, the Company promptly reverses such balances through current period interest income in the period deemed uncollectable. Additionally, the Company has also elected not to include the balance of accrued interest receivable in the amortized cost basis of financial assets within the scope of ASC 326. Accrued interest receivable will continue to be presented separately in the consolidated financial statements. 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 1 adverse regulatory capital effects of ASU 2016-13. Additionally, in March 2020, the U.S. federal bank regulatory agencies issued an interim final rule that provides banking organizations an option to delay the estimated CECL impact on regulatory capital for an additional two years for a total transition period of up to five years to provide regulatory relief to banking organizations to better focus on supporting lending to creditworthy households and businesses in light of recent strains on the U.S. economy as a result of the COVID-19 pandemic. The final rule was adopted and became effective in September 2020. As a result, entities have the option to gradually phase in the full effect of CECL on regulatory capital over a five-year transition period. The Company implemented its CECL model commencing January 1, 2020 and elected to phase in the full effect of CECL on regulatory capital over the five-year transition period. The following table illustrates the impact of the adoption of the CECL model under ASC 326 on the Company’s consolidated statements of financial position as of January 1, 2020: January 1, 2020 Pre-CECL Adoption Impact of CECL Adoption As Reported Under CECL (Dollars in thousands) Assets: Allowance for credit losses on debt securities: Held-to-maturity $ — $ — $ — Available-for-sale — — — Allowance for credit losses on loans: Investor loans secured by real estate 9,027 16,072 25,099 Business loans secured by real estate 5,492 27,572 33,064 Commercial loans 20,118 9,519 29,637 Retail loans 1,061 2,523 3,584 Deferred tax (liabilities) assets (1,371) 18,346 16,975 Liabilities: Allowance for credit losses on off-balance sheet credit exposures $ 3,279 $ 8,285 $ 11,564 Stockholders' equity: Retained earnings $ 396,051 $ (45,625) $ 350,426 In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)—Facilitation of the Effects of Reference Rate Reform on Financial Reporting . In response to concerns about structural risks of interbank offered rates (“IBORs”), and, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”), regulators around the world have undertaken reference rate reform initiatives to identify alternative reference rates that are more observable or transaction-based and less susceptible to manipulation. The amendments in this Update provide optional guidance for a limited time to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting as well as optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in this Update apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022. The amendments in this Update are elective and became effective upon issuance for all entities. An entity may elect to apply the amendments for contract modifications by Topic or Industry Subtopic as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. Once elected for a Topic or an Industry Subtopic, the amendments in this Update must be applied prospectively for all eligible contract modifications for that Topic or Industry Subtopic. The Company has not yet made a determination on whether it will make this election and is currently tracking the exposure as of each reporting period and assessing the significance of impact towards implementing any necessary modification in consideration of the election of this amendment. An entity may elect to apply the amendments in this Update to eligible hedging relationships existing as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company does not currently engage in hedging related transactions, and as such, the amendments included in this Update have not had an impact 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 became effective for the Company beginning on January 1, 2020. This ASU did not have a material effect on the Company’s financial statements. 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: • 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. • 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. • 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 became effective for the Company beginning on January 1, 2020. This ASU did not have a material effect on the Company’s financial statements. Recent Accounting Guidance Not Yet Effective In October 2020, the FASB issued ASU 2020-08, Codification Improvements to Subtopic 310-20, Receivables - Nonrefundable Fees and Other Costs . The amendments included in this Update are intended to clarify that an entity should reevaluate whether a callable debt security is within the scope of paragraph 310-20-35-33 for each reporting period. The guidance in paragraph 310-20-35-33 relates to amortization of premiums on individual callable debt securities and the period over which the premium shall be amortized in relation to the date the security is callable. For public business entities, the amendments in this Update are effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020. The Company is evaluating the impact of this Update on its financial statements. The adoption of this accounting guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In August 2020, the FASB issued ASU 2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The FASB issued this Update to address complexities associated with the accounting for certain financial instruments that possess characteristics of liabilities and equity, and to amend guidance for the derivatives scope exception for contracts in an entity’s own equity in an effort to reduce disparate accounting results for certain economically similar contracts. With respect to convertible instruments, this Update eliminates certain accounting models with the intent to simplify the accounting for convertible instruments and reduce the complexity for preparers and users of an entity’s financial statements. Convertible instruments primarily affected by this Update are those issued with beneficial conversion features or cash conversion features, because the accounting models for those specific features are removed. For contracts in an entity’s own equity, the type of contracts primarily affected by this Update are freestanding and embedded features that are accounted for as derivatives under the current guidance due to a failure to meet the settlement conditions of the derivative scope exception. This Update simplifies the related settlement assessment by removing the requirements to (i) consider whether the contract would be settled in registered shares, (ii) consider whether collateral is required to be posted, and (iii) assess shareholder rights. This Update also makes targeted improvements to the disclosures for convertible instruments and earnings per share guidance. Entities may adopt the provisions of this Update using either the modified retrospective method or a fully retrospective method. Under the modified retrospective method, entities are required to apply the guidance to transactions outstanding as of the beginning of the fiscal year in which the amendments in this Update are adopted. Any cumulative effect of the change should be recognized as an adjustment to the opening balance of retained earnings in the year of adoption for entities applying the modified retrospective method. The amendments in this Update are effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company is evaluating the impact of this Update on its financial statements. The adoption of this accounting guidance is not expected to have a material impact on the Company’s Consolidated Financial Statements. In January 2020, the FASB issued ASU 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815. |
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, custodial account 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 Other Intangible Assets | Goodwill and Other Intangible Assets. 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 a policy to test goodwill for impairment annually in the fourth quarter of each year, or more frequently if events or circumstances lead management to believe the value of goodwill may be impaired. Impairment testing is performed at the reporting unit level, which is considered the Company level as management has identified the Company is its sole reporting unit as of the date of the consolidated balance sheets. Management’s assessment of goodwill first consists of a qualitative assessment to determine if it is more likely than not the fair value of the Company’s equity is below its carrying value. Should the results of this analysis indicate it is likely the fair value of the Company’s equity is below its carrying value, the Company performs a quantitative assessment of goodwill to determine the fair value of the reporting unit and compares it to its carrying value. If the fair value of the reporting unit is below its carrying value, the Company would then compare the implied fair value of the reporting unit goodwill to its carrying value to determine the amount of impairment to recognize. Impairment losses are recorded as a charge to noninterest expense. 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. |
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, 2020, 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. |
Securities/Securities Held-to-Maturity/Securities Available-for-Sale | Securities. The Company has established written guidelines and objectives for its investing activities. At the time of purchase, management designates the security as either held to maturity, available-for-sale or held for trading based on the Company’s investment objectives, operational needs, and intent. The investments are monitored to ensure that those activities are consistent with the established guidelines and objectives. Securities Held-to-Maturity. Investments in debt securities that management has the positive intent and ability to hold to maturity are reported at cost and adjusted for periodic principal payments and the amortization of premiums and accretion of discounts, which are recognized in interest income using the interest method over the period of time remaining to investment’s maturity. Securities Available-for-Sale. Investments in debt securities that management has no immediate plan to sell, but which may be sold in the future, are carried at fair value. Premiums and discounts are amortized using the interest method over the remaining period to the call date for premiums or contractual maturity for discounts and, in the case of mortgage-backed securities, the estimated average life, which can fluctuate based on the anticipated prepayments on the underlying collateral of the securities. Unrealized holding gains and losses, net of tax, are recorded in a separate component of stockholders’ equity as accumulated other comprehensive income. Realized gains and losses on the sales of securities are determined on the specific identification method, recorded on a trade date basis based on the amortized cost basis of the specific security and are included in noninterest income as net gain (loss) on investment securities. |
Allowance for Credit Losses on Investment Securities | Allowance for Credit Losses on Investment Securities. The ACL on investment securities is determined for both the held-to-maturity and available-for-sale classifications of the investment portfolio in accordance with ASC 326. For available-for-sale investment securities, the Company performs a quarterly qualitative evaluation for securities in an unrealized loss position to determine if, for those investments in an unrealized loss position, the decline in fair value is credit related or non-credit related. In determining whether a security’s decline in fair value is credit related, the Company considers a number of factors including, but not limited to: (i) the extent to which the fair value of the investment is less than its amortized cost; (ii) the financial condition and near-term prospects of the issuer; (iii) downgrades in credit ratings; (iv) payment structure of the security, (v) the ability of the issuer of the security to make scheduled principal and interest payments, and (vi) general market conditions which reflect prospects for the economy as a whole, including interest rates and sector credit spreads. If it is determined that the unrealized loss can be attributed to credit loss, the Company records the amount of credit loss through a charge to provision for credit losses in current period earnings. However, the amount of credit loss recorded in current period earnings is limited to the amount of the total unrealized loss on the security, which is measured as the amount by which the security’s fair value is below its amortized cost. If it is likely the Company will be required to sell the security in an unrealized loss position, the total amount of the loss is recognized in current period earnings. Unrealized losses deemed non-credit related are recorded, net of tax, through accumulated other comprehensive income. The Company determines expected credit losses on available-for-sale and held-to-maturity securities through a discounted cash flow approach, using the security’s effective interest rate. However, as previously mentioned, the measurement of credit losses on available-for-sale securities only occurs when, through the Company’s qualitative assessment, it is determined all or a portion of the unrealized loss is deemed to be credit related. The Company’s discounted cash flow approach incorporates assumptions about the collectability of future cash flows. The amount of credit loss is measured as the amount by which the security’s amortized cost exceeds the present value of expected future cash flows. Credit losses on available-for-sale securities are measured on an individual basis, while credit losses on held-to-maturity securities are measured on a collective basis according to shared risk characteristics. Credit losses on held-to-maturity securities are only recognized at the individual security level when the Company determines a security no longer possesses risk characteristics similar to others in the portfolio. The Company does not measure credit losses on an investment’s accrued interest receivable, but rather promptly reverses from current period earnings the amount of accrued interest that is no longer deemed collectable. Accrued interest receivable for investment securities is included in accrued interest receivable balances in the consolidated statements of financial condition. |
Loans Held for Investment/Investor Loans Secured by Real Estate/Acquired Loans | Loans Held for Investment. Loans held for investment are loans the Company has the ability and intent to hold until their maturity. These loans are carried at amortized cost, including discounts and premiums on purchased and acquired loans, and net deferred loan origination fees and costs. Purchase discounts and premiums and net deferred loan origination fees and costs on loans are accreted or amortized as an adjustment of yield, using the interest method, over the expected lives of the loans. Income recognition of deferred loan fees and costs is discontinued for loans placed on nonaccrual. Any remaining discounts, premiums, deferred fees or costs, and prepayment fees associated with loans payoffs prior to contractual maturity are included in loan interest income in the period of payoff. Loan commitment fees received to originate or purchase a loan are deferred and, if the commitment is exercised, recognized over the life of the loan using the interest method as an adjustment of yield or, if the commitment expires unexercised, recognized as income upon expiration of the commitment. The Company accrues interest on loans using the interest method and only if deemed collectible. Loans for which the accrual of interest has been discontinued are designated as nonaccrual loans. The accrual of interest on loans is discontinued when principal or interest is past due 90 days or more based on contractual terms of the loan or when, in the opinion of management, there is reasonable doubt as to collection of principal and or interest. When loans are placed on nonaccrual status, previously accrued and uncollected interest is promptly reversed against current period interest income, and as such an ACL for accrued interest receivable is not established. Interest income generally is not recognized on nonaccrual loans unless the likelihood of further loss is remote. Interest payments received on nonaccrual loans are applied as a reduction to the loan principal balance. Interest accruals are resumed on such loans only when they are brought current with respect to interest and principal and when, in the judgment of management, the loans are estimated to be fully collectible as to all principal and interest. Investor Loans Secured by Real Estate: • Commercial real estate non-owner-occupied - Commercial real estate (“CRE”) non-owner-occupied includes loans for which the Company holds real property as collateral, but where the borrower does not occupy the underlying property. The primary risks associated with these loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, significant increases in interest rates, which may make the real e state loan unprofitable to the borrower, changes in market rents, and vacancy of the underlying property. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. • Multifamily - Multifamily loans are secured by multi-tenant (5 or more units) residential real properties. Payments on multifamily loans are dependent on the successful operation or management of the properties, and repayment of these loans may be subject to adverse conditions in the real estate market or the economy. • Construction and land - We originate loans for the construction of one-to-four family and multifamily residences and CRE properties in our primary market area. We concentrate our efforts on single homes and small infill projects in established neighborhoods where there is not abundant land available for development. Construction loans are considered to have higher risks due to construction completion and timing risk, and the ultimate repayment being sensitive to interest rate changes, government regulation of real property, and the availability of long-term financing. Additionally, economic conditions may impact the Company’s ability to recover its investment in construction loans, as adverse economic conditions may negatively impact the real estate market, which could affect the borrower’s ability to complete and sell the project. Additionally, the fair value of the underlying collateral may fluctuate as market conditions change. We occasionally originate land loans located predominantly in California for the purpose of facilitating the ultimate construction of a home or commercial building. The primary risks include the borrower’s inability to pay and the inability of the Company to recover its investment due to a decline in the fair value of the underlying collateral. Business Loans Secured by Real Estate: • Commercial real estate owner-occupied - CRE owner-occupied includes loans for which the Company holds real property as collateral and where the underlying property is occupied by the borrower, such as with a place of business. These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. The primary risks associated with CRE owner-occupied loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral, and significant increases in interest rates, which may make the real estate loan unprofitable to the borrower. Real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. • Franchise secured by real estate - Franchise real estate secured loans are business loans secured by real property occupied by franchised restaurants, generally quick-service restaurants . These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. • Small Business Administration (“SBA”) - We are approved to originate loans under the SBA’s Preferred Lenders Program (“PLP”). The PLP lending status affords us a higher level of delegated credit autonomy, translating to a significantly shorter turnaround time from application to funding, which is critical to our marketing efforts. We originate loans nationwide under the SBA’s 7(a), SBA Express, International Trade and 504(a) loan programs, in conformity with SBA underwriting and documentation standards. SBA loans are similar to commercial business loans, but have additional credit enhancement provided by the U.S. Small Business Administration, for up to 85% of the loan amount for loans up to $150,000 and 75% of the loan amount for loans of more than $150,000. The Company originates SBA loans with the intent to sell the guaranteed portion into the secondary market on a quarterly basis. Certain loans classified as SBA are secured by commercial real estate property. SBA loans secured by hotels are included in the segment investor loans secured by real estate, and SBA loans secured by all other forms of real estate are included in the business loans secured by real estate segment. All other SBA loans are included in the commercial loans segment below, and are secured by business assets. Commercial Loans: • Commercial and industrial (including franchise commercial loans) (“C&I”) - Loans secured by business assets including inventory, receivables, and machinery and equipment to businesses located generally in our primary market area. Loan types includes revolving lines or credit, term loans, seasonal loans, and loans secured by liquid collateral such as cash deposits or marketable securities. Franchise credit facilities not secured by real estate and Home Owners’ Association (“HOA”) credit facilities are included in C&I loans. We also issue letters of credit on behalf of our customers. Risk arises primarily due to the difference between expected and actual cash flows of the borrowers. In addition, the recoverability of the Company’s investment in these loans is also dependent on other factors primarily dictated by the type of collateral securing these loans. The fair value of the collateral securing these loans may fluctua te as market conditions change. In the case of loans secured by accounts receivable, the recovery of the Company’s investment is dependent upon the borrower’s ability to collect amounts due from its customers. • SBA Paycheck Protection Program (“PPP”) loans - Federally guaranteed loans designed to assist small and medium sized businesses through the disruptions in business brought on by the COVID-19 pandemic. The Paycheck Protection Program is part of the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act that was signed into law in March 2020. The loans are designed to help businesses meet the on-going costs associated with running and maintaining a business through the COVID-19 pandemic and provide the potential for forgiveness of the loan if the borrower uses the funds for certain purposes, such as maintaining employees on payroll for a specified period of time. Additionally, the PPP allows for a deferral period until the date when the amount of loan forgiveness is determined and remitted to the lender. For borrowers who do not apply for forgiveness, the loan deferral period is 10 months after the applicable forgiveness period ends. In July 2020, the Company sold its entire SBA PPP loan portfolio with an aggregate amortized cost of $1.13 billion to a seasoned and experienced non-bank lender and servicer of SBA loans, resulting in improved balance sheet liquidity and a gain on sale of approximately of $18.9 million, net of net deferred origination fees and purchase discounts. As of September 30, 2020, the Company had no SBA PPP loans. Retail Loans: • One-to-four family - Although we do not originate, we have acquired first lien single family loans through bank acquisitions. The primary risks of one-to-four family loans include the borrower’s inability to pay, material decreases in the value of the real estate that is being held as collateral and significant increases in interest rates, which may make loans unprofitable to the borrower. • Consumer loans - In addition to consumer loans acquired through our various bank acquisitions, we originate a limited number of consumer loans, generally for banking clients only, which consist primarily of home equity lines of credit, savings account secured loans and auto loans. Repayment of these loans is dependent on the borrower’s ability to pay and the fair value of the underlying collateral. Acquired Loans. Loans acquired through a purchase or a business combination are recorded at their fair value at the acquisition date. The Company performs an assessment of acquired loans to first determine if such loans have experienced more than insignificant deterioration in credit quality since their origination and thus should be classified and accounted for as purchased credit deteriorated (“PCD”) loans. For loans that have not experienced more than insignificant deterioration in credit quality since origination, referred to as non-PCD loans, the Company records such loans at fair value, with any resulting discount or premium accreted or amortized into interest income over the remaining life of the loan using the interest method. Additionally, upon the purchase or acquisition of non-PCD loans, the Company measures and records an ACL based on the Company’s methodology for determining the ACL. The ACL for non-PCD loans is recorded through a charge to the provision for credit losses in the period in which the loans were purchased or acquired. Acquired loans that are classified as PCD are acquired at fair value, which includes any resulting discounts or premiums. Discounts and premiums are accreted or amortized into interest income over the remaining life of the loan using the interest method. Unlike non-PCD loans, the initial ACL for PCD loans is established through an adjustment to the acquired loan balance and not through a charge to the provision for credit losses in the period in which the loans were acquired. The ACL for PCD loans is determined with the use of the Company’s ACL methodology. Characteristics of PCD loans include: delinquency, downgrade in credit quality since origination, loans on nonaccrual status, and/or other factors the Company may become aware of through its initial analysis of acquired loans that may indicate there has been more than insignificant deterioration in credit quality since a loan’s origination. In connection with the Opus acquisition on June 1, 2020, the Company acquired PCD loans with an aggregate fair value of approximately $841.2 million, and recorded an ACL of approximately $21.2 million, which was added to the amortized cost of the loans. Subsequent to acquisition, the ACL for both non-PCD and PCD loans are determined with the use of the Company’s ACL methodology in the same manner as all other loans. |
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans. The Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to record an estimate of expected lifetime credit losses for loans at the time of origination or acquisition. The ACL is maintained at a level deemed appropriate by management to provide for expected credit losses in the portfolio as of the date of the consolidated statements of financial condition. Estimating expected credit losses requires management to use relevant forward-looking information, including the use of reasonable and supportable forecasts. The measurement of the ACL is performed by collectively evaluating loans with similar risk characteristics. The Company measures the ACL on commercial real estate loans and commercial loans using a discounted cash flow approach, and a historical loss rate methodology is used to determine the ACL on retail loans. The Company’s discounted cash flow methodology incorporates a probability of default and loss given default model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the probability of default and loss given default model with the use of reasonable and supportable forecasts generate estimates for cash flows expected to be collected over the estimated life of a loan. Estimates of future expected cash flows ultimately reflect assumptions made concerning net credit losses over the life of a loan. The use of reasonable and supportable forecasts requires significant judgment, such as selecting forecast scenarios and related scenario-weighting, as well as determining the appropriate length of the forecast horizon. Management leverages economic projections from a reputable and independent third party to inform and provide 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 Company’s ACL model reverts to long-term average loss rates for purposes of estimating expected cash flows beyond a period deemed reasonable and supportable. The Company forecasts economic conditions and expected credit losses over a two-year time horizon before reverting to long-term average loss rates. The duration of the forecast horizon, the period over which forecasts revert to long-term averages, 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 loan portfolio. Changes in economic forecasts, in conjunction with changes in loan specific attributes, impact a loan’s probability of default and loss given default, which can drive changes in the determination of the ACL. Expectations of future cash flows are discounted at the loan’s effective interest rate. The resulting ACL represents the amount by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows. The ACL is recorded through a charge to provision for credit losses and is reduced by charge-offs, net of recoveries on loans previously charged-off. It is the Company’s policy to charge-off loan balances at the time they have been deemed uncollectable. Please also see Note 7 - Allowance for Credit Losses , of these consolidated financial statements for additional discussion concerning the Company’s ACL methodology. The Company’s ACL model also includes adjustments for qualitative factors, where appropriate. Since historical information (such as historical net losses and economic cycles) may not always, by itself, provide a sufficient basis for determining future expected credit losses, the Company periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not limited to factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of model data inputs used to determine the ACL. The Company has a credit portfolio review process designed to detect problem loans. Problem loans are typically those of a substandard or worse internal risk grade, and may consist of loans on nonaccrual status, troubled debt restructurings (“TDRs”), loans where the likelihood of foreclosure on underlying collateral has increased, collateral dependent loans and other loans where concern or doubt over the ultimate collectability of all contractual amounts due has become elevated. Such loans may, in the opinion of management, be deemed to no longer possess risk characteristics similar to other loans in the loan portfolio, and as such may require individual evaluation to determine an appropriate ACL for the loan. When a loan is individually evaluated, the Company typically measures the expected credit loss for the loan based on a discounted cash flow approach, unless the loan has been deemed collateral dependent. Collateral dependent loans are loans where the repayment of the loan is expected to come from the operation of and/or eventual liquidation of the underlying collateral. The ACL for collateral dependent loans is determined using estimates for the fair value of the underlying collateral, less costs to sell. Although management uses the best information available to derive estimates necessary to measure an appropriate level of ACL, future adjustments to the ACL may be necessary due to economic, operating, regulatory, and other conditions that may extend beyond the Company’s control. Various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL and credit review process. Such agencies may require the Company to recognize additions to the allowance based on judgments different from those of management. |
