Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 28, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
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 | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | PPBI | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding (in shares) | 95,012,077 | |
Entity Central Index Key | 0001028918 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and due from banks | $ 132,351 | $ 83,150 |
Interest-bearing deposits with financial institutions | 606,860 | 221,553 |
Cash and cash equivalents | 739,211 | 304,703 |
Interest-bearing time deposits with financial institutions | 1,733 | 2,216 |
Investments held-to-maturity, at amortized cost, net of allowance for credit losses of $91 and $22 (fair value of $1,055,187 and $384,423) at September 30, 2022 and December 31, 2021, respectively | 1,385,502 | 381,674 |
Investment securities available-for-sale, at fair value | 2,661,079 | 4,273,864 |
FHLB, FRB, and other stock, at cost | 118,778 | 117,538 |
Loans held for sale, at lower of cost or fair value | 2,163 | 10,869 |
Loans held for investment | 14,908,811 | 14,295,897 |
Allowance for credit losses | (195,549) | (197,752) |
Loans held for investment, net | 14,713,262 | 14,098,145 |
Accrued interest receivable | 66,192 | 65,728 |
Premises and equipment | 65,651 | 71,908 |
Deferred income taxes, net | 190,948 | 87,344 |
Bank owned life insurance | 457,301 | 449,353 |
Intangible assets | 59,028 | 69,571 |
Goodwill | 901,312 | 901,312 |
Other assets | 257,041 | 260,204 |
Total assets | 21,619,201 | 21,094,429 |
Deposit accounts: | ||
Noninterest-bearing checking | 6,775,465 | 6,757,259 |
Interest-bearing: | ||
Checking | 3,605,498 | 3,493,331 |
Money market/savings | 5,493,988 | 5,806,726 |
Retail certificates of deposit | 872,421 | 1,058,273 |
Wholesale/brokered certificates of deposit | 999,002 | 0 |
Total interest-bearing | 10,970,909 | 10,358,330 |
Total deposits | 17,746,374 | 17,115,589 |
FHLB advances and other borrowings | 600,000 | 558,000 |
Subordinated debentures | 331,045 | 330,567 |
Accrued expenses and other liabilities | 206,386 | 203,962 |
Total liabilities | 18,883,805 | 18,208,118 |
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, 2022 and December 31, 2021; 95,016,767 shares and 94,389,543 shares issued and outstanding, respectively | 933 | 929 |
Additional paid-in capital | 2,357,731 | 2,351,294 |
Retained earnings | 657,845 | 541,950 |
Accumulated other comprehensive loss | (281,113) | (7,862) |
Total stockholders’ equity | 2,735,396 | 2,886,311 |
Total liabilities and stockholders’ equity | $ 21,619,201 | $ 21,094,429 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Investments held-to-maturity, allowance for credit losses | $ 91 | $ 22 |
Investments held-to-maturity, fair value | $ 1,055,187 | $ 384,423 |
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) | 95,016,767 | 94,389,543 |
Common stock, shares outstanding (in shares) | 95,016,767 | 94,389,543 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
INTEREST INCOME | |||||
Loans | $ 174,204 | $ 164,455 | $ 157,025 | $ 489,263 | $ 464,615 |
Investment securities and other interest-earning assets | 24,821 | 18,771 | 19,022 | 61,534 | 55,118 |
Total interest income | 199,025 | 183,226 | 176,047 | 550,797 | 519,733 |
INTEREST EXPENSE | |||||
Deposits | 9,873 | 2,682 | 2,432 | 14,228 | 10,123 |
FHLB advances and other borrowings | 3,480 | 3,217 | 1 | 7,171 | 66 |
Subordinated debentures | 4,560 | 4,562 | 4,545 | 13,682 | 17,889 |
Total interest expense | 17,913 | 10,461 | 6,978 | 35,081 | 28,078 |
Net interest income before provision for credit losses | 181,112 | 172,765 | 169,069 | 515,716 | 491,655 |
Provision for credit losses | 1,077 | 469 | (19,726) | 1,994 | (56,228) |
Net interest income after provision for credit losses | 180,035 | 172,296 | 188,795 | 513,722 | 547,883 |
NONINTEREST INCOME | |||||
Loan servicing income | 397 | 502 | 536 | 1,318 | 1,616 |
Earnings on bank owned life insurance | 3,339 | 3,240 | 3,266 | 9,800 | 7,778 |
Net gain from sales of loans | 457 | 1,136 | 1,187 | 3,087 | 3,094 |
Net (loss) gain from sales of investment securities | (393) | (31) | 4,190 | 1,710 | 13,321 |
Other income | 1,023 | 1,173 | 4,049 | 3,764 | 12,606 |
Total noninterest income | 20,164 | 22,193 | 30,100 | 68,251 | 80,569 |
NONINTEREST EXPENSE | |||||
Compensation and benefits | 56,355 | 57,562 | 53,592 | 170,898 | 159,614 |
Premises and occupancy | 12,011 | 11,829 | 12,611 | 35,792 | 36,831 |
Data processing | 7,058 | 6,604 | 6,296 | 19,658 | 17,889 |
FDIC insurance premiums | 1,461 | 1,452 | 1,392 | 4,309 | 3,885 |
Legal and professional services | 4,075 | 4,629 | 4,563 | 12,772 | 12,684 |
Marketing expense | 1,912 | 1,926 | 2,008 | 5,647 | 5,096 |
Office expense | 1,338 | 1,252 | 1,076 | 3,793 | 4,494 |
Loan expense | 789 | 1,144 | 1,332 | 3,067 | 3,612 |
Deposit expense | 4,846 | 4,081 | 3,974 | 12,678 | 11,818 |
Merger-related expense | 0 | 0 | 0 | 0 | 5 |
Amortization of intangible assets | 3,472 | 3,479 | 3,912 | 10,543 | 12,056 |
Other expense | 7,549 | 5,016 | 5,284 | 18,331 | 15,041 |
Total noninterest expense | 100,866 | 98,974 | 96,040 | 297,488 | 283,025 |
Net income before income taxes | 99,333 | 95,515 | 122,855 | 284,485 | 345,427 |
Income tax expense | 25,970 | 25,712 | 32,767 | 74,415 | 90,369 |
Net income | $ 73,363 | $ 69,803 | $ 90,088 | $ 210,070 | $ 255,058 |
EARNINGS PER SHARE | |||||
Basic (in dollars per share) | $ 0.77 | $ 0.74 | $ 0.95 | $ 2.22 | $ 2.70 |
Diluted (in dollars per share) | $ 0.77 | $ 0.73 | $ 0.95 | $ 2.21 | $ 2.68 |
WEIGHTED AVERAGE SHARES OUTSTANDING | |||||
Basic (in shares) | 93,793,502 | 93,765,264 | 93,549,639 | 93,687,230 | 93,571,468 |
Diluted (in shares) | 94,120,637 | 94,040,691 | 94,060,724 | 94,055,116 | 94,090,407 |
Service charges on deposit accounts | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 2,704 | $ 2,690 | $ 2,375 | $ 8,009 | $ 6,629 |
Other service fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | 323 | 366 | 350 | 1,056 | 1,175 |
Debit card interchange fee income | |||||
NONINTEREST INCOME | |||||
Noninterest income | 808 | 936 | 834 | 2,580 | 2,720 |
Trust custodial account fees | |||||
NONINTEREST INCOME | |||||
Noninterest income | 9,951 | 10,354 | 11,446 | 31,884 | 26,565 |
Escrow and exchange fees | |||||
NONINTEREST INCOME | |||||
Noninterest income | $ 1,555 | $ 1,827 | $ 1,867 | $ 5,043 | $ 5,065 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | ||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 73,363 | $ 69,803 | $ 90,088 | $ 210,070 | $ 255,058 | |
Other comprehensive loss, net of tax: | ||||||
Unrealized loss on securities available-for-sale, net of income taxes | [1] | (68,070) | (40,474) | (20,138) | (227,135) | (47,387) |
Reclassification adjustment for net loss (gain) on sales of securities included in net income, net of income taxes | [2] | 281 | 22 | (2,991) | (1,222) | (9,510) |
Net unrealized loss on securities transferred from available-for-sale to held-to-maturity, net of income taxes | [3] | 0 | (31,326) | (2,277) | (47,884) | (2,277) |
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity, net of income taxes | [4] | 1,694 | 993 | 58 | 2,990 | 58 |
Other comprehensive loss , net of tax | (66,095) | (70,785) | (25,348) | (273,251) | (59,116) | |
Comprehensive income (loss), net of tax | $ 7,268 | $ (982) | $ 64,740 | $ (63,181) | $ 195,942 | |
[1]Income tax (benefit) expense of the unrealized loss on securities was $(27.2) million, $(16.2) million, and $(8.1) million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and $(90.7) million and $(19.0) million for the nine months ended September 30, 2022 and September 30, 2021, respectively.[2]Income tax (benefit) expense on the reclassification adjustment for net loss (gain) on sales of securities included in net income was $(112,000), $(9,000), and $1.2 million for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and $488,000 and $3.8 million for the nine months ended September 30, 2022 and September 30, 2021, respectively.[3]Income tax (benefit) expense on the unrealized loss on securities transferred from available-for-sale to held-to-maturity was $0, $(12.5) million, and $(913,000) for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and $(19.1) million and $(913,000) for the nine months ended September 30, 2022 and September 30, 2021.[4]Income tax expense on the amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity included in net income was $677,000, $396,000, and $24,000 for the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, respectively, and $1.2 million and $24,000 for the nine months ended September 30, 2022 and September 30, 2021, respectively. |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | |||||
Unrealized holding loss on securities arising during the period, income tax expense (benefit) | $ (27,200) | $ (16,200) | $ (8,100) | $ (90,700) | $ (19,000) |
Reclassification adjustment for net loss (gain) on sale of securities included in net income, income tax expense (benefit) | (112) | (9) | 1,200 | 488 | 3,800 |
Unrealized loss on securities transferred from available-for-sale to held-to maturity, income tax (benefit) expense | 0 | (12,500) | (913) | (19,100) | (913) |
Amortization of unrealized loss on securities transferred from available-for-sale to held-to-maturity, income tax expense | $ 677 | $ 396 | $ 24 | $ 1,200 | $ 24 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Retained Earnings | Accumulated Other Comprehensive Loss |
Balance at beginning of period (in shares) at Dec. 31, 2020 | 94,483,136 | ||||
Balance at beginning of period at Dec. 31, 2020 | $ 2,746,649 | $ 931 | $ 2,354,871 | $ 330,555 | $ 60,292 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 255,058 | 255,058 | |||
Other comprehensive loss | (59,116) | (59,116) | |||
Repurchase and retirement of common stock (in shares) | (479,944) | ||||
Repurchase and retirement of common stock | (18,067) | $ (5) | (11,942) | (6,120) | |
Cash dividends declared | (90,747) | (90,747) | |||
Dividend equivalents declared | 0 | 361 | (361) | ||
Share-based compensation expense | 9,911 | 9,911 | |||
Issuance of restricted stock, net (in shares) | 450,549 | ||||
Issuance of restricted stock, net | 0 | $ 3 | (3) | ||
Restricted stock surrendered and canceled (in shares) | (149,782) | ||||
Restricted stock surrendered and canceled | (6,354) | (6,354) | |||
Exercise of stock options (in shares) | 50,252 | ||||
Exercise of stock options | 782 | 782 | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 94,354,211 | ||||
Balance at end of period at Sep. 30, 2021 | 2,838,116 | $ 929 | 2,347,626 | 488,385 | 1,176 |
Balance at beginning of period (in shares) at Jun. 30, 2021 | 94,656,575 | ||||
Balance at beginning of period at Jun. 30, 2021 | 2,813,419 | $ 931 | 2,352,112 | 433,852 | 26,524 |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 90,088 | 90,088 | |||
Other comprehensive loss | (25,348) | (25,348) | |||
Repurchase and retirement of common stock (in shares) | (280,270) | ||||
Repurchase and retirement of common stock | (11,170) | $ (3) | (6,965) | (4,202) | |
Cash dividends declared | (31,226) | (31,226) | |||
Dividend equivalents declared | 0 | 127 | (127) | ||
Share-based compensation expense | 3,349 | 3,349 | |||
Issuance of restricted stock, net (in shares) | 14,592 | ||||
Issuance of restricted stock, net | 0 | $ 1 | (1) | ||
Restricted stock surrendered and canceled (in shares) | (39,755) | ||||
Restricted stock surrendered and canceled | (1,046) | (1,046) | |||
Exercise of stock options (in shares) | 3,069 | ||||
Exercise of stock options | 50 | 50 | |||
Balance at end of period (in shares) at Sep. 30, 2021 | 94,354,211 | ||||
Balance at end of period at Sep. 30, 2021 | $ 2,838,116 | $ 929 | 2,347,626 | 488,385 | 1,176 |
Balance at beginning of period (in shares) at Dec. 31, 2021 | 94,389,543 | 94,389,543 | |||
Balance at beginning of period at Dec. 31, 2021 | $ 2,886,311 | $ 929 | 2,351,294 | 541,950 | (7,862) |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 210,070 | 210,070 | |||
Other comprehensive loss | (273,251) | (273,251) | |||
Cash dividends declared | (93,806) | (93,806) | |||
Dividend equivalents declared | 0 | 369 | (369) | ||
Share-based compensation expense | 14,171 | 14,171 | |||
Issuance of restricted stock, net (in shares) | 818,229 | ||||
Issuance of restricted stock, net | 0 | $ 4 | (4) | ||
Restricted stock surrendered and canceled (in shares) | (234,851) | ||||
Restricted stock surrendered and canceled | (8,858) | (8,858) | |||
Exercise of stock options (in shares) | 43,846 | ||||
Exercise of stock options | $ 759 | 759 | |||
Balance at end of period (in shares) at Sep. 30, 2022 | 95,016,767 | 95,016,767 | |||
Balance at end of period at Sep. 30, 2022 | $ 2,735,396 | $ 933 | 2,357,731 | 657,845 | (281,113) |
Balance at beginning of period (in shares) at Jun. 30, 2022 | 94,976,605 | ||||
Balance at beginning of period at Jun. 30, 2022 | 2,755,219 | $ 933 | 2,353,361 | 615,943 | (215,018) |
Increase (Decrease) in Stockholders' Equity | |||||
Net income | 73,363 | 73,363 | |||
Other comprehensive loss | (66,095) | (66,095) | |||
Cash dividends declared | (31,337) | (31,337) | |||
Dividend equivalents declared | 0 | 124 | (124) | ||
Share-based compensation expense | 4,336 | 4,336 | |||
Issuance of restricted stock, net (in shares) | 56,452 | ||||
Issuance of restricted stock, net | 0 | 0 | |||
Restricted stock surrendered and canceled (in shares) | (22,348) | ||||
Restricted stock surrendered and canceled | (184) | (184) | |||
Exercise of stock options (in shares) | 6,058 | ||||
Exercise of stock options | $ 94 | 94 | |||
Balance at end of period (in shares) at Sep. 30, 2022 | 95,016,767 | 95,016,767 | |||
Balance at end of period at Sep. 30, 2022 | $ 2,735,396 | $ 933 | $ 2,357,731 | $ 657,845 | $ (281,113) |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends declared (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.99 | $ 0.96 |
Dividend equivalents declared (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.99 | $ 0.96 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 210,070 | $ 255,058 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization expense | 11,164 | 12,147 |
Provision for credit losses | 1,994 | (56,228) |
Share-based compensation expense | 14,171 | 9,911 |
Loss on sales and disposals of premises and equipment | 54 | 179 |
Net amortization on securities | 14,127 | 17,078 |
Net (accretion) of discounts/premiums for acquired loans and deferred loan fees/costs | (22,328) | (31,955) |
Gain on sales of investment securities available-for-sale | (1,710) | (13,321) |
Loss on debt extinguishment | 0 | 180 |
Gain on sales of loans | (3,087) | (3,094) |
Deferred income tax expense | 5,561 | 29,111 |
Income from bank owned life insurance, net | (7,949) | (6,071) |
Amortization of intangible assets | 10,543 | 12,056 |
Originations of loans held for sale | (57,685) | (34,902) |
Proceeds from the sales of and principal payments from loans held for sale | 69,478 | 29,973 |
Change in accrued expenses and other liabilities, net | 6,075 | (17,404) |
Change in accrued interest receivable and other assets, net | 82,719 | 53,953 |
Net cash provided by operating activities | 333,197 | 256,671 |
Cash flows from investing activities: | ||
Net decrease in interest-bearing time deposits with financial institutions | 483 | 137 |
Loan originations and payments, net | (664,678) | (719,657) |
Proceeds from loans held for sale previously classified as portfolio loans | 0 | 1,530 |
Purchase of loans held for investment | (797) | 0 |
Proceeds from prepayments and maturities of securities held-to-maturity | 15,570 | 7,509 |
Purchase of securities available-for-sale | (986,997) | (2,079,198) |
Proceeds from prepayments and maturities of securities available-for-sale | 248,629 | 429,235 |