Troubled Debt Restructurings | Troubled Debt Restructurings (“TDRs”). From time-to-time, the Company makes modifications to certain loans when a borrower is experiencing financial difficulty. These modifications are made to alleviate temporary impairments in the borrower’s financial condition and/or constraints on the borrower’s ability to repay the loan, and to minimize potential losses to the Company. Modifications typically include: changes in the amortization terms of the loan, reductions in interest rates, acceptance of interest only payments, and, in limited cases, reductions to the outstanding loan balance. Such loans are typically placed on nonaccrual status and are returned to accrual status when all contractual amounts past due have been brought current, the loan has performed under the modified terms of the loan agreement for a period of at least six months, and the ultimate collectability of all contractual amounts due under the modified terms of the loan agreement is no longer in doubt. The Company typically measures the ACL for TDRs on an individual basis when the loans are deemed to no longer share similar risk characteristics with other loans in the portfolio. The determination of the ACL for TDRs is based on a discounted cash flow approach for both those measured collectively and individually, unless the loan is deemed collateral dependent, which requires measurement of the ACL based on the fair value of the collateral less cost to sell. The CARES Act, signed into law on March 27, 2020, permits financial institutions to suspend requirements under GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDRs and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. The Company has elected to apply this guidance to qualifying loan modifications. For such modifications, in the form of payment deferrals, the delinquency status will not advance and loans that were accruing at the time that the relief is provided will generally not be placed on nonaccrual status during the deferral period. Interest income will continue to be recognized over the contractual life of the loan. However, the Company, through its credit portfolio management activities, has continued to monitor facts and circumstances associated with the underlying credit quality of loans modified under the provisions of the CARES Act |
Other Real Estate Owned (“OREO”) | Other Real Estate Owned (“OREO”). Real estate properties acquired through, or in lieu of, loan foreclosure are recorded at fair value, less cost to sell, with any excess of the loan’s amortized cost balance over the fair value of the property recorded as a charge against the ACL. The Company obtains an appraisal and/or market valuation on all other real estate owned at the time of possession. After foreclosure, valuations are periodically performed by management. Any subsequent declines in fair value are recorded as a charge to non-interest expense in current period earnings with a corresponding write-down to the asset. All legal fees and direct costs, including foreclosure and other related costs, are expensed as incurred. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. |
Fair Value Measurement | 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. Interest rate swaps – 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 majority of inputs used in deriving the fair value of these derivative contracts, the valuation of interest rate swaps is classified as Level 2. Equity warrant assets – The Company acquired equity warrant assets as a result of acquisition of Opus. Opus received equity warrant assets through its lending activities as part of loan origination fees. The warrants provide the Bank the right to purchase a specific number of equity shares of the underlying company’s equity at a certain price before expiration and contain net settlement terms qualifying as derivatives under ASC Topic 815. The fair value of equity warrant assets is determined using a Black-Scholes option pricing model and are classified as Level 3 with the fair value hierarchy due to the extent of unobservable inputs. The key assumptions used in determining the fair value include the exercise price of the warrants, valuation of the underlying entity's outstanding stock, expected term, risk-free interest rate, marketability discount for private company warrants, and price volatility. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Individually evaluated Loans (impaired loans prior to adoption of ASC 326) – A loan is individually evaluated for expected credit losses when it is probable that payment of interest and principal will not be made in accordance with the contractual terms of the loan agreement. Individually evaluated loans are measured based on the fair value of the underlying collateral or the discounted expected future cash flows. Collateral generally consists of accounts receivable, inventory, fixed assets, real estate, and cash. 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. Other Real Estate Owned – OREO is initially recorded at the fair value less estimated costs to sell at the date of transfer. This amount becomes the property’s new basis. Any fair value adjustments based on the property’s fair value less estimated costs to sell at the date of acquisition are charged to the allowance for credit losses. The fair value of individually evaluated loans and other real estate owned were determined using Level 3 assumptions, and represents individually evaluated loan and other real estate owned balances for which a specific reserve has been established or on which a write down has been taken. For real estate loans, 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 individually evaluated loans and other real estate owned to determine fair value. In determining the net realizable value of the underlying collateral for individually evaluated loans, the Company will then discount the valuation to cover both market price fluctuations and selling costs, typically ranging from 7% to 10% of the collateral value, that 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. For non-real estate loans, fair value of the loan’s collateral may be determined using an appraisal, net book value per the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions and management’s expertise and knowledge of the client and client’s business. |
Recently Issued Accounting Pr_2
Recently Issued Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Schedule of Impact of Adoption | The following table illustrates the impact of the adoption of the CECL model under ASC 326 on the Company’s consolidated statements of financial position as of January 1, 2020: January 1, 2020 Pre-CECL Adoption Impact of CECL Adoption As Reported Under CECL (Dollars in thousands) Assets: Allowance for credit losses on debt securities: Held-to-maturity $ — $ — $ — Available-for-sale — — — Allowance for credit losses on loans: Investor loans secured by real estate 9,027 16,072 25,099 Business loans secured by real estate 5,492 27,572 33,064 Commercial loans 20,118 9,519 29,637 Retail loans 1,061 2,523 3,584 Deferred tax (liabilities) assets (1,371) 18,346 16,975 Liabilities: Allowance for credit losses on off-balance sheet credit exposures $ 3,279 $ 8,285 $ 11,564 Stockholders' equity: Retained earnings $ 396,051 $ (45,625) $ 350,426 |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Summary of total transaction consideration value | The value of the total transaction consideration paid amounted to approximately $749.6 million. The Opus warrants assumed by the Corporation expired unexercised as of September 30, 2020 and no longer remain outstanding. The Opus options assumed by the Corporation have been fully exercised as of September 30, 2020. May 29, 2020 Merger consideration (Dollars in thousands) Value of stock consideration paid to shareholders $ 747,458 Cash paid in lieu of fractional shares 2 Value of restricted stock awards 328 Value of options and warrants (1) 1,817 Total merger consideration $ 749,605 ______________________________ (1) The Opus warrants assumed by the Corporation expired unexercised as of September 30, 2020 and no longer remain outstanding. The Opus options assumed by the Corporation have been fully exercised as of September 30, 2020. |
Schedule of assets acquired and liabilities assumed | The following table summarizes the estimated fair value of assets acquired and liabilities assumed of Opus as of June 1, 2020 under the acquisition method of accounting: Identifiable net assets acquired, at fair value June 1, 2020 (Dollars in thousands) Assets acquired Cash and cash equivalents $ 937,102 Interest bearing time deposits with financial institutions 137 Investment securities 829,891 Loans 5,809,451 Allowance for credit losses (21,242) Premises and equipment 22,121 Intangible assets 19,267 Deferred tax assets 48,312 Other assets 367,130 Total assets acquired $ 8,012,169 Liabilities assumed Deposits $ 6,915,990 FHLB advances and other borrowings 213,491 Subordinated debt 138,653 Other liabilities 84,542 Total liabilities assumed 7,352,676 Total fair value of identifiable net assets 659,493 Total merger consideration 749,605 Goodwill recognized $ 90,112 |
Summary of pro forma financial information | The following table presents certain unaudited pro forma financial information for illustrative purposes only, for the three and nine months ended September 30, 2020 and 2019 as if Opus had been acquired on January 1, 2019. This unaudited pro forma information combines the historical results of Opus with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value, cost savings, or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented and the differences could be significant. Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollar in thousands, except per share data) Net interest and other income $ 193,304 $ 197,866 $ 577,779 $ 579,353 Net income (loss) 66,566 70,835 (78,570) 181,087 Basic earnings (loss) per share 0.71 0.79 (0.84) 1.97 Diluted earnings (loss) per share 0.70 0.78 (0.84) 1.94 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 Amortized Gross Unrealized Gross Unrealized Estimated (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 30,161 $ 2,578 $ — $ 32,739 Agency 577,627 26,109 (691) 603,045 Corporate 397,670 2,035 (2,169) 397,536 Municipal bonds 1,305,389 23,581 (15,062) 1,313,908 Collateralized mortgage obligations 357,615 1,130 (465) 358,280 Mortgage-backed securities 868,298 27,121 (196) 895,223 Total investment securities available-for-sale 3,536,760 82,554 (18,583) 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities 26,357 1,419 — 27,776 Other 1,623 — — 1,623 Total investment securities held-to-maturity 27,980 1,419 — 29,399 Total investment securities $ 3,564,740 $ 83,973 $ (18,583) $ 3,630,130 December 31, 2019 Amortized Gross Unrealized Gross Unrealized Estimated (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ 60,457 $ 3,137 $ (39) $ 63,555 Agency 240,348 7,686 (1,676) 246,358 Corporate 149,150 2,217 (14) 151,353 Municipal bonds 384,032 13,450 (184) 397,298 Collateralized mortgage obligations 9,869 123 (8) 9,984 Mortgage-backed securities 494,404 7,603 (2,171) 499,836 Total investment securities available-for-sale 1,338,260 34,216 (4,092) 1,368,384 Investment securities held-to-maturity: Mortgage-backed securities 36,114 922 — 37,036 Other 1,724 — — 1,724 Total investment securities held-to-maturity 37,838 922 — 38,760 Total investment securities $ 1,376,098 $ 35,138 $ (4,092) $ 1,407,144 |
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, 2020 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: U.S. Treasury — $ — $ — — $ — $ — — $ — $ — Agency 3 57,720 (370) 9 11,179 (321) 12 68,899 (691) Corporate 17 145,419 (2,169) — — — 17 145,419 (2,169) Municipal bonds 141 776,203 (15,062) — — — 141 776,203 (15,062) Collateralized mortgage obligations 11 129,496 (463) 1 476 (2) 12 129,972 (465) Mortgage-backed securities. 8 98,253 (196) — — — 8 98,253 (196) Total investment securities available-for-sale 180 $ 1,207,091 $ (18,260) 10 $ 11,655 $ (323) 190 $ 1,218,746 $ (18,583) December 31, 2019 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: U.S. Treasury 1 $ 10,194 $ (39) — $ — $ — 1 $ 10,194 $ (39) Agency 13 102,874 (1,340) 9 13,514 (336) 22 116,388 (1,676) Corporate 1 1,017 (14) — — — 1 1,017 (14) Municipal bonds 12 30,541 (184) — — — 12 30,541 (184) Collateralized mortgage obligations — — — 1 603 (8) 1 603 (8) Mortgage-backed securities 18 130,014 (1,681) 11 26,886 (490) 29 156,900 (2,171) Total investment securities available-for-sale 45 $ 274,640 $ (3,258) 21 $ 41,003 $ (834) 66 $ 315,643 $ (4,092) |
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, 2020, by contractual maturity are shown in the table below. Due in One Year Due after One Year Due after Five Years Due after Total Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury $ — $ — $ 30,161 $ 32,739 $ — $ — $ — $ — $ 30,161 $ 32,739 Agency 1,000 1,006 266,255 272,144 234,070 247,806 76,302 82,089 577,627 603,045 Corporate 159,949 160,420 26,391 26,363 156,824 156,934 54,506 53,819 397,670 397,536 Municipal bonds 9,921 10,263 1,458 1,586 36,895 39,849 1,257,115 1,262,210 1,305,389 1,313,908 Collateralized mortgage obligations — — 3,620 3,622 135,863 136,445 218,132 218,213 357,615 358,280 Mortgage-backed securities — — 2,190 2,335 197,517 212,743 668,591 680,145 868,298 895,223 Total investment securities available-for-sale 170,870 171,689 330,075 338,789 761,169 793,777 2,274,646 2,296,476 3,536,760 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities — — — — — — 26,357 27,776 26,357 27,776 Other — — — — — — 1,623 1,623 1,623 1,623 Total investment securities held-to-maturity — — — — — — 27,980 29,399 27,980 29,399 Total investment securities $ 170,870 $ 171,689 $ 330,075 $ 338,789 $ 761,169 $ 793,777 $ 2,302,626 $ 2,325,875 $ 3,564,740 $ 3,630,130 |
Schedule of Investment Securities by External Credit Rating | The following table summarizes the Company’s investment securities portfolio by Moody’s external rating equivalent and by vintage as of September 30, 2020: Vintage 2020 2019 2018 2017 2016 Prior Total (Dollars in thousands) Investment securities available-for-sale: U.S. Treasury Aaa - Aa3 $ — $ — $ 22,006 $ 10,733 $ — $ — $ 32,739 Agency Aaa - Aa3 284,262 44,884 159,319 9,869 21,246 83,465 603,045 Corporate debt A1 - A3 59,797 19,922 — — 119,221 9,256 208,196 Baa1 - Baa3 80,417 41,866 5,074 18,029 8,801 35,153 189,340 Municipal bonds Aaa - Aa3 904,523 284,555 32,497 50,942 15,238 25,296 1,313,051 A1 - A3 — — — — — 857 857 Collateralized mortgage obligations Aaa - Aa3 119,689 86,130 14,500 3,975 114,460 19,526 358,280 Mortgage-backed securities Aaa - Aa3 305,534 182,206 43,802 187,996 85,510 90,175 895,223 Total investment securities available-for-sale 1,754,222 659,563 277,198 281,544 364,476 263,728 3,600,731 Investment securities held-to-maturity: Mortgage-backed securities Aaa - Aa3 — — 7,291 6,908 4,613 7,545 26,357 Other Baa1 - Baa3 — — 628 — — 995 1,623 Total investment securities held-to-maturity — — 7,919 6,908 4,613 8,540 27,980 Total investment securities $ 1,754,222 $ 659,563 $ 285,117 $ 288,452 $ 369,089 $ 272,268 $ 3,628,711 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of components of loans held for investment | The following table presents the composition of the loan portfolio for the period indicated: September 30, December 31, 2020 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,707,930 $ 2,070,141 Multifamily 5,142,069 1,575,726 Construction and land 337,872 438,786 SBA secured by real estate 57,610 68,431 Total investor loans secured by real estate 8,245,481 4,153,084 Business loans secured by real estate CRE owner-occupied 2,119,788 1,846,554 Franchise real estate secured 359,329 353,240 SBA secured by real estate 84,126 88,381 Total business loans secured by real estate 2,563,243 2,288,175 Commercial loans Commercial and industrial 1,820,995 1,393,270 Franchise non-real estate secured 515,980 564,357 SBA non-real estate secured 16,748 17,426 Total commercial loans 2,353,723 1,975,053 Retail loans Single family residential 243,359 255,024 Consumer 45,034 50,975 Total retail loans 288,393 305,999 Gross loans held for investment (1) 13,450,840 8,722,311 Allowance for credit losses for loans held for investment (2) (282,503) (35,698) Loans held for investment, net $ 13,168,337 $ 8,686,613 Loans held for sale, at lower of cost or fair value $ 1,032 $ 1,672 ______________________________ (1) Includes unaccreted fair value net purchase discounts of $126.3 million and $40.7 million as of September 30, 2020 and December 31, 2019, respectively. (2) The allowance for credit losses as of December 31, 2019 was the allowance for loan and lease losses (“ALLL”) accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The allowance for credit losses at September 30, 2020 is accounted for under ASC 326, which is reflective of estimated expected lifetime credit losses. |
Summary of loan portfolio by the Company's internal risk grading system | The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of September 30, 2020: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied Pass $ 190,701 $ 566,855 $ 475,363 $ 314,190 $ 290,179 $ 852,044 $ 11,031 $ — $ 2,700,363 Special mention — — 1,839 435 — 1,816 — — 4,090 Substandard — — 202 — 517 2,199 559 — 3,477 Multifamily Pass 638,349 1,735,235 964,740 750,548 412,893 639,171 574 — 5,141,510 Substandard — — — 559 — — — — 559 Construction and land Pass 25,240 145,709 104,702 33,023 19,932 7,997 374 — 336,977 Substandard — — 895 — — — — — 895 SBA secured by real estate Pass 494 10,412 11,058 14,842 6,712 9,037 — — 52,555 Substandard — 163 2,117 698 399 1,678 — — 5,055 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied Pass $ 210,662 $ 412,186 $ 358,157 $ 346,906 $ 235,040 $ 505,999 $ 4,593 $ — $ 2,073,543 Special mention — 15,827 — 10,268 4,186 2,008 — — 32,289 Substandard — — 3,636 725 2,666 6,679 250 — 13,956 Franchise real estate secured Pass 20,507 87,749 74,459 102,756 31,512 42,346 — — 359,329 SBA secured by real estate Pass 2,643 7,658 14,054 17,110 9,643 26,768 95 — 77,971 Substandard — — 22 1,994 914 3,225 — — 6,155 Total loans secured by business real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial Pass $ 98,656 $ 339,144 $ 183,259 $ 232,648 $ 71,414 $ 94,220 $ 682,523 $ 6,311 $ 1,708,175 Special mention — 43 17,231 15,810 1,398 — 7,886 — 42,368 Substandard — 4,902 22,763 1,111 1,265 4,393 34,271 1,747 70,452 Franchise non-real estate secured Pass 20,205 201,621 117,113 53,160 47,290 43,239 1,361 511 484,500 Substandard — 2,050 957 28,473 — — — — 31,480 SBA non-real estate secured Pass 355 2,299 1,700 2,254 623 3,881 — 268 11,380 Special mention — — — 1,661 — — — — 1,661 Substandard — 85 369 820 275 1,424 734 — 3,707 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 Retail Loans Single family residential Pass $ 4,469 $ 8,385 $ 14,972 $ 14,884 $ 35,074 $ 133,137 $ 31,452 — $ 242,373 Special mention — — — — — 57 — — 57 Substandard — — — — — 929 — — 929 Consumer loans Pass 63 142 60 38,037 12 3,255 3,422 — 44,991 Substandard — — — — — 43 — — 43 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 Totals gross loans $ 1,212,344 $ 3,540,465 $ 2,369,668 $ 1,982,912 $ 1,171,944 $ 2,385,545 $ 779,125 $ 8,837 $ 13,450,840 The following tables stratify the loan portfolio by the Company’s internal risk grading as of December 31, 2019: Credit Risk Grades Pass Special Substandard Total Gross December 31, 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,067,875 $ 1,178 $ 1,088 $ 2,070,141 Multifamily 1,575,510 — 216 1,575,726 Construction and land 438,769 — 17 438,786 SBA secured by real estate 65,835 973 1,623 68,431 Total investor loans secured by real estate 4,147,989 2,151 2,944 4,153,084 Business loans secured by real estate CRE owner-occupied 1,831,853 11,167 3,534 1,846,554 Franchise real estate secured 352,319 921 — 353,240 SBA secured by real estate 83,106 1,842 3,433 88,381 Total business loans secured by real estate 2,267,278 13,930 6,967 2,288,175 Commercial loans Commercial and industrial 1,359,662 13,226 20,382 1,393,270 Franchise non-real estate secured 546,594 6,930 10,833 564,357 SBA not secured by real estate 13,933 485 3,008 17,426 Total commercial loans 1,920,189 20,641 34,223 1,975,053 Retail loans Single family residential 254,463 — 561 255,024 Consumer loans 50,921 — 54 50,975 Total retail loans 305,384 — 615 305,999 Total gross loans $ 8,640,840 $ 36,722 $ 44,749 $ 8,722,311 The following table presents PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the date indicated. Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 0% - 5.00% $ 188,404 $ 543,940 $ 374,636 $ 265,887 $ 266,967 $ 792,295 $ 10,788 $ — $ 2,442,917 >5.00% - 10.00% — 7,015 102,566 10,874 17,282 25,791 243 — 163,771 Greater than 10% 2,297 15,900 202 37,864 6,447 37,973 559 — 101,242 Multifamily 0% - 5.00% 630,900 1,709,927 935,659 723,886 399,890 618,503 574 — 5,019,339 >5.00% - 10.00% 4,251 11,286 14,944 14,708 2,836 2,102 — — 50,127 Greater than 10% 3,198 14,022 14,137 12,513 10,167 18,566 — — 72,603 Construction and Land 0% - 5.00% 24,862 56,858 12,550 22,362 — 6,448 — — 123,080 >5.00% - 10.00% — 36,289 10,750 466 — — — — 47,505 Greater than 10% 378 52,562 82,297 10,195 19,932 1,549 374 — 167,287 SBA secured by real estate 0% - 5.00% 494 10,412 12,584 15,540 7,111 10,204 — — 56,345 >5.00% - 10.00% — — — — — — — — — Greater than 10% — 163 591 — — 511 — — 1,265 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied 0% - 5.00% $ 202,228 $ 368,034 $ 299,843 $ 296,647 $ 197,043 $ 426,513 $ 520 $ — $ 1,790,828 >5.00% - 10.00% 8,434 37,617 58,314 53,967 39,056 78,666 3,826 — 279,880 Greater than 10% — 22,362 3,636 7,285 5,793 9,507 497 — 49,080 Franchise real estate secured 0% - 5.00% 19,753 85,363 73,100 102,756 31,512 42,346 — — 354,830 >5.00% - 10.00% 754 — 631 — — — — — 1,385 Greater than 10% — 2,386 728 — — — — — 3,114 SBA secured by real estate 0% - 5.00% 2,643 7,658 13,375 15,993 6,150 22,077 95 — 67,991 >5.00% - 10.00% — — 679 1,117 3,493 4,679 — — 9,968 Greater than 10% — — 22 1,994 914 3,237 — — 6,167 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial 0% - 5.00% $ 90,745 $ 289,250 $ 141,811 $ 206,524 $ 49,843 $ 76,628 $ 343,482 $ 4,024 $ 1,202,307 >5.00% - 10.00% 7,911 48,778 39,716 19,950 18,894 14,807 302,843 2,037 454,936 Greater than 10% — 6,061 41,726 23,095 5,340 7,178 78,355 1,997 163,752 Franchise non-real estate secured 0% - 5.00% 14,547 193,899 112,760 48,916 45,265 40,753 1,361 511 458,012 >5.00% - 10.00% 5,658 7,722 4,353 4,245 2,025 2,486 — — 26,489 Greater than 10% — 2,050 957 28,472 — — — — 31,479 SBA not secured by real estate 0% - 5.00% 355 2,299 1,392 1,460 499 2,571 — 268 8,844 >5.00% - 10.00% — — 308 796 124 1,285 — — 2,513 Greater than 10% — 85 369 2,479 275 1,449 734 — 5,391 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 55% and below $ 100,859 $ 238,182 $ 190,263 $ 156,791 $ 192,044 $ 602,788 $ 11,031 — $ 1,491,958 >55-65% 71,824 220,089 110,830 136,117 84,644 217,812 559 — 841,875 >65-75% 18,018 105,825 171,532 18,946 13,796 30,887 — — 359,004 Greater than 75% — 2,759 4,779 2,771 212 4,572 — — 15,093 Multifamily 55% and below 147,694 347,848 303,801 252,662 90,318 294,211 574 — 1,437,108 >55-65% 233,564 742,570 406,271 234,044 169,033 242,603 — — 2,028,085 >65-75% 257,091 628,393 244,007 262,512 153,542 96,542 — — 1,642,087 Greater than 75% — 16,424 10,661 1,889 — 5,815 — — 34,789 Construction and land 55% and below 24,116 129,160 66,830 26,261 19,932 7,997 374 — 274,670 >55-65% 1,124 13,254 23,699 6,762 — — — — 44,839 >65-75% — 3,295 15,068 — — — — — 18,363 Greater than 75% — — — — — — — — — SBA secured by real estate 55% and below — 2,070 653 673 330 785 — — 4,511 >55-65% — 2,433 1,643 4,017 621 4,482 — — 13,196 >65-75% — 3,905 5,075 4,185 4,795 1,897 — — 19,857 Greater than 75% 494 2,167 5,804 6,665 1,365 3,551 — — 20,046 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loan secured by real estate CRE owner-occupied 55% and below $ 56,954 $ 156,880 $ 171,740 $ 203,875 $ 133,740 $ 357,734 $ 4,843 — $ 1,085,766 >55-65% 56,139 93,895 97,245 94,359 73,389 80,933 — — 495,960 >65-75% 55,932 155,872 80,898 46,241 32,547 50,458 — — 421,948 Greater than 75% 41,637 21,366 11,910 13,424 2,216 25,561 — — 116,114 Franchise real estate secured 55% and below 7,462 13,322 14,407 21,162 11,592 20,549 — — 88,494 >55-65% — 9,981 15,893 23,658 7,784 5,862 — — 63,178 >65-75% 3,972 53,584 21,750 9,768 11,017 14,697 — — 114,788 Greater than 75% 9,073 10,862 22,409 48,168 1,119 1,238 — — 92,869 SBA secured by real estate 55% and below 1,355 1,633 5,376 5,683 3,175 15,281 95 — 32,598 >55-65% 104 513 1,802 1,719 3,706 5,665 — — 13,509 >65-75% 264 3,148 751 4,193 2,340 5,401 — — 16,097 Greater than 75% 920 2,364 6,147 7,509 1,336 3,646 — — 21,922 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 The following table presents FICO bands for the retail segment of the loan portfolio as of the date indicated: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Retail Loans Single family residential Greater than 740 $ 4,469 $ 7,198 $ 12,719 $ 9,658 $ 29,291 $ 91,460 $ 22,566 — $ 177,361 >680 - 740 — 1,187 2,253 4,763 2,641 28,625 7,919 — 47,388 >580 - 680 — — — 463 3,142 11,113 932 — 15,650 Less than 580 — — — — — 2,925 35 — 2,960 Consumer loans Greater than 740 63 85 54 46 10 2,648 1,670 — 4,576 >680 - 740 — 40 6 37,991 — 480 1,665 — 40,182 >580 - 680 — 17 — — 2 144 59 — 222 Less than 580 — — — — — 26 28 — 54 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 |
Schedule of delinquencies in the Company's loan portfolio | The following tables stratify loans held by investment by delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due Current 30-59 60-89 90+ Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,707,169 $ — $ — $ 761 $ 2,707,930 Multifamily 5,142,069 — — — 5,142,069 Construction and land 336,977 — — 895 337,872 SBA secured by real estate 56,346 673 — 591 57,610 Total investor loans secured by real estate 8,242,561 673 — 2,247 8,245,481 Business loans secured by real estate CRE owner-occupied 2,114,484 — 250 5,054 2,119,788 Franchise real estate secured 359,329 — — — 359,329 SBA secured by real estate 83,116 — — 1,010 84,126 Total business loans secured by real estate 2,556,929 — 250 6,064 2,563,243 Commercial loans Commercial and industrial 1,810,027 5,717 836 4,415 1,820,995 Franchise non-real estate secured 508,237 — — 7,743 515,980 SBA not secured by real estate 15,691 320 — 737 16,748 Total commercial loans 2,333,955 6,037 836 12,895 2,353,723 Retail loans Single family residential 242,985 374 — — 243,359 Consumer loans 45,034 — — — 45,034 Total retail loans 288,019 374 — — 288,393 Totals $ 13,421,464 $ 7,084 $ 1,086 $ 21,206 $ 13,450,840 Days Past Due Current 30-59 60-89 90+ Total Gross Loans December 31, 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,067,874 $ 1,179 $ — $ 1,088 $ 2,070,141 Multifamily 1,575,726 — — — 1,575,726 Construction and land 438,786 — — — 438,786 SBA secured by real estate 68,041 — — 390 68,431 Total investor loans secured by real estate 4,150,427 1,179 — 1,478 4,153,084 Business loans secured by real estate CRE owner-occupied 1,846,223 331 — — 1,846,554 Franchise real estate secured 353,240 — — — 353,240 SBA secured by real estate 86,946 — 589 846 88,381 Total business loans secured by real estate 2,286,409 331 589 846 2,288,175 Commercial loans Commercial and industrial 1,389,026 422 826 2,996 1,393,270 Franchise non-real estate secured 555,215 — 9,142 — 564,357 SBA not secured by real estate 16,141 167 — 1,118 17,426 Total commercial loans 1,960,382 589 9,968 4,114 1,975,053 Retail loans Single family residential 255,024 — — — 255,024 Consumer loans 50,967 5 2 1 50,975 Total retail loans 305,991 5 2 1 305,999 Totals loans $ 8,703,209 $ 2,104 $ 10,559 $ 6,439 $ 8,722,311 |