Proceeds from sales of securities available-for-sale | 936,413 | 630,437 |
Proceeds from the sales of premises and equipment | 0 | 26 |
Proceeds from surrender of bank owned life insurance | 0 | 1,400 |
Purchase of bank owned life insurance | 0 | (150,000) |
Purchase of premises and equipment | (4,961) | (6,318) |
Change in FHLB, FRB, and other stock, at cost | (2,321) | 3 |
Funding of CRA investments, net | (10,910) | (19,001) |
Net cash used in investing activities | (469,569) | (1,903,897) |
Cash flows from financing activities: | ||
Net increase in deposit accounts | 630,785 | 1,255,822 |
Net change in short-term borrowings | (358,000) | 140,000 |
Proceeds from long-term borrowings | 400,000 | 0 |
Repayments of long-term borrowings | 0 | (21,503) |
Redemption of junior subordinated debt securities | 0 | (171,153) |
Cash dividends paid | (93,806) | (90,747) |
Repurchase and retirement of common stock | 0 | (18,067) |
Proceeds from exercise of stock options | 759 | 782 |
Restricted stock surrendered and canceled | (8,858) | (6,354) |
Net cash provided by financing activities | 570,880 | 1,088,780 |
Net increase (decrease) in cash and cash equivalents | 434,508 | (558,446) |
Cash and cash equivalents, beginning of period | 304,703 | 880,766 |
Cash and cash equivalents, end of period | 739,211 | 322,320 |
Supplemental cash flow disclosures: | ||
Interest paid | 28,638 | 29,745 |
Income taxes paid, net | 47,932 | 56,472 |
Noncash investing activities during the period: | ||
Transfers from portfolio loans to loans held for sale | 0 | 1,006 |
Transfers of investment securities from available-for-sale to held-to-maturity | 1,019,472 | 154,456 |
Recognition of operating lease right-of-use assets | (1,183) | (3,812) |
Recognition of operating lease liabilities | $ 1,183 | $ 3,812 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
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 and accruals that are necessary for a fair presentation of the statement of financial position and the results of operations for the interim periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for any other interim period or the full year ending December 31, 2022. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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, 2021 (the “2021 Form 10-K”). The Company consolidates voting entities in which the Company has control through voting interests or entities through which the Company has 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 14 – Variable Interest Entities for additional information. |
Recently Issued Accounting Pron
Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Recent Accounting Guidance Not Yet Effective In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures . The FASB issued this Update in response to feedback the FASB received from various stakeholders in its post-implementation review process related to the issuance of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was effective for the Company on January 1, 2020. The amendments in this Update include the elimination of accounting guidance for troubled debt restructurings (“TDRs”) in Subtopic 310-40 - Receivables - Troubled Debt Restructurings by Creditors , and introduce new disclosures and enhance existing disclosures concerning certain loan refinancings and restructurings when a borrower is experiencing financial difficulty. Rather than applying the recognition and measurement guidance of troubled debt restructurings, an entity must determine whether a modification results in a new loan or the continuation of an existing loan. Further, the amendments in this Update require that a public business entity disclose current period gross charge-offs on financing receivables within the scope of ASC 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost , by year of origination and class of financing receivable. The amendments in this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as interim periods within those years. Early adoption is permitted. The amendments in this Update are to be applied prospectively. However, for the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact of this Update on the Company’s consolidated financial statements with internal stakeholders in finance, credit administration, and loan servicing. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815) Fair Value Hedging - Portfolio Layer Method . The amendments in this Update make targeted improvements to fair value hedge accounting and more specifically to the last-of-layer hedge accounting method. This Update expands the last-of-layer hedge accounting method to allow for multiple hedged layers to be designated for a single closed portfolio of prepayable financial assets, and renames this accounting method the “portfolio layer method.” The provisions of this Update also include: (i) expanding the scope of the portfolio layer method to nonprepayable financial assets, (ii) specifying that eligible hedging instruments in a single layer hedge may include spot-starting or forward-starting constant-notional or amortizing-notional swaps and that the number of hedged layers corresponds with the number of hedges designated, (iii) specifies that an entity hedging multiple amounts in a closed portfolio using a single amortizing-notional swap is executing a single-layer hedge, (iv) provides additional guidance on the accounting for and disclosure of hedge basis adjustments resulting from a fair value hedge under the portfolio layer method by requiring such basis adjustments be maintained at the portfolio level and not allocated to individual assets, and to disclose basis adjustments as a reconciling item in certain disclosures, such as those for loans, and (v) specifies that an entity is to exclude hedge basis adjustments in the determination of credit losses on the assets within the closed portfolio. The provisions of this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as interim periods within those years. Early adoption is permitted. Entities may designate multiple layer hedges only on a prospective basis upon the adoption of this Update. The provisions of this Update that relate to hedge basis adjustments, except for those related to disclosure, are to be applied on a modified retrospective basis through a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The provisions of this Update that relate to disclosure may be applied on a prospective basis or on a retrospective basis to each prior period presented. The Company is currently evaluating the impact of this Update on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this Update address how to determine whether a contract liability is recognized by an acquirer in a business combination. In addition, the Update addresses inconsistencies in the recognition and measurement of acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as all interim periods within those years. Early adoption is permitted. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application, and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company has not yet adopted the provisions of this Update. The Company does not currently anticipate the adoption of this Update will have a material impact on the Company’s consolidated financial statements. 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 become effective upon issuance for all entities. 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 has not entered into any hedging related transactions that reference LIBOR or another reference rate that is expected to be discontinued, and as such, the amendments included in this Update have not had an impact on the Company’s Consolidated Financial Statements. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
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 2021 Form 10-K. Select policies have been reiterated below that have a particular affiliation to our interim financial statements. 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 (“HTM”). 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. The Company accounts for transfers of debt securities from available-for-sale classification to held-to-maturity classification at fair value on the transfer date. Any associated unrealized gains or losses on such securities become part of the security’s amortized cost at the time of transfer and are subsequently amortized or accreted into interest income over the remaining life of the security using the interest method. In addition, the related unrealized gains and losses included in accumulated other comprehensive income on the date of transfer are also subsequently amortized or accreted into interest income over the remaining life of the security using the interest method. Securities Available-for-Sale (“AFS”). 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 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 allowance for credit losses (“ACL”) on investment securities is determined for both the HTM and AFS classifications of the investment portfolio in accordance with the guidance ASC 326 on a quarterly basis. The ACL for HTM investment securities is recorded at the time of purchase or acquisition, representing the Company’s best estimate of current expected credit losses (“CECL”) as of the date for the consolidated statements of financial condition. The ACL for HTM investment securities is determined on a collective basis, based on shared risk characteristics, and is determined at the individual security level when the Company deems a security to no longer possess shared risk characteristics. For investment securities where the Company has reason to believe the credit loss exposure is remote, a zero credit loss assumption is applied. Such investment securities typically consist of those guaranteed by the U.S. government or other government enterprises, where there is an explicit or implicit guarantee by the U.S. government, that are highly rated by rating agencies, and historically have had no credit loss experience. For available-for-sale investment securities, the Company performs a 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, or a portion thereof, is credit related, 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, in accumulated other comprehensive income. The Company determines expected credit losses on AFS and HTM 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. 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. Equity Investments. Equity investments that have readily determinable fair values are carried at fair value with changes in fair value recognized in current period earnings as a component of noninterest income. Equity investments that do not have readily determinable fair values are carried at cost, adjusted for any observable price changes in orderly transactions for identical or similar investments of the same issuer. Such investments are also recorded net of any previously recognized impairment. Certain equity securities the Company holds, such as investments in the stock of the Federal Home Loan Bank and the Federal Reserve Bank of San Francisco are carried at cost, less any previously recognized impairment. Investment in these securities is restricted to member banks and the securities are not actively traded on an exchange. Dividends received on equity securities are included in interest income on investment securities and other interest earning assets in the consolidated statements of income. The Company applies the equity method of accounting to investments in the equity of certain entities where it is deemed to have the ability to exercise significant influence over the entity, but does not control the entity, such as when its ownership interest is between 20% and 50%. Further, the Company also applies the equity method of accounting to equity investments it makes in limited partnerships and limited liability companies when its ownership interest in such entities exceeds 3-5% or when the Company believes it has the ability to exercise significant influence over the partnership. Such investments typically reflect equity interests in various partnerships that make investments qualifying for credit under the Community Reinvestment Act (“CRA”). The Company records its share of the operating results associated with equity method investments, based on the most recent information available from the investee, in other noninterest income in the consolidated statements of income. Loans Held for Investment. Loans held for investment are loans the Company has the ability and intent to hold for the foreseeable future or until their maturity. These loans are carried at amortized cost, net of discounts and premiums on acquired and purchased 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 in interest income as an adjustment of yield, using the interest method, over the contractual life of the loans. Amortization of deferred loan fees or costs, as well as any purchase discounts and premiums, are discontinued for loans that are placed on nonaccrual. Any remaining discounts, premiums, deferred fees or costs, and prepayment fees associated with loan payoffs prior to contractual maturity are included in interest income on loans 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 based on the contractual terms of the loan or when, in the opinion of management, there is reasonable doubt as to the collection of principal and/or interest. When loans are placed on nonaccrual status, all previously accrued and uncollected interest is promptly reversed against current period interest income, and therefore 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 deemed 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 (“PD”) and loss given default (“LGD”) model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the PD and LGD model with the use of reasonable and supportable forecasts generate estimates for cash flows expected and not 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 forecasts PD and LGD over a two-year time horizon, which the Company believes is a reasonable and supportable period. PD and LGD forecasts are derived using economic forecast scenarios. Beyond the two-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a period of three years. The duration of the forecast horizon, the period over which forecasts revert to historical 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 PD and LGD, 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 for term loans represents the amount by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows expected to be collected. The ACL for credit facilities is determined by discounting estimates for cash flows not expected to be collected. 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 uncollectible. 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, management considers the need for qualitative adjustments to the ACL on a quarterly basis. 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 backtesting, 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, 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, which have exhibited a deterioration in credit quality 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 the 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. Additionally, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL and credit review process and may require changes to the ACL. Please also see Note 6 – Allowance for Credit Losses , of these Consolidated Financial Statements for additional discussion concerning the Company’s ACL methodology, including discussion concerning economic forecasts used in the determination of the ACL. 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, 2022, the Company had the following segments and 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, changes in market rents, and vacancy of the underlying property, any of 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. • 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 origination efforts on single homes and infill multifamily and commercial 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 (“QSR”). These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. Risks associated with these loans include material decreases in the value of real estate being held as collateral, and the borrower’s inability to pay as a result of increases in interest rates or decreases in cash flow from the underlying business. • 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. government. 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 to businesses, secured by business assets including inventory, receivables, and machinery and equipment. Loan types include revolving lines of 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, and occasionally upon other borrower assets and guarantor assets. The fair value of the collateral securing these loans may fluctuate 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. Retail Loans: • One-to-four family - Although we do not originate first lien single family loans, we have acquired them 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 to banking clients, 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. 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, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms 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 estimated expected fair value of the underlying collateral, less costs to sell. Acquired Loans. When the Company acquires loans through purchase or a business combination, an assessment is first performed to 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 or otherwise classified as non-PCD loans. All acquired loans are recorded at their fair value as of the date of acquisition. Any resulting discount or premium on acquired loans is accreted or amortized into interest income over the remaining life of the loans 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. 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. As with non-PCD loans, 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. Subsequent to acquisition, the ACL for both non-PCD and PCD loans are measured with the use of the Company’s ACL methodology in the same manner as all other loans. Goodwill and Other Intangible Assets. Goodwill assets originate from business combinations where the Company has acquired other financial institutions, and is 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 that are determined to have indefinite useful lives are not amortized, but are tested for impairment at least annually or more frequently if events and circumstances lead management to believe the value of those assets 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. Management’s assessment of goodwill is performed in accordance with ASC 350-20 - Intangibles - Goodwill and Other - Goodwill , which allows the Company to first perform a qualitative assessment of goodwill to determine if it is more likely than not the fair value of the Company’s equity is below its carrying value. However, GAAP also allows the Company, at its option, to unconditionally forego the qualitative assessment and proceed directly to a quantitative assessment. When performing a qualitative assessment of goodwill, should the results of such analysis indicate it is more likely than not the fair value of the Company’s equity is below its carrying value, the Company then performs the 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 recognize the amount of impairment as the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to the reporting unit. Impairment losses are recorded as a charge to noninterest expense. The Company’s annual impairment test of goodwill is performed in the fourth quarter of each year. The Company performed a qualitative assessment of goodwill in the fourth quarter of 2021, the results of which indicated the value of goodwill assets could be supported and were not impaired. There have been no changes since the most recent assessment. Other intangible assets include core deposit and customer relationship intangible assets arising from the acquisition of other financial institutions and are amortized on a basis reflecting the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, or on a straight-line basis over their estimated useful lives, which range from 6 to 11 years. GAAP requires that intangible assets other than goodwill be tested for impairment when events and circumstances change, indicating that their carrying value may not be recoverable. For intangible assets other than goodwill, the Company first performs a qualitative assessment to determine if the carrying value of such assets may not be recoverable. A quantitative assessment is followed to determine the amount of impairment in the event the carrying value of such assets are deemed not recoverable. Impairment is measured as the amount by which their carrying value exceeds their estimated fair value. The Company tests intangible assets for impairment in the fourth quarter of each year, the results of which indicated the value of intangible assets could be supported and were not impaired. Derivatives as Part of Designated Accounting Hedges. The Company applies hedge accounting to certain derivative instruments used for risk management purposes, primarily interest rate risk. To qualify for hedge accounting, a derivative instrument must be highly effective at reducing the risk associated with the hedged exposure, and the hedging relationship must be formally documented at its inception. The Company uses regression analysis to assess the effectiveness of each hedging relationship, unless the hedge qualifies for other methods of assessing effectiveness (e.g., shortcut or critical terms match), both at inception and throughout |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities The amortized cost and estimated fair value of investment securities available-for-sale were as follows: (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated AFS investment securities: September 30, 2022 U.S. Treasury $ 48,926 $ — $ (2,152) $ 46,774 Agency 486,111 — (55,248) 430,863 Corporate debt 602,058 — (46,308) 555,750 Collateralized mortgage obligations 856,867 24 (65,776) 791,115 Mortgage-backed securities 991,429 — (154,852) 836,577 Total AFS investment securities $ 2,985,391 $ 24 $ (324,336) $ 2,661,079 December 31, 2021 U.S. Treasury $ 57,708 $ 614 $ (456) $ 57,866 Agency 440,183 2,081 (10,129) 432,135 Corporate debt 451,621 6,096 (3,856) 453,861 Municipal bonds 1,061,985 32,209 (4,281) 1,089,913 Collateralized mortgage obligations 680,686 2,012 (6,055) 676,643 Mortgage-backed securities 1,586,406 3,220 (26,180) 1,563,446 Total AFS investment securities $ 4,278,589 $ 46,232 $ (50,957) $ 4,273,864 The carrying amount and estimated fair value of investment securities held-to-maturity were as follows: (Dollars in thousands) Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrecognized Gross Unrecognized Estimated HTM investment securities: September 30, 2022 Municipal bonds $ 1,148,234 $ (91) $ 1,148,143 $ — $ (294,439) $ 853,704 Mortgage-backed securities 235,937 — 235,937 — (35,876) 200,061 Other 1,422 — 1,422 — — 1,422 Total HTM investment securities $ 1,385,593 $ (91) $ 1,385,502 $ — $ (330,315) $ 1,055,187 December 31, 2021 Municipal bonds $ 368,344 $ (22) $ 368,322 $ 3,834 $ (1,649) $ 370,507 Mortgage-backed securities 11,843 — 11,843 564 — 12,407 Other 1,509 — 1,509 — — 1,509 Total HTM investment securities $ 381,696 $ (22) $ 381,674 $ 4,398 $ (1,649) $ 384,423 The Company reassesses classification of certain investments as part of the ongoing review of the investment securities portfolio. During the first half of 2022, the Company transferred all of the AFS municipal bond portfolio of $831.4 million as well as mortgage-backed securities of $255.0 million, both of which the Company intends and has the ability to hold to maturity, to HTM securities. The transfer of these securities was accounted for at fair value on the transfer date. In total, the municipal bonds had a net carrying amount of $780.7 million with a pre-tax unrealized loss of $50.8 million, and the mortgage-backed securities had a net carrying amount of $238.8 million with a pre-tax unrealized loss of $16.2 million, and both realized losses were reflected as discounts on the date of transfer. These discounts are accreted into interest income as yield adjustments over the remaining term of the securities. The amortization of the unrealized losses reported in accumulated other comprehensive income largely offsets the effect on interest income of the accretion of the discounts. No gains or losses were recorded at the time of transfer. During the third quarter of 2022, there was no investment securities transfer from AFS to HTM. Investment securities with carrying values of $194.0 million and $130.7 million as of September 30, 2022 and December 31, 2021, respectively, were pledged to secure public deposits, other borrowings, and for other purposes as required or permitted by law. Unrealized Gains and Losses Unrealized gains and losses on AFS investment securities are recognized in stockholders’ equity as accumulated other comprehensive income or loss. At September 30, 2022, the Company had a net unrealized loss on AFS investment securities of $324.3 million, or $231.7 million net of tax in accumulated other comprehensive loss, compared to a net unrealized loss of $4.7 million, or $3.3 million net of tax in accumulated other comprehensive loss, at December 31, 2021. For investment securities transferred from AFS to HTM, the unrealized gains and losses at the date of transfer continue to be reported in stockholders’ equity as accumulated other comprehensive income or loss and are amortized over the remaining lives of the securities with an offsetting entry to interest income as an adjustment of yield. At September 30, 2022, the unrealized loss on investment securities transferred from AFS to HTM was $69.2 million, or $49.4 million net of tax in accumulated other comprehensive loss. The table below summarizes the number, fair value, and gross unrealized holding losses of the Company’s AFS investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of the dates indicated, aggregated by investment category and length of time in a continuous loss position. September 30, 2022 Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Number Fair Gross Number Fair Gross Number Fair Gross AFS investment securities: U.S. Treasury 5 $ 33,865 $ (125) 1 $ 12,909 $ (2,027) 6 $ 46,774 $ (2,152) Agency 8 80,049 (1,118) 35 350,814 (54,130) 43 430,863 (55,248) Corporate debt 49 468,523 (28,413) 8 87,227 (17,895) 57 555,750 (46,308) Collateralized mortgage obligations 44 543,696 (35,355) 36 239,916 (30,421) 80 783,612 (65,776) Mortgage-backed securities. 16 103,048 (8,957) 66 733,529 (145,895) 82 836,577 (154,852) Total AFS investment securities 122 $ 1,229,181 $ (73,968) 146 $ 1,424,395 $ (250,368) 268 $ 2,653,576 $ (324,336) December 31, 2021 Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Number Fair Gross Number Fair Gross Number Fair Gross AFS investment securities: U.S. Treasury 3 $ 47,235 $ (456) — $ — $ — 3 $ 47,235 $ (456) Agency 19 278,078 (5,634) 16 119,750 (4,495) 35 397,828 (10,129) Corporate debt 17 166,563 (849) 3 57,274 (3,007) 20 223,837 (3,856) Municipal bonds 36 277,564 (4,079) 2 6,596 (202) 38 284,160 (4,281) Collateralized mortgage obligations 26 226,763 (3,738) 15 121,185 (2,317) 41 347,948 (6,055) Mortgage-backed securities 103 1,306,455 (20,417) 15 173,121 (5,763) 118 1,479,576 (26,180) Total AFS investment securities 204 $ 2,302,658 $ (35,173) 51 $ 477,926 $ (15,784) 255 $ 2,780,584 $ (50,957) Allowance for Credit Losses on Investment Securities The Company reviews individual securities classified as AFS 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. An ACL on AFS 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, through the Company’s qualitative assessment, to be credit related. Non-credit related declines in fair value of AFS investment securities, which may be attributed to changes in interest rates and other market-related factors, are not recorded through an ACL. Such declines are recorded as an adjustment to accumulated other comprehensive income, net of tax. In the event the Company is required to sell or has the intent to sell an AFS 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. Credit losses on HTM investment securities are recorded at the time of purchase or acquisition and when the Company has designated securities as HTM. Credit losses on HTM investment securities are representative of current expected credit losses that may be incurred over the life of the investment. The Company determines credit losses on both AFS and HTM 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 AFS 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. At September 30, 2022 and December 31, 2021, the Company had an ACL of $91,000 and $22,000, respectively, for HTM investment securities classified as municipal bonds. The following table presents a rollforward by major security type of the allowance for credit losses on the Company's HTM debt securities as of and for the periods indicated: Three Months Ended September 30, 2022 (Dollars in thousands) Balance, June 30, 2022 Provision for Credit Losses Balance, September 30, 2022 HTM investment securities: Municipal bonds $ 109 $ (18) $ 91 Three Months Ended September 30, 2021 (Dollars in thousands) Balance, Provision for Credit Losses Balance, HTM investment securities: Municipal bonds $ — $ 11 $ 11 Nine Months Ended September 30, 2022 (Dollars in thousands) Balance, Provision for Credit Losses Balance, September 30, 2022 HTM investment securities: Municipal bonds $ 22 $ 69 $ 91 Nine Months Ended September 30, 2021 (Dollars in thousands) Balance, Provision for Credit Losses Balance, HTM investment securities: Municipal bonds $ — $ 11 $ 11 The Company had no ACL for AFS investment securities at September 30, 2022 and December 31, 2021. The Company performed a qualitative assessment of these investments as of September 30, 2022 and determined that the increase in unrealized losses was the result of changes in interest rates driven by the Federal Reserve’s policy to fight against inflation, and does not believe the declines in fair value were credit related. As of September 30, 2022, the Company had not recorded credit losses on certain AFS securities that were in an unrealized loss position due to the high quality of the investments, with investment grade ratings, and many of them issued by U.S. government agencies. No issuers of these securities have, to the Company’s knowledge, experienced credit downgrades. Additionally, the Company continues to receive contractual principal and interest payments in a timely manner. The Company does not intend to sell these securities, and it is more likely than not that the Company will not be required to sell the securities prior to their anticipated recoveries. There was no provision for credit losses recognized for AFS investment securities during the three months ended September 30, 2022, June 30, 2022, or September 30, 2021, or the nine months ended September 30, 2022 and September 30, 2021. At September 30, 2022 and December 31, 2021, there were no AFS or HTM securities in nonaccrual status. All securities in the portfolio were current with their contractual principal and interest payments. At September 30, 2022 and December 31, 2021, there were no securities purchased with deterioration in credit quality since their origination. At September 