Summary of 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) December 31, 2019 Investor loans secured by real estate CRE non-owner-occupied $ 1,184 $ 1,088 $ — $ 1,088 $ — SBA secured by real estate 772 390 — 390 — Business loans secured by real estate SBA secured by real estate 1,743 1,517 — 1,517 — Commercial loans Commercial and industrial 7,755 7,529 — 7,529 — Franchise non-real estate secured 10,835 10,834 — 10,834 — SBA non-real estate secured 1,555 1,118 — 1,118 — Retail loans Single family residential 412 366 — 366 — Totals $ 24,256 $ 22,842 $ — $ 22,842 $ — The following table presents information on impaired loans and leases, disaggregated by loan segment, for the periods indicated: Impaired Loans September 30, 2019 Three Months Ended Nine Months Ended Average Recorded Investment Interest Income Recognized (1) Average Recorded Investment Interest Income Recognized (1) (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 421 $ — $ 194 $ — Construction and land 320 — 160 — SBA secured by real estate 406 — 1,196 — Business loans secured by real estate CRE owner-occupied 845 — 662 — Franchise real estate secured — — 2,516 — SBA secured by real estate 969 — 692 — Commercial loans Commercial and industrial 10,170 104 9,925 303 Franchise non-real estate secured 679 — 385 — SBA non-real estate secured 1,113 — 1,081 — Retail loans Single family residential 373 — 383 — Consumer loans — — 25 — Totals $ 15,296 $ 104 $ 17,219 $ 303 ______________________________ (1) Interest income recognized represents interest on accruing loans. |
Schedule of acquired loans classified as PCD | The following table reconciles the par value, or initial amortized cost, of PCD loans acquired in the Opus acquisition as of the date of the acquisition with the purchase price (or initial fair value of the loans): June 1, 2020 Investor Loans Secured by Real Estate Business Loans Secured by Real Estate Commercial Loans Retail Loans Total (Dollars in thousands) Par value (unpaid principal balance) $ 704,441 $ 105,578 $ 80,184 $ 6,280 $ 896,483 Allowance for credit losses (1) (13,786) (4,083) (25,635) (381) (43,885) (Discount) premium related to factors other than credit (8,696) (2,512) 138 (294) (11,364) Purchase price (initial fair value) $ 681,959 $ 98,983 $ 54,687 $ 5,605 $ 841,234 ______________________________ (1) The initial gross ACL determined for PCD loans was $43.9 million as of the acquisition date. Of this amount, approximately $22.7 million relates to net uncollectable balances such as loans that were fully or partially charged off prior to acquisition. Therefore, the net impact to the ACL related to PCD loans was an increase of $21.2 million. |
Summary of nonaccrual loans | The following tables provide a summary of nonaccrual loans as of the date indicated: Nonaccrual Loans (1) Collateral Dependent Loans ACL Non-Collateral Dependent Loans ACL Total Nonaccrual Loans (2) Nonaccrual Loans with No ACL September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,838 $ — $ — $ — $ 2,838 $ 2,838 Construction and land 895 — — — 895 895 SBA secured by real estate 1,264 — — — 1,264 1,264 Total investor loans secured by real estate 4,997 — — — 4,997 4,997 Business loans secured by real estate CRE owner-occupied 6,105 — — — 6,105 6,105 SBA secured by real estate 1,084 — — — 1,084 1,084 Total business loans secured by real estate 7,189 — — — 7,189 7,189 Commercial loans Commercial and industrial 4,309 557 1,790 266 6,099 2,809 Franchise non-real estate secured — — 7,742 1,165 7,742 — SBA non-real estate secured 737 — — — 737 737 Total commercial loans 5,046 557 9,532 1,431 14,578 3,546 Retail loans Single family residential 450 — — — 450 450 Total retail loans 450 — — — 450 450 Totals nonaccrual loans $ 17,682 $ 557 $ 9,532 $ 1,431 $ 27,214 $ 16,182 ______________________________ (1) The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent. The ACL for collateral dependent loans is determined based on the estimated fair value of the underlying collateral. (2) No interest income was recognized on nonaccrual loans during the three and nine months ended September 30, 2020. |
Schedule of collateral dependent loans by collateral type | The following table summarizes collateral dependent loans by collateral type as of September 30, 2020: September 30, 2020 Office Properties Industrial Properties Retail Properties Land Properties Hotel Properties Residential Properties Business Assets Total (Dollars in thousands) Investor loan secured by real estate CRE non-owner-occupied $ — $ — $ 2,636 $ — $ 202 $ — $ — $ 2,838 Construction and land — — — — — 895 — 895 SBA secured by real estate — — — — 1,264 — — 1,264 Total investor loans secured by real estate — — 2,636 — 1,466 895 — 4,997 Business loans secured by real estate CRE owner-occupied — 801 — 5,304 — — — 6,105 SBA secured by real estate 304 758 — — — 22 — 1,084 Total business loans secured by real estate 304 1,559 — 5,304 — 22 — 7,189 Commercial loans Commercial and industrial — — — — — — 4,309 4,309 SBA non-real estate secured — — — — — — 737 737 Total commercial loans — — — — — — 5,046 5,046 Retail loans Single family residential — — — — — 450 — 450 Total retail loans — — — — — 450 — 450 Totals collateral dependent loans $ 304 $ 1,559 $ 2,636 $ 5,304 $ 1,466 $ 1,367 $ 5,046 $ 17,682 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Provision for Loan and Lease Losses [Abstract] | |
Summary of allocation of the allowance for loan losses | The following table provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of, and for the period indicated: Three Months Ended September 30, 2020 Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 63,007 $ (443) $ — $ (8,459) $ 54,105 Multifamily 63,511 — — 3,825 67,336 Construction and land 18,804 (377) — (2,870) 15,557 SBA secured by real estate 2,010 (145) 34 3,428 5,327 Business loans secured by real estate CRE owner-occupied 48,213 (1,739) 21 2,171 48,666 Franchise real estate secured 13,060 — — (1,072) 11,988 SBA secured by real estate 4,368 — 76 1,716 6,160 Commercial loans Commercial and industrial 41,967 (2,437) 10 8,374 47,914 Franchise non-real estate secured 21,676 (207) 865 (2,185) 20,149 SBA non-real estate secured 600 (10) 8 353 951 Retail loans Single family residential 1,479 — 2 (238) 1,243 Consumer loans 3,576 (129) 1 (341) 3,107 Totals $ 282,271 $ (5,487) $ 1,017 $ 4,702 $ 282,503 Nine Months Ended September 30, 2020 Beginning ACL Balance (1) Adoption of ASC 326 Initial ACL Recorded for PCD Loans Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 1,899 $ 8,423 $ 3,025 $ (830) $ — $ 41,588 $ 54,105 Multifamily 729 9,174 8,710 — — 48,723 67,336 Construction and land 4,484 (124) 2,051 (377) — 9,523 15,557 SBA secured by real estate 1,915 (1,401) — (699) 34 5,478 5,327 Business loans secured by real estate CRE owner-occupied 2,781 20,166 3,766 (1,739) 44 23,648 48,666 Franchise real estate secured 592 5,199 — — — 6,197 11,988 SBA secured by real estate 2,119 2,207 235 (315) 147 1,767 6,160 Commercial loans Commercial and industrial 13,857 87 2,325 (5,213) 37 36,821 47,914 Franchise non-real estate secured 5,816 9,214 — (1,434) 865 5,688 20,149 SBA non-real estate secured 445 218 924 (803) 13 154 951 Retail loans Single family residential 655 541 206 (62) 3 (100) 1,243 Consumer loans 406 1,982 — (137) 2 854 3,107 Totals $ 35,698 $ 55,686 $ 21,242 $ (11,609) $ 1,145 $ 180,341 $ 282,503 ______________________________ (1) Beginning ACL balance represents the ALLL accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The following table provides the allocation of the ALLL for loans held for investment as well as the activity attributed to various segments in the loan portfolio as of, and for the period indicated, as determined in accordance with ASC 450 and ASC 310, prior to the adoption of ASC 326: For the Three Months Ended September 30, 2019 Beginning ALLL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,765 $ (86) $ — $ 199 $ 1,878 Multifamily 705 — — 10 715 Construction and land 5,408 — — (617) 4,791 SBA secured by real estate 1,322 — — 468 1,790 Business loans secured by real estate CRE owner-occupied 2,299 — 8 257 2,564 Franchise real estate secured 579 — — (12) 567 SBA secured by real estate 1,611 (61) 21 539 2,110 Commercial loans Commercial and industrial 13,796 (290) 54 (664) 12,896 Franchise non-real estate secured 6,186 (995) — 975 6,166 SBA non-real estate secured 430 (82) 41 92 481 Retail loans Single family residential 704 — 1 (14) 691 Consumer loans 221 (11) 9 132 351 Totals $ 35,026 $ (1,525) $ 134 $ 1,365 $ 35,000 For the Nine Months Ended September 30, 2019 Beginning ALLL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,624 $ (574) $ — $ 828 $ 1,878 Multifamily 740 — — (25) 715 Construction and land 5,964 — — (1,173) 4,791 SBA secured by real estate 1,827 (721) — 684 1,790 Business loans secured by real estate CRE owner-occupied 1,908 — 31 625 2,564 Franchise real estate secured 743 (1,376) — 1,200 567 SBA secured by real estate 1,824 (315) 21 580 2,110 Commercial loans Commercial and industrial 13,695 (985) 168 18 12,896 Franchise non-real estate secured 6,066 (1,155) — 1,255 6,166 SBA non-real estate secured 654 (326) 45 108 481 Retail loans Single family residential 808 — 2 (119) 691 Consumer loans 219 (16) 10 138 351 Totals $ 36,072 $ (5,468) $ 277 $ 4,119 $ 35,000 The following table presents loans individually and collectively evaluated for impairment and their respective ALLL allocation at December 31, 2019 as determined in accordance with ASC 450 and ASC 310, prior to the adoption of ASC 326: December 31, 2019 Loans Evaluated Individually for Impairment ALLL Attributed to Individually Evaluated Loans Loans Evaluated Collectively for Impairment ALLL Attributed to Collectively Evaluated Loans (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 1,088 $ — $ 2,069,053 $ 1,899 Multifamily — — 1,575,726 729 Construction and land — — 438,786 4,484 SBA secured by real estate 390 — 68,041 1,915 Business loans secured by real estate CRE owner-occupied — — 1,846,554 2,781 Franchise real estate secured — — 353,240 592 SBA secured by real estate 1,517 — 86,864 2,119 Commercial loans Commercial and industrial 7,529 — 1,385,741 13,857 Franchise non-real estate secured 10,834 — 553,523 5,816 SBA non-real estate secured 1,118 — 16,308 445 Retail loans Single family residential 366 — 254,658 655 Consumer loans — — 50,975 406 Totals $ 22,842 $ — $ 8,699,469 $ 35,698 |
Schedule of allowance for credit quality indicators | The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of September 30, 2020: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied Pass $ 190,701 $ 566,855 $ 475,363 $ 314,190 $ 290,179 $ 852,044 $ 11,031 $ — $ 2,700,363 Special mention — — 1,839 435 — 1,816 — — 4,090 Substandard — — 202 — 517 2,199 559 — 3,477 Multifamily Pass 638,349 1,735,235 964,740 750,548 412,893 639,171 574 — 5,141,510 Substandard — — — 559 — — — — 559 Construction and land Pass 25,240 145,709 104,702 33,023 19,932 7,997 374 — 336,977 Substandard — — 895 — — — — — 895 SBA secured by real estate Pass 494 10,412 11,058 14,842 6,712 9,037 — — 52,555 Substandard — 163 2,117 698 399 1,678 — — 5,055 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied Pass $ 210,662 $ 412,186 $ 358,157 $ 346,906 $ 235,040 $ 505,999 $ 4,593 $ — $ 2,073,543 Special mention — 15,827 — 10,268 4,186 2,008 — — 32,289 Substandard — — 3,636 725 2,666 6,679 250 — 13,956 Franchise real estate secured Pass 20,507 87,749 74,459 102,756 31,512 42,346 — — 359,329 SBA secured by real estate Pass 2,643 7,658 14,054 17,110 9,643 26,768 95 — 77,971 Substandard — — 22 1,994 914 3,225 — — 6,155 Total loans secured by business real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial Pass $ 98,656 $ 339,144 $ 183,259 $ 232,648 $ 71,414 $ 94,220 $ 682,523 $ 6,311 $ 1,708,175 Special mention — 43 17,231 15,810 1,398 — 7,886 — 42,368 Substandard — 4,902 22,763 1,111 1,265 4,393 34,271 1,747 70,452 Franchise non-real estate secured Pass 20,205 201,621 117,113 53,160 47,290 43,239 1,361 511 484,500 Substandard — 2,050 957 28,473 — — — — 31,480 SBA non-real estate secured Pass 355 2,299 1,700 2,254 623 3,881 — 268 11,380 Special mention — — — 1,661 — — — — 1,661 Substandard — 85 369 820 275 1,424 734 — 3,707 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 Retail Loans Single family residential Pass $ 4,469 $ 8,385 $ 14,972 $ 14,884 $ 35,074 $ 133,137 $ 31,452 — $ 242,373 Special mention — — — — — 57 — — 57 Substandard — — — — — 929 — — 929 Consumer loans Pass 63 142 60 38,037 12 3,255 3,422 — 44,991 Substandard — — — — — 43 — — 43 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 Totals gross loans $ 1,212,344 $ 3,540,465 $ 2,369,668 $ 1,982,912 $ 1,171,944 $ 2,385,545 $ 779,125 $ 8,837 $ 13,450,840 The following tables stratify the loan portfolio by the Company’s internal risk grading as of December 31, 2019: Credit Risk Grades Pass Special Substandard Total Gross December 31, 2019 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 2,067,875 $ 1,178 $ 1,088 $ 2,070,141 Multifamily 1,575,510 — 216 1,575,726 Construction and land 438,769 — 17 438,786 SBA secured by real estate 65,835 973 1,623 68,431 Total investor loans secured by real estate 4,147,989 2,151 2,944 4,153,084 Business loans secured by real estate CRE owner-occupied 1,831,853 11,167 3,534 1,846,554 Franchise real estate secured 352,319 921 — 353,240 SBA secured by real estate 83,106 1,842 3,433 88,381 Total business loans secured by real estate 2,267,278 13,930 6,967 2,288,175 Commercial loans Commercial and industrial 1,359,662 13,226 20,382 1,393,270 Franchise non-real estate secured 546,594 6,930 10,833 564,357 SBA not secured by real estate 13,933 485 3,008 17,426 Total commercial loans 1,920,189 20,641 34,223 1,975,053 Retail loans Single family residential 254,463 — 561 255,024 Consumer loans 50,921 — 54 50,975 Total retail loans 305,384 — 615 305,999 Total gross loans $ 8,640,840 $ 36,722 $ 44,749 $ 8,722,311 The following table presents PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the date indicated. Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 0% - 5.00% $ 188,404 $ 543,940 $ 374,636 $ 265,887 $ 266,967 $ 792,295 $ 10,788 $ — $ 2,442,917 >5.00% - 10.00% — 7,015 102,566 10,874 17,282 25,791 243 — 163,771 Greater than 10% 2,297 15,900 202 37,864 6,447 37,973 559 — 101,242 Multifamily 0% - 5.00% 630,900 1,709,927 935,659 723,886 399,890 618,503 574 — 5,019,339 >5.00% - 10.00% 4,251 11,286 14,944 14,708 2,836 2,102 — — 50,127 Greater than 10% 3,198 14,022 14,137 12,513 10,167 18,566 — — 72,603 Construction and Land 0% - 5.00% 24,862 56,858 12,550 22,362 — 6,448 — — 123,080 >5.00% - 10.00% — 36,289 10,750 466 — — — — 47,505 Greater than 10% 378 52,562 82,297 10,195 19,932 1,549 374 — 167,287 SBA secured by real estate 0% - 5.00% 494 10,412 12,584 15,540 7,111 10,204 — — 56,345 >5.00% - 10.00% — — — — — — — — — Greater than 10% — 163 591 — — 511 — — 1,265 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loans secured by real estate CRE owner-occupied 0% - 5.00% $ 202,228 $ 368,034 $ 299,843 $ 296,647 $ 197,043 $ 426,513 $ 520 $ — $ 1,790,828 >5.00% - 10.00% 8,434 37,617 58,314 53,967 39,056 78,666 3,826 — 279,880 Greater than 10% — 22,362 3,636 7,285 5,793 9,507 497 — 49,080 Franchise real estate secured 0% - 5.00% 19,753 85,363 73,100 102,756 31,512 42,346 — — 354,830 >5.00% - 10.00% 754 — 631 — — — — — 1,385 Greater than 10% — 2,386 728 — — — — — 3,114 SBA secured by real estate 0% - 5.00% 2,643 7,658 13,375 15,993 6,150 22,077 95 — 67,991 >5.00% - 10.00% — — 679 1,117 3,493 4,679 — — 9,968 Greater than 10% — — 22 1,994 914 3,237 — — 6,167 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 Commercial Real Estate Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Commercial Loans Commercial and industrial 0% - 5.00% $ 90,745 $ 289,250 $ 141,811 $ 206,524 $ 49,843 $ 76,628 $ 343,482 $ 4,024 $ 1,202,307 >5.00% - 10.00% 7,911 48,778 39,716 19,950 18,894 14,807 302,843 2,037 454,936 Greater than 10% — 6,061 41,726 23,095 5,340 7,178 78,355 1,997 163,752 Franchise non-real estate secured 0% - 5.00% 14,547 193,899 112,760 48,916 45,265 40,753 1,361 511 458,012 >5.00% - 10.00% 5,658 7,722 4,353 4,245 2,025 2,486 — — 26,489 Greater than 10% — 2,050 957 28,472 — — — — 31,479 SBA not secured by real estate 0% - 5.00% 355 2,299 1,392 1,460 499 2,571 — 268 8,844 >5.00% - 10.00% — — 308 796 124 1,285 — — 2,513 Greater than 10% — 85 369 2,479 275 1,449 734 — 5,391 Total commercial loans $ 119,216 $ 550,144 $ 343,392 $ 335,937 $ 122,265 $ 147,157 $ 726,775 $ 8,837 $ 2,353,723 Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied 55% and below $ 100,859 $ 238,182 $ 190,263 $ 156,791 $ 192,044 $ 602,788 $ 11,031 — $ 1,491,958 >55-65% 71,824 220,089 110,830 136,117 84,644 217,812 559 — 841,875 >65-75% 18,018 105,825 171,532 18,946 13,796 30,887 — — 359,004 Greater than 75% — 2,759 4,779 2,771 212 4,572 — — 15,093 Multifamily 55% and below 147,694 347,848 303,801 252,662 90,318 294,211 574 — 1,437,108 >55-65% 233,564 742,570 406,271 234,044 169,033 242,603 — — 2,028,085 >65-75% 257,091 628,393 244,007 262,512 153,542 96,542 — — 1,642,087 Greater than 75% — 16,424 10,661 1,889 — 5,815 — — 34,789 Construction and land 55% and below 24,116 129,160 66,830 26,261 19,932 7,997 374 — 274,670 >55-65% 1,124 13,254 23,699 6,762 — — — — 44,839 >65-75% — 3,295 15,068 — — — — — 18,363 Greater than 75% — — — — — — — — — SBA secured by real estate 55% and below — 2,070 653 673 330 785 — — 4,511 >55-65% — 2,433 1,643 4,017 621 4,482 — — 13,196 >65-75% — 3,905 5,075 4,185 4,795 1,897 — — 19,857 Greater than 75% 494 2,167 5,804 6,665 1,365 3,551 — — 20,046 Total investor loans secured by real estate $ 854,784 $ 2,458,374 $ 1,560,916 $ 1,114,295 $ 730,632 $ 1,513,942 $ 12,538 $ — $ 8,245,481 Business loan secured by real estate CRE owner-occupied 55% and below $ 56,954 $ 156,880 $ 171,740 $ 203,875 $ 133,740 $ 357,734 $ 4,843 — $ 1,085,766 >55-65% 56,139 93,895 97,245 94,359 73,389 80,933 — — 495,960 >65-75% 55,932 155,872 80,898 46,241 32,547 50,458 — — 421,948 Greater than 75% 41,637 21,366 11,910 13,424 2,216 25,561 — — 116,114 Franchise real estate secured 55% and below 7,462 13,322 14,407 21,162 11,592 20,549 — — 88,494 >55-65% — 9,981 15,893 23,658 7,784 5,862 — — 63,178 >65-75% 3,972 53,584 21,750 9,768 11,017 14,697 — — 114,788 Greater than 75% 9,073 10,862 22,409 48,168 1,119 1,238 — — 92,869 SBA secured by real estate 55% and below 1,355 1,633 5,376 5,683 3,175 15,281 95 — 32,598 >55-65% 104 513 1,802 1,719 3,706 5,665 — — 13,509 >65-75% 264 3,148 751 4,193 2,340 5,401 — — 16,097 Greater than 75% 920 2,364 6,147 7,509 1,336 3,646 — — 21,922 Total business loans secured by real estate $ 233,812 $ 523,420 $ 450,328 $ 479,759 $ 283,961 $ 587,025 $ 4,938 $ — $ 2,563,243 The following table presents FICO bands for the retail segment of the loan portfolio as of the date indicated: Term Loans by Vintage 2020 2019 2018 2017 2016 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2020 (Dollars in thousands) Retail Loans Single family residential Greater than 740 $ 4,469 $ 7,198 $ 12,719 $ 9,658 $ 29,291 $ 91,460 $ 22,566 — $ 177,361 >680 - 740 — 1,187 2,253 4,763 2,641 28,625 7,919 — 47,388 >580 - 680 — — — 463 3,142 11,113 932 — 15,650 Less than 580 — — — — — 2,925 35 — 2,960 Consumer loans Greater than 740 63 85 54 46 10 2,648 1,670 — 4,576 >680 - 740 — 40 6 37,991 — 480 1,665 — 40,182 >580 - 680 — 17 — — 2 144 59 — 222 Less than 580 — — — — — 26 28 — 54 Total retail loans $ 4,532 $ 8,527 $ 15,032 $ 52,921 $ 35,086 $ 137,421 $ 34,874 $ — $ 288,393 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | September 30, September 30, 2020 2019 (Dollars in thousands) Balance, beginning of year $ 808,322 $ 808,726 Goodwill acquired during the year 92,844 — Purchase accounting adjustments (2,732) (404) Balance, end of year $ 898,434 $ 808,322 Accumulated impairment losses at end of year $ — $ — |
Schedule of finite-lived intangible assets | The change in the gross balance of core deposit intangibles and customer relationship intangibles, and the related accumulated amortization consisted of the following for the periods indicated: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, 2020 2020 2019 2020 2019 (Dollars in thousands) Gross amount of intangible assets: Beginning balance $ 145,212 $ 125,945 $ 125,945 $ 125,945 $ 125,945 Additions due to acquisitions — 19,267 — 19,267 — Ending balance 145,212 145,212 125,945 145,212 125,945 Accumulated amortization: Beginning balance (50,662) (46,596) (34,104) (42,633) (25,387) Amortization (4,538) (4,066) (4,281) (12,567) (12,998) Ending balance (55,200) (50,662) (38,385) (55,200) (38,385) Net intangible assets $ 90,012 $ 94,550 $ 87,560 $ 90,012 $ 87,560 |
Subordinated Debentures (Tables
Subordinated Debentures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding subordinated debentures | The following table summarizes our outstanding subordinated debentures as of the dates indicated: September 30, 2020 December 31, 2019 Stated Maturity Current Interest Rate Current Principal Balance Carrying Value (Dollars in thousands) Subordinated notes Subordinated notes due 2024, 5.75% per annum September 3, 2024 5.75 % $ 60,000 $ 59,522 $ 59,432 Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter May 15, 2029 4.875 % 125,000 122,813 122,622 Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter June 15, 2030 5.375 % 150,000 147,435 — Subordinated notes due 2025, 7.125% per annum June 26, 2025 7.125 % 25,000 25,115 25,133 Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter July 1, 2026 5.50 % 135,000 138,492 — Total subordinated notes 495,000 493,377 207,187 Subordinated debt Heritage Oaks Capital Trust II (junior subordinated debt), 3-month LIBOR+1.72% January 1, 2037 2.02 % 5,248 4,105 4,054 Santa Lucia Bancorp (CA) Capital Trust (junior subordinated debt), 3-month LIBOR+1.48% July 7, 2036 1.76 % 5,155 3,961 3,904 Total subordinated debt 10,403 8,066 7,958 Total subordinated debentures $ 505,403 $ 501,443 $ 215,145 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Company's unaudited earnings per share calculations | The following tables set forth the Corporation’s earnings per share calculations for the periods indicated: Three Months Ended September 30, 2020 June 30, 2020 September 30, 2019 (Dollars in thousands, except per share data) Basic Net income (loss) $ 66,566 $ (99,091) $ 41,375 Less: Dividends and undistributed earnings allocated to participating securities (612) (222) (432) Net income (loss) allocated to common stockholders $ 65,954 $ (99,313) $ 40,943 Weighted average common shares outstanding 93,529,967 70,425,027 59,293,218 Basic earnings (loss) per common share $ 0.71 $ (1.41) $ 0.69 Diluted Net income (loss) allocated to common stockholders $ 65,954 $ (99,313) $ 40,943 Weighted average common shares outstanding 93,529,967 70,425,027 59,293,218 Diluted effect of share-based compensation 189,200 — 377,637 Weighted average diluted common shares 93,719,167 70,425,027 59,670,855 Diluted earnings (loss) per common share $ 0.70 $ (1.41) $ 0.69 Nine Months Ended September 30, 2020 September 30, 2019 (Dollars in thousands, except per share data) Basic Net income (loss) $ (6,785) $ 118,620 Less: Dividends and undistributed earnings allocated to participating securities (564) (1,223) Net income (loss) allocated to common stockholders $ (7,349) $ 117,397 Weighted average common shares outstanding 74,391,688 60,853,081 Basic earnings (loss) per common share $ (0.10) $ 1.93 Diluted Net income (loss) allocated to common stockholders $ (7,349) $ 117,397 Weighted average common shares outstanding 74,391,688 60,853,081 Diluted effect of share-based compensation — 348,777 Weighted average diluted common shares 74,391,688 61,201,858 Diluted earnings (loss) per common share $ (0.10) $ 1.92 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 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 $ — $ 32,739 $ — $ 32,739 Agency — 603,045 — 603,045 Corporate — 397,536 — 397,536 Municipal bonds — 1,313,908 — 1,313,908 Collateralized mortgage obligations — 358,280 — 358,280 Mortgage-backed securities — 895,223 — 895,223 Total securities available-for-sale $ — $ 3,600,731 $ — $ 3,600,731 Derivative assets: Interest rate swaps $ — $ 14,697 $ — $ 14,697 Equity warrants — — 1,920 1,920 Total derivative assets $ — $ 14,697 $ 1,920 $ 16,617 Financial liabilities Derivative liabilities $ — $ 14,789 $ — $ 14,789 December 31, 2019 Fair Value Measurement Using Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Investment securities available-for-sale: U.S. Treasury $ — $ 63,555 $ — $ 63,555 Agency — 246,358 — 246,358 Corporate — 151,353 — 151,353 Municipal bonds — 397,298 — 397,298 Collateralized mortgage obligations — 9,984 — 9,984 Mortgage-backed securities — 499,836 — 499,836 Total securities available-for-sale $ — $ 1,368,384 $ — $ 1,368,384 Derivative assets $ — $ 2,103 $ — $ 2,103 Financial liabilities Derivative liabilities $ — $ 2,103 $ — $ 2,103 |
Schedule of reconciliation of fair value of equity warrants | The following table is a reconciliation of the fair value of the equity warrants that are classified as Level 3 and measured on a recurring basis as of : September 30, 2020 Three Months Ended Nine Months Ended (Dollars in thousands) Beginning Balance $ 1,952 $ 5,162 Change in fair value (1) (32) (35) Sales — (3,207) Ending balance $ 1,920 $ 1,920 ______________________________ (1) The changes in fair value are included in other income on the consolidated statement of income. |
Schedule of quantitative information for level 3 fair value measurements | The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a recurring basis at September 30, 2020. September 30, 2020 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Equity warrants $ 1,920 Black-Scholes Volatility 30.00% 0.13% 6.00% 35.00% 0.28% 16.00% 31.20% 0.17% 13.48% The following table presents quantitative information about level 3 of fair value measurements for assets measured at fair value on a nonrecurring basis at September 30, 2020 and December 31, 2019. September 30, 2020 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 591 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% SBA secured by real estate (1) 202 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Business loans secured by real estate SBA secured by real estate (2) 230 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Commercial loans Commercial and industrial 22 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Franchise non-real estate secured 2,844 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 9.11% SBA non-real estate secured 860 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 8.19% Total individually evaluated loans 4,749 Total assets $ 4,749 December 31, 2019 Range Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average (Dollars in thousands) Investor loans secured by real estate CRE non-owner-occupied $ 569 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% SBA secured by real estate (1) 408 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Business loans secured by real estate SBA secured by real estate (2) 140 Fair value of collateral Collateral discount and cost to sell 7.00% 10.00% 7.81% Commercial loans SBA non-real estate secured 1,140 Fair value of collateral Collateral discount and cost to sell 7.00% 63.00% 15.33% Total individually evaluated loans $ 2,257 ______________________________ (1) SBA loans that are collateralized by hotel/motel real property. (2) SBA loans that are collateralized by real property other than hotel/motel real property. |
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, 2020 and December 31, 2019. September 30, 2020 Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Collateral dependent loans $ — $ — $ 4,749 $ 4,749 December 31, 2019 Level 1 Level 2 Level 3 Total (Dollars in thousands) Financial assets Impaired loans $ — $ — $ 2,257 $ 2,257 |
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, 2020 Carrying Level 1 Level 2 Level 3 Estimated (Dollars in thousands) Assets Cash and cash equivalents $ 1,103,077 $ 1,103,077 $ — $ — $ 1,103,077 Interest-bearing time deposits with financial institutions 2,845 2,845 — — 2,845 Investments held-to-maturity 27,980 — 29,399 — 29,399 Investment securities available-for-sale 3,600,731 — 3,600,731 — 3,600,731 Loans held for sale 1,032 — 1,091 — 1,091 Loans held for investment, net 13,450,840 — — 13,578,530 13,578,530 Derivative assets 16,617 — 14,697 1,920 16,617 Accrued interest receivable 73,112 73,112 — — 73,112 Liabilities Deposit accounts $ 16,330,807 $ 14,612,343 $ 1,724,569 $ — $ 16,336,912 FHLB advances 41,000 — 41,652 — 41,652 Subordinated debentures 501,443 — 515,729 — 515,729 Derivative liabilities 14,789 — 14,789 — 14,789 Accrued interest payable 7,638 7,638 — — 7,638 At December 31, 2019 Carrying Level 1 Level 2 Level 3 Estimated (Dollars in thousands) Assets Cash and cash equivalents $ 326,850 $ 326,850 $ — $ — $ 326,850 Interest-bearing time deposits with financial institutions 2,708 2,708 — — 2,708 Investments held-to-maturity 37,838 — 38,760 — 38,760 Investment securities available-for-sale 1,368,384 — 1,368,384 — 1,368,384 Loans held for sale 1,672 — 1,821 — 1,821 Loans held for investment, net 8,722,311 — — 8,691,019 8,691,019 Derivative assets 2,103 — 2,103 — 2,103 Accrued interest receivable 39,442 39,442 — — 39,442 Liabilities Deposit accounts $ 8,898,509 $ 7,850,667 $ 1,048,583 $ — $ 8,899,250 FHLB advances 517,026 — 517,291 — 517,291 Subordinated debentures 215,145 — 237,001 — 237,001 Derivative liabilities 2,103 — 2,103 — 2,103 Accrued interest payable 2,686 2,686 — — 2,686 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (Dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swaps $ 146,760 $ 14,697 $ 146,760 $ 14,789 Equity warrants — 1,920 — — Total derivative instruments $ 146,760 $ 16,617 $ 146,760 $ 14,789 December 31, 2019 Derivative Assets Derivative Liabilities Notional Fair Value Notional Fair Value (Dollars in thousands) Derivative instruments not designated as hedging instruments: Interest rate swaps $ 76,314 $ 2,103 $ 76,314 $ 2,103 Total derivative instruments $ 76,314 $ 2,103 $ 76,314 $ 2,103 The following table summarizes the effect of the derivative financial instruments in the consolidated statements of income. Three Months Ended Nine Months Ended Derivative Not Designated as Hedging Instruments: Location of Gain Recognized in Income on Derivative Instruments September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollars in thousands) Other contracts Other income $ 218 $ — $ 415 $ — Equity warrants Other income (31) — (35) — Total $ 187 $ — $ 380 $ — |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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 the periods indicated are presented below: Gross Amounts Not Offset in the Consolidated Gross Amounts Recognized Gross Amounts Offset in the Consolidated Statements of Financial Condition Net Amounts Presented in the Consolidated Statements of Financial Condition Financial Instruments (1) Cash Collateral (2) Net Amount (Dollars in thousands) September 30, 2020 Derivative assets: Interest rate swaps $ 14,697 $ — $ 14,697 $ — $ — $ 14,697 Total $ 14,697 $ — $ 14,697 $ — $ — $ 14,697 Derivative liabilities: Interest rate swaps $ 14,789 $ — $ 14,789 $ (5,500) $ (8,568) $ 721 Total $ 14,789 $ — $ 14,789 $ (5,500) $ (8,568) $ 721 December 31, 2019 Derivative assets: Interest rate swaps $ 2,103 $ — $ 2,103 $ — $ — $ 2,103 Total $ 2,103 $ — $ 2,103 $ — $ — $ 2,103 Derivative liabilities: Interest rate swaps $ 2,107 $ (4) $ 2,103 $ — $ (1,678) $ 425 Total $ 2,107 $ (4) $ 2,103 $ — $ (1,678) $ 425 (1) Represents the fair value of securities pledged with counterparty bank. (2) Represents cash collateral pledged with counterparty bank. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Components of lease expense | The Company’s lease expense is recorded in premises and occupancy expense in the consolidated statements of income. The following table presents the components of lease expense for the periods indicated: Three Months Ended Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 (Dollars in thousands) Operating lease $ 5,618 2,879 $ 12,690 $ 8,403 Short-term lease 495 575 1,425 1,893 Total lease expense $ 6,113 $ 3,454 $ 14,115 $ 10,296 |
Schedule of supplemental information | The following table presents supplemental information related to operating leases as of and for nine months ended: September 30, 2020 December 31, 2019 (Dollars in thousands) Balance Sheet: Operating lease right of use assets $ 81,150 $ 43,177 Operating lease liabilities 91,202 46,498 Nine Months Ended September 30, 2020 September 30, 2019 (Dollars in thousands) Cash Flows: Operating cash flows from operating leases $ 10,946 $ 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 the dates indicated: 2020 2021 2022 2023 2024 Thereafter Total (Dollars in thousands) As of September 30, 2020 Operating leases $ 5,559 $ 21,839 $ 20,222 $ 18,667 $ 16,138 $ 23,503 $ 105,928 Short-term leases 74 47 — — — — 121 Total contractual base rents (1) $ 5,633 $ 21,886 $ 20,222 $ 18,667 $ 16,138 $ 23,503 $ 106,049 Total liability to make lease payments $ 91,202 Difference in undiscounted and discounted future lease payments $ 14,847 Weighted average discount rate 5.70 % Weighted average remaining lease term (years) 5.4 2020 2021 2022 2023 2024 Thereafter Total (Dollars in thousands) As of December 31, 2019 Operating leases $ 10,138 $ 10,602 $ 10,137 $ 9,055 $ 7,318 $ 7,265 $ 54,515 Short-term leases 143 7 — — — — 150 Total contractual base rents (1) $ 10,281 $ 10,609 $ 10,137 $ 9,055 $ 7,318 $ 7,265 $ 54,665 Total liability to make lease payments $ 46,498 Difference in undiscounted and discounted future lease payments $ 8,167 Weighted average discount rate 6.13 % Weighted average remaining lease term (years) 5.4 ______________________________ (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. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
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, 2020 June 30, 2020 September 30, 2019 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (Dollars in thousands) Noninterest income: Loan servicing fees $ — $ 481 $ — $ 434 $ — $ 546 Service charges on deposit accounts 1,593 — 1,399 — 1,440 — Other service fee income 487 — 297 — 360 — Debit card interchange income 944 — 457 — 421 — Earnings on bank-owned life insurance — 2,270 — 1,314 — 861 Net gain from sales of loans — 9,542 — (2,032) — 2,313 Net gain from sales of investment securities — 1,141 — (21) — 4,261 Custodial account fees 6,960 — 2,397 — — — Other income 1,233 2,107 184 2,469 592 636 Total noninterest income $ 11,217 $ 15,541 $ 4,734 $ 2,164 $ 2,813 $ 8,617 ______________________________ (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, 2020 September 30, 2019 Within Scope (1) Out of Scope (2) Within Scope (1) Out of Scope (2) (Dollars in thousands) Noninterest income: Loan servicing fees $ — $ 1,395 $ — $ 1,353 Service charges on deposit accounts 4,707 — 4,211 — Other service fee income 1,095 — 1,079 — Debit card interchange income 1,749 — 2,637 — Earnings on bank-owned life insurance — 4,920 — 2,622 Net gain from sales of loans — 8,281 — 4,944 Net gain from sales of investment securities — 8,880 — 4,900 Custodial account fees 9,357 — — — Other income 1,634 6,113 1,328 2,361 Total noninterest income $ 18,542 $ 29,589 $ 9,255 $ 16,180 ______________________________ (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. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of variable interest entities | The following table provides a summary of the carrying amount of assets and liabilities in the Company’s consolidated balance sheet and maximum loss exposures as of September 30, 2020 and December 31, 2019 that relate to variable interests in non-consolidated VIEs. September 30, 2020 December 31, 2019 Maximum Loss Assets Liabilities Maximum Loss Assets Liabilities (Dollars in thousands) Multifamily loan securitization: Investment securities (1) $ 114,460 $ 114,460 $ — $ — $ — $ — Reimbursement obligation (2) 50,901 — 540 — — — Affordable housing partnership: Other investments (3) 76,057 95,292 — 32,466 53,880 — Unfunded equity commitments (2) — — 19,235 — — 21,414 Total $ 241,418 $ 209,752 $ 19,775 $ 32,466 $ 53,880 $ 21,414 ______________________________ (1) Included in investment securities available-for-sale on the consolidated statement of financial condition. (2) Included in accrued expenses and other liabilities on the consolidated statement of financial condition. (3) Included in other assets on the consolidated statement of financial condition. . |
Basis of Presentation (Details)
Basis of Presentation (Details) $ in Thousands | Jun. 01, 2020USD ($)office | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Business Acquisition [Line Items] | |||
Total assets | $ 19,844,240 | $ 11,776,012 | |
Loans held for investment | 13,450,840 | 8,722,311 | |
Total deposits | $ 16,330,807 | $ 8,898,509 | |
Opus Bank | |||
Business Acquisition [Line Items] | |||
Total merger consideration | $ 749,605 | ||
Opus Bank | Opus Bank | |||
Business Acquisition [Line Items] | |||
Total assets | 8,320,000 | ||
Loans held for investment | 5,940,000 | ||
Total deposits | $ 6,910,000 | ||
Number of banking offices | office | 46 |
Recently Issued Accounting Pr_3
Recently Issued Accounting Pronouncements - Narrative (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Jan. 01, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||||||||
Net decrease to retained earnings balance | $ 2,012,594,000 | $ 2,688,085,000 | $ 2,654,647,000 | $ 1,988,998,000 | $ 1,984,456,000 | $ 1,969,697,000 | |||
Allowance for credit losses on loans | 35,698,000 | 282,503,000 | 282,271,000 | 35,000,000 | 35,026,000 | 36,072,000 | |||
Deferred income taxes, net | 0 | 108,050,000 | |||||||
Loans held for investment | 8,722,311,000 | 13,450,840,000 | |||||||
Allowance for credit losses on off-balance sheet credit exposures | 3,300,000 | 21,500,000 | $ 3,279,000 | ||||||
Allowance for credit losses on debt securities, Held-to-maturity | 0 | ||||||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | ||||||||
Commercial loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 20,118,000 | ||||||||
Loans held for investment | 1,975,053,000 | 2,353,723,000 | |||||||
Accumulated Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Net decrease to retained earnings balance | 396,051,000 | $ 289,960,000 | $ 247,078,000 | $ 368,051,000 | $ 343,366,000 | $ 300,407,000 | |||
Impact of CECL Adoption | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Net decrease to retained earnings balance | [1] | (45,625,000) | |||||||
Allowance for credit losses on loans | 55,686,000 | 64,000,000 | |||||||
Deferred income taxes, net | 18,300,000 | ||||||||
Loans held for investment | 55,700,000 | ||||||||
Allowance for credit losses on off-balance sheet credit exposures | 8,285,000 | ||||||||
Allowance for credit losses on debt securities, Held-to-maturity | 0 | ||||||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | ||||||||
Impact of CECL Adoption | Commercial loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 9,519,000 | ||||||||
Impact of CECL Adoption | Commercial loans | Investor loans secured by real estate | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 16,100,000 | ||||||||
Impact of CECL Adoption | Commercial loans | Business loans secured by real estate | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 27,600,000 | ||||||||
Impact of CECL Adoption | Commercial loans | Commercial loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 9,500,000 | ||||||||
Impact of CECL Adoption | Consumer loans | Retail loans | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses on loans | 2,500,000 | ||||||||
Impact of CECL Adoption | Accumulated Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Net decrease to retained earnings balance | $ (45,625,000) | [1] | $ (45,600,000) | ||||||
[1] | Related to the adoption of Accounting Standards Update 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . See Note 2 - Recently Issue Accounting Pronouncements for further discussion. |
Recently Issued Accounting Pr_4
Recently Issued Accounting Pronouncements - Schedule of Impact of Adoption (Details) - USD ($) | Sep. 30, 2020 | Jun. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on debt securities, Held-to-maturity | $ 0 | ||||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | ||||||
Allowance for credit losses on loans | $ 282,503,000 | $ 282,271,000 | $ 35,698,000 | $ 35,000,000 | $ 35,026,000 | $ 36,072,000 | |
Deferred tax (liabilities) assets | (1,371,000) | ||||||
Allowance for credit losses on off-balance sheet credit exposures | 21,500,000 | 3,279,000 | 3,300,000 | ||||
Retained earnings | $ 289,960,000 | 396,051,000 | 396,051,000 | ||||
Investor loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 9,027,000 | ||||||
Business loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 5,492,000 | ||||||
Commercial loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 20,118,000 | ||||||
Retail loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 1,061,000 | ||||||
Impact of CECL Adoption | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on debt securities, Held-to-maturity | 0 | ||||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | ||||||
Allowance for credit losses on loans | 64,000,000 | $ 55,686,000 | |||||
Deferred tax (liabilities) assets | 18,346,000 | ||||||
Allowance for credit losses on off-balance sheet credit exposures | 8,285,000 | ||||||
Retained earnings | (45,625,000) | ||||||
Impact of CECL Adoption | Investor loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 16,072,000 | ||||||
Impact of CECL Adoption | Business loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 27,572,000 | ||||||
Impact of CECL Adoption | Commercial loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 9,519,000 | ||||||
Impact of CECL Adoption | Retail loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 2,523,000 | ||||||
As Reported Under CECL | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on debt securities, Held-to-maturity | 0 | ||||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | ||||||
Deferred tax (liabilities) assets | 16,975,000 | ||||||
Allowance for credit losses on off-balance sheet credit exposures | 11,564,000 | ||||||
Retained earnings | 350,426,000 | ||||||
As Reported Under CECL | Investor loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 25,099,000 | ||||||
As Reported Under CECL | Business loans secured by real estate | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 33,064,000 | ||||||
As Reported Under CECL | Commercial loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | 29,637,000 | ||||||
As Reported Under CECL | Retail loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Allowance for credit losses on loans | $ 3,584,000 |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | Jun. 01, 2020 | Jul. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Goodwill | $ 898,434,000 | $ 808,322,000 | $ 898,434,000 | $ 808,322,000 | $ 808,726,000 | ||
Proceeds from loans held for sale previously classified as portfolio loans | 1,283,214,000 | $ 76,579,000 | |||||
Loans held for investment | 13,450,840,000 | 8,722,311,000 | |||||
Initial ACL Recorded for PCD Loans | 21,242,000 | ||||||
Opus Bank | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Goodwill | $ 90,112,000 | ||||||
Purchase price (initial fair value) | 841,234,000 | ||||||
Initial ACL Recorded for PCD Loans | 21,200,000 | ||||||
Commercial loans | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Loans held for investment | 2,353,723,000 | $ 1,975,053,000 | |||||
Commercial loans | Opus Bank | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Purchase price (initial fair value) | $ 54,687,000 | ||||||
Commercial loans | SBA PPP | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Proceeds from loans held for sale previously classified as portfolio loans | $ 1,130,000,000 | ||||||
Gain (loss) on sale of SBA PPP loan portfolio | $ 18,900,000 | ||||||
Loans held for investment | $ 0 | $ 1,130,000,000 | |||||
Min | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Qualitative analysis of market related data, average basis, CARES Act | 15 days | ||||||
Weighted average useful life | 6 years | ||||||
Max | |||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||
Qualitative analysis of market related data, average basis, CARES Act | 30 days | ||||||
Weighted average useful life | 11 years |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ / shares in Units, $ in Thousands | Jun. 01, 2020USD ($)office$ / sharesshares | May 29, 2020USD ($)$ / shares | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | May 31, 2020USD ($)client_account | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | ||||||||||
Total assets | $ 19,844,240 | $ 19,844,240 | $ 11,776,012 | |||||||
Total gross loans | 13,450,840 | 13,450,840 | 8,722,311 | |||||||
Total deposits | 16,330,807 | 16,330,807 | 8,898,509 | |||||||
Goodwill | 898,434 | $ 898,434 | $ 808,322 | 898,434 | $ 808,322 | $ 808,322 | $ 808,726 | |||
Purchase accounting adjustments | (2,732) | (404) | ||||||||
ACL expense (reversal) | 4,702 | 1,365 | 180,341 | 4,119 | ||||||
Initial ACL Recorded for PCD Loans | 21,242 | |||||||||
Merger-related expense | 2,988 | $ 39,346 | $ (4) | 44,058 | $ 656 | |||||
PENSCO | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Custodial assets | $ 14,480,000 | |||||||||
Number of client accounts | client_account | 44,000 | |||||||||
Opus Bank | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Equity issued, ratio | 0.900 | |||||||||
Stock transaction value (usd per share) | $ / shares | $ 19.31 | |||||||||
Closing price of Corporation's common stock (in dollars per share) | $ / shares | $ 21.62 | |||||||||
Total merger consideration | $ 749,605 | |||||||||
Intangible assets | 19,267 | |||||||||
Goodwill | 90,112 | |||||||||
Purchase accounting adjustments | $ (2,700) | |||||||||
Fair value of non-PCD loans | 4,940,000 | |||||||||
Fair value of PCD loans | 841,234 | |||||||||
Contractual balance of non-PCD loans | 5,050,000 | |||||||||
Contractual balance of PCD loans | 896,483 | |||||||||
ACL expense (reversal) | 75,900 | $ 75,900 | ||||||||
Initial ACL Recorded for PCD Loans | 21,200 | |||||||||
Opus Bank | Core Deposits | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets | 16,100 | |||||||||
Opus Bank | Customer Relationships | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Intangible assets | $ 3,200 | |||||||||
Opus Bank | Common Stock | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common stock issued as consideration (in shares) | shares | 34,407,403 | |||||||||
Common stock issued issued for tax withholding (in shares) | shares | 165,136 | |||||||||
Vaue of equity interests issued and issuable | $ 747,458 | |||||||||
Opus Bank | Equity warrants | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common stock issued as consideration (in shares) | shares | 406,778 | |||||||||
Vaue of equity interests issued and issuable | $ 1,800 | |||||||||
Opus Bank | Equity Option | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Common stock issued as consideration (in shares) | shares | 9,538 | |||||||||
Vaue of equity interests issued and issuable | $ 46 | |||||||||
Opus Bank | Restricted Stock Awards | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Vaue of equity interests issued and issuable | 328 | $ 328 | ||||||||
Opus Bank | Opus Bank | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Total assets | 8,320,000 | |||||||||
Total gross loans | 5,940,000 | |||||||||
Total deposits | $ 6,910,000 | |||||||||
Number of banking offices | office | 46 |
Acquisitions - Total Transactio
Acquisitions - Total Transaction Consideration Value (Details) - Opus Bank - USD ($) $ in Thousands | Jun. 01, 2020 | May 29, 2020 |
Business Acquisition [Line Items] | ||
Cash paid in lieu of fractional shares | $ 2 | |
Total merger consideration | $ 749,605 | |
Common Stock | ||
Business Acquisition [Line Items] | ||
Vaue of equity interests issued and issuable | 747,458 | |
Restricted Stock Awards | ||
Business Acquisition [Line Items] | ||
Vaue of equity interests issued and issuable | $ 328 | 328 |
Options and Warrants | ||
Business Acquisition [Line Items] | ||
Vaue of equity interests issued and issuable | $ 1,817 |
Acquisitions - Assets Acquired
Acquisitions - Assets Acquired and Liabilities Assumed - (Details) - USD ($) $ in Thousands | Jun. 01, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Liabilities assumed | ||||||
Goodwill recognized | $ 898,434 | $ 898,434 | $ 808,322 | $ 808,322 | $ 808,726 | |
Opus Bank | ||||||
Assets acquired | ||||||
Cash and cash equivalents | $ 937,102 | |||||
Interest bearing time deposits with financial institutions | 137 | |||||
Investment securities | 829,891 | |||||
Loans | 5,809,451 | |||||
Allowance for credit losses | (21,242) | |||||
Premises and equipment | 22,121 | |||||
Intangible assets | 19,267 | |||||
Deferred tax assets | 48,312 | |||||
Other assets | 367,130 | |||||
Total assets acquired | 8,012,169 | |||||
Liabilities assumed | ||||||
Deposits | 6,915,990 | |||||
FHLB advances and other borrowings | 213,491 | |||||
Subordinated debt | 138,653 | |||||
Other liabilities | 84,542 | |||||
Total liabilities assumed | 7,352,676 | |||||
Total fair value of identifiable net assets | 659,493 | |||||
Total merger consideration | 749,605 | |||||
Goodwill recognized | $ 90,112 |
Acquisitions - Pro Forma Financ
Acquisitions - Pro Forma Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Combinations [Abstract] | ||||
Net interest and other income | $ 193,304 | $ 197,866 | $ 577,779 | $ 579,353 |
Net income (loss) | $ 66,566 | $ 70,835 | $ (78,570) | $ 181,087 |
Basic earnings (loss) per share (in dollars per share) | $ 0.71 | $ 0.79 | $ (0.84) | $ 1.97 |
Diluted earnings (loss) per share (in dollars per share) | $ 0.70 | $ 0.78 | $ (0.84) | $ 1.94 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Investment securities available-for-sale: | ||
Total | $ 3,536,760 | $ 1,338,260 |
Gross Unrealized Gain | 82,554 | 34,216 |
Gross Unrealized Loss | (18,583) | (4,092) |
Estimated Fair Value | 3,600,731 | 1,368,384 |
Investment securities held-to-maturity: | ||
Amortized Cost | 27,980 | 37,838 |
Gross Unrealized Gain | 1,419 | 922 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 29,399 | 38,760 |
Total investment securities | ||
Amortized Cost | 3,564,740 | 1,376,098 |
Gross Unrealized Gain | 83,973 | 35,138 |
Gross Unrealized Loss | (18,583) | (4,092) |
Estimated Fair Value | 3,630,130 | 1,407,144 |
U.S. Treasury | ||
Investment securities available-for-sale: | ||
Total | 30,161 | 60,457 |
Gross Unrealized Gain | 2,578 | 3,137 |
Gross Unrealized Loss | 0 | (39) |
Estimated Fair Value | 32,739 | 63,555 |
Agency | ||
Investment securities available-for-sale: | ||
Total | 577,627 | 240,348 |
Gross Unrealized Gain | 26,109 | 7,686 |
Gross Unrealized Loss | (691) | (1,676) |
Estimated Fair Value | 603,045 | 246,358 |
Corporate | ||
Investment securities available-for-sale: | ||
Total | 397,670 | 149,150 |
Gross Unrealized Gain | 2,035 | 2,217 |
Gross Unrealized Loss | (2,169) | (14) |
Estimated Fair Value | 397,536 | 151,353 |
Municipal bonds | ||
Investment securities available-for-sale: | ||
Total | 1,305,389 | 384,032 |
Gross Unrealized Gain | 23,581 | 13,450 |
Gross Unrealized Loss | (15,062) | (184) |
Estimated Fair Value | 1,313,908 | 397,298 |
Collateralized mortgage obligations | ||
Investment securities available-for-sale: | ||
Total | 357,615 | 9,869 |
Gross Unrealized Gain | 1,130 | 123 |
Gross Unrealized Loss | (465) | (8) |
Estimated Fair Value | 358,280 | 9,984 |
Mortgage-backed securities | ||
Investment securities available-for-sale: | ||
Total | 868,298 | 494,404 |
Gross Unrealized Gain | 27,121 | 7,603 |
Gross Unrealized Loss | (196) | (2,171) |
Estimated Fair Value | 895,223 | 499,836 |
Investment securities held-to-maturity: | ||
Amortized Cost | 26,357 | 36,114 |
Gross Unrealized Gain | 1,419 | 922 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | 27,776 | 37,036 |
Other | ||
Investment securities held-to-maturity: | ||
Amortized Cost | 1,623 | 1,724 |
Gross Unrealized Gain | 0 | 0 |
Gross Unrealized Loss | 0 | 0 |
Estimated Fair Value | $ 1,623 | $ 1,724 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)investmentSecurity | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)investmentSecurity | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($)investmentSecurity | |
Investment Securities | ||||||
Accumulated other comprehensive income (loss) before tax amount | $ 64,000,000 | $ 64,000,000 | $ 30,100,000 | |||
Accumulated other comprehensive income (loss), net of tax | $ 45,663,000 | 45,663,000 | $ 21,523,000 | |||
Available-for-sale securities acquired | 2,057,690,000 | $ 603,457,000 | ||||
Available-for-sale securities, provision for credit losses | $ 0 | |||||
Other than temporary impairment losses recognized in earnings | 0 | |||||
Available-for-sale and held-to-maturity securities in nonaccrual status | investmentSecurity | 0 | 0 | ||||
Available-for-sale and held-to-maturity securities purchased with deterioration in credit quality | investmentSecurity | 0 | 0 | 0 | |||
Available-for-sale and held-to-maturity collateral dependant | investmentSecurity | 0 | 0 | ||||
Gross gains | $ 1,200,000 | $ 1,300,000 | $ 5,100,000 | $ 10,400,000 | 6,500,000 | |
Gross losses | 12,000 | 1,300,000 | 811,000 | 1,500,000 | 1,600,000 | |
Proceeds from available-for-sale securities | 212,500,000 | 191,100,000 | 191,300,000 | 558,900,000 | $ 418,500,000 | |
Receivables for securities with a later settlement date | 6,500,000 | |||||
Investment securities pledged | 149,000,000 | 149,000,000 | $ 125,700,000 | |||
FHLB stock | 17,300,000 | 17,300,000 | ||||
FRB stock | 51,700,000 | 51,700,000 | ||||
Other stock | 25,700,000 | 25,700,000 | ||||
Amount of stock repurchased by FHLB | $ 0 | 17,300,000 | $ 5,400,000 | |||
Impairment loss on investments in FHLB, FRB and other stock | $ 0 | |||||
Opus Bank | ||||||
Investment Securities | ||||||
Available-for-sale securities acquired | 829,900,000 | |||||
Allowance for credit losses of available-for-sale securities classified as purchase credit deteriorated | 0 | |||||
Opus Bank | Financial Asset Acquired with Credit Deterioration | ||||||
Investment Securities | ||||||
Available-for-sale securities acquired | $ 0 |
Investment Securities - Investm
Investment Securities - Investment Category and Length of Time (Details) $ in Thousands | Sep. 30, 2020USD ($)investmentSecurity | Dec. 31, 2019USD ($)investmentSecurity |
Less than 12 Months | ||
Number | investmentSecurity | 180 | 45 |
Fair Value | $ 1,207,091 | $ 274,640 |
Gross Unrealized Losses | $ (18,260) | $ (3,258) |
12 Months or Longer | ||
Number | investmentSecurity | 10 | 21 |
Fair Value | $ 11,655 | $ 41,003 |
Gross Unrealized Losses | $ (323) | $ (834) |
Total | ||
Number | investmentSecurity | 190 | 66 |
Fair Value | $ 1,218,746 | $ 315,643 |
Gross Unrealized Losses | $ (18,583) | $ (4,092) |
U.S. Treasury | ||
Less than 12 Months | ||
Number | investmentSecurity | 0 | 1 |
Fair Value | $ 0 | $ 10,194 |
Gross Unrealized Losses | $ 0 | $ (39) |
12 Months or Longer | ||
Number | investmentSecurity | 0 | 0 |
Fair Value | $ 0 | $ 0 |
Gross Unrealized Losses | $ 0 | $ 0 |
Total | ||
Number | investmentSecurity | 0 | 1 |
Fair Value | $ 0 | $ 10,194 |
Gross Unrealized Losses | $ 0 | $ (39) |
Agency | ||
Less than 12 Months | ||
Number | investmentSecurity | 3 | 13 |
Fair Value | $ 57,720 | $ 102,874 |
Gross Unrealized Losses | $ (370) | $ (1,340) |
12 Months or Longer | ||
Number | investmentSecurity | 9 | 9 |
Fair Value | $ 11,179 | $ 13,514 |
Gross Unrealized Losses | $ (321) | $ (336) |
Total | ||
Number | investmentSecurity | 12 | 22 |
Fair Value | $ 68,899 | $ 116,388 |
Gross Unrealized Losses | $ (691) | $ (1,676) |
Corporate | ||
Less than 12 Months | ||
Number | investmentSecurity | 17 | 1 |
Fair Value | $ 145,419 | $ 1,017 |
Gross Unrealized Losses | $ (2,169) | $ (14) |
12 Months or Longer | ||
Number | investmentSecurity | 0 | 0 |
Fair Value | $ 0 | $ 0 |
Gross Unrealized Losses | $ 0 | $ 0 |
Total | ||
Number | investmentSecurity | 17 | 1 |
Fair Value | $ 145,419 | $ 1,017 |
Gross Unrealized Losses | $ (2,169) | $ (14) |
Municipal bonds | ||
Less than 12 Months | ||
Number | investmentSecurity | 141 | 12 |
Fair Value | $ 776,203 | $ 30,541 |
Gross Unrealized Losses | $ (15,062) | $ (184) |
12 Months or Longer | ||
Number | investmentSecurity | 0 | 0 |
Fair Value | $ 0 | $ 0 |
Gross Unrealized Losses | $ 0 | $ 0 |
Total | ||
Number | investmentSecurity | 141 | 12 |
Fair Value | $ 776,203 | $ 30,541 |
Gross Unrealized Losses | $ (15,062) | $ (184) |
Collateralized mortgage obligations | ||
Less than 12 Months | ||
Number | investmentSecurity | 11 | 0 |
Fair Value | $ 129,496 | $ 0 |
Gross Unrealized Losses | $ (463) | $ 0 |
12 Months or Longer | ||
Number | investmentSecurity | 1 | 1 |
Fair Value | $ 476 | $ 603 |
Gross Unrealized Losses | $ (2) | $ (8) |
Total | ||
Number | investmentSecurity | 12 | 1 |
Fair Value | $ 129,972 | $ 603 |
Gross Unrealized Losses | $ (465) | $ (8) |
Mortgage-backed securities | ||
Less than 12 Months | ||
Number | investmentSecurity | 8 | 18 |
Fair Value | $ 98,253 | $ 130,014 |
Gross Unrealized Losses | $ (196) | $ (1,681) |
12 Months or Longer | ||
Number | investmentSecurity | 0 | 11 |
Fair Value | $ 0 | $ 26,886 |
Gross Unrealized Losses | $ 0 | $ (490) |
Total | ||
Number | investmentSecurity | 8 | 29 |
Fair Value | $ 98,253 | $ 156,900 |
Gross Unrealized Losses | $ (196) | $ (2,171) |
Investment Securities - By Cont
Investment Securities - By Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
Due in One Year or Less | $ 170,870 | |
Due after One Year through Five Years | 330,075 | |
Due after Five Years through Ten Years | 761,169 | |
Due after Ten Years | 2,274,646 | |
Total | 3,536,760 | $ 1,338,260 |
Fair Value | ||
Due in One Year or Less | 171,689 | |
Due after One Year through Five Years | 338,789 | |
Due after Five Years through Ten Years | 793,777 | |
Due after Ten Years | 2,296,476 | |
Total | 3,600,731 | 1,368,384 |
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 | 27,980 | |
Amortized Cost | 27,980 | 37,838 |
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 | 29,399 | |
Total | 29,399 | 38,760 |
Amortized Cost | ||
Due in One Year or Less | 170,870 | |
Due after One Year through Five Years | 330,075 | |
Due after Five Years through Ten Years | 761,169 | |
Due after Ten Years | 2,302,626 | |
Total | 3,564,740 | |
Fair Value | ||
Due in One Year or Less | 171,689 | |
Due after One Year through Five Years | 338,789 | |
Due after Five Years through Ten Years | 793,777 | |
Due after Ten Years | 2,325,875 | |
Total | 3,630,130 | |