30, 2022 and December 31, 2021, there were no collateral dependent AFS or HTM securities. Realized Gains and Losses The following table presents the amortized cost of securities sold with related gross realized gains, gross realized losses, and net realized (losses) gains for the periods indicated: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Amortized cost of AFS investment securities sold $ 231,076 $ 45,121 $ 161,597 $ 934,703 $ 617,116 Gross realized gains $ — $ 7 $ 4,190 $ 13,645 $ 18,462 Gross realized (losses) (393) (38) — (11,935) (5,141) Net realized (losses) gains on sales of AFS investment securities $ (393) $ (31) $ 4,190 $ 1,710 $ 13,321 Contractual Maturities The amortized cost and estimated fair value of investment securities at September 30, 2022, by contractual maturity, are shown in the table below. Due in One Year Due after One Year Due after Five Years Due after Total (Dollars in thousands) Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair AFS investment securities: U.S. Treasury $ 9,648 $ 9,639 $ 24,342 $ 24,226 $ 14,936 $ 12,909 $ — $ — $ 48,926 $ 46,774 Agency 25,583 25,329 326,627 298,271 96,469 79,143 37,432 28,120 486,111 430,863 Corporate debt — — 298,578 289,014 303,480 266,736 — — 602,058 555,750 Collateralized mortgage obligations 34,661 34,426 70,542 68,834 213,821 192,325 537,843 495,530 856,867 791,115 Mortgage-backed securities — — 35,049 34,770 549,549 468,798 406,831 333,009 991,429 836,577 Total AFS investment securities 69,892 69,394 755,138 715,115 1,178,255 1,019,911 982,106 856,659 2,985,391 2,661,079 HTM investment securities: Municipal bonds — — 10,484 9,749 50,556 43,410 1,087,194 800,545 1,148,234 853,704 Mortgage-backed securities — — — — — — 235,937 200,061 235,937 200,061 Other — — — — — — 1,422 1,422 1,422 1,422 Total HTM investment securities — — 10,484 9,749 50,556 43,410 1,324,553 1,002,028 1,385,593 1,055,187 Total investment securities $ 69,892 $ 69,394 $ 765,622 $ 724,864 $ 1,228,811 $ 1,063,321 $ 2,306,659 $ 1,858,687 $ 4,370,984 $ 3,716,266 FHLB, FRB, and Other Stock The Company’s equity securities primarily consist of Federal Home Loan Bank of San Francisco (“FHLB”) and Federal Reserve Bank of San Francisco (“FRB”) stock, which are considered restricted securities and held as a condition of membership of the FHLB and the Board of Governors of the Federal Reserve System. These equity securities without readily determinable fair values are carried at cost less impairment. At September 30, 2022, the Company had $19.4 million in FHLB stock, $74.7 million in FRB stock, and $24.7 million in other stock. At December 31, 2021, the Company had $17.3 million in FHLB stock, $74.5 million in FRB stock, and $25.7 million in other stock. |
Loans Held for Investment
Loans Held for Investment | 9 Months Ended |
Sep. 30, 2022 | |
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. This loan portfolio includes commercial and industrial, franchise loans non-real estate secured, and SBA loans non-real estate secured. Retail loans include 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 periods indicated: September 30, December 31, (Dollars in thousands) 2022 2021 Investor loans secured by real estate CRE non-owner-occupied $ 2,771,272 $ 2,771,137 Multifamily 6,199,581 5,891,934 Construction and land 373,194 277,640 SBA secured by real estate 42,998 46,917 Total investor loans secured by real estate 9,387,045 8,987,628 Business loans secured by real estate CRE owner-occupied 2,477,530 2,251,014 Franchise real estate secured 383,468 380,381 SBA secured by real estate 64,002 69,184 Total business loans secured by real estate 2,925,000 2,700,579 Commercial loans Commercial and industrial 2,164,623 2,103,112 Franchise non-real estate secured 409,773 392,576 SBA non-real estate secured 11,557 11,045 Total commercial loans 2,585,953 2,506,733 Retail loans Single family residential 75,176 95,292 Consumer 3,761 5,665 Total retail loans 78,937 100,957 Loans held for investment before basis adjustment (1) 14,976,935 14,295,897 Basis adjustment associated with fair value hedge (2) (68,124) — Loans held for investment 14,908,811 14,295,897 Allowance for credit losses for loans held for investment (195,549) (197,752) Loans held for investment, net $ 14,713,262 $ 14,098,145 Total unfunded loan commitments $ 2,823,555 $ 2,507,911 Loans held for sale, at lower of cost or fair value 2,163 10,869 ______________________________ (1) Includes net deferred origination fees of $3.0 million and $3.5 million, and unaccreted fair value net purchase discounts of $59.0 million and $77.1 million as of September 30, 2022 and December 31, 2021, respectively. (2) Represents the basis adjustment associated with the application of hedge accounting on certain loans. Refer to Note 11 – Derivative Instruments for additional information. 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 initially records a servicing asset 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, 2022 and December 31, 2021, the servicing asset totaled $3.4 million and $3.8 million, respectively, and were included in other assets in the Company’s consolidated statement of financial condition. Servicing assets 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, 2022 and December 31, 2021, the Company determined that no valuation allowance was necessary. In connection with the acquisition of Opus Bank (“Opus”), the Company acquired Federal Home Loan Mortgage Corporation (“Freddie Mac”) guaranteed structured pass-through certificates, which were issued as a result of Opus’s securitization sale of $509 million in originated multifamily loans through a Freddie Mac-sponsored transaction in December 2016. 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. 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 $338,000 as of September 30, 2022 and December 31, 2021. 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 $491.0 million at September 30, 2022 and $565.8 million at December 31, 2021. Included in those totals are multifamily loans transferred through securitization with Freddie Mac of $57.4 million and $78.1 million at September 30, 2022 and December 31, 2021, respectively, and SBA participations serviced for others of $328.6 million and $365.6 million at September 30, 2022 and December 31, 2021, respectively. Concentration of Credit Risk As of September 30, 2022, 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, CRE non-owner-occupied, CRE owner-occupied, and C&I 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. 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 $813.1 million for secured loans and $487.9 million for unsecured loans at September 30, 2022. In order to manage concentration risk, the Bank maintains a house lending limit well below these statutory maximums. At September 30, 2022, the Bank’s largest aggregate outstanding balance of loans to one borrower was $257.3 million primarily comprised of an asset-based line of credit. Credit Quality and Credit Risk Management The Company’s credit quality and credit risk are controlled in two distinct areas. The first is the loan origination process, wherein the Bank underwrites credit and chooses which types and levels of risk it is willing to accept. The Company maintains a credit policy which addresses many related topics, sets forth maximum tolerances for key elements of loan risk, and indicates appropriate protocols for identifying and analyzing these risk elements. The policy 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 all key risk factors are analyzed, with most underwriting including a global cash flow analysis of the prospective borrowers. The second area is in the ongoing oversight of the loan portfolio, where existing credit risk is measured and monitored, and where performance issues are dealt with in a timely and appropriate fashion. Credit risk is monitored and managed within the loan portfolio by the Company’s portfolio managers based on both the credit policy and a credit and portfolio review policy. This latter policy requires a program of financial data collection and analysis, thorough loan reviews, property and/or business inspections, monitoring of portfolio concentrations and trends, and incorporation of current business and economic conditions. The portfolio managers also monitor 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. Most individual loans, excluding the homogeneous loan portfolio, are reviewed at least annually, 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 federal banking 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 an acceptable level of credit quality that contains no well-defined deficiencies or weaknesses. • 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 through foreclosure is also classified as substandard assets. • Doubtful assets have all the weaknesses inherent in substandard assets, 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. Collateral generally consists of accounts receivable, inventory, fixed assets, real estate properties, and cash. 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. However, if a loan is not considered collateral dependent and management determines that the loan no longer possesses risk characteristics similar to other loans in the loan portfolio, the loan is individually evaluated, and the associated ACL is determined through the use of a discounted cash flow analysis. 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, 2022: Term Loans by Vintage (Dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied Pass $ 500,592 $ 619,259 $ 223,908 $ 362,597 $ 318,172 $ 711,998 $ — $ — $ 2,736,526 Special mention — — — — 7,537 3,965 — — 11,502 Substandard — — — 16,393 194 6,182 — 475 23,244 Multifamily Pass 1,193,692 2,225,146 796,705 922,115 292,670 759,311 388 — 6,190,027 Substandard — 6,074 — 2,732 — 748 — — 9,554 Construction and land Pass 154,286 152,548 38,569 18,817 1,853 7,121 — — 373,194 SBA secured by real estate Pass 6,596 130 494 5,466 7,575 14,833 — — 35,094 Substandard — — — — 2,422 5,482 — — 7,904 Total investor loans secured by real estate 1,855,166 3,003,157 1,059,676 1,328,120 630,423 1,509,640 388 475 9,387,045 Business loans secured by real estate CRE owner-occupied Pass 589,994 737,861 252,950 248,513 121,626 489,097 5,510 — 2,445,551 Special mention — — 504 — — 9,393 — — 9,897 Substandard — — 4,656 2,442 4,718 10,266 — — 22,082 Franchise real estate secured Pass 56,586 147,304 33,874 45,173 33,203 60,255 — — 376,395 Substandard 981 — — 6,092 — — — — 7,073 SBA secured by real estate Pass 10,015 7,038 2,332 6,486 4,968 27,076 — — 57,915 Substandard — — — — 1,362 4,725 — — 6,087 Total loans secured by business real estate 657,576 892,203 294,316 308,706 165,877 600,812 5,510 — 2,925,000 Commercial loans Commercial and industrial Pass 251,964 306,145 61,872 161,641 90,096 149,371 1,107,645 2,601 2,131,335 Special mention 15,375 — — — — — 3,764 — 19,139 Substandard 1,437 1,132 — 4,899 615 1,230 4,786 50 14,149 Franchise non-real estate secured Pass 91,787 146,650 19,005 64,017 32,914 35,933 779 — 391,085 Substandard 1,775 400 2,983 2,276 — 11,254 — — 18,688 SBA non-real estate secured Pass 3,212 444 472 1,679 707 3,723 — — 10,237 Substandard — — — 133 231 349 — 607 1,320 Total commercial loans 365,550 454,771 84,332 234,645 124,563 201,860 1,116,974 3,258 2,585,953 Term Loans by Vintage (Dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2022 Retail loans Single family residential Pass $ — $ 303 $ 178 $ — $ 23 $ 50,648 $ 23,982 $ — $ 75,134 Substandard — — — — — 42 — — 42 Consumer loans Pass — 7 19 13 — 1,113 2,609 — 3,761 Total retail loans — 310 197 13 23 51,803 26,591 — 78,937 Loans held for investment before basis adjustment (1) $ 2,878,292 $ 4,350,441 $ 1,438,521 $ 1,871,484 $ 920,886 $ 2,364,115 $ 1,149,463 $ 3,733 $ 14,976,935 ______________________________ (1) Excludes the basis adjustment of $68.1 million to the carrying amount of certain loans included in fair value hedging relationships. Refer to Note 11 – Derivative Instruments for additional information. The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of December 31, 2021: Term Loans by Vintage (Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Revolving Converted to Term During the Period Total December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied Pass $ 708,560 $ 269,944 $ 393,097 $ 387,923 $ 218,388 $ 730,736 $ 9,353 $ — $ 2,718,001 Special mention — — 16,166 7,682 — — — — 23,848 Substandard — — 25,777 — — 2,998 513 — 29,288 Multifamily Pass 2,260,708 952,127 1,199,505 444,904 479,029 554,067 286 — 5,890,626 Substandard — — — 543 — 765 — — 1,308 Construction and land Pass 119,532 97,721 40,556 12,415 3,857 3,559 — — 277,640 SBA secured by real estate Pass 130 497 6,259 9,074 12,070 9,198 — — 37,228 Special mention — — — 957 — 544 — — 1,501 Substandard — — — 2,343 3,679 2,166 — — 8,188 Total investor loans secured by real estate 3,088,930 1,320,289 1,681,360 865,841 717,023 1,304,033 10,152 — 8,987,628 Term Loans by Vintage (Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Revolving Converted to Term During the Period Total December 31, 2021 Business loans secured by real estate CRE owner-occupied Pass $ 853,044 $ 273,469 $ 287,249 $ 161,636 $ 187,130 $ 464,271 $ 6,738 $ 292 $ 2,233,829 Substandard — — 2,553 6,074 2,966 5,592 — — 17,185 Franchise real estate secured Pass 156,381 36,335 55,091 40,047 56,288 34,878 1,361 — 380,381 SBA secured by real estate Pass 6,379 2,364 7,331 9,125 10,734 24,627 — — 60,560 Special mention — — — — — 62 — — 62 Substandard — — — 2,062 2,690 3,810 — — 8,562 Total loans secured by business real estate 1,015,804 312,168 352,224 218,944 259,808 533,240 8,099 292 2,700,579 Commercial loans Commercial and industrial Pass 425,683 79,635 200,234 117,471 123,345 70,789 1,032,053 3,371 2,052,581 Special mention — — 146 — — 152 14,814 178 15,290 Substandard 1,772 — 14 2,683 863 1,150 27,684 1,075 35,241 Franchise non-real estate secured Pass 163,865 23,943 85,206 45,061 23,672 31,163 — — 372,910 Substandard — — 1,589 3,627 13,346 1,104 — — 19,666 SBA non-real estate secured Pass 474 564 1,292 666 2,806 2,148 — — 7,950 Special mention — — 681 114 — — — — 795 Substandard — — 76 339 685 547 653 — 2,300 Total commercial loans 591,794 104,142 289,238 169,961 164,717 107,053 1,075,204 4,624 2,506,733 Retail loans Single family residential Pass 313 211 — 32 2,008 68,759 23,920 — 95,243 Substandard — — — — — 49 — — 49 Consumer loans Pass 11 28 49 19 11 1,394 4,113 — 5,625 Substandard — — 5 — — 35 — — 40 Total retail loans 324 239 54 51 2,019 70,237 28,033 — 100,957 Loans held for investment $ 4,696,852 $ 1,736,838 $ 2,322,876 $ 1,254,797 $ 1,143,567 $ 2,014,563 $ 1,121,488 $ 4,916 $ 14,295,897 The following tables stratify loans held for investment by delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due (Dollars in thousands) Current 30-59 60-89 90+ Total September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied $ 2,754,403 $ — $ — $ 16,869 $ 2,771,272 Multifamily 6,193,507 — — 6,074 6,199,581 Construction and land 373,194 — — — 373,194 SBA secured by real estate 42,998 — — — 42,998 Total investor loans secured by real estate 9,364,102 — — 22,943 9,387,045 Business loans secured by real estate CRE owner-occupied 2,466,281 — 6,398 4,851 2,477,530 Franchise real estate secured 383,468 — — — 383,468 SBA secured by real estate 62,675 1,244 — 83 64,002 Total business loans secured by real estate 2,912,424 1,244 6,398 4,934 2,925,000 Commercial loans Commercial and industrial 2,159,494 240 135 4,754 2,164,623 Franchise non-real estate secured 409,773 — — — 409,773 SBA not secured by real estate 10,950 — — 607 11,557 Total commercial loans 2,580,217 240 135 5,361 2,585,953 Retail loans Single family residential 75,176 — — — 75,176 Consumer loans 3,759 — 