U.S. Treasury | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 30,161 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 0 | |
Total | 30,161 | 60,457 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 32,739 | |
Due after Five Years through Ten Years | 0 | |
Due after Ten Years | 0 | |
Total | 32,739 | 63,555 |
Agency | ||
Amortized Cost | ||
Due in One Year or Less | 1,000 | |
Due after One Year through Five Years | 266,255 | |
Due after Five Years through Ten Years | 234,070 | |
Due after Ten Years | 76,302 | |
Total | 577,627 | 240,348 |
Fair Value | ||
Due in One Year or Less | 1,006 | |
Due after One Year through Five Years | 272,144 | |
Due after Five Years through Ten Years | 247,806 | |
Due after Ten Years | 82,089 | |
Total | 603,045 | 246,358 |
Corporate | ||
Amortized Cost | ||
Due in One Year or Less | 159,949 | |
Due after One Year through Five Years | 26,391 | |
Due after Five Years through Ten Years | 156,824 | |
Due after Ten Years | 54,506 | |
Total | 397,670 | 149,150 |
Fair Value | ||
Due in One Year or Less | 160,420 | |
Due after One Year through Five Years | 26,363 | |
Due after Five Years through Ten Years | 156,934 | |
Due after Ten Years | 53,819 | |
Total | 397,536 | 151,353 |
Municipal bonds | ||
Amortized Cost | ||
Due in One Year or Less | 9,921 | |
Due after One Year through Five Years | 1,458 | |
Due after Five Years through Ten Years | 36,895 | |
Due after Ten Years | 1,257,115 | |
Total | 1,305,389 | 384,032 |
Fair Value | ||
Due in One Year or Less | 10,263 | |
Due after One Year through Five Years | 1,586 | |
Due after Five Years through Ten Years | 39,849 | |
Due after Ten Years | 1,262,210 | |
Total | 1,313,908 | 397,298 |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 3,620 | |
Due after Five Years through Ten Years | 135,863 | |
Due after Ten Years | 218,132 | |
Total | 357,615 | 9,869 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 3,622 | |
Due after Five Years through Ten Years | 136,445 | |
Due after Ten Years | 218,213 | |
Total | 358,280 | 9,984 |
Mortgage-backed securities | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 2,190 | |
Due after Five Years through Ten Years | 197,517 | |
Due after Ten Years | 668,591 | |
Total | 868,298 | 494,404 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 2,335 | |
Due after Five Years through Ten Years | 212,743 | |
Due after Ten Years | 680,145 | |
Total | 895,223 | 499,836 |
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 | 26,357 | |
Amortized Cost | 26,357 | 36,114 |
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 | 27,776 | |
Total | 27,776 | $ 37,036 |
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 | 1,623 | |
Amortized Cost | 1,623 | |
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 | 1,623 | |
Total | $ 1,623 |
Investment Securities - Inves_2
Investment Securities - Investment Securities by External Credit Rating (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Debt Securities, Available-for-sale [Line Items] | |
2020 | $ 1,754,222 |
2019 | 659,563 |
2018 | 285,117 |
2017 | 288,452 |
2016 | 369,089 |
Prior | 272,268 |
Total | 3,628,711 |
Investment securities available-for-sale: | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 1,754,222 |
2019 | 659,563 |
2018 | 277,198 |
2017 | 281,544 |
2016 | 364,476 |
Prior | 263,728 |
Total | 3,600,731 |
Investment securities available-for-sale: | U.S. Treasury | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 22,006 |
2017 | 10,733 |
2016 | 0 |
Prior | 0 |
Total | 32,739 |
Investment securities available-for-sale: | Agency | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 284,262 |
2019 | 44,884 |
2018 | 159,319 |
2017 | 9,869 |
2016 | 21,246 |
Prior | 83,465 |
Total | 603,045 |
Investment securities available-for-sale: | Corporate | A1 - A3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 59,797 |
2019 | 19,922 |
2018 | 0 |
2017 | 0 |
2016 | 119,221 |
Prior | 9,256 |
Total | 208,196 |
Investment securities available-for-sale: | Corporate | Baa1 - Baa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 80,417 |
2019 | 41,866 |
2018 | 5,074 |
2017 | 18,029 |
2016 | 8,801 |
Prior | 35,153 |
Total | 189,340 |
Investment securities available-for-sale: | Municipal bonds | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 904,523 |
2019 | 284,555 |
2018 | 32,497 |
2017 | 50,942 |
2016 | 15,238 |
Prior | 25,296 |
Total | 1,313,051 |
Investment securities available-for-sale: | Municipal bonds | A1 - A3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 0 |
2017 | 0 |
2016 | 0 |
Prior | 857 |
Total | 857 |
Investment securities available-for-sale: | Collateralized mortgage obligations | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 119,689 |
2019 | 86,130 |
2018 | 14,500 |
2017 | 3,975 |
2016 | 114,460 |
Prior | 19,526 |
Total | 358,280 |
Investment securities available-for-sale: | Mortgage-backed securities | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 305,534 |
2019 | 182,206 |
2018 | 43,802 |
2017 | 187,996 |
2016 | 85,510 |
Prior | 90,175 |
Total | 895,223 |
Investment securities held-to-maturity: | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 7,919 |
2017 | 6,908 |
2016 | 4,613 |
Prior | 8,540 |
Total | 27,980 |
Investment securities held-to-maturity: | Mortgage-backed securities | Aaa - Aa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 7,291 |
2017 | 6,908 |
2016 | 4,613 |
Prior | 7,545 |
Total | 26,357 |
Investment securities held-to-maturity: | Other | Baa1 - Baa3 | |
Debt Securities, Available-for-sale [Line Items] | |
2020 | 0 |
2019 | 0 |
2018 | 628 |
2017 | 0 |
2016 | 0 |
Prior | 995 |
Total | $ 1,623 |
Loans Held for Investment - Com
Loans Held for Investment - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Loans Held for Investment | |||||||
Loans held for investment | $ 13,450,840 | $ 8,722,311 | |||||
Allowance for credit losses for loans held for investment | (282,503) | $ (282,271) | (35,698) | $ (35,000) | $ (35,026) | $ (36,072) | |
Loans held for investment, net | 13,168,337 | 8,686,613 | |||||
Loans held for sale, at lower of cost or fair value | 1,032 | 1,672 | |||||
Unaccreted mark-to-market discount | 126,300 | 40,700 | |||||
Investor loans secured by real estate | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 8,245,481 | 4,153,084 | |||||
Allowance for credit losses for loans held for investment | $ (9,027) | ||||||
Investor loans secured by real estate | CRE non-owner-occupied | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 2,707,930 | 2,070,141 | |||||
Allowance for credit losses for loans held for investment | (54,105) | (63,007) | (1,899) | (1,878) | (1,765) | (1,624) | |
Investor loans secured by real estate | Multifamily | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 5,142,069 | 1,575,726 | |||||
Allowance for credit losses for loans held for investment | (67,336) | (63,511) | (729) | (715) | (705) | (740) | |
Investor loans secured by real estate | Construction and land | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 337,872 | 438,786 | |||||
Allowance for credit losses for loans held for investment | (15,557) | (18,804) | (4,484) | (4,791) | (5,408) | (5,964) | |
Investor loans secured by real estate | SBA secured by real estate | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 57,610 | 68,431 | |||||
Allowance for credit losses for loans held for investment | (5,327) | (2,010) | (1,915) | (1,790) | (1,322) | (1,827) | |
Business loans secured by real estate | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 2,563,243 | 2,288,175 | |||||
Allowance for credit losses for loans held for investment | (5,492) | ||||||
Business loans secured by real estate | SBA secured by real estate | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 84,126 | 88,381 | |||||
Allowance for credit losses for loans held for investment | (6,160) | (4,368) | (2,119) | (2,110) | (1,611) | (1,824) | |
Business loans secured by real estate | CRE owner-occupied | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 2,119,788 | 1,846,554 | |||||
Allowance for credit losses for loans held for investment | (48,666) | (48,213) | (2,781) | (2,564) | (2,299) | (1,908) | |
Business loans secured by real estate | Franchise real estate secured | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 359,329 | 353,240 | |||||
Allowance for credit losses for loans held for investment | (11,988) | (13,060) | (592) | (567) | (579) | (743) | |
Commercial loans | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 2,353,723 | 1,975,053 | |||||
Allowance for credit losses for loans held for investment | (20,118) | ||||||
Commercial loans | Commercial and industrial | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 1,820,995 | 1,393,270 | |||||
Allowance for credit losses for loans held for investment | (47,914) | (41,967) | (13,857) | (12,896) | (13,796) | (13,695) | |
Commercial loans | Franchise non-real estate secured | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 515,980 | 564,357 | |||||
Allowance for credit losses for loans held for investment | (20,149) | (21,676) | (5,816) | (6,166) | (6,186) | (6,066) | |
Commercial loans | SBA non-real estate secured | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 16,748 | 17,426 | |||||
Allowance for credit losses for loans held for investment | (951) | (600) | (445) | (481) | (430) | (654) | |
Retail loans | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 288,393 | 305,999 | |||||
Allowance for credit losses for loans held for investment | $ (1,061) | ||||||
Retail loans | Single family residential | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 243,359 | 255,024 | |||||
Allowance for credit losses for loans held for investment | (1,243) | (1,479) | (655) | (691) | (704) | (808) | |
Retail loans | Consumer | |||||||
Loans Held for Investment | |||||||
Loans held for investment | 45,034 | 50,975 | |||||
Allowance for credit losses for loans held for investment | $ (3,107) | $ (3,576) | $ (406) | $ (351) | $ (221) | $ (219) |
Loans Held for Investment - Nar
Loans Held for Investment - Narrative (Details) | Sep. 30, 2020USD ($)loan | Dec. 31, 2019USD ($)loan | Dec. 23, 2016USD ($) | Jul. 31, 2020USD ($) | Sep. 30, 2020USD ($)loan | Sep. 30, 2019loan | Sep. 30, 2020USD ($)loanareagrade | Sep. 30, 2019USD ($)loan | Dec. 31, 2019USD ($)loan | Jun. 30, 2020USD ($) | Jun. 01, 2020USD ($) | Jan. 01, 2020USD ($) |
Loans Held for Investment | ||||||||||||
Loans held for investment | $ 13,450,840,000 | $ 8,722,311,000 | $ 13,450,840,000 | $ 13,450,840,000 | $ 8,722,311,000 | |||||||
Proceeds from loans held for sale previously classified as portfolio loans | 1,283,214,000 | $ 76,579,000 | ||||||||||
Servicing rights retained from guaranteed portion of SBA loans sold | 5,900,000 | 7,700,000 | 5,900,000 | 5,900,000 | 7,700,000 | |||||||
Accrued expenses and other liabilities | 282,905,000 | 131,367,000 | 282,905,000 | 282,905,000 | 131,367,000 | |||||||
Unpaid principal balance for loans and participations serviced for others | 727,200,000 | 633,800,000 | 727,200,000 | 727,200,000 | 633,800,000 | |||||||
Secured loans limit to one borrower | 800,100,000 | 800,100,000 | 800,100,000 | |||||||||
Unsecured loans limit to one borrower | 480,100,000 | 480,100,000 | 480,100,000 | |||||||||
Aggregate outstanding balance of loans to one borrower of secured credit | 126,400,000 | 126,400,000 | $ 126,400,000 | |||||||||
Number of areas where the entity's credit quality is maintained and credit risk managed | area | 2 | |||||||||||
Number of pass scale grades | grade | 6 | |||||||||||
Individually evaluated loans | 26,500,000 | 22,842,000 | 26,500,000 | $ 26,500,000 | 22,842,000 | |||||||
ACL attributable to individually evaluated loans | 2,000,000 | 0 | 2,000,000 | 2,000,000 | 0 | |||||||
Loans on nonaccrual status | 26,500,000 | $ 26,500,000 | $ 26,500,000 | |||||||||
Loans 90 days or more past due and still accruing | $ 0 | $ 0 | ||||||||||
Number of loans modified | loan | 0 | 0 | 0 | 0 | ||||||||
Number of TDR loans | loan | 2 | 2 | ||||||||||
Premodification TDR | $ 3,000,000 | |||||||||||
Number of loans, subsequent default | loan | 0 | 0 | 0 | 0 | ||||||||
Accounting standards update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||||||||
Total nonaccrual loans | 27,214,000 | 8,500,000 | $ 27,214,000 | $ 27,214,000 | $ 8,500,000 | |||||||
Consumer mortgage loans collateralized by residential real estate, foreclosure proceedings in process | $ 0 | 0 | $ 0 | $ 0 | 0 | |||||||
Impact of CECL Adoption | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | $ 55,700,000 | |||||||||||
Impact of CECL Adoption | Financial Asset Acquired with Credit Deterioration | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | $ 0 | |||||||||||
COVID-19 Related Loan Modifications | ||||||||||||
Loans Held for Investment | ||||||||||||
Number of loans modified | loan | 54 | |||||||||||
Number of TDR loans | loan | 0 | 0 | 0 | |||||||||
Total balance of loans modified | $ 118,300,000 | $ 118,300,000 | $ 118,300,000 | |||||||||
Percentage of total loans held for investment | 0.90% | 0.90% | 0.90% | |||||||||
Opus Bank | COVID-19 Related Loan Modifications | ||||||||||||
Loans Held for Investment | ||||||||||||
Number of loans modified | loan | 12 | |||||||||||
Total balance of loans modified | $ 24,500,000 | $ 24,500,000 | $ 24,500,000 | |||||||||
Discounted cash flow approach | ||||||||||||
Loans Held for Investment | ||||||||||||
Individually evaluated loans | 8,800,000 | 8,800,000 | 8,800,000 | |||||||||
Underlying value of the collateral | ||||||||||||
Loans Held for Investment | ||||||||||||
Individually evaluated loans | 17,700,000 | 17,700,000 | 17,700,000 | |||||||||
Secured Debt | ||||||||||||
Loans Held for Investment | ||||||||||||
Aggregate outstanding balance of loans to one borrower of secured credit | 101,500,000 | 101,500,000 | 101,500,000 | |||||||||
Unsecured Debt | ||||||||||||
Loans Held for Investment | ||||||||||||
Aggregate outstanding balance of loans to one borrower of secured credit | 24,900,000 | 24,900,000 | 24,900,000 | |||||||||
Opus Bank | Opus Bank | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | $ 5,940,000,000 | |||||||||||
Multifamily Loan Securitization | ||||||||||||
Loans Held for Investment | ||||||||||||
Unpaid principal balance for loans and participations serviced for others | 111,100,000 | 111,100,000 | 111,100,000 | |||||||||
Multifamily Loan Securitization | Opus Bank | ||||||||||||
Loans Held for Investment | ||||||||||||
Proceeds from sale of loans receivable | $ 509,000,000 | |||||||||||
SBA | ||||||||||||
Loans Held for Investment | ||||||||||||
Unpaid principal balance for loans and participations serviced for others | 437,400,000 | 475,300,000 | 437,400,000 | 437,400,000 | 475,300,000 | |||||||
Commercial loans | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | 2,353,723,000 | 1,975,053,000 | 2,353,723,000 | 2,353,723,000 | 1,975,053,000 | |||||||
Total nonaccrual loans | 14,578,000 | 14,578,000 | 14,578,000 | |||||||||
Commercial loans | SBA PPP | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | 0 | 0 | 0 | $ 1,130,000,000 | ||||||||
Proceeds from loans held for sale previously classified as portfolio loans | $ 1,130,000,000 | |||||||||||
Gain (loss) on sale of SBA PPP loan portfolio | $ 18,900,000 | |||||||||||
Commercial loans | Commercial and industrial | ||||||||||||
Loans Held for Investment | ||||||||||||
Loans held for investment | 1,820,995,000 | 1,393,270,000 | 1,820,995,000 | 1,820,995,000 | 1,393,270,000 | |||||||
Individually evaluated loans | 7,529,000 | 7,529,000 | ||||||||||
ACL attributable to individually evaluated loans | $ 0 | $ 0 | ||||||||||
Total nonaccrual loans | $ 6,099,000 | $ 6,099,000 | $ 6,099,000 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grading System under ASC 326 (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | $ 1,212,344 | |
2019 | 3,540,465 | |
2018 | 2,369,668 | |
2017 | 1,982,912 | |
2016 | 1,171,944 | |
Prior | 2,385,545 | |
Revolving | 779,125 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | 13,450,840 | $ 8,722,311 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 8,640,840 | |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 36,722 | |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 44,749 | |
Investor loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 854,784 | |
2019 | 2,458,374 | |
2018 | 1,560,916 | |
2017 | 1,114,295 | |
2016 | 730,632 | |
Prior | 1,513,942 | |
Revolving | 12,538 | |
Revolving Converted to Term During the Period | 0 | |
Total | 8,245,481 | 4,153,084 |
Investor loans secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 4,147,989 | |
Investor loans secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,151 | |
Investor loans secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,944 | |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,707,930 | 2,070,141 |
Investor loans secured by real estate | CRE non-owner-occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 190,701 | |
2019 | 566,855 | |
2018 | 475,363 | |
2017 | 314,190 | |
2016 | 290,179 | |
Prior | 852,044 | |
Revolving | 11,031 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,700,363 | 2,067,875 |
Investor loans secured by real estate | CRE non-owner-occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 1,839 | |
2017 | 435 | |
2016 | 0 | |
Prior | 1,816 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 4,090 | 1,178 |
Investor loans secured by real estate | CRE non-owner-occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 202 | |
2017 | 0 | |
2016 | 517 | |
Prior | 2,199 | |
Revolving | 559 | |
Revolving Converted to Term During the Period | 0 | |
Total | 3,477 | 1,088 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Multifamily | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 638,349 | |
2019 | 1,735,235 | |
2018 | 964,740 | |
2017 | 750,548 | |
2016 | 412,893 | |
Prior | 639,171 | |
Revolving | 574 | |
Revolving Converted to Term During the Period | 0 | |
Total | 5,141,510 | 1,575,510 |
Investor loans secured by real estate | Multifamily | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | |
Investor loans secured by real estate | Multifamily | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 559 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 559 | 216 |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 337,872 | 438,786 |
Investor loans secured by real estate | Construction and land | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 25,240 | |
2019 | 145,709 | |
2018 | 104,702 | |
2017 | 33,023 | |
2016 | 19,932 | |
Prior | 7,997 | |
Revolving | 374 | |
Revolving Converted to Term During the Period | 0 | |
Total | 336,977 | 438,769 |
Investor loans secured by real estate | Construction and land | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | |
Investor loans secured by real estate | Construction and land | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 895 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 895 | 17 |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 57,610 | 68,431 |
Investor loans secured by real estate | SBA secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 494 | |
2019 | 10,412 | |
2018 | 11,058 | |
2017 | 14,842 | |
2016 | 6,712 | |
Prior | 9,037 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 52,555 | 65,835 |
Investor loans secured by real estate | SBA secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 973 | |
Investor loans secured by real estate | SBA secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 163 | |
2018 | 2,117 | |
2017 | 698 | |
2016 | 399 | |
Prior | 1,678 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 5,055 | 1,623 |
Business loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 233,812 | |
2019 | 523,420 | |
2018 | 450,328 | |
2017 | 479,759 | |
2016 | 283,961 | |
Prior | 587,025 | |
Revolving | 4,938 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,563,243 | 2,288,175 |
Business loans secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,267,278 | |
Business loans secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 13,930 | |
Business loans secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 6,967 | |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 84,126 | 88,381 |
Business loans secured by real estate | SBA secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 2,643 | |
2019 | 7,658 | |
2018 | 14,054 | |
2017 | 17,110 | |
2016 | 9,643 | |
Prior | 26,768 | |
Revolving | 95 | |
Revolving Converted to Term During the Period | 0 | |
Total | 77,971 | 83,106 |
Business loans secured by real estate | SBA secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 1,842 | |
Business loans secured by real estate | SBA secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 22 | |
2017 | 1,994 | |
2016 | 914 | |
Prior | 3,225 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 6,155 | 3,433 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,119,788 | 1,846,554 |
Business loans secured by real estate | CRE owner-occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 210,662 | |
2019 | 412,186 | |
2018 | 358,157 | |
2017 | 346,906 | |
2016 | 235,040 | |
Prior | 505,999 | |
Revolving | 4,593 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,073,543 | 1,831,853 |
Business loans secured by real estate | CRE owner-occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 15,827 | |
2018 | 0 | |
2017 | 10,268 | |
2016 | 4,186 | |
Prior | 2,008 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 32,289 | 11,167 |
Business loans secured by real estate | CRE owner-occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 3,636 | |
2017 | 725 | |
2016 | 2,666 | |
Prior | 6,679 | |
Revolving | 250 | |
Revolving Converted to Term During the Period | 0 | |
Total | 13,956 | 3,534 |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 359,329 | 353,240 |
Business loans secured by real estate | Franchise real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 20,507 | |
2019 | 87,749 | |
2018 | 74,459 | |
2017 | 102,756 | |
2016 | 31,512 | |
Prior | 42,346 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 359,329 | 352,319 |
Business loans secured by real estate | Franchise real estate secured | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 921 | |
Business loans secured by real estate | Franchise real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 119,216 | |
2019 | 550,144 | |
2018 | 343,392 | |
2017 | 335,937 | |
2016 | 122,265 | |
Prior | 147,157 | |
Revolving | 726,775 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | 2,353,723 | 1,975,053 |
Commercial loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 1,920,189 | |
Commercial loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 20,641 | |
Commercial loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 34,223 | |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 1,820,995 | 1,393,270 |
Commercial loans | Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 98,656 | |
2019 | 339,144 | |
2018 | 183,259 | |
2017 | 232,648 | |
2016 | 71,414 | |
Prior | 94,220 | |
Revolving | 682,523 | |
Revolving Converted to Term During the Period | 6,311 | |
Total | 1,708,175 | 1,359,662 |
Commercial loans | Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 43 | |
2018 | 17,231 | |
2017 | 15,810 | |
2016 | 1,398 | |
Prior | 0 | |
Revolving | 7,886 | |
Revolving Converted to Term During the Period | 0 | |
Total | 42,368 | 13,226 |
Commercial loans | Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 4,902 | |
2018 | 22,763 | |
2017 | 1,111 | |
2016 | 1,265 | |
Prior | 4,393 | |
Revolving | 34,271 | |
Revolving Converted to Term During the Period | 1,747 | |
Total | 70,452 | 20,382 |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 515,980 | 564,357 |
Commercial loans | Franchise non-real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 20,205 | |
2019 | 201,621 | |
2018 | 117,113 | |
2017 | 53,160 | |
2016 | 47,290 | |
Prior | 43,239 | |
Revolving | 1,361 | |
Revolving Converted to Term During the Period | 511 | |
Total | 484,500 | 546,594 |
Commercial loans | Franchise non-real estate secured | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 6,930 | |
Commercial loans | Franchise non-real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 2,050 | |
2018 | 957 | |
2017 | 28,473 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 31,480 | 10,833 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 16,748 | 17,426 |
Commercial loans | SBA non-real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 355 | |
2019 | 2,299 | |
2018 | 1,700 | |
2017 | 2,254 | |
2016 | 623 | |
Prior | 3,881 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 268 | |
Total | 11,380 | 13,933 |
Commercial loans | SBA non-real estate secured | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 1,661 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,661 | 485 |
Commercial loans | SBA non-real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 85 | |
2018 | 369 | |
2017 | 820 | |
2016 | 275 | |
Prior | 1,424 | |
Revolving | 734 | |
Revolving Converted to Term During the Period | 0 | |
Total | 3,707 | 3,008 |
Retail loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 4,532 | |
2019 | 8,527 | |
2018 | 15,032 | |
2017 | 52,921 | |
2016 | 35,086 | |
Prior | 137,421 | |
Revolving | 34,874 | |
Revolving Converted to Term During the Period | 0 | |
Total | 288,393 | 305,999 |
Retail loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 305,384 | |
Retail loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | |
Retail loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 615 | |
Retail loans | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 243,359 | 255,024 |
Retail loans | Single family residential | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 4,469 | |
2019 | 8,385 | |
2018 | 14,972 | |
2017 | 14,884 | |
2016 | 35,074 | |
Prior | 133,137 | |
Revolving | 31,452 | |
Revolving Converted to Term During the Period | 0 | |
Total | 242,373 | 254,463 |
Retail loans | Single family residential | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 57 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 57 | 0 |
Retail loans | Single family residential | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 929 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 929 | 561 |
Retail loans | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 45,034 | 50,975 |
Retail loans | Consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 63 | |
2019 | 142 | |
2018 | 60 | |
2017 | 38,037 | |
2016 | 12 | |
Prior | 3,255 | |
Revolving | 3,422 | |
Revolving Converted to Term During the Period | 0 | |
Total | 44,991 | 50,921 |
Retail loans | Consumer | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 0 | |
Retail loans | Consumer | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 43 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | $ 43 | $ 54 |
Loans Held for Investment - I_2
Loans Held for Investment - Internal Risk Grading System (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | $ 13,450,840 | $ 8,722,311 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 8,640,840 | |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 36,722 | |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 44,749 | |
Investor loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 8,245,481 | 4,153,084 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,707,930 | 2,070,141 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 337,872 | 438,786 |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 57,610 | 68,431 |
Investor loans secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 4,147,989 | |
Investor loans secured by real estate | Pass | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,700,363 | 2,067,875 |
Investor loans secured by real estate | Pass | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 5,141,510 | 1,575,510 |
Investor loans secured by real estate | Pass | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 336,977 | 438,769 |
Investor loans secured by real estate | Pass | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 52,555 | 65,835 |
Investor loans secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,151 | |
Investor loans secured by real estate | Special Mention | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 4,090 | 1,178 |
Investor loans secured by real estate | Special Mention | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 0 | |
Investor loans secured by real estate | Special Mention | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 0 | |
Investor loans secured by real estate | Special Mention | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 973 | |
Investor loans secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,944 | |
Investor loans secured by real estate | Substandard | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 3,477 | 1,088 |
Investor loans secured by real estate | Substandard | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 559 | 216 |
Investor loans secured by real estate | Substandard | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 895 | 17 |
Investor loans secured by real estate | Substandard | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 5,055 | 1,623 |
Business loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,563,243 | 2,288,175 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 84,126 | 88,381 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,119,788 | 1,846,554 |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 359,329 | 353,240 |
Business loans secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,267,278 | |
Business loans secured by real estate | Pass | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 77,971 | 83,106 |
Business loans secured by real estate | Pass | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,073,543 | 1,831,853 |
Business loans secured by real estate | Pass | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 359,329 | 352,319 |
Business loans secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 13,930 | |
Business loans secured by real estate | Special Mention | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 1,842 | |
Business loans secured by real estate | Special Mention | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 32,289 | 11,167 |
Business loans secured by real estate | Special Mention | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 921 | |
Business loans secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 6,967 | |
Business loans secured by real estate | Substandard | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 6,155 | 3,433 |
Business loans secured by real estate | Substandard | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 13,956 | 3,534 |
Business loans secured by real estate | Substandard | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 0 | |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 2,353,723 | 1,975,053 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 1,820,995 | 1,393,270 |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 515,980 | 564,357 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 16,748 | 17,426 |
Commercial loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 1,920,189 | |
Commercial loans | Pass | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 1,708,175 | 1,359,662 |
Commercial loans | Pass | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 484,500 | 546,594 |
Commercial loans | Pass | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 11,380 | 13,933 |
Commercial loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 20,641 | |
Commercial loans | Special Mention | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 42,368 | 13,226 |
Commercial loans | Special Mention | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 6,930 | |
Commercial loans | Special Mention | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 1,661 | 485 |
Commercial loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 34,223 | |
Commercial loans | Substandard | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 70,452 | 20,382 |
Commercial loans | Substandard | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 31,480 | 10,833 |
Commercial loans | Substandard | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 3,707 | 3,008 |
Retail loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 288,393 | 305,999 |
Retail loans | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 243,359 | 255,024 |
Retail loans | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 45,034 | 50,975 |
Retail loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 305,384 | |
Retail loans | Pass | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 242,373 | 254,463 |
Retail loans | Pass | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 44,991 | 50,921 |
Retail loans | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 0 | |
Retail loans | Special Mention | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 57 | 0 |
Retail loans | Special Mention | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 0 | |
Retail loans | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 615 | |
Retail loans | Substandard | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | 929 | 561 |
Retail loans | Substandard | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total gross loans | $ 43 | $ 54 |
Loans Held for Investment - Del
Loans Held for Investment - Delinquencies (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Past Due [Line Items] | ||
Total | $ 13,450,840 | $ 8,722,311 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 13,421,464 | 8,703,209 |
30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 7,084 | 2,104 |
60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 1,086 | 10,559 |
90 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 21,206 | 6,439 |
Investor loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 8,245,481 | 4,153,084 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2,707,930 | 2,070,141 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 337,872 | 438,786 |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 57,610 | 68,431 |
Investor loans secured by real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 8,242,561 | 4,150,427 |
Investor loans secured by real estate | Current | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 2,707,169 | 2,067,874 |
Investor loans secured by real estate | Current | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Current | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 336,977 | 438,786 |
Investor loans secured by real estate | Current | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 56,346 | 68,041 |
Investor loans secured by real estate | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 673 | 1,179 |
Investor loans secured by real estate | 30-59 | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 1,179 |
Investor loans secured by real estate | 30-59 | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 30-59 | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 30-59 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 673 | 0 |
Investor loans secured by real estate | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 60-89 | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 60-89 | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 60-89 | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 60-89 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 90 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 2,247 | 1,478 |
Investor loans secured by real estate | 90 | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 761 | 1,088 |
Investor loans secured by real estate | 90 | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Investor loans secured by real estate | 90 | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 895 | 0 |
Investor loans secured by real estate | 90 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 591 | 390 |
Business loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2,563,243 | 2,288,175 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 84,126 | 88,381 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2,119,788 | 1,846,554 |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 359,329 | 353,240 |
Business loans secured by real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 2,556,929 | 2,286,409 |
Business loans secured by real estate | Current | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 83,116 | 86,946 |
Business loans secured by real estate | Current | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 2,114,484 | 1,846,223 |
Business loans secured by real estate | Current | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 359,329 | 353,240 |
Business loans secured by real estate | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 331 |
Business loans secured by real estate | 30-59 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Business loans secured by real estate | 30-59 | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 331 |
Business loans secured by real estate | 30-59 | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Business loans secured by real estate | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 250 | 589 |
Business loans secured by real estate | 60-89 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 589 |
Business loans secured by real estate | 60-89 | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 250 | 0 |
Business loans secured by real estate | 60-89 | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Business loans secured by real estate | 90 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 6,064 | 846 |
Business loans secured by real estate | 90 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 1,010 | 846 |
Business loans secured by real estate | 90 | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 5,054 | 0 |
Business loans secured by real estate | 90 | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 2,353,723 | 1,975,053 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 1,820,995 | 1,393,270 |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 515,980 | 564,357 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 16,748 | 17,426 |
Commercial loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 2,333,955 | 1,960,382 |
Commercial loans | Current | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 1,810,027 | 1,389,026 |
Commercial loans | Current | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 508,237 | 555,215 |
Commercial loans | Current | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 15,691 | 16,141 |
Commercial loans | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 6,037 | 589 |
Commercial loans | 30-59 | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 5,717 | 422 |
Commercial loans | 30-59 | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Commercial loans | 30-59 | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 320 | 167 |
Commercial loans | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 836 | 9,968 |
Commercial loans | 60-89 | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 836 | 826 |
Commercial loans | 60-89 | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 9,142 |
Commercial loans | 60-89 | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Commercial loans | 90 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 12,895 | 4,114 |
Commercial loans | 90 | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 4,415 | 2,996 |
Commercial loans | 90 | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 7,743 | 0 |
Commercial loans | 90 | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 737 | 1,118 |
Retail loans | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 288,393 | 305,999 |
Retail loans | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 243,359 | 255,024 |
Retail loans | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Total | 45,034 | 50,975 |
Retail loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 288,019 | 305,991 |
Retail loans | Current | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 242,985 | 255,024 |
Retail loans | Current | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Current | 45,034 | 50,967 |
Retail loans | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 374 | 5 |
Retail loans | 30-59 | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 374 | 0 |
Retail loans | 30-59 | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 5 |
Retail loans | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 2 |
Retail loans | 60-89 | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Retail loans | 60-89 | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 2 |
Retail loans | 90 | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 1 |
Retail loans | 90 | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | 0 | 0 |
Retail loans | 90 | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Days Past Due | $ 0 | $ 1 |
Loans Held for Investment - Inv
Loans Held for Investment - Investment in Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2019 | Dec. 31, 2019 | |
Impaired Loans | |||
Unpaid Principal Balance | $ 24,256 | ||
Recorded Investment | 22,842 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 22,842 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | $ 15,296 | $ 17,219 | |
Interest Income Recognized | 104 | 303 | |
Investor loans secured by real estate | CRE non-owner-occupied | |||
Impaired Loans | |||
Unpaid Principal Balance | 1,184 | ||
Recorded Investment | 1,088 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 1,088 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 421 | 194 | |
Interest Income Recognized | 0 | 0 | |
Investor loans secured by real estate | Construction and land | |||
Impaired Loans | |||
Average Recorded Investment | 320 | 160 | |
Interest Income Recognized | 0 | 0 | |
Investor loans secured by real estate | SBA secured by real estate | |||
Impaired Loans | |||
Unpaid Principal Balance | 772 | ||
Recorded Investment | 390 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 390 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 406 | 1,196 | |
Interest Income Recognized | 0 | 0 | |
Business loans secured by real estate | SBA secured by real estate | |||
Impaired Loans | |||
Unpaid Principal Balance | 1,743 | ||
Recorded Investment | 1,517 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 1,517 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 969 | 692 | |
Interest Income Recognized | 0 | 0 | |
Business loans secured by real estate | CRE owner-occupied | |||
Impaired Loans | |||
Average Recorded Investment | 845 | 662 | |
Interest Income Recognized | 0 | 0 | |
Business loans secured by real estate | Franchise real estate secured | |||
Impaired Loans | |||
Average Recorded Investment | 0 | 2,516 | |
Interest Income Recognized | 0 | 0 | |
Commercial loans | Commercial and industrial | |||
Impaired Loans | |||
Unpaid Principal Balance | 7,755 | ||
Recorded Investment | 7,529 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 7,529 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 10,170 | 9,925 | |
Interest Income Recognized | 104 | 303 | |
Commercial loans | Franchise non-real estate secured | |||
Impaired Loans | |||
Unpaid Principal Balance | 10,835 | ||
Recorded Investment | 10,834 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 10,834 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 679 | 385 | |
Interest Income Recognized | 0 | 0 | |
Commercial loans | SBA non-real estate secured | |||
Impaired Loans | |||
Unpaid Principal Balance | 1,555 | ||
Recorded Investment | 1,118 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 1,118 | ||
Specific Allowance for Impaired Loans | 0 | ||
Average Recorded Investment | 1,113 | 1,081 | |
Interest Income Recognized | 0 | 0 | |
Retail loans | Single family residential | |||
Impaired Loans | |||
Unpaid Principal Balance | 412 | ||
Recorded Investment | 366 | ||
With Specific Allowance | 0 | ||
Without Specific Allowance | 366 | ||
Specific Allowance for Impaired Loans | $ 0 | ||
Average Recorded Investment | 373 | 383 | |
Interest Income Recognized | 0 | 0 | |
Retail loans | Consumer | |||
Impaired Loans | |||
Average Recorded Investment | 0 | 25 | |
Interest Income Recognized | $ 0 | $ 0 |
Loans Held for Investment - Acq
Loans Held for Investment - Acquired Loans Classified as PCD (Details) - USD ($) $ in Thousands | Jun. 01, 2020 | Sep. 30, 2020 |
Loans Held for Investment | ||
Initial ACL Recorded for PCD Loans | $ 21,242 | |
Opus Bank | ||
Loans Held for Investment | ||
Par value (unpaid principal balance) | $ 896,483 | |
Allowance for credit losses | (43,885) | |
(Discount) premium related to factors other than credit | (11,364) | |
Purchase price (initial fair value) | 841,234 | |
Uncollectable allowance for credit losses | 22,700 | |
Initial ACL Recorded for PCD Loans | 21,200 | |
Opus Bank | Investor loans secured by real estate | ||
Loans Held for Investment | ||
Par value (unpaid principal balance) | 704,441 | |
Allowance for credit losses | (13,786) | |
(Discount) premium related to factors other than credit | (8,696) | |
Purchase price (initial fair value) | 681,959 | |
Opus Bank | Business loans secured by real estate | ||
Loans Held for Investment | ||
Par value (unpaid principal balance) | 105,578 | |
Allowance for credit losses | (4,083) | |
(Discount) premium related to factors other than credit | (2,512) | |
Purchase price (initial fair value) | 98,983 | |
Opus Bank | Commercial loans | ||
Loans Held for Investment | ||
Par value (unpaid principal balance) | 80,184 | |
Allowance for credit losses | (25,635) | |
(Discount) premium related to factors other than credit | 138 | |
Purchase price (initial fair value) | 54,687 | |
Opus Bank | Retail loans | ||
Loans Held for Investment | ||
Par value (unpaid principal balance) | 6,280 | |
Allowance for credit losses | (381) | |
(Discount) premium related to factors other than credit | (294) | |
Purchase price (initial fair value) | $ 5,605 |
Loans Held for Investment - Sum
Loans Held for Investment - Summary of Nonaccrual Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | $ 17,682,000 | $ 17,682,000 | |
ACL | 557,000 | 557,000 | |
Non-Collateral Dependent Loans | 9,532,000 | 9,532,000 | |
ACL | 1,431,000 | 1,431,000 | |
Total Nonaccrual Loans | 27,214,000 | 27,214,000 | $ 8,500,000 |
Nonaccrual Loans with No ACL | 16,182,000 | 16,182,000 | |
Interest income | 0 | 0 | |
Investor loans secured by real estate | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 4,997,000 | 4,997,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 4,997,000 | 4,997,000 | |
Nonaccrual Loans with No ACL | 4,997,000 | 4,997,000 | |
Investor loans secured by real estate | CRE non-owner-occupied | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 2,838,000 | 2,838,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 2,838,000 | 2,838,000 | |
Nonaccrual Loans with No ACL | 2,838,000 | 2,838,000 | |
Investor loans secured by real estate | Construction and land | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 895,000 | 895,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 895,000 | 895,000 | |
Nonaccrual Loans with No ACL | 895,000 | 895,000 | |
Investor loans secured by real estate | SBA secured by real estate | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 1,264,000 | 1,264,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 1,264,000 | 1,264,000 | |
Nonaccrual Loans with No ACL | 1,264,000 | 1,264,000 | |
Business loans secured by real estate | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 7,189,000 | 7,189,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 7,189,000 | 7,189,000 | |
Nonaccrual Loans with No ACL | 7,189,000 | 7,189,000 | |
Business loans secured by real estate | SBA secured by real estate | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 1,084,000 | 1,084,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 1,084,000 | 1,084,000 | |
Nonaccrual Loans with No ACL | 1,084,000 | 1,084,000 | |
Business loans secured by real estate | CRE owner-occupied | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 6,105,000 | 6,105,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 6,105,000 | 6,105,000 | |
Nonaccrual Loans with No ACL | 6,105,000 | 6,105,000 | |
Commercial loans | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 5,046,000 | 5,046,000 | |
ACL | 557,000 | 557,000 | |
Non-Collateral Dependent Loans | 9,532,000 | 9,532,000 | |
ACL | 1,431,000 | 1,431,000 | |
Total Nonaccrual Loans | 14,578,000 | 14,578,000 | |
Nonaccrual Loans with No ACL | 3,546,000 | 3,546,000 | |
Commercial loans | Commercial and industrial | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 4,309,000 | 4,309,000 | |
ACL | 557,000 | 557,000 | |
Non-Collateral Dependent Loans | 1,790,000 | 1,790,000 | |
ACL | 266,000 | 266,000 | |
Total Nonaccrual Loans | 6,099,000 | 6,099,000 | |
Nonaccrual Loans with No ACL | 2,809,000 | 2,809,000 | |
Commercial loans | Franchise non-real estate secured | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 7,742,000 | 7,742,000 | |
ACL | 1,165,000 | 1,165,000 | |
Total Nonaccrual Loans | 7,742,000 | 7,742,000 | |
Nonaccrual Loans with No ACL | 0 | 0 | |
Commercial loans | SBA non-real estate secured | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 737,000 | 737,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 737,000 | 737,000 | |
Nonaccrual Loans with No ACL | 737,000 | 737,000 | |
Retail loans | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 450,000 | 450,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 450,000 | 450,000 | |
Nonaccrual Loans with No ACL | 450,000 | 450,000 | |
Retail loans | Single family residential | |||
Financing Receivable, Nonaccrual [Line Items] | |||
Collateral Dependent Loans | 450,000 | 450,000 | |
ACL | 0 | 0 | |
Non-Collateral Dependent Loans | 0 | 0 | |
ACL | 0 | 0 | |
Total Nonaccrual Loans | 450,000 | 450,000 | |
Nonaccrual Loans with No ACL | $ 450,000 | $ 450,000 |
Loans Held for Investment - Col
Loans Held for Investment - Collateral Dependent Loans by Collateral Type (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | $ 17,682 |
Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 304 |
Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,559 |
Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 2,636 |
Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,304 |
Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,466 |
Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,367 |
Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,046 |
Investor loans secured by real estate | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 4,997 |
Investor loans secured by real estate | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 2,636 |
Investor loans secured by real estate | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,466 |
Investor loans secured by real estate | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 895 |
Investor loans secured by real estate | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 2,838 |
Investor loans secured by real estate | CRE non-owner-occupied | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 2,636 |
Investor loans secured by real estate | CRE non-owner-occupied | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 202 |
Investor loans secured by real estate | CRE non-owner-occupied | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 895 |
Investor loans secured by real estate | Construction and land | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | Construction and land | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 895 |
Investor loans secured by real estate | Construction and land | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,264 |
Investor loans secured by real estate | SBA secured by real estate | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,264 |
Investor loans secured by real estate | SBA secured by real estate | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Investor loans secured by real estate | SBA secured by real estate | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 7,189 |
Business loans secured by real estate | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 304 |
Business loans secured by real estate | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,559 |
Business loans secured by real estate | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,304 |
Business loans secured by real estate | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 22 |
Business loans secured by real estate | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | SBA secured by real estate | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 1,084 |
Business loans secured by real estate | SBA secured by real estate | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 304 |
Business loans secured by real estate | SBA secured by real estate | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 758 |
Business loans secured by real estate | SBA secured by real estate | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | SBA secured by real estate | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | SBA secured by real estate | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | SBA secured by real estate | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 22 |
Business loans secured by real estate | SBA secured by real estate | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | CRE owner-occupied | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 6,105 |
Business loans secured by real estate | CRE owner-occupied | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | CRE owner-occupied | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 801 |
Business loans secured by real estate | CRE owner-occupied | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | CRE owner-occupied | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,304 |
Business loans secured by real estate | CRE owner-occupied | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | CRE owner-occupied | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Business loans secured by real estate | CRE owner-occupied | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,046 |
Commercial loans | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 5,046 |
Commercial loans | Commercial and industrial | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 4,309 |
Commercial loans | Commercial and industrial | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | Commercial and industrial | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 4,309 |
Commercial loans | SBA non-real estate secured | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 737 |
Commercial loans | SBA non-real estate secured | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Commercial loans | SBA non-real estate secured | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 737 |
Retail loans | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 450 |
Retail loans | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 450 |
Retail loans | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 450 |
Retail loans | Single family residential | Office Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | Industrial Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | Retail Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | Land Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | Hotel Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 0 |
Retail loans | Single family residential | Residential Properties | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | 450 |
Retail loans | Single family residential | Business Assets | |
Financing Receivable, Past Due [Line Items] | |
Collateral dependent loans | $ 0 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) - USD ($) | Jun. 01, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Qualitative adjustments included in the ACL | $ 15,000,000 | $ 15,000,000 | ||||||
Increase (decrease) in ACL during period | 232,000 | 246,800,000 | ||||||
Provision for Credit Losses | 4,702,000 | $ 1,365,000 | 180,341,000 | $ 4,119,000 | ||||
Net charge-offs | 4,500,000 | 10,500,000 | ||||||
Loans held for investment | 13,450,840,000 | 13,450,840,000 | $ 8,722,311,000 | |||||
Initial ACL Recorded for PCD Loans | 21,242,000 | |||||||
Allowance for credit losses on off-balance sheet credit exposures | 21,500,000 | 21,500,000 | $ 3,279,000 | $ 3,300,000 | ||||
Provision for credit losses for off-balance sheet commitments | $ (492,000) | 10,000,000 | ||||||
Financial Asset Acquired with Credit Deterioration | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Provision for credit losses for off-balance sheet commitments | 1,400,000 | |||||||
Opus Bank | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Provision for Credit Losses | $ 75,900,000 | $ 75,900,000 | ||||||
Initial ACL Recorded for PCD Loans | $ 21,200,000 | |||||||
Provision for credit losses for off-balance sheet commitments | $ 8,600,000 | |||||||
Impact of CECL Adoption | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Loans held for investment | 55,700,000 | |||||||
Allowance for credit losses on off-balance sheet credit exposures | 8,285,000 | |||||||
Impact of CECL Adoption | Financial Asset Acquired with Credit Deterioration | ||||||||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||||||||
Loans held for investment | $ 0 |
Allowance for Credit Losses - A
Allowance for Credit Losses - Allocation of Allowance for Loan and Lease Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | $ 282,271 | $ 35,026 | $ 35,698 | $ 36,072 | |
Initial ACL Recorded for PCD Loans | 21,242 | ||||
Charge-offs | (5,487) | (1,525) | (11,609) | (5,468) | |
Recoveries | 1,017 | 134 | 1,145 | 277 | |
Provision for Credit Losses | 4,702 | 1,365 | 180,341 | 4,119 | |
Ending ACL Balance | 282,503 | 35,000 | 282,503 | 35,000 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 26,500 | 26,500 | $ 22,842 | ||
ALLL Attributed to Individually Evaluated Loans | 2,000 | 2,000 | 0 | ||
Loans Evaluated Collectively for Impairment | 8,699,469 | ||||
ALLL Attributed to Collectively Evaluated Loans | 35,698 | ||||
Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 55,686 | ||||
Investor loans secured by real estate | CRE non-owner-occupied | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 63,007 | 1,765 | 1,899 | 1,624 | |
Initial ACL Recorded for PCD Loans | 3,025 | ||||
Charge-offs | (443) | (86) | (830) | (574) | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for Credit Losses | (8,459) | 199 | 41,588 | 828 | |
Ending ACL Balance | 54,105 | 1,878 | 54,105 | 1,878 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 1,088 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 2,069,053 | ||||
ALLL Attributed to Collectively Evaluated Loans | 1,899 | ||||
Investor loans secured by real estate | CRE non-owner-occupied | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 8,423 | ||||
Investor loans secured by real estate | Multifamily | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 63,511 | 705 | 729 | 740 | |
Initial ACL Recorded for PCD Loans | 8,710 | ||||
Charge-offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for Credit Losses | 3,825 | 10 | 48,723 | (25) | |
Ending ACL Balance | 67,336 | 715 | 67,336 | 715 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 0 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 1,575,726 | ||||
ALLL Attributed to Collectively Evaluated Loans | 729 | ||||