2 — 3,761 Total retail loans 78,935 — 2 — 78,937 Loans held for investment before basis adjustment (1) $ 14,935,678 $ 1,484 $ 6,535 $ 33,238 $ 14,976,935 December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied $ 2,760,882 $ — $ — $ 10,255 $ 2,771,137 Multifamily 5,890,704 1,230 — — 5,891,934 Construction and land 277,640 — — — 277,640 SBA secured by real estate 46,580 — — 337 46,917 Total investor loans secured by real estate 8,975,806 1,230 — 10,592 8,987,628 Business loans secured by real estate CRE owner-occupied 2,246,062 — — 4,952 2,251,014 Franchise real estate secured 380,381 — — — 380,381 SBA secured by real estate 68,743 — — 441 69,184 Total business loans secured by real estate 2,695,186 — — 5,393 2,700,579 Commercial loans Commercial and industrial 2,101,558 92 — 1,462 2,103,112 Franchise non-real estate secured 392,576 — — — 392,576 SBA not secured by real estate 10,319 73 — 653 11,045 Total commercial loans 2,504,453 165 — 2,115 2,506,733 Retail loans Single family residential 95,292 — — — 95,292 Consumer loans 5,665 — — — 5,665 Total retail loans 100,957 — — — 100,957 Loans held for investment $ 14,276,402 $ 1,395 $ — $ 18,100 $ 14,295,897 ______________________________ (1) Excludes the basis adjustment of $68.1 million to the carrying amount of certain loans included in fair value hedging relationships. Refer to Note 11 – Derivative Instruments for additional information. Individually Evaluated Loans 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 expected 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, 2022, $60.5 million of loans were individually evaluated with $4.4 million ACL attributed to such loans. At September 30, 2022, $11.3 million of individually evaluated loans were evaluated using a discounted cash flow approach, and $49.2 million of individually evaluated loans were evaluated based on the underlying value of the collateral. All individually evaluated loans were on nonaccrual status at September 30, 2022. As of December 31, 2021, $31.3 million of loans were individually evaluated, and the ACL attributed to such loans totaled $1.5 million. At December 31, 2021, $12.4 million of individually evaluated loans were evaluated using a discounted cash flow approach, and $18.9 million of individually evaluated loans were evaluated based on the underlying value of the collateral. All individually evaluated loans were on nonaccrual status at December 31, 2021. 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. In most cases, the Company initially places TDRs on nonaccrual status, and they may return to accrual status when the loans are brought current, have performed in accordance with the restructured contractual terms for a period of at least six months, and the ultimate collectability of the total contractual restructured principal and interest payments are no longer in doubt. At September 30, 2022, the Company had five loans totaling $16.3 million modified as TDRs, consisting of three CRE owner-occupied loans and one C&I loan totaling $5.1 million belonging to one borrower relationship with the terms modified due to bankruptcy, and one franchise non-real estate secured loan of $11.2 million belonging to another borrower relationship with the terms modified for payment deferral. Those same loan relationships were classified as TDRs at December 31, 2021. At December 31, 2021, there were six loans totaling $17.3 million modified as TDRs, consisting of three CRE owner-occupied loans and one C&I loan totaling $5.2 million belonging to one borrower relationship with the terms modified due to bankruptcy, and two franchise non-real estate secured loans totaling $12.1 million belonging to another borrower relationship with the terms modified for payment deferral. During the three and nine months ended September 30, 2022, three CRE owner-occupied loans and one C&I loan classified as TDRs experienced payment defaults after modifications within the previous 12 months and were in payment default. All TDRs were on nonaccrual status as of September 30, 2022 and December 31, 2021. During the three and nine months ended September 30, 2021, three CRE owner-occupied loans and one C&I loan classified as TDRs experienced payment defaults after modifications within the previous 12 months. Purchased Credit Deteriorated Loans The Company analyzed acquired loans for more-than-insignificant deterioration in credit quality since their origination. Such loans are classified as purchased credit deteriorated loans. Please see Note 3 – Significant Accounting Policies for more information concerning the accounting for PCD loans. The Company had PCD loans of $451.6 million and $567.6 million at September 30, 2022 and December 31, 2021, respectively. Acquired loans classified as PCD are recorded at an initial amortized cost, which is comprised of the purchase price of the loans (or initial fair value) and the initial ACL determined for the loans, which is added to the purchase price, as well as any resulting discount or premium related to factors other than credit. The Company accounts for interest income on PCD loans using the interest method, whereby any purchase discounts or premiums are accreted or amortized into interest income as an adjustment of the loan’s yield. Subsequent to acquisition, the ACL for PCD loans is measured in accordance with the Company’s ACL methodology. Please also see Note 6 – Allowance for Credit Losses for more information concerning the Company’s ACL methodology. Nonaccrual Loans When loans are placed on nonaccrual status, previously accrued but unpaid interest is reversed from current period earnings. Payments received on nonaccrual loans are generally applied as a reduction to the loan principal balance. If the likelihood of further loss is remote, the Company may recognize interest on a cash basis. Loans may be returned to accruing status if the Company believes that all remaining principal and interest is fully collectible and there has been at least three months of sustained repayment performance since the loan was placed on nonaccrual. The Company typically does not accrue interest on loans 90 days or more past due or when, in the opinion of management, there is reasonable doubt as to the timely collection of principal or interest. However, when such loans are well secured and in the process of collection, the Company may continue with the accrual of interest. The Company had loans on nonaccrual status of $60.5 million at September 30, 2022 and $31.3 million at December 31, 2021. The Company did not record income from the receipt of cash payments related to nonaccruing loans during the three and nine months ended September 30, 2022 and September 30, 2021. The Company had no loans 90 days or more past due and still accruing at September 30, 2022 and December 31, 2021, respectively. The following tables provide a summary of nonaccrual loans as of the dates indicated: Nonaccrual Loans (1) Collateral Dependent Loans Non-Collateral Dependent Loans Total Nonaccrual Loans Nonaccrual Loans with No ACL (Dollars in thousands) Balance ACL Balance ACL September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied $ 23,050 $ 2,640 $ — $ — $ 23,050 $ 6,656 Multifamily 8,806 — — — 8,806 8,806 SBA secured by real estate 547 — — — 547 547 Total investor loans secured by real estate 32,403 2,640 — — 32,403 16,009 Business loans secured by real estate CRE owner-occupied 11,249 1,742 — — 11,249 9,507 SBA secured by real estate 197 — — — 197 197 Total business loans secured by real estate 11,446 1,742 — — 11,446 9,704 Commercial loans Commercial and industrial 4,754 — — — 4,754 4,754 Franchise non-real estate secured — — 11,254 — 11,254 11,254 SBA non-real estate secured 607 — — — 607 607 Total commercial loans 5,361 — 11,254 — 16,615 16,615 Total nonaccrual loans $ 49,210 $ 4,382 $ 11,254 $ — $ 60,464 $ 42,328 December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied $ 10,255 $ 1,455 $ — $ — $ 10,255 $ 2,640 SBA secured by real estate 937 — — — 937 937 Total investor loans secured by real estate 11,192 1,455 — — 11,192 3,577 Business loans secured by real estate CRE owner-occupied 4,952 — — — 4,952 4,952 SBA secured by real estate 589 — — — 589 589 Total business loans secured by real estate 5,541 — — — 5,541 5,541 Commercial loans Commercial and industrial 1,462 — 336 — 1,798 1,797 Franchise non-real estate secured — — 12,079 — 12,079 12,079 SBA non-real estate secured 653 — — — 653 653 Total commercial loans 2,115 — 12,415 — 14,530 14,529 Retail loans Single family residential 10 — — — 10 10 Total retail loans 10 — — — 10 10 Total nonaccrual loans $ 18,858 $ 1,455 $ 12,415 $ — $ 31,273 $ 23,657 ______________________________ (1) The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent; otherwise, the ACL for collateral dependent nonaccrual loans is determined based on the estimated fair value of the underlying collateral. Residential Real Estate Loans In Process of Foreclosure The Company had no consumer mortgage loans collateralized by residential real estate property for which formal foreclosure proceedings were in process as of September 30, 2022 or December 31, 2021. Collateral Dependent Loans Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation |
Allowance for Credit Losses
Allowance for Credit Losses | 9 Months Ended |
Sep. 30, 2022 | |
Provision for Loan and Lease Losses [Abstract] | |
Allowance for Credit Losses | Allowance for Credit Losses The Company maintains an ACL for loans and unfunded loan commitments in accordance with ASC 326 - Financial Instruments - Credit Losses . ASC 326 requires the Company to recognize estimates for lifetime credit losses on loans and unfunded loan commitments at the time of origination or acquisition. The recognition of credit losses at origination or acquisition represents the Company’s best estimate of lifetime expected credit losses, given the facts and circumstances associated with a particular loan or group of loans with similar risk characteristics. Determining the ACL involves the use of significant management judgement and estimates, which are subject to change based on management’s ongoing 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 PD, (ii) the estimated LGD, 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 expected 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 an originated 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 expected to be collected. The ACL for credit facilities is determined by discounting estimates for cash flows not expected to be collected. Probability of Default The PD for investor loans secured by real estate 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 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. This model also incorporates assumptions for PD at a loan’s maturity. Significant loan and property level attributes include: loan-to-value (“LTV”) ratios, debt service coverage, loan size, loan vintage, and property types. The PD for business loans secured by real estate and 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 these loans, the PD assigned to them also changes. As with investor loans secured by real estate, the PD for business loans secured by real estate and 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 for loans in the Company’s loan portfolio, such as: LTVs, estimated time to resolution, property size, and current and estimated future market price changes for underlying collateral. The LGD is highly dependent upon LTV 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 index for CRE pricing, GDP growth rate, unemployment rates, and the Consumer Price Index. 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 segment, 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 is 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. Economic Forecasts 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 a loan. The Company uses macroeconomic scenarios from an independent third party. These scenarios are based on past events, current conditions, and the likelihood of future events occurring. These scenarios typically are comprised of: a base-case scenario, an upside scenario, representing slightly better economic conditions than currently experienced, and a downside scenario, representing recessionary conditions. Management periodically evaluates appropriateness of 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 likelihood that the economy would perform better than each scenario, 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. The Company’s ACL model at September 30, 2022 includes assumptions concerning the rising interest rate environment, ongoing inflationary pressures throughout the U.S. economy, higher energy prices, the potential impact of the ongoing war between Russia and Ukraine, general uncertainty concerning future economic conditions, and the potential for recessionary conditions. The Company currently forecasts PDs and LGDs based on economic scenarios over a two-year period, which we believe is a reasonable and supportable period. Beyond this point, PDs and LGDs 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 the Company does not expect to collect for each loan. It is important to note that the Company’s ACL model relies on multiple economic variables, which are used in 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. These key economic variables include the U.S. unemployment rate, U.S. real GDP growth, CRE prices, and the 10-year U.S. Treasury yield. Qualitative Adjustments The Company recognizes that historical information used as the basis for determining future expected credit losses may not always, by itself, provide a sufficient basis for determining future expected credit losses. The Company, therefore, considers the need for qualitative adjustments to the ACL on a quarterly basis. 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, 2022, qualitative adjustments primarily relate to certain segments of the loan portfolio deemed by management to be of a higher-risk profile where management believes the quantitative component of the Company’s ACL model may not have fully captured the associated impact to the ACL. In addition, qualitative adjustments also relate to heightened uncertainty as to future macroeconomic conditions and the related impact on certain loan segments. Management reviews the need for an 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 tables provide 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 periods indicated: Three Months Ended September 30, 2022 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 37,221 $ (1,128) $ — $ 1,011 $ 37,104 Multifamily 56,293 — — (207) 56,086 Construction and land 5,436 — — 1,004 6,440 SBA secured by real estate 2,865 — — 90 2,955 Business loans secured by real estate CRE owner-occupied 31,461 — 19 346 31,826 Franchise real estate secured 6,530 — — 180 6,710 SBA secured by real estate 5,149 — — (364) 4,785 Commercial loans Commercial and industrial 37,048 (190) 143 (1,503) 35,498 Franchise non-real estate secured 13,124 — — 70 13,194 SBA non-real estate secured 452 — 26 (38) 440 Retail loans Single family residential 278 — 58 (40) 296 Consumer loans 218 — — (3) 215 Totals $ 196,075 $ (1,318) $ 246 $ 546 $ 195,549 Nine Months Ended September 30, 2022 Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 37,380 $ (1,128) $ — $ 852 $ 37,104 Multifamily 55,209 — — 877 56,086 Construction and land 5,211 — — 1,229 6,440 SBA secured by real estate 3,201 (70) — (176) 2,955 Business loans secured by real estate CRE owner-occupied 29,575 — 33 2,218 31,826 Franchise real estate secured 7,985 — — (1,275) 6,710 SBA secured by real estate 4,866 — — (81) 4,785 Commercial loans Commercial and industrial 38,136 (7,750) 2,517 2,595 35,498 Franchise non-real estate secured 15,084 (448) — (1,442) 13,194 SBA non-real estate secured 565 (50) 44 (119) 440 Retail loans Single family residential 255 — 91 (50) 296 Consumer loans 285 (2) — (68) 215 Totals $ 197,752 $ (9,448) $ 2,685 $ 4,560 $ 195,549 Three Months Ended September 30, 2021 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 47,112 $ — $ — $ (4,645) $ 42,467 Multifamily 59,059 — — (6,895) 52,164 Construction and land 9,548 — — (1,531) 8,017 SBA secured by real estate 4,681 (158) — (644) 3,879 Business loans secured by real estate CRE owner-occupied 35,747 — 14 (2,082) 33,679 Franchise real estate secured 11,436 — — (1,810) 9,626 SBA secured by real estate 6,317 — 50 (1,263) 5,104 Commercial loans Commercial and industrial 39,879 (84) 729 (2,929) 37,595 Franchise non-real estate secured 17,313 (2,398) 80 2,523 17,518 SBA non-real estate secured 730 — 15 (113) 632 Retail loans Single family residential 670 — 2 (143) 529 Consumer loans 282 — — (11) 271 Totals $ 232,774 $ (2,640) $ 890 $ (19,543) $ 211,481 Nine Months Ended September 30, 2021 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 49,176 $ (154) $ — $ (6,555) $ 42,467 Multifamily 62,534 — — (10,370) 52,164 Construction and land 12,435 — — (4,418) 8,017 SBA secured by real estate 5,159 (423) — (857) 3,879 Business loans secured by real estate CRE owner-occupied 50,517 — 44 (16,882) 33,679 Franchise real estate secured 11,451 — — (1,825) 9,626 SBA secured by real estate 6,567 (98) 130 (1,495) 5,104 Commercial loans Commercial and industrial 46,964 (4,653) 3,428 (8,144) 37,595 Franchise non-real estate secured 20,525 (2,554) 80 (533) 17,518 SBA non-real estate secured 995 — 19 (382) 632 Retail loans Single family residential 1,204 — 3 (678) 529 Consumer loans 491 — — (220) 271 Totals $ 268,018 $ (7,882) $ 3,704 $ (52,359) $ 211,481 The decrease in the ACL for loans held for investment during the three months ended September 30, 2022 of $526,000 was comprised of $1.1 million in net charge-offs, partially offset by a $546,000 provision for credit losses. The provision for credit losses for the three months ended September 30, 2022 was reflective of a combination of factors, including an increase due to specific reserves on two individually evaluated loans, and a decrease due to an overall decrease in loans held for investment, changes in the composition of the loan portfolio, and an overall lower balance of qualitative adjustments included in the ACL. The decrease in the ACL for loans held for investment during the nine months ended September 30, 2022 of $2.2 million can be attributed to net charge-offs of $6.8 million, partially offset by a $4.6 million provision for credit losses. The provision for credit losses during the nine months ended September 30, 2022 is largely attributed to an increase in loans held for investment and specific reserves on two individually evaluated loans, partially offset by the favorable impact of macroeconomic forecasts and an overall lower balance of qualitative adjustments included in the ACL. Charge-offs during the three months ended September 30, 2022 are largely attributed to one CRE non-owner-occupied relationship, while charge-offs during the nine months ended September 30, 2022 can be attributed to one C&I lending relationship, as well as one CRE non-owner-occupied lending relationship. The decrease in the ACL for loans held for investment during the three months ended September 30, 2021 of $21.3 million was comprised of a $19.5 million provision recapture and $1.8 million in net charge-offs. The provision recapture for the three months ended September 30, 2021 was reflective of improving macroeconomic forecasts employed in the Company’s ACL model relative to prior periods and the favorable asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the quarter. The decrease in the ACL for the nine months ended September 30, 2021 of $56.5 million was comprised of a $52.4 million provision recapture and $4.2 million in net charge-offs. The provision recapture for the nine months ended September 30, 2021 was also reflective of improving macroeconomic forecasts employed in the Company’s ACL model and the favorable asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the first nine months of 2021. Allowance for Credit Losses for Off-Balance Sheet Commitments The Company maintains an ACL for off-balance sheet commitments related to unfunded loans and lines of credit, which is included in other liabilities of the consolidated statements of financial condition. The allowance for off-balance sheet commitments was $24.7 million at September 30, 2022, $24.1 million at June 30, 2022, and $27.4 million at December 31, 2021. The Company recorded a provision for credit losses on off-balance sheet commitments during the three months ended September 30, 2022 of $549,000 and a provision recapture of $2.6 million during the nine months ended September 30, 2022. The provision for credit losses in the third quarter of 2022 was largely due to higher unfunded commitments in the commercial and industrial loan segment. The provision recapture during the first nine months of 2022 is largely reflective of slightly favorable macroeconomic forecasts reflected in the Company’s ACL model during the first three quarters of 2022 and changes in the mix of unfunded commitments between various loan segments. The Company applies an expected credit loss estimation methodology for off-balance sheet commitments that is largely 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 utilization at default. These assumptions are based on the Company’s own historical internal loan data. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible AssetsThe Company had goodwill of $901.3 million at September 30, 2022 and December 31, 2021, respectively. The Company recorded adjustments to goodwill associated with the acquisition of Opus in the amount of $2.7 million during the nine months ended September 30, 2021, within the one-year measurement period subsequent to the acquisition date of June 1, 2020. These adjustments largely relate to the finalization of the short-year Opus tax returns. During the second quarter of 2021, the Company finalized its fair value analysis of the acquired assets and assumed liabilities associated with the Opus acquisition. The following table summarizes the change in the balance of goodwill for the periods indicated below: September 30, September 30, (Dollars in thousands) 2022 2021 Beginning balance $ 901,312 $ 898,569 Purchase accounting adjustments — 2,743 Ending balance $ 901,312 $ 901,312 Accumulated impairment losses at end of period $ — $ — 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. Other intangible assets with definite lives were $59.0 million at September 30, 2022, consisting of $56.6 million in core deposit intangibles and $2.4 million in customer relationship intangibles. At December 31, 2021, other intangibles assets were $69.6 million, consisting of $66.9 million in core deposit intangibles and $2.7 million in customer relationship intangibles. The following table summarizes the change in the balance of core deposit intangibles and customer relationship intangibles, and the related accumulated amortization for the periods indicated below: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Gross amount of intangible assets: Beginning balance $ 145,212 $ 145,212 $ 145,212 $ 145,212 $ 145,212 Additions due to acquisitions — — — — — Ending balance 145,212 145,212 145,212 145,212 145,212 Accumulated amortization: Beginning balance (82,712) (79,234) (67,849) (75,641) (59,705) Amortization (3,472) (3,478) (3,912) (10,543) (12,056) Ending balance (86,184) (82,712) (71,761) (86,184) (71,761) Net intangible assets $ 59,028 $ 62,500 $ 73,451 $ 59,028 $ 73,451 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, 2022 | |
Debt Disclosure [Abstract] | |
Subordinated Debentures | Subordinated Debentures As of September 30, 2022, the Company had three issuances of subordinated notes with an aggregate carrying value of $331.0 million and a weighted interest rate of 5.32%, compared to $330.6 million with a weighted interest rate of 5.33% at December 31, 2021. The following table summarizes our outstanding subordinated debentures as of the dates indicated: Carrying Value (Dollars in thousands) Stated Maturity Current Interest Rate Current Principal Balance September 30, 2022 December 31, 2021 Subordinated notes Subordinated notes due 2024, 5.75% per annum September 3, 2024 5.75 % $ 60,000 $ 59,761 $ 59,671 Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter May 15, 2029 4.875 % 125,000 123,323 123,132 Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter June 15, 2030 5.375 % 150,000 147,961 147,764 Total subordinated debentures $ 335,000 $ 331,045 $ 330,567 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 and senior unsecured debt rating of A- and subordinated debt of BBB+ for the Bank. The Corporation’s and Bank’s ratings were reaffirmed in June 2022 by KBRA. For additional information on the Company’s subordinated debentures, see “ Note 13 — Subordinated Debentures ” to the Consolidated Financial Statements of the Company’s 2021 Form 10-K. For regulatory capital purposes, subordinated notes qualify as Tier 2 capital. The regulatory total capital ratios of the Company and the Bank continued to exceed regulatory minimums, inclusive of the fully phased-in capital conservation buffer. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings Per Share The Company’s restricted stock awards contain non-forfeitable rights to dividends and therefore are considered participating securities. The Company calculates basic and diluted earnings per common share 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 (Dollars in thousands, except per share data) September 30, 2022 June 30, 2022 September 30, 2021 Basic Net income $ 73,363 $ 69,803 $ 90,088 Less: dividends and undistributed earnings allocated to participating securities (917) (867) (937) Net income allocated to common stockholders $ 72,446 $ 68,936 $ 89,151 Weighted average common shares outstanding 93,793,502 93,765,264 93,549,639 Basic earnings per common share $ 0.77 $ 0.74 $ 0.95 Diluted Net income allocated to common stockholders $ 72,446 $ 68,936 $ 89,151 Weighted average common shares outstanding 93,793,502 93,765,264 93,549,639 Dilutive effect of share-based compensation 327,135 275,427 511,085 Weighted average diluted common shares 94,120,637 94,040,691 94,060,724 Diluted earnings per common share $ 0.77 $ 0.73 $ 0.95 Nine Months Ended (Dollars in thousands, except per share data) September 30, 2022 September 30, 2021 Basic Net income $ 210,070 $ 255,058 Less: dividends and undistributed earnings allocated to participating securities (2,467) (2,641) Net income allocated to common stockholders $ 207,603 $ 252,417 Weighted average common shares outstanding 93,687,230 93,571,468 Basic earnings per common share $ 2.22 $ 2.70 Diluted Net income allocated to common stockholders $ 207,603 $ 252,417 Weighted average common shares outstanding 93,687,230 93,571,468 Dilutive effect of share-based compensation 367,886 518,939 Weighted average diluted common shares 94,055,116 94,090,407 Diluted earnings per common share $ 2.21 $ 2.68 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2022 | |
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. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. 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. AFS 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 marketplace 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 these securities within Level 2 of the fair value hierarchy. Equity Securities with readily determinable fair values – The Company’s equity securities with readily determinable fair values consist of investments in public companies and qualify for CRA purposes. The fair value is based on the closing price on nationally recognized securities exchanges at the end of each period and classified as Level 1 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 Company also enters into interest rate swap contracts with institutional counterparties to hedge against certain fixed-rate loans. 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. The Company incorporates credit value adjustments on derivatives to properly reflect the respective counterparty’s nonperformance risk in the fair value measurements of its derivatives. The Company has determined that the observable nature of the majority of inputs used in deriving the fair value of these derivative contracts fall within Level 2 of the fair value hierarchy, and the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the valuation of interest rate swaps is classified as Level 2 of the fair value hierarchy. Equity Warrant Assets – The Company acquired equity warrant assets as a result of the 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. Foreign Exchange Contracts – The Company enters into foreign exchange contracts to accommodate the business needs of its customers. Company also enters into offsetting contracts with institutional counterparties to mitigate the Company’s foreign exchange exposure with its customers, or enters into bilateral collateral and master netting agreements with certain customer counterparties to manage its credit exposure. The Company measures the fair value of foreign exchange contracts based on quoted prices for identical instruments in active markets, a Level 1 measurement. 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, 2022 Fair Value Measurement Using Total Fair Value (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets AFS investment securities: U.S. Treasury $ — $ 46,774 $ — $ 46,774 Agency — 430,863 — 430,863 Corporate debt — 555,750 — 555,750 Collateralized mortgage obligations — 791,115 — 791,115 Mortgage-backed securities — 836,577 — 836,577 Total AFS investment securities $ — $ 2,661,079 $ — $ 2,661,079 Equity securities with readily determinable fair values $ 1,035 $ — $ — $ 1,035 Derivative assets: Foreign exchange contracts $ 15 $ — $ — $ 15 Interest rate swaps (1) — 8,033 — 8,033 Equity warrants — — 1,911 1,911 Total derivative assets $ 15 $ 8,033 $ 1,911 $ 9,959 Financial liabilities Derivative liabilities: Foreign exchange $ 7 $ — $ — $ 7 Interest rate swaps — 12,766 — 12,766 Total derivative liabilities $ 7 $ 12,766 $ — $ 12,773 ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. See Note 11 – Derivative Instruments for additional information. December 31, 2021 Fair Value Measurement Using Total Fair Value (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets AFS investment securities: U.S. Treasury $ — $ 57,866 $ — $ 57,866 Agency — 432,135 — 432,135 Corporate debt — 453,861 — 453,861 Municipal bonds — 1,089,913 — 1,089,913 Collateralized mortgage obligations — 676,643 — 676,643 Mortgage-backed securities — 1,563,446 — 1,563,446 Total AFS investment securities $ — $ 4,273,864 $ — $ 4,273,864 Derivative assets: Interest rate swaps $ — $ 10,100 $ — $ 10,100 Equity warrants — — 1,889 1,889 Total derivative assets $ — $ 10,100 $ 1,889 $ 11,989 Financial liabilities Derivative liabilities: Interest rate swaps $ — $ 5,263 $ — $ 5,263 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: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Beginning balance $ 1,906 $ 1,908 $ 1,903 $ 1,889 $ 1,914 Change in fair value (1) 5 (2) (8) 22 (19) Ending balance $ 1,911 $ 1,906 $ 1,895 $ 1,911 $ 1,895 ______________________________ (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 fair value measurements for assets measured at fair value on a recurring basis at the dates indicated. September 30, 2022 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Equity warrants $ 1,911 Black-Scholes Volatility 30.00% 3.92% 5.50% 35.00% 4.25% 16.00% 31.17% 4.00% 13.55% December 31, 2021 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Equity warrants $ 1,889 Black-Scholes Volatility 30.00% 0.39% 6.00% 35.00% 0.97% 16.00% 31.14% 0.52% 13.61% Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Individually Evaluated Loans – 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 and it does not share similar risk characteristics with other loans. 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 costs. The fair value of individually evaluated loans were determined using Level 3 assumptions, and represents individually evaluated loan balances for which a specific reserve has been established and/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 then discounts the valuation to cover both market price fluctuations and selling costs, typically ranging from 7% to 10% of the collateral value, that the Company expects 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, 2022, 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 recorded the related reserves where applicable during the nine months ended September 30, 2022. The following table presents our assets measured at fair value on a nonrecurring basis at the dates indicated. September 30, 2022 Fair Value Measurement Using Total (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets Collateral dependent loans $ — $ — $ 18,268 $ 18,268 December 31, 2021 Fair Value Measurement Using Total (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets Collateral dependent loans $ — $ — $ 937 $ 937 The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a nonrecurring basis at the dates indicated. September 30, 2022 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Investor loans secured by real estate CRE non-owner-occupied $ 13,754 Fair value of collateral Collateral discount and cost to sell 7.00% 7.00% 7.00% Commercial loans Commercial and industrial 4,514 Fair value of collateral Collateral discount and cost to sell 6.00% 6.00% 6.00% Total individually evaluated loans $ 18,268 December 31, 2021 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Investor loans secured by real estate SBA secured by real estate (1) $ 937 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Total individually evaluated loans $ 937 ______________________________ (1) SBA loans that are collateralized by 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, 2022 (Dollars in thousands) Carrying Level 1 Level 2 Level 3 Estimated Assets Cash and cash equivalents $ 739,211 $ 739,211 $ — $ — $ 739,211 Interest-bearing time deposits with financial institutions 1,733 1,733 — — 1,733 Investment securities held-to-maturity 1,385,502 — 1,055,187 — 1,055,187 Investment securities available-for-sale 2,661,079 — 2,661,079 — 2,661,079 Equity securities with readily determinable fair values 1,035 1,035 — — 1,035 Loans held for sale 2,163 — 2,261 — 2,261 Loans held for investment, net 14,908,811 — — 14,207,668 14,207,668 Derivative assets (1) 9,959 15 8,033 1,911 9,959 Accrued interest receivable 66,192 — 66,192 — 66,192 Liabilities Deposit accounts $ 17,746,374 $ — $ 17,724,242 $ — $ 17,724,242 FHLB advances 600,000 — 582,313 — 582,313 Subordinated debentures 331,045 — 330,742 — 330,742 Derivative liabilities 12,773 7 12,766 — 12,773 Accrued interest payable 8,785 — 8,785 — 8,785 ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. See Note 11 – Derivative Instruments for additional information. At December 31, 2021 (Dollars in thousands) Carrying Level 1 Level 2 Level 3 Estimated Assets Cash and cash equivalents $ 304,703 $ 304,703 $ — $ — $ 304,703 Interest-bearing time deposits with financial institutions 2,216 2,216 — — 2,216 Investment securities held-to-maturity 381,674 — 384,423 — 384,423 Investment securities available-for-sale 4,273,864 — 4,273,864 — 4,273,864 Loans held for sale 10,869 — 11,959 — 11,959 Loans held for investment, net 14,295,897 — — 14,392,684 14,392,684 Derivative assets 11,989 — 10,100 1,889 11,989 Accrued interest receivable 65,728 65,728 — — 65,728 Liabilities Deposit accounts $ 17,115,589 $ 16,057,316 $ 1,058,822 $ — $ 17,116,138 FHLB advances 550,000 — 550,093 — 550,093 Other borrowings 8,000 — 8,000 — 8,000 Subordinated debentures 330,567 — 350,359 — 350,359 Derivative liabilities 5,263 — 5,263 — 5,263 Accrued interest payable 2,366 2,366 — — 2,366 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company uses derivative instruments to manage its exposure to market risks, including interest rate risk, and to assist customers with their risk management objectives. The Company designates certain derivatives as hedging instruments in a qualifying hedge accounting relationship, while other derivatives serve as economic hedges that do not qualify for hedge accounting. Derivatives Designated as Hedging Instruments Fair Value Hedges – The Company is exposed to changes in the fair value of fixed-rate assets due to changes in benchmark interest rates. During the second half of 2021, the Company entered into pay-fixed and receive-floating interest rate swaps associated with certain fixed rate loans, primarily commercial real estate loans, to manage its exposure to changes in fair value on these instruments attributable to changes in the designated USD-SOFR-COMPOUND benchmark interest rate. These interest rate swaps are designated as fair value hedges using the last-of-layer method. The Company receives variable-rate interest payments in exchange for making fixed-rate payments over the lives of the contracts without exchanging the notional amounts. The fair value hedges are recorded as components of other assets and other liabilities in the Company’s consolidated statements of financial condition. The gain or loss on these derivatives, as well as the offsetting loss or gain on the hedged items attributable to the hedged risk are recognized in interest income in the Company’s consolidated statements of income. At September 30, 2022 and December 31, 2021, interest rate swaps with an aggregate notional amount of $1.20 billion were designated as fair value hedges. The following amounts were recorded on the consolidated statement of financial condition related to cumulative basis adjustment for fair value hedges as of the dates indicated: Line Item in the Statement of Financial Position in Which the Hedged Item is Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Loans held for investment (1) $ 1,131,876 $ 1,194,702 $ (68,124) $ (5,298) Total $ 1,131,876 $ 1,194,702 $ (68,124) $ (5,298) ______________________________ (1) These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At September 30, 2022 and December 31, 2021, the amortized cost basis of the closed portfolios used in these hedging relationships was $3.24 billion and $3.61 billion, respectively, the cumulative basis adjustments associated with these hedging relationships was $(68.1) million and $(5.3) million, respectively; and the amounts of the designated hedged items were $1.20 billion and $1.20 billion, respectively. Derivatives Not Designated as Hedging Instruments Interest Rate Swap Contracts – 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 offsetting interest rate swap agreements with another financial institution to mitigate the Company’s interest rate risk exposure associated with the swap agreements it enters into with its borrowers. The Company had over-the-counter derivative instruments and centrally-cleared derivative instruments with matched terms. The fair values of these agreements are determined through a third-party valuation model used by the Company’s swap advisory firm, which uses observable market data such as interest 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 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 investment securities, and swap agreements with borrowers are secured by the collateral arrangements for the underlying loans these borrowers have with the Company. All interest rate swap agreements entered into by the Company are free-standing derivatives and are not designated as hedging instruments. Equity Warrant Assets – The Company acquired equity warrant assets as a result of the acquisition of 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 respective underlying private company 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 the fair value of the warrants are recognized as a component of noninterest income with a corresponding offset within other assets. The total fair value of the warrants was $1.9 million in other assets as of September 30, 2022 and December 31, 2021. The two remaining warrants expire on March 12, 2023 and July 28, 2025, respectively. Foreign Exchange Contracts – The Company offers foreign exchange spot and forward contracts as accommodations to its customers to purchase and/or sell foreign currencies at a contractual price. In conjunction with these products the Company also enters into offsetting contracts with institutional counterparties to mitigate the Company’s foreign exchange exposure with its customers, or enters into bilateral collateral and master netting agreements with certain customer counterparties to manage its credit exposure. These contracts allow the Company to offer its customers foreign exchange products while minimizing its exposure to foreign exchange rate fluctuations. These foreign exchange contracts are not designated as hedging instruments and are recorded at fair value in other assets and other liabilities in the Company’s consolidated statements of financial condition. Changes in the fair value of these contracts are recorded in the Company’s consolidated statements of income as a component of noninterest income. 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, 2022 Derivative Assets Derivative Liabilities (Dollars in thousands) Notional Fair Value Notional Fair Value Derivative instruments designated as hedging instruments: Fair value hedge - interest rate swap contracts $ 1,200,000 $ 69,169 $ — $ — Total derivative designated as hedging instruments 1,200,000 69,169 — — Derivative instruments not designated as hedging instruments: Foreign exchange contracts 835 15 528 7 Interest rate swaps contracts 113,632 12,765 113,632 12,766 Equity warrants — 1,911 — — Total derivative not designated as hedging instruments 114,467 14,691 114,160 12,773 Total derivatives $ 1,314,467 83,860 $ 114,160 12,773 Netting adjustments - cleared positions (1) 73,901 — Total derivatives in the Balance Sheet $ 9,959 $ 12,773 ______________________________ (1) Netting adjustments represents the variation margin payments that are considered legal settlements of derivative exposure and applied to net the fair value of the respective derivative contracts in accordance with the applicable accounting guidance on the settle-to-market rule for cleared derivatives. December 31, 2021 Derivative Assets Derivative Liabilities (Dollars in thousands) Notional Fair Value Notional Fair Value Derivative instruments designated as hedging instruments: Fair value hedge - interest rate swap contracts $ 1,100,000 $ 4,874 $ 100,000 $ 33 Total derivative designated as hedging instruments 1,100,000 4,874 100,000 33 Derivative instruments not designated as hedging instruments: Interest rate swaps contracts 132,056 5,226 132,056 5,230 Equity warrants — 1,889 — — Total derivative not designated as hedging instruments 132,056 7,115 132,056 5,230 Total derivatives $ 1,232,056 $ 11,989 $ 232,056 $ 5,263 The following table presents the effect of fair value hedge accounting on the consolidated statements of income: Three Months Ended Nine Months Ended (Dollars in thousands) Location of Gain (Loss) Recognized in Income on Derivative Instruments September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Gain (loss) on fair value hedging relationships: Hedged items Interest Income $ (17,037) $ (11,866) $ (1,027) $ (62,826) $ (1,027) Derivatives designated as hedging instruments Interest Income 21,582 12,082 932 65,921 932 The following table summarizes the effect of the derivatives not designated as hedging instruments in the consolidated statements of income. (Dollars in thousands) Three Months Ended Nine Months Ended Derivatives Not Designated as Hedging Instruments: Location of Gain (Loss) Recognized in Income on Derivative Instruments September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Foreign exchange contracts Other income $ 141 $ 77 $ 22 $ 264 $ 32 Interest rate products Other income 1 2 1 4 9 Equity warrants Other income 5 (2) (8) 22 (19) Total $ 147 $ 77 $ 15 $ 290 $ 22 |
Balance Sheet Offsetting
Balance Sheet Offsetting | 9 Months Ended |
Sep. 30, 2022 | |
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. 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 the 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. The Company elected to account for centrally-cleared derivative contracts on a gross basis, even when the right for setoff are in place. However, for derivative contracts cleared through certain central clearing parties, the fair value of the respective derivative contracts is reported net of the variation margin payments. 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 (Dollars in thousands) Gross Amounts Recognized (1) Gross Amounts Offset in the Consolidated Statements of Financial Condition Net Amounts Presented in the Consolidated Statements of Financial Condition Financial Instruments Cash Collateral (2) Net Amount September 30, 2022 Derivative assets: Interest rate swaps $ 8,033 $ — $ 8,033 $ — $ (3,990) $ 4,043 Total $ 8,033 $ — $ 8,033 $ — $ (3,990) $ 4,043 Derivative liabilities: Interest rate swaps $ 12,766 $ — $ 12,766 $ — $ — $ 12,766 Total $ 12,766 $ — $ 12,766 $ — $ — $ 12,766 December 31, 2021 Derivative assets: Interest rate swaps $ 10,100 $ — $ 10,100 $ — $ — $ 10,100 Total $ 10,100 $ — $ 10,100 $ — $ — $ 10,100 Derivative liabilities: Interest rate swaps $ 5,263 $ — $ 5,263 $ (4,377) $ (886) $ — Total $ 5,263 $ — $ 5,263 $ (4,377) $ (886) $ — ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. (2) Represents cash collateral received from or pledged with counterparty bank. Amounts are limited to the derivative asset or liability balance and, accordingly, do not include excess collateral, if any, received or pledged. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases [Abstract] | |
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. The Company’s leases primarily represent future obligations to make payments for the use of buildings or space for its operations. Liabilities to make future lease payments are recorded in accrued expenses and other liabilities, while right-of-use assets are recorded in other assets in the Company’s consolidated statements of financial condition. At September 30, 2022, all of the Company’s leases were classified as operating leases or short-term leases. Short-term leases are leases that have a term of 12 months or less at commencement. Liabilities to make future lease payments 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 the Company’s estimated incremental borrowing rate if the rate implicit in the lease is not readily determinable. Liabilities to make future lease payments on operating leases are 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 on the related liability to make future lease payments. The Company recognizes expense for both operating leases and short-term leases on a straight-line basis. 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 (Dollars in thousands) September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease $ 4,603 $ 4,614 $ 4,826 $ 13,955 $ 14,725 Short-term lease 495 388 433 1,373 1,263 Total lease expense $ 5,098 $ 5,002 $ 5,259 $ 15,328 $ 15,988 The following table presents supplemental information related to operating leases as of and for nine months ended: (Dollars in thousands) September 30, 2022 December 31, 2021 Balance Sheet: Operating lease right-of-use assets $ 54,062 $ 64,009 Operating lease liabilities 61,852 72,541 Nine Months Ended (Dollars in thousands) September 30, 2022 September 30, 2021 Cash Flows: Operating cash outflow from operating leases $ 15,024 $ 15,512 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: (Dollars in thousands) 2022 2023 2024 2025 2026 Thereafter Total September 30, 2022 Operating leases $ 4,954 $ 19,383 $ 17,368 $ 11,657 $ 5,996 $ 9,619 $ 68,977 Short-term leases 53 40 — — — — 93 Total contractual base rents (1) $ 5,007 $ 19,423 $ 17,368 $ 11,657 $ 5,996 $ 9,619 $ 69,070 Total liability to make lease payments $ 61,852 Difference in undiscounted and discounted future lease payments 7,125 Weighted average discount rate 5.07 % Weighted average remaining lease term (years) 4.3 ______________________________ (1) Contractual base rents reflect options to extend and renewals, and do not include property taxes and other operating expenses due under respective lease agreements. The Company from time to time leases portions of space it owns to other parties. Income received from these transactions is recorded on a straight-line basis over the term of the sublease. For the three months ended September 30, 2022, June 30, 2022, and September 30, 2021, rental income totaled $77,000, $86,000, and $176,000, respectively. For the nine months ended September 30, 2022 and September 30, 2021, rental income totaled $288,000 and $528,000, respectively. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2022 | |
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 and affordable housing investments that qualify for the low-income housing tax credit (“LIHTC”). The Company has determined that its interests in these entities meet the definition of variable interests. As of September 30, 2022 and December 31, 2021, 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 statements of financial condition and maximum exposure to loss as of September 30, 2022 and December 31, 2021 that relate to variable interests in non-consolidated VIEs. September 30, 2022 December 31, 2021 (Dollars in thousands) Maximum Loss Assets Liabilities Maximum Loss Assets Liabilities Multifamily loan securitization: Investment securities (1) $ 57,525 $ 57,525 $ — $ 81,103 $ 81,103 $ — Reimbursement obligation (2) 50,901 — 338 50,901 — 338 Affordable housing partnership: Other investments (3) 60,692 76,201 — 68,765 85,994 — Unfunded equity commitments (2) — — 15,509 — — 17,229 Total $ 169,118 $ 133,726 $ 15,847 $ 200,769 $ 167,097 $ 17,567 ______________________________ (1) Included in investment securities AFS 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 5 – Loans Held for Investment , the Company’s variable interests reside with the underlying Freddie Mac-issued guaranteed, structured pass-through certificates that were held as investment securities AFS at fair value as of September 30, 2022. 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, 2022 and December 31, 2021, our reserve for estimated losses with respect to the reimbursement obligation was $338,000. Investments in qualified affordable housing partnerships 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 the ability to exercise significant influence over or participate in the decision-making activities related to the management of the projects, and therefore, is not the primary beneficiary, and does not consolidate these interests. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsQuarterly cash dividendOn October 19, 2022, the Corporation’s Board of Directors declared a cash dividend of $0.33 per share, payable on November 10, 2022 to stockholders of record as of October 31, 2022. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
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 and accruals that are necessary for a fair presentation of the statement of financial position and the results of operations for the interim periods presented. The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for any other interim period or the full year ending December 31, 2022. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“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, 2021 (the “2021 Form 10-K”). |
Variable Interest Entities | The Company consolidates voting entities in which the Company has control through voting interests or entities through which the Company has 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 and affordable housing investments that qualify for the low-income housing tax credit (“LIHTC”). The Company has determined that its interests in these entities meet the definition of variable interests. |
Recently Issued Accounting Pronouncements | Recent Accounting Guidance Not Yet Effective In March 2022, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures . The FASB issued this Update in response to feedback the FASB received from various stakeholders in its post-implementation review process related to the issuance of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which was effective for the Company on January 1, 2020. The amendments in this Update include the elimination of accounting guidance for troubled debt restructurings (“TDRs”) in Subtopic 310-40 - Receivables - Troubled Debt Restructurings by Creditors , and introduce new disclosures and enhance existing disclosures concerning certain loan refinancings and restructurings when a borrower is experiencing financial difficulty. Rather than applying the recognition and measurement guidance of troubled debt restructurings, an entity must determine whether a modification results in a new loan or the continuation of an existing loan. Further, the amendments in this Update require that a public business entity disclose current period gross charge-offs on financing receivables within the scope of ASC 326-20, Financial Instruments - Credit Losses - Measured at Amortized Cost , by year of origination and class of financing receivable. The amendments in this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as interim periods within those years. Early adoption is permitted. The amendments in this Update are to be applied prospectively. However, for the transition method related to the recognition and measurement of TDRs, an entity has the option to apply a modified retrospective transition method, resulting in a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company is currently evaluating the impact of this Update on the Company’s consolidated financial statements with internal stakeholders in finance, credit administration, and loan servicing. In March 2022, the FASB issued ASU 2022-01, Derivatives and Hedging (Topic 815) Fair Value Hedging - Portfolio Layer Method . The amendments in this Update make targeted improvements to fair value hedge accounting and more specifically to the last-of-layer hedge accounting method. This Update expands the last-of-layer hedge accounting method to allow for multiple hedged layers to be designated for a single closed portfolio of prepayable financial assets, and renames this accounting method the “portfolio layer method.” The provisions of this Update also include: (i) expanding the scope of the portfolio layer method to nonprepayable financial assets, (ii) specifying that eligible hedging instruments in a single layer hedge may include spot-starting or forward-starting constant-notional or amortizing-notional swaps and that the number of hedged layers corresponds with the number of hedges designated, (iii) specifies that an entity hedging multiple amounts in a closed portfolio using a single amortizing-notional swap is executing a single-layer hedge, (iv) provides additional guidance on the accounting for and disclosure of hedge basis adjustments resulting from a fair value hedge under the portfolio layer method by requiring such basis adjustments be maintained at the portfolio level and not allocated to individual assets, and to disclose basis adjustments as a reconciling item in certain disclosures, such as those for loans, and (v) specifies that an entity is to exclude hedge basis adjustments in the determination of credit losses on the assets within the closed portfolio. The provisions of this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as interim periods within those years. Early adoption is permitted. Entities may designate multiple layer hedges only on a prospective basis upon the adoption of this Update. The provisions of this Update that relate to hedge basis adjustments, except for those related to disclosure, are to be applied on a modified retrospective basis through a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The provisions of this Update that relate to disclosure may be applied on a prospective basis or on a retrospective basis to each prior period presented. The Company is currently evaluating the impact of this Update on the Company’s consolidated financial statements. In October 2021, the FASB issued ASU 2021-08, Business Combinations - Accounting for Contract Assets and Contract Liabilities from Contracts with Customers . The amendments in this Update address how to determine whether a contract liability is recognized by an acquirer in a business combination. In addition, the Update addresses inconsistencies in the recognition and measurement of acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments in this Update are effective for the Company in fiscal years beginning after December 15, 2022, as well as all interim periods within those years. Early adoption is permitted. An entity that early adopts in an interim period should apply the amendments (1) retrospectively to all business combinations for which the acquisition date occurs on or after the beginning of the fiscal year that includes the interim period of early application, and (2) prospectively to all business combinations that occur on or after the date of initial application. The Company has not yet adopted the provisions of this Update. The Company does not currently anticipate the adoption of this Update will have a material impact on the Company’s consolidated financial statements. 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 become effective upon issuance for all entities. 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 has not entered into any hedging related transactions that reference LIBOR or another reference rate that is expected to be discontinued, and as such, the amendments included in this Update have not had an impact on the Company’s Consolidated Financial Statements. |
Securities | 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/Securities Available-for-Sale | Securities Held-to-Maturity (“HTM”). 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. The Company accounts for transfers of debt securities from available-for-sale classification to held-to-maturity classification at fair value on the transfer date. Any associated unrealized gains or losses on such securities become part of the security’s amortized cost at the time of transfer and are subsequently amortized or accreted into interest income over the remaining life of the security using the interest method. In addition, the related unrealized gains and losses included in accumulated other comprehensive income on the date of transfer are also subsequently amortized or accreted into interest income over the remaining life of the security using the interest method. Securities Available-for-Sale (“AFS”). 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 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 and Loans | Allowance for Credit Losses on Investment Securities . The allowance for credit losses (“ACL”) on investment securities is determined for both the HTM and AFS classifications of the investment portfolio in accordance with the guidance ASC 326 on a quarterly basis. The ACL for HTM investment securities is recorded at the time of purchase or acquisition, representing the Company’s best estimate of current expected credit losses (“CECL”) as of the date for the consolidated statements of financial condition. The ACL for HTM investment securities is determined on a collective basis, based on shared risk characteristics, and is determined at the individual security level when the Company deems a security to no longer possess shared risk characteristics. For investment securities where the Company has reason to believe the credit loss exposure is remote, a zero credit loss assumption is applied. Such investment securities typically consist of those guaranteed by the U.S. government or other government enterprises, where there is an explicit or implicit guarantee by the U.S. government, that are highly rated by rating agencies, and historically have had no credit loss experience. For available-for-sale investment securities, the Company performs a 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, or a portion thereof, is credit related, 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, in accumulated other comprehensive income. The Company determines expected credit losses on AFS and HTM 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. 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. 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 (“PD”) and loss given default (“LGD”) model, as well as expectations of future economic conditions, using reasonable and supportable forecasts. Together, the PD and LGD model with the use of reasonable and supportable forecasts generate estimates for cash flows expected and not 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 forecasts PD and LGD over a two-year time horizon, which the Company believes is a reasonable and supportable period. PD and LGD forecasts are derived using economic forecast scenarios. Beyond the two-year forecast time horizon, the Company’s ACL model reverts to historical long-term average loss rates over a period of three years. The duration of the forecast horizon, the period over which forecasts revert to historical 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 PD and LGD, 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 for term loans represents the amount by which the loan’s amortized cost exceeds the net present value of a loan’s discounted cash flows expected to be collected. The ACL for credit facilities is determined by discounting estimates for cash flows not expected to be collected. 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 uncollectible. 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, management considers the need for qualitative adjustments to the ACL on a quarterly basis. 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 backtesting, 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, 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, which have exhibited a deterioration in credit quality 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 the 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. Additionally, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s ACL and credit review process and may require changes to the ACL. Please also see Note 6 – Allowance for Credit Losses , of these Consolidated Financial Statements for additional discussion concerning the Company’s ACL methodology, including discussion concerning economic forecasts used in the determination of the ACL. The Company maintains an ACL for loans and unfunded loan commitments in accordance with ASC 326 - Financial Instruments - Credit Losses . ASC 326 requires the Company to recognize estimates for lifetime credit losses on loans and unfunded loan commitments at the time of origination or acquisition. The recognition of credit losses at origination or acquisition represents the Company’s best estimate of lifetime expected credit losses, given the facts and circumstances associated with a particular loan or