Investor loans secured by real estate | Multifamily | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 9,174 | ||||
Investor loans secured by real estate | Construction and land | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 18,804 | 5,408 | 4,484 | 5,964 | |
Initial ACL Recorded for PCD Loans | 2,051 | ||||
Charge-offs | (377) | 0 | (377) | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for Credit Losses | (2,870) | (617) | 9,523 | (1,173) | |
Ending ACL Balance | 15,557 | 4,791 | 15,557 | 4,791 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 0 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 438,786 | ||||
ALLL Attributed to Collectively Evaluated Loans | 4,484 | ||||
Investor loans secured by real estate | Construction and land | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | (124) | ||||
Investor loans secured by real estate | SBA secured by real estate | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 2,010 | 1,322 | 1,915 | 1,827 | |
Initial ACL Recorded for PCD Loans | 0 | ||||
Charge-offs | (145) | 0 | (699) | (721) | |
Recoveries | 34 | 0 | 34 | 0 | |
Provision for Credit Losses | 3,428 | 468 | 5,478 | 684 | |
Ending ACL Balance | 5,327 | 1,790 | 5,327 | 1,790 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 390 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 68,041 | ||||
ALLL Attributed to Collectively Evaluated Loans | 1,915 | ||||
Investor loans secured by real estate | SBA secured by real estate | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | (1,401) | ||||
Business loans secured by real estate | SBA secured by real estate | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 4,368 | 1,611 | 2,119 | 1,824 | |
Initial ACL Recorded for PCD Loans | 235 | ||||
Charge-offs | 0 | (61) | (315) | (315) | |
Recoveries | 76 | 21 | 147 | 21 | |
Provision for Credit Losses | 1,716 | 539 | 1,767 | 580 | |
Ending ACL Balance | 6,160 | 2,110 | 6,160 | 2,110 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 1,517 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 86,864 | ||||
ALLL Attributed to Collectively Evaluated Loans | 2,119 | ||||
Business loans secured by real estate | SBA secured by real estate | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 2,207 | ||||
Business loans secured by real estate | CRE owner-occupied | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 48,213 | 2,299 | 2,781 | 1,908 | |
Initial ACL Recorded for PCD Loans | 3,766 | ||||
Charge-offs | (1,739) | 0 | (1,739) | 0 | |
Recoveries | 21 | 8 | 44 | 31 | |
Provision for Credit Losses | 2,171 | 257 | 23,648 | 625 | |
Ending ACL Balance | 48,666 | 2,564 | 48,666 | 2,564 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 0 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 1,846,554 | ||||
ALLL Attributed to Collectively Evaluated Loans | 2,781 | ||||
Business loans secured by real estate | CRE owner-occupied | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 20,166 | ||||
Business loans secured by real estate | Franchise real estate secured | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 13,060 | 579 | 592 | 743 | |
Initial ACL Recorded for PCD Loans | 0 | ||||
Charge-offs | 0 | 0 | 0 | (1,376) | |
Recoveries | 0 | 0 | 0 | 0 | |
Provision for Credit Losses | (1,072) | (12) | 6,197 | 1,200 | |
Ending ACL Balance | 11,988 | 567 | 11,988 | 567 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 0 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 353,240 | ||||
ALLL Attributed to Collectively Evaluated Loans | 592 | ||||
Business loans secured by real estate | Franchise real estate secured | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 5,199 | ||||
Commercial loans | Commercial and industrial | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 41,967 | 13,796 | 13,857 | 13,695 | |
Initial ACL Recorded for PCD Loans | 2,325 | ||||
Charge-offs | (2,437) | (290) | (5,213) | (985) | |
Recoveries | 10 | 54 | 37 | 168 | |
Provision for Credit Losses | 8,374 | (664) | 36,821 | 18 | |
Ending ACL Balance | 47,914 | 12,896 | 47,914 | 12,896 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 7,529 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 1,385,741 | ||||
ALLL Attributed to Collectively Evaluated Loans | 13,857 | ||||
Commercial loans | Commercial and industrial | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 87 | ||||
Commercial loans | Franchise non-real estate secured | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 21,676 | 6,186 | 5,816 | 6,066 | |
Initial ACL Recorded for PCD Loans | 0 | ||||
Charge-offs | (207) | (995) | (1,434) | (1,155) | |
Recoveries | 865 | 0 | 865 | 0 | |
Provision for Credit Losses | (2,185) | 975 | 5,688 | 1,255 | |
Ending ACL Balance | 20,149 | 6,166 | 20,149 | 6,166 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 10,834 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 553,523 | ||||
ALLL Attributed to Collectively Evaluated Loans | 5,816 | ||||
Commercial loans | Franchise non-real estate secured | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 9,214 | ||||
Commercial loans | SBA non-real estate secured | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 600 | 430 | 445 | 654 | |
Initial ACL Recorded for PCD Loans | 924 | ||||
Charge-offs | (10) | (82) | (803) | (326) | |
Recoveries | 8 | 41 | 13 | 45 | |
Provision for Credit Losses | 353 | 92 | 154 | 108 | |
Ending ACL Balance | 951 | 481 | 951 | 481 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 1,118 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 16,308 | ||||
ALLL Attributed to Collectively Evaluated Loans | 445 | ||||
Commercial loans | SBA non-real estate secured | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 218 | ||||
Retail loans | Single family residential | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 1,479 | 704 | 655 | 808 | |
Initial ACL Recorded for PCD Loans | 206 | ||||
Charge-offs | 0 | 0 | (62) | 0 | |
Recoveries | 2 | 1 | 3 | 2 | |
Provision for Credit Losses | (238) | (14) | (100) | (119) | |
Ending ACL Balance | 1,243 | 691 | 1,243 | 691 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 366 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 254,658 | ||||
ALLL Attributed to Collectively Evaluated Loans | 655 | ||||
Retail loans | Single family residential | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 541 | ||||
Retail loans | Consumer | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | 3,576 | 221 | 406 | 219 | |
Initial ACL Recorded for PCD Loans | 0 | ||||
Charge-offs | (129) | (11) | (137) | (16) | |
Recoveries | 1 | 9 | 2 | 10 | |
Provision for Credit Losses | (341) | 132 | 854 | 138 | |
Ending ACL Balance | $ 3,107 | $ 351 | 3,107 | $ 351 | |
Other disclosures | |||||
Loans Evaluated Individually for Impairment | 0 | ||||
ALLL Attributed to Individually Evaluated Loans | 0 | ||||
Loans Evaluated Collectively for Impairment | 50,975 | ||||
ALLL Attributed to Collectively Evaluated Loans | $ 406 | ||||
Retail loans | Consumer | Impact of CECL Adoption | |||||
Allocation of allowance as well as the activity in allowance | |||||
Beginning ACL Balance | $ 1,982 |
Allowance for Credit Losses - C
Allowance for Credit Losses - Commercial Real Estate and Commercial Loan Segments (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | $ 1,212,344 | |
2019 | 3,540,465 | |
2018 | 2,369,668 | |
2017 | 1,982,912 | |
2016 | 1,171,944 | |
Prior | 2,385,545 | |
Revolving | 779,125 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | 13,450,840 | $ 8,722,311 |
Investor loans secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 854,784 | |
2019 | 2,458,374 | |
2018 | 1,560,916 | |
2017 | 1,114,295 | |
2016 | 730,632 | |
Prior | 1,513,942 | |
Revolving | 12,538 | |
Revolving Converted to Term During the Period | 0 | |
Total | 8,245,481 | 4,153,084 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 2,707,930 | 2,070,141 |
Investor loans secured by real estate | CRE non-owner-occupied | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 188,404 | |
2019 | 543,940 | |
2018 | 374,636 | |
2017 | 265,887 | |
2016 | 266,967 | |
Prior | 792,295 | |
Revolving | 10,788 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,442,917 | |
Investor loans secured by real estate | CRE non-owner-occupied | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 7,015 | |
2018 | 102,566 | |
2017 | 10,874 | |
2016 | 17,282 | |
Prior | 25,791 | |
Revolving | 243 | |
Revolving Converted to Term During the Period | 0 | |
Total | 163,771 | |
Investor loans secured by real estate | CRE non-owner-occupied | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 2,297 | |
2019 | 15,900 | |
2018 | 202 | |
2017 | 37,864 | |
2016 | 6,447 | |
Prior | 37,973 | |
Revolving | 559 | |
Revolving Converted to Term During the Period | 0 | |
Total | 101,242 | |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Multifamily | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 630,900 | |
2019 | 1,709,927 | |
2018 | 935,659 | |
2017 | 723,886 | |
2016 | 399,890 | |
Prior | 618,503 | |
Revolving | 574 | |
Revolving Converted to Term During the Period | 0 | |
Total | 5,019,339 | |
Investor loans secured by real estate | Multifamily | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 4,251 | |
2019 | 11,286 | |
2018 | 14,944 | |
2017 | 14,708 | |
2016 | 2,836 | |
Prior | 2,102 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 50,127 | |
Investor loans secured by real estate | Multifamily | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 3,198 | |
2019 | 14,022 | |
2018 | 14,137 | |
2017 | 12,513 | |
2016 | 10,167 | |
Prior | 18,566 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 72,603 | |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 337,872 | 438,786 |
Investor loans secured by real estate | Construction and land | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 24,862 | |
2019 | 56,858 | |
2018 | 12,550 | |
2017 | 22,362 | |
2016 | 0 | |
Prior | 6,448 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 123,080 | |
Investor loans secured by real estate | Construction and land | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 36,289 | |
2018 | 10,750 | |
2017 | 466 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 47,505 | |
Investor loans secured by real estate | Construction and land | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 378 | |
2019 | 52,562 | |
2018 | 82,297 | |
2017 | 10,195 | |
2016 | 19,932 | |
Prior | 1,549 | |
Revolving | 374 | |
Revolving Converted to Term During the Period | 0 | |
Total | 167,287 | |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 57,610 | 68,431 |
Investor loans secured by real estate | SBA secured by real estate | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 494 | |
2019 | 10,412 | |
2018 | 12,584 | |
2017 | 15,540 | |
2016 | 7,111 | |
Prior | 10,204 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 56,345 | |
Investor loans secured by real estate | SBA secured by real estate | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 0 | |
Investor loans secured by real estate | SBA secured by real estate | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 163 | |
2018 | 591 | |
2017 | 0 | |
2016 | 0 | |
Prior | 511 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,265 | |
Business loans secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 233,812 | |
2019 | 523,420 | |
2018 | 450,328 | |
2017 | 479,759 | |
2016 | 283,961 | |
Prior | 587,025 | |
Revolving | 4,938 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,563,243 | 2,288,175 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 84,126 | 88,381 |
Business loans secured by real estate | SBA secured by real estate | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 2,643 | |
2019 | 7,658 | |
2018 | 13,375 | |
2017 | 15,993 | |
2016 | 6,150 | |
Prior | 22,077 | |
Revolving | 95 | |
Revolving Converted to Term During the Period | 0 | |
Total | 67,991 | |
Business loans secured by real estate | SBA secured by real estate | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 679 | |
2017 | 1,117 | |
2016 | 3,493 | |
Prior | 4,679 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 9,968 | |
Business loans secured by real estate | SBA secured by real estate | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 22 | |
2017 | 1,994 | |
2016 | 914 | |
Prior | 3,237 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 6,167 | |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 2,119,788 | 1,846,554 |
Business loans secured by real estate | CRE owner-occupied | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 202,228 | |
2019 | 368,034 | |
2018 | 299,843 | |
2017 | 296,647 | |
2016 | 197,043 | |
Prior | 426,513 | |
Revolving | 520 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,790,828 | |
Business loans secured by real estate | CRE owner-occupied | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 8,434 | |
2019 | 37,617 | |
2018 | 58,314 | |
2017 | 53,967 | |
2016 | 39,056 | |
Prior | 78,666 | |
Revolving | 3,826 | |
Revolving Converted to Term During the Period | 0 | |
Total | 279,880 | |
Business loans secured by real estate | CRE owner-occupied | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 22,362 | |
2018 | 3,636 | |
2017 | 7,285 | |
2016 | 5,793 | |
Prior | 9,507 | |
Revolving | 497 | |
Revolving Converted to Term During the Period | 0 | |
Total | 49,080 | |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 359,329 | 353,240 |
Business loans secured by real estate | Franchise real estate secured | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 19,753 | |
2019 | 85,363 | |
2018 | 73,100 | |
2017 | 102,756 | |
2016 | 31,512 | |
Prior | 42,346 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 354,830 | |
Business loans secured by real estate | Franchise real estate secured | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 754 | |
2019 | 0 | |
2018 | 631 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,385 | |
Business loans secured by real estate | Franchise real estate secured | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 2,386 | |
2018 | 728 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 3,114 | |
Commercial loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 119,216 | |
2019 | 550,144 | |
2018 | 343,392 | |
2017 | 335,937 | |
2016 | 122,265 | |
Prior | 147,157 | |
Revolving | 726,775 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | 2,353,723 | 1,975,053 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 1,820,995 | 1,393,270 |
Commercial loans | Commercial and industrial | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 90,745 | |
2019 | 289,250 | |
2018 | 141,811 | |
2017 | 206,524 | |
2016 | 49,843 | |
Prior | 76,628 | |
Revolving | 343,482 | |
Revolving Converted to Term During the Period | 4,024 | |
Total | 1,202,307 | |
Commercial loans | Commercial and industrial | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 7,911 | |
2019 | 48,778 | |
2018 | 39,716 | |
2017 | 19,950 | |
2016 | 18,894 | |
Prior | 14,807 | |
Revolving | 302,843 | |
Revolving Converted to Term During the Period | 2,037 | |
Total | 454,936 | |
Commercial loans | Commercial and industrial | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 6,061 | |
2018 | 41,726 | |
2017 | 23,095 | |
2016 | 5,340 | |
Prior | 7,178 | |
Revolving | 78,355 | |
Revolving Converted to Term During the Period | 1,997 | |
Total | 163,752 | |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 515,980 | 564,357 |
Commercial loans | Franchise non-real estate secured | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 14,547 | |
2019 | 193,899 | |
2018 | 112,760 | |
2017 | 48,916 | |
2016 | 45,265 | |
Prior | 40,753 | |
Revolving | 1,361 | |
Revolving Converted to Term During the Period | 511 | |
Total | 458,012 | |
Commercial loans | Franchise non-real estate secured | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 5,658 | |
2019 | 7,722 | |
2018 | 4,353 | |
2017 | 4,245 | |
2016 | 2,025 | |
Prior | 2,486 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 26,489 | |
Commercial loans | Franchise non-real estate secured | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 2,050 | |
2018 | 957 | |
2017 | 28,472 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 31,479 | |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 16,748 | $ 17,426 |
Commercial loans | SBA non-real estate secured | 0% - 5.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 355 | |
2019 | 2,299 | |
2018 | 1,392 | |
2017 | 1,460 | |
2016 | 499 | |
Prior | 2,571 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 268 | |
Total | 8,844 | |
Commercial loans | SBA non-real estate secured | >5.00% - 10.00% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 308 | |
2017 | 796 | |
2016 | 124 | |
Prior | 1,285 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,513 | |
Commercial loans | SBA non-real estate secured | Greater than 10% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 85 | |
2018 | 369 | |
2017 | 2,479 | |
2016 | 275 | |
Prior | 1,449 | |
Revolving | 734 | |
Revolving Converted to Term During the Period | 0 | |
Total | 5,391 | |
Commercial loans | Total commercial loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 119,216 | |
2019 | 550,144 | |
2018 | 343,392 | |
2017 | 335,937 | |
2016 | 122,265 | |
Prior | 147,157 | |
Revolving | 726,775 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | $ 2,353,723 |
Allowance for Credit Losses -_2
Allowance for Credit Losses - Amortized Cost of Loans by Estimated LTV and FICO Bands (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | $ 1,212,344 | |
2019 | 3,540,465 | |
2018 | 2,369,668 | |
2017 | 1,982,912 | |
2016 | 1,171,944 | |
Prior | 2,385,545 | |
Revolving | 779,125 | |
Revolving Converted to Term During the Period | 8,837 | |
Total | 13,450,840 | $ 8,722,311 |
Investor loans secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 854,784 | |
2019 | 2,458,374 | |
2018 | 1,560,916 | |
2017 | 1,114,295 | |
2016 | 730,632 | |
Prior | 1,513,942 | |
Revolving | 12,538 | |
Revolving Converted to Term During the Period | 0 | |
Total | 8,245,481 | 4,153,084 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 2,707,930 | 2,070,141 |
Investor loans secured by real estate | CRE non-owner-occupied | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 100,859 | |
2019 | 238,182 | |
2018 | 190,263 | |
2017 | 156,791 | |
2016 | 192,044 | |
Prior | 602,788 | |
Revolving | 11,031 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,491,958 | |
Investor loans secured by real estate | CRE non-owner-occupied | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 71,824 | |
2019 | 220,089 | |
2018 | 110,830 | |
2017 | 136,117 | |
2016 | 84,644 | |
Prior | 217,812 | |
Revolving | 559 | |
Revolving Converted to Term During the Period | 0 | |
Total | 841,875 | |
Investor loans secured by real estate | CRE non-owner-occupied | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 18,018 | |
2019 | 105,825 | |
2018 | 171,532 | |
2017 | 18,946 | |
2016 | 13,796 | |
Prior | 30,887 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 359,004 | |
Investor loans secured by real estate | CRE non-owner-occupied | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 2,759 | |
2018 | 4,779 | |
2017 | 2,771 | |
2016 | 212 | |
Prior | 4,572 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 15,093 | |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 5,142,069 | 1,575,726 |
Investor loans secured by real estate | Multifamily | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 147,694 | |
2019 | 347,848 | |
2018 | 303,801 | |
2017 | 252,662 | |
2016 | 90,318 | |
Prior | 294,211 | |
Revolving | 574 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,437,108 | |
Investor loans secured by real estate | Multifamily | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 233,564 | |
2019 | 742,570 | |
2018 | 406,271 | |
2017 | 234,044 | |
2016 | 169,033 | |
Prior | 242,603 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,028,085 | |
Investor loans secured by real estate | Multifamily | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 257,091 | |
2019 | 628,393 | |
2018 | 244,007 | |
2017 | 262,512 | |
2016 | 153,542 | |
Prior | 96,542 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,642,087 | |
Investor loans secured by real estate | Multifamily | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 16,424 | |
2018 | 10,661 | |
2017 | 1,889 | |
2016 | 0 | |
Prior | 5,815 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 34,789 | |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 337,872 | 438,786 |
Investor loans secured by real estate | Construction and land | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 24,116 | |
2019 | 129,160 | |
2018 | 66,830 | |
2017 | 26,261 | |
2016 | 19,932 | |
Prior | 7,997 | |
Revolving | 374 | |
Revolving Converted to Term During the Period | 0 | |
Total | 274,670 | |
Investor loans secured by real estate | Construction and land | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 1,124 | |
2019 | 13,254 | |
2018 | 23,699 | |
2017 | 6,762 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 44,839 | |
Investor loans secured by real estate | Construction and land | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 3,295 | |
2018 | 15,068 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 18,363 | |
Investor loans secured by real estate | Construction and land | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 0 | |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 57,610 | 68,431 |
Investor loans secured by real estate | SBA secured by real estate | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 2,070 | |
2018 | 653 | |
2017 | 673 | |
2016 | 330 | |
Prior | 785 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 4,511 | |
Investor loans secured by real estate | SBA secured by real estate | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 2,433 | |
2018 | 1,643 | |
2017 | 4,017 | |
2016 | 621 | |
Prior | 4,482 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 13,196 | |
Investor loans secured by real estate | SBA secured by real estate | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 3,905 | |
2018 | 5,075 | |
2017 | 4,185 | |
2016 | 4,795 | |
Prior | 1,897 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 19,857 | |
Investor loans secured by real estate | SBA secured by real estate | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 494 | |
2019 | 2,167 | |
2018 | 5,804 | |
2017 | 6,665 | |
2016 | 1,365 | |
Prior | 3,551 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 20,046 | |
Business loans secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 233,812 | |
2019 | 523,420 | |
2018 | 450,328 | |
2017 | 479,759 | |
2016 | 283,961 | |
Prior | 587,025 | |
Revolving | 4,938 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,563,243 | 2,288,175 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 84,126 | 88,381 |
Business loans secured by real estate | SBA secured by real estate | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 1,355 | |
2019 | 1,633 | |
2018 | 5,376 | |
2017 | 5,683 | |
2016 | 3,175 | |
Prior | 15,281 | |
Revolving | 95 | |
Revolving Converted to Term During the Period | 0 | |
Total | 32,598 | |
Business loans secured by real estate | SBA secured by real estate | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 104 | |
2019 | 513 | |
2018 | 1,802 | |
2017 | 1,719 | |
2016 | 3,706 | |
Prior | 5,665 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 13,509 | |
Business loans secured by real estate | SBA secured by real estate | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 264 | |
2019 | 3,148 | |
2018 | 751 | |
2017 | 4,193 | |
2016 | 2,340 | |
Prior | 5,401 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 16,097 | |
Business loans secured by real estate | SBA secured by real estate | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 920 | |
2019 | 2,364 | |
2018 | 6,147 | |
2017 | 7,509 | |
2016 | 1,336 | |
Prior | 3,646 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 21,922 | |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 2,119,788 | 1,846,554 |
Business loans secured by real estate | CRE owner-occupied | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 56,954 | |
2019 | 156,880 | |
2018 | 171,740 | |
2017 | 203,875 | |
2016 | 133,740 | |
Prior | 357,734 | |
Revolving | 4,843 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,085,766 | |
Business loans secured by real estate | CRE owner-occupied | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 56,139 | |
2019 | 93,895 | |
2018 | 97,245 | |
2017 | 94,359 | |
2016 | 73,389 | |
Prior | 80,933 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 495,960 | |
Business loans secured by real estate | CRE owner-occupied | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 55,932 | |
2019 | 155,872 | |
2018 | 80,898 | |
2017 | 46,241 | |
2016 | 32,547 | |
Prior | 50,458 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 421,948 | |
Business loans secured by real estate | CRE owner-occupied | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 41,637 | |
2019 | 21,366 | |
2018 | 11,910 | |
2017 | 13,424 | |
2016 | 2,216 | |
Prior | 25,561 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 116,114 | |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 359,329 | 353,240 |
Business loans secured by real estate | Franchise real estate secured | 55% and below | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 7,462 | |
2019 | 13,322 | |
2018 | 14,407 | |
2017 | 21,162 | |
2016 | 11,592 | |
Prior | 20,549 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 88,494 | |
Business loans secured by real estate | Franchise real estate secured | >55-65% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 9,981 | |
2018 | 15,893 | |
2017 | 23,658 | |
2016 | 7,784 | |
Prior | 5,862 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 63,178 | |
Business loans secured by real estate | Franchise real estate secured | >65-75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 3,972 | |
2019 | 53,584 | |
2018 | 21,750 | |
2017 | 9,768 | |
2016 | 11,017 | |
Prior | 14,697 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 114,788 | |
Business loans secured by real estate | Franchise real estate secured | Greater than 75% | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 9,073 | |
2019 | 10,862 | |
2018 | 22,409 | |
2017 | 48,168 | |
2016 | 1,119 | |
Prior | 1,238 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 92,869 | |
Retail loans | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 4,532 | |
2019 | 8,527 | |
2018 | 15,032 | |
2017 | 52,921 | |
2016 | 35,086 | |
Prior | 137,421 | |
Revolving | 34,874 | |
Revolving Converted to Term During the Period | 0 | |
Total | 288,393 | 305,999 |
Retail loans | Single family residential | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 243,359 | 255,024 |
Retail loans | Single family residential | Greater than 740 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 4,469 | |
2019 | 7,198 | |
2018 | 12,719 | |
2017 | 9,658 | |
2016 | 29,291 | |
Prior | 91,460 | |
Revolving | 22,566 | |
Revolving Converted to Term During the Period | 0 | |
Total | 177,361 | |
Retail loans | Single family residential | >680 - 740 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 1,187 | |
2018 | 2,253 | |
2017 | 4,763 | |
2016 | 2,641 | |
Prior | 28,625 | |
Revolving | 7,919 | |
Revolving Converted to Term During the Period | 0 | |
Total | 47,388 | |
Retail loans | Single family residential | >580 - 680 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 463 | |
2016 | 3,142 | |
Prior | 11,113 | |
Revolving | 932 | |
Revolving Converted to Term During the Period | 0 | |
Total | 15,650 | |
Retail loans | Single family residential | Less than 580 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 2,925 | |
Revolving | 35 | |
Revolving Converted to Term During the Period | 0 | |
Total | 2,960 | |
Retail loans | Consumer | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
Total | 45,034 | $ 50,975 |
Retail loans | Consumer | Greater than 740 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 63 | |
2019 | 85 | |
2018 | 54 | |
2017 | 46 | |
2016 | 10 | |
Prior | 2,648 | |
Revolving | 1,670 | |
Revolving Converted to Term During the Period | 0 | |
Total | 4,576 | |
Retail loans | Consumer | >680 - 740 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 40 | |
2018 | 6 | |
2017 | 37,991 | |
2016 | 0 | |
Prior | 480 | |
Revolving | 1,665 | |
Revolving Converted to Term During the Period | 0 | |
Total | 40,182 | |
Retail loans | Consumer | >580 - 680 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 17 | |
2018 | 0 | |
2017 | 0 | |
2016 | 2 | |
Prior | 144 | |
Revolving | 59 | |
Revolving Converted to Term During the Period | 0 | |
Total | 222 | |
Retail loans | Consumer | Less than 580 | ||
Financing Receivable, Allowance for Credit Loss [Line Items] | ||
2020 | 0 | |
2019 | 0 | |
2018 | 0 | |
2017 | 0 | |
2016 | 0 | |
Prior | 26 | |
Revolving | 28 | |
Revolving Converted to Term During the Period | 0 | |
Total | $ 54 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | |||||||||
Goodwill | $ 898,434,000 | $ 898,434,000 | $ 808,322,000 | $ 898,434,000 | $ 808,322,000 | $ 808,322,000 | $ 808,726,000 | ||
Goodwill acquired during the year | 92,844,000 | 0 | |||||||
Purchase accounting adjustments | (2,732,000) | (404,000) | |||||||
Impairment losses | 0 | 0 | $ 0 | ||||||
Net intangible assets | 90,012,000 | 94,550,000 | 87,560,000 | 90,012,000 | 87,560,000 | ||||
Additions due to acquisitions | 0 | 19,267,000 | $ 0 | 19,267,000 | 0 | ||||
Remainder of fiscal year | 17,100,000 | 17,100,000 | |||||||
2021 | 15,900,000 | 15,900,000 | |||||||
2022 | 14,000,000 | 14,000,000 | |||||||
2023 | 12,300,000 | 12,300,000 | |||||||
2024 | 11,100,000 | $ 11,100,000 | |||||||
Min | |||||||||
Goodwill [Line Items] | |||||||||
Weighted average useful life | 6 years | ||||||||
Max | |||||||||
Goodwill [Line Items] | |||||||||
Weighted average useful life | 11 years | ||||||||
Core Deposits | |||||||||
Goodwill [Line Items] | |||||||||
Net intangible assets | 86,900,000 | $ 86,900,000 | $ 83,300,000 | ||||||
Customer Relationships | |||||||||
Goodwill [Line Items] | |||||||||
Net intangible assets | 3,100,000 | $ 3,100,000 | |||||||
Opus Bank | |||||||||
Goodwill [Line Items] | |||||||||
Goodwill | $ 90,112,000 | ||||||||
Purchase accounting adjustments | $ (2,700,000) | ||||||||
Opus Bank | Core Deposits | |||||||||
Goodwill [Line Items] | |||||||||
Additions due to acquisitions | 16,100,000 | ||||||||
Opus Bank | Customer Relationships | |||||||||
Goodwill [Line Items] | |||||||||
Additions due to acquisitions | $ 3,200,000 | ||||||||
Grandpoint Capital, Inc. | |||||||||
Goodwill [Line Items] | |||||||||
Purchase accounting adjustments | $ (404,000) |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill [Roll Forward] | |||
Balance, beginning of year | $ 898,434 | $ 808,322 | $ 808,726 |
Goodwill acquired during the year | 92,844 | 0 | |
Purchase accounting adjustments | (2,732) | (404) | |
Balance, end of year | 898,434 | 898,434 | 808,322 |
Accumulated impairment losses at end of year | $ 0 | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Finite-Lived Intangible Assets Roll Forward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Gross Balance of CDI: | |||||
Balance, beginning of year | $ 145,212 | $ 125,945 | $ 125,945 | $ 125,945 | $ 125,945 |
Additions due to acquisitions | 0 | 19,267 | 0 | 19,267 | 0 |
Balance, end of year | 145,212 | 145,212 | 125,945 | 145,212 | 125,945 |
Accumulated amortization: | |||||
Balance, beginning of year | (50,662) | (46,596) | (34,104) | (42,633) | (25,387) |
Amortization | (4,538) | (4,066) | (4,281) | (12,567) | (12,998) |
Balance, end of year | (55,200) | (50,662) | (38,385) | (55,200) | (38,385) |
Net intangible assets | $ 90,012 | $ 94,550 | $ 87,560 | $ 90,012 | $ 87,560 |
Subordinated Debentures - Narra
Subordinated Debentures - Narrative (Details) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($)note | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt issued | $ 505,403,000 | ||
Subordinated debentures | 501,443,000 | $ 215,145,000 | |
Subordinated notes | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt issued | 495,000,000 | ||
Subordinated debentures | 493,377,000 | $ 207,187,000 | |
FHLB advances and other borrowings | $ 3,500,000 | ||
Number of notes/securities | note | 5 | ||
Weighted interest rate | 5.39% | 5.37% | |
Subordinated notes | Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt issued | $ 135,000,000 | ||
Fixed interest rate (as a percent) | 5.50% | ||
Subordinated debentures | $ 138,492,000 | $ 0 | |
Subordinated notes | Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter | LIBOR | |||
Debt Instrument [Line Items] | |||
Floating interest rate, basis points added to base rate (as a percent) | 4.285% | ||
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt issued | $ 150,000,000 | $ 150,000,000 | |
Fixed interest rate (as a percent) | 5.375% | 5.375% | |
Subordinated debentures | $ 147,435,000 | 0 | |
Offering price, percentage of aggregate principal amount | 100.00% | ||
Unamortized debt issuance cost | $ 2,200,000 | ||
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | LIBOR | |||
Debt Instrument [Line Items] | |||
Floating interest rate, basis points added to base rate (as a percent) | 5.17% | ||
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | SOFR | |||
Debt Instrument [Line Items] | |||
Floating interest rate, basis points added to base rate (as a percent) | 5.17% | ||
Subordinated debt | |||
Debt Instrument [Line Items] | |||
Aggregate principal amount of debt issued | $ 10,403,000 | ||
Subordinated debentures | $ 8,066,000 | $ 7,958,000 | |
Number of notes/securities | note | 2 |
Subordinated Debentures - Sched
Subordinated Debentures - Schedule of outstanding subordinated debentures (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Current Principal Balance | $ 505,403,000 | ||
Carrying Value | 501,443,000 | $ 215,145,000 | |
Subordinated notes | |||
Debt Instrument [Line Items] | |||
Current Principal Balance | 495,000,000 | ||
Carrying Value | $ 493,377,000 | 207,187,000 | |
Subordinated notes | Subordinated notes due 2024, 5.75% per annum | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.75% | ||
Current Principal Balance | $ 60,000,000 | ||
Carrying Value | $ 59,522,000 | 59,432,000 | |
Subordinated notes | Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 4.875% | ||
Current Principal Balance | $ 125,000,000 | ||
Carrying Value | $ 122,813,000 | 122,622,000 | |
Subordinated notes | Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 2.50% | ||
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.375% | 5.375% | |
Current Principal Balance | $ 150,000,000 | $ 150,000,000 | |
Carrying Value | $ 147,435,000 | 0 | |
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 5.17% | ||
Subordinated notes | Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter | SOFR | |||
Debt Instrument [Line Items] | |||
Variable rate | 5.17% | ||
Subordinated notes | Subordinated notes due 2025, 7.125% per annum | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 7.125% | ||
Current Principal Balance | $ 25,000,000 | ||
Carrying Value | $ 25,115,000 | 25,133,000 | |
Subordinated notes | Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter | |||
Debt Instrument [Line Items] | |||
Current Interest Rate | 5.50% | ||
Current Principal Balance | $ 135,000,000 | ||
Carrying Value | $ 138,492,000 | 0 | |
Subordinated notes | Subordinated notes due 2026, 5.50% per annum until June 30 2021, 3-month LIBOR +4.285% thereafter | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 4.285% | ||
Subordinated debt | |||
Debt Instrument [Line Items] | |||
Current Principal Balance | $ 10,403,000 | ||
Carrying Value | 8,066,000 | 7,958,000 | |
Subordinated debt | Heritage Oaks Bancorp | |||
Debt Instrument [Line Items] | |||
Current Principal Balance | $ 5,248,000 | ||
Current Interest Rate | 2.02% | ||
Carrying Value | $ 4,105,000 | 4,054,000 | |
Subordinated debt | Heritage Oaks Bancorp | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.72% | ||
Subordinated debt | Santa Lucia Bancorp (CA) Capital Trust | |||
Debt Instrument [Line Items] | |||
Current Principal Balance | $ 5,155,000 | ||
Current Interest Rate | 1.76% | ||
Carrying Value | $ 3,961,000 | $ 3,904,000 | |
Subordinated debt | Santa Lucia Bancorp (CA) Capital Trust | LIBOR | |||
Debt Instrument [Line Items] | |||
Variable rate | 1.48% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Basic | |||||
Net income (loss) | $ 66,566 | $ (99,091) | $ 41,375 | $ (6,785) | $ 118,620 |
Less: Dividends and undistributed earnings allocated to participating securities | (612) | (222) | (432) | (564) | (1,223) |
Net income (loss) allocated to common stockholders | $ 65,954 | $ (99,313) | $ 40,943 | $ (7,349) | $ 117,397 |
Weighted average common shares outstanding (in shares) | 93,529,967 | 70,425,027 | 59,293,218 | 74,391,688 | 60,853,081 |
Basic earnings (loss) per common share (in dollars per share) | $ 0.71 | $ (1.41) | $ 0.69 | $ (0.10) | $ 1.93 |
Diluted | |||||
Net income (loss) allocated to common stockholders | $ 65,954 | $ (99,313) | $ 40,943 | $ (7,349) | $ 117,397 |
Weighted average common shares outstanding (in shares) | 93,529,967 | 70,425,027 | 59,293,218 | 74,391,688 | 60,853,081 |
Diluted effect of share-based compensation (in shares) | 189,200 | 0 | 377,637 | 0 | 348,777 |
Weighted average diluted common shares (in shares) | 93,719,167 | 70,425,027 | 59,670,855 | 74,391,688 | 61,201,858 |
Diluted earnings (loss) per common share (in dollars per share) | $ 0.70 | $ (1.41) | $ 0.69 | $ (0.10) | $ 1.92 |
Weighted-average shares of anti-dilutive RSUs excluded from diluted EPS computation | 27,815 | 173,235 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Hierarchy Table on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financial assets | ||
Investment securities available-for-sale, at fair value | $ 3,600,731 | $ 1,368,384 |
U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 32,739 | 63,555 |
Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 603,045 | 246,358 |
Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 397,536 | 151,353 |
Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,313,908 | 397,298 |
Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 358,280 | 9,984 |
Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 895,223 | 499,836 |
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 | 3,600,731 | 1,368,384 |
Derivative assets | 14,697 | 2,103 |
Financial liabilities | ||
Derivative liabilities | 14,789 | 2,103 |
Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 1,920 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 3,600,731 | 1,368,384 |
Derivative assets | 16,617 | 2,103 |
Financial liabilities | ||
Derivative liabilities | 14,789 | 2,103 |
Recurring | Interest rate swaps | ||
Financial assets | ||
Derivative assets | 14,697 | |
Recurring | Equity warrants | ||
Financial assets | ||
Derivative assets | 1,920 | |
Recurring | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 32,739 | 63,555 |
Recurring | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 603,045 | 246,358 |
Recurring | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 397,536 | 151,353 |
Recurring | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,313,908 | 397,298 |
Recurring | Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 358,280 | 9,984 |
Recurring | Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 895,223 | 499,836 |
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 | Interest rate swaps | ||
Financial assets | ||
Derivative assets | 0 | |
Recurring | Level 1 | Equity warrants | ||
Financial assets | ||
Derivative assets | 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 obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Mortgage-backed securities | ||
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 | 3,600,731 | 1,368,384 |
Derivative assets | 14,697 | 2,103 |
Financial liabilities | ||
Derivative liabilities | 14,789 | 2,103 |
Recurring | Level 2 | Interest rate swaps | ||
Financial assets | ||
Derivative assets | 14,697 | |
Recurring | Level 2 | Equity warrants | ||
Financial assets | ||
Derivative assets | 0 | |
Recurring | Level 2 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 32,739 | 63,555 |
Recurring | Level 2 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 603,045 | 246,358 |
Recurring | Level 2 | Corporate | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 397,536 | 151,353 |
Recurring | Level 2 | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,313,908 | 397,298 |
Recurring | Level 2 | Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 358,280 | 9,984 |
Recurring | Level 2 | Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 895,223 | 499,836 |
Recurring | Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Derivative assets | 1,920 | 0 |
Financial liabilities | ||
Derivative liabilities | 0 | 0 |
Recurring | Level 3 | Interest rate swaps | ||
Financial assets | ||
Derivative assets | 0 | |
Recurring | Level 3 | Equity warrants | ||
Financial assets | ||
Derivative assets | 1,920 | |
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 obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 3 | Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | $ 0 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Reconciliation of Fair Value of Equity Warrants (Details) - Equity warrants - Level 3 - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning Balance | $ 1,952 | $ 5,162 |
Change in fair value | (32) | (35) |
Sales | 0 | (3,207) |
Ending balance | $ 1,920 | $ 1,920 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Schedule of Quantitative Information for Level 3 Fair Value Measurements (Details) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 13,578,530 | $ 8,691,019 |
Recurring | Level 3 | Black-Scholes option pricing model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants | $ 1,920 | |
Recurring | Level 3 | Black-Scholes option pricing model | Volatility | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.3000 | |
Recurring | Level 3 | Black-Scholes option pricing model | Volatility | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.3500 | |
Recurring | Level 3 | Black-Scholes option pricing model | Volatility | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.3120 | |
Recurring | Level 3 | Black-Scholes option pricing model | Risk free interest rate | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0013 | |
Recurring | Level 3 | Black-Scholes option pricing model | Risk free interest rate | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0028 | |
Recurring | Level 3 | Black-Scholes option pricing model | Risk free interest rate | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0017 | |
Recurring | Level 3 | Black-Scholes option pricing model | Marketability Discount | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0600 | |
Recurring | Level 3 | Black-Scholes option pricing model | Marketability Discount | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.1600 | |
Recurring | Level 3 | Black-Scholes option pricing model | Marketability Discount | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.1348 | |
Nonrecurring | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 4,749 | 2,257 |
Nonrecurring | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | 4,749 | 2,257 |
Total assets | 4,749 | |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 591 | $ 569 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | SBA secured by real estate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 202 | $ 408 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Business loans secured by real estate | SBA secured by real estate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 230 | $ 140 |
Nonrecurring | Level 3 | Fair value of collateral | Business loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.0700 |
Nonrecurring | Level 3 | Fair value of collateral | Business loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.1000 |
Nonrecurring | Level 3 | Fair value of collateral | Business loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.0781 |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 22 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Franchise non-real estate secured | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 2,844 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Franchise non-real estate secured | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0700 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Franchise non-real estate secured | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Franchise non-real estate secured | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0911 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | SBA non-real estate secured | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 860 | $ 1,140 |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | SBA non-real estate secured | Collateral discount and cost to sell | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0700 | 0.0700 |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | SBA non-real estate secured | Collateral discount and cost to sell | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.1000 | 0.6300 |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | SBA non-real estate secured | Collateral discount and cost to sell | Weighted Average | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0819 | 0.1533 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Narrative (Details) $ in Thousands | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Specific reserve recorded on loan | $ 2,000 | $ 0 |
Discount Rate | Min | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned, input | 0.07 | |
Discount Rate | Max | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Other real estate owned, input | 0.10 |
Fair Value of Financial Instr_7
Fair Value of Financial Instruments - Hierarchy Table on Noncrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Level 1 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | $ 0 | $ 0 |
Level 2 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 0 | 0 |
Level 3 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 13,578,530 | 8,691,019 |
Nonrecurring | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 4,749 | 2,257 |
Nonrecurring | Level 1 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 0 | 0 |
Nonrecurring | Level 2 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 0 | 0 |
Nonrecurring | Level 3 | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | $ 4,749 | $ 2,257 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Fair Value Estimates (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Investments held-to-maturity | $ 29,399 | $ 38,760 |
Investment securities available-for-sale | 3,600,731 | 1,368,384 |
Accrued interest receivable | 73,112 | 39,442 |
Level 1 | ||
Assets | ||
Cash and cash equivalents | 1,103,077 | 326,850 |
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 assets | 0 | 0 |
Accrued interest receivable | 73,112 | 39,442 |
Liabilities | ||
Deposit accounts | 14,612,343 | 7,850,667 |
FHLB advances | 0 | 0 |
Subordinated debentures | 0 | 0 |
Derivative liabilities | 0 | 0 |
Accrued interest payable | 7,638 | 2,686 |
Level 1 | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | 2,845 | 2,708 |
Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investments held-to-maturity | 29,399 | 38,760 |
Investment securities available-for-sale | 3,600,731 | 1,368,384 |
Loans held for sale | 1,091 | 1,821 |
Loans held for investment, net | 0 | 0 |
Derivative assets | 14,697 | 2,103 |
Accrued interest receivable | 0 | 0 |
Liabilities | ||
Deposit accounts | 1,724,569 | 1,048,583 |
FHLB advances | 41,652 | 517,291 |
Subordinated debentures | 515,729 | 237,001 |
Derivative liabilities | 14,789 | 2,103 |
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 | 13,578,530 | 8,691,019 |
Derivative assets | 1,920 | 0 |
Accrued interest receivable | 0 | 0 |
Liabilities | ||
Deposit accounts | 0 | 0 |
FHLB advances | 0 | 0 |
Subordinated debentures | 0 | 0 |
Derivative liabilities | 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 | 1,103,077 | 326,850 |
Investments held-to-maturity | 27,980 | 37,838 |
Investment securities available-for-sale | 3,600,731 | 1,368,384 |
Loans held for sale | 1,032 | 1,672 |
Loans held for investment, net | 13,450,840 | 8,722,311 |
Derivative assets | 16,617 | 2,103 |
Accrued interest receivable | 73,112 | 39,442 |
Liabilities | ||
Deposit accounts | 16,330,807 | 8,898,509 |
FHLB advances | 41,000 | 517,026 |
Subordinated debentures | 501,443 | 215,145 |
Derivative liabilities | 14,789 | 2,103 |
Accrued interest payable | 7,638 | 2,686 |
Carrying Amount | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | 2,845 | 2,708 |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 1,103,077 | 326,850 |
Investments held-to-maturity | 29,399 | 38,760 |
Investment securities available-for-sale | 3,600,731 | 1,368,384 |
Loans held for sale | 1,091 | 1,821 |
Loans held for investment, net | 13,578,530 | 8,691,019 |
Derivative assets | 16,617 | 2,103 |
Accrued interest receivable | 73,112 | 39,442 |
Liabilities | ||
Deposit accounts | 16,336,912 | 8,899,250 |
FHLB advances | 41,652 | 517,291 |
Subordinated debentures | 515,729 | 237,001 |
Derivative liabilities | 14,789 | 2,103 |
Accrued interest payable | 7,638 | 2,686 |
Estimated Fair Value | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | $ 2,845 | $ 2,708 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Derivative [Line Items] | |||||
Derivative financial instruments included in gain (loss) | $ 187 | $ 0 | $ 380 | $ 0 | |
Other contracts | Other Income | |||||
Derivative [Line Items] | |||||
Derivative financial instruments included in gain (loss) | 218 | 0 | 415 | 0 | |
Equity warrants | Other Income | |||||
Derivative [Line Items] | |||||
Derivative financial instruments included in gain (loss) | (31) | $ 0 | (35) | $ 0 | |
Not Designated as Hedging Instruments | |||||
Derivative [Line Items] | |||||
Derivative assets, notional | 146,760 | 146,760 | $ 76,314 | ||
Derivative assets | 16,617 | 16,617 | 2,103 | ||
Derivative liabilities, notional | 146,760 | 146,760 | 76,314 | ||
Derivative liabilities | 14,789 | 14,789 | 2,103 | ||
Not Designated as Hedging Instruments | Interest rate swaps | |||||
Derivative [Line Items] | |||||
Derivative assets, notional | 146,760 | 146,760 | 76,314 | ||
Derivative assets | 14,697 | 14,697 | 2,103 | ||
Derivative liabilities, notional | 146,760 | 146,760 | 76,314 | ||
Derivative liabilities | 14,789 | 14,789 | $ 2,103 | ||
Not Designated as Hedging Instruments | Equity warrants | |||||
Derivative [Line Items] | |||||
Derivative assets, notional | 0 | 0 | |||
Derivative assets | 1,920 | 1,920 | |||
Derivative liabilities, notional | 0 | 0 | |||
Derivative liabilities | $ 0 | $ 0 |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative assets: | ||
Gross Amounts Recognized | $ 14,697 | $ 2,103 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 14,697 | 2,103 |
Financial Instruments | 0 | 0 |
Cash Collateral | 0 | 0 |
Net Amount | 14,697 | 2,103 |
Derivative liabilities: | ||
Gross Amounts Recognized | 14,789 | 2,107 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | (4) |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 14,789 | 2,103 |
Financial Instruments | (5,500) | 0 |
Cash Collateral | (8,568) | (1,678) |
Net Amount | 721 | 425 |
Interest rate swaps | ||
Derivative assets: | ||
Gross Amounts Recognized | 14,697 | 2,103 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 14,697 | 2,103 |
Financial Instruments | 0 | 0 |
Cash Collateral | 0 | 0 |
Net Amount | 14,697 | 2,103 |
Derivative liabilities: | ||
Gross Amounts Recognized | 14,789 | 2,107 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | (4) |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 14,789 | 2,103 |
Financial Instruments | (5,500) | 0 |
Cash Collateral | (8,568) | (1,678) |
Net Amount | $ 721 | $ 425 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Operating lease | $ 5,618 | $ 2,879 | $ 12,690 | $ 8,403 |
Short-term lease | 495 | 575 | 1,425 | 1,893 |
Total lease expense | $ 6,113 | $ 3,454 | $ 14,115 | $ 10,296 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 01, 2020 | Dec. 31, 2019 | |
Lessee, Lease, Description [Line Items] | ||||||
Operating lease liability, statement of financial position [Extensible List] | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities | us-gaap:AccruedLiabilitiesAndOtherLiabilities | |||
Operating lease right-of-use asset, statement of financial position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets | us-gaap:OtherAssets | |||
Operating lease liabilities | $ 91,202 | $ 91,202 | $ 46,498 | |||
Operating lease right of use assets | 81,150 | 81,150 | $ 43,177 | |||
Rental income | $ 265 | $ 25 | $ 356 | $ 116 | ||
Opus Bank | ||||||
Lessee, Lease, Description [Line Items] | ||||||
Operating lease liabilities | $ 43,300 | |||||
Operating lease right of use assets | 42,400 | |||||
Unfavorable lease liability adjustments | $ 900 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Information (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Operating lease right of use assets | $ 81,150,000 | $ 43,177,000 | |
Operating lease liabilities | 91,202,000 | $ 46,498,000 | |
Operating cash flows from operating leases | $ 10,946,000 | $ 8,786,000 |
Leases - Schedule of Minimum Co
Leases - Schedule of Minimum Contractual Lease Payments and Other Information (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Operating leases | ||
2020 | $ 5,559 | |
2021 | 21,839 | $ 10,138 |
2022 | 20,222 | 10,602 |
2023 | 18,667 | 10,137 |
2024 | 16,138 | 9,055 |
2024 | 7,318 | |
Thereafter | 23,503 | |
Thereafter | 7,265 | |
Total | 105,928 | 54,515 |
Short-term leases | ||
2020 | 74 | |
2021 | 47 | 143 |
2022 | 0 | 7 |
2023 | 0 | 0 |
2024 | 0 | 0 |
2024 | 0 | |
Thereafter | 0 | |
Thereafter | 0 | |
Total | 121 | 150 |
Total contractual base rents (1) | ||
2020 | 5,633 | |
2021 | 21,886 | 10,281 |
2022 | 20,222 | 10,609 |
2023 | 18,667 | 10,137 |
2024 | 16,138 | 9,055 |
2024 | 7,318 | |
Thereafter | 23,503 | |
Thereafter | 7,265 | |
Total | 106,049 | 54,665 |
Total liability to make lease payments | 91,202 | 46,498 |
Difference in undiscounted and discounted future lease payments | $ 14,847 | $ 8,167 |
Weighted average discount rate | 5.70% | 6.13% |
Weighted average remaining lease term (years) | 5 years 4 months 24 days | 5 years 4 months 24 days |
Revenue Recognition - Summary o
Revenue Recognition - Summary of Company's Revenue Streams (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Noninterest income: | |||||
Loan servicing fees | $ 481 | $ 434 | $ 546 | $ 1,395 | $ 1,353 |
Earnings on bank-owned life insurance | 2,270 | 1,314 | 861 | 4,920 | 2,622 |
Net gain (loss) from sales of loans | 9,542 | (2,032) | 2,313 | 8,281 | 4,944 |
Net gain (loss) from sales of investment securities | 1,141 | (21) | 4,261 | 8,880 | 4,900 |
Other income | 3,340 | 2,653 | 1,228 | 7,747 | 3,689 |
Total noninterest income | 26,758 | 6,898 | 11,430 | 48,131 | 25,435 |
Service charges on deposit accounts | |||||
Noninterest income: | |||||
Noninterest income | 1,593 | 1,399 | 1,440 | 4,707 | 4,211 |
Other service fee income | |||||
Noninterest income: | |||||
Noninterest income | 487 | 297 | 360 | 1,095 | 1,079 |
Debit card interchange income | |||||
Noninterest income: | |||||
Noninterest income | 944 | 457 | 421 | 1,749 | 2,637 |
Custodial account fees | |||||
Noninterest income: | |||||
Noninterest income | 6,960 | 2,397 | 0 | 9,357 | 0 |
Within Scope | |||||
Noninterest income: | |||||
Other income | 1,233 | 184 | 592 | 1,634 | 1,328 |
Total noninterest income | 11,217 | 4,734 | 2,813 | 18,542 | 9,255 |
Within Scope | Service charges on deposit accounts | |||||
Noninterest income: | |||||
Noninterest income | 1,593 | 1,399 | 1,440 | 4,707 | 4,211 |
Within Scope | Other service fee income | |||||
Noninterest income: | |||||
Noninterest income | 487 | 297 | 360 | 1,095 | 1,079 |
Within Scope | Debit card interchange income | |||||
Noninterest income: | |||||
Noninterest income | 944 | 457 | 421 | 1,749 | 2,637 |
Within Scope | Custodial account fees | |||||
Noninterest income: | |||||
Noninterest income | 6,960 | 2,397 | 0 | 9,357 | 0 |
Out of Scope | |||||
Noninterest income: | |||||
Loan servicing fees | 481 | 434 | 546 | 1,395 | 1,353 |
Earnings on bank-owned life insurance | 2,270 | 1,314 | 861 | 4,920 | 2,622 |
Net gain (loss) from sales of loans | 9,542 | (2,032) | 2,313 | 8,281 | 4,944 |
Net gain (loss) from sales of investment securities | 1,141 | (21) | 4,261 | 8,880 | 4,900 |
Other income | 2,107 | 2,469 | 636 | 6,113 | 2,361 |
Total noninterest income | $ 15,541 | $ 2,164 | $ 8,617 | $ 29,589 | $ 16,180 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | ||
Escrow proceeds from property sales | $ 1.1 | $ 1.4 |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Variable Interest Entities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Investment securities available-for-sale | $ 3,600,731 | $ 1,368,384 |
Accrued expenses and other liabilities | 282,905 | 131,367 |
Other assets | 282,276 | 154,992 |
Total assets | 19,844,240 | 11,776,012 |
Liabilities | 17,156,155 | 9,763,418 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | 241,418 | 32,466 |
Total assets | 209,752 | 53,880 |
Liabilities | 19,775 | 21,414 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization | ||
Variable Interest Entity [Line Items] | ||
Investment securities available-for-sale | 114,460 | 0 |
Accrued expenses and other liabilities | 540 | 0 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Asset | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | 114,460 | 0 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | 50,901 | 0 |
Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Partnership | ||
Variable Interest Entity [Line Items] | ||
Accrued expenses and other liabilities | 19,235 | 21,414 |
Other assets | 95,292 | 53,880 |
Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Partnership, Asset | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | 76,057 | 32,466 |
Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Partnership, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | $ 0 | $ 0 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Accrued expenses and other liabilities | $ 282,905 | $ 131,367 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Maximum loss | $ 241,418 | 32,466 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum loss, percentage of loans | 10.00% | |
Maximum loss | $ 50,901 | 0 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization | ||
Variable Interest Entity [Line Items] | ||
Accrued expenses and other liabilities | $ 540 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 23, 2020$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Sep. 30, 2020$ / shares | Sep. 30, 2019$ / shares | Oct. 06, 2020office | Oct. 05, 2020office |
Subsequent Event [Line Items] | |||||||
Cash dividends declared (in dollars per share) | $ / shares | $ 0.25 | $ 0.22 | $ 0.75 | $ 0.66 | |||
Subsequent Event | |||||||
Subsequent Event [Line Items] | |||||||
Cash dividends declared (in dollars per share) | $ / shares | $ 0.28 | ||||||
Number of bank branch offices consolidated | office | 20 | ||||||
Number of bank branch offices operated | office | 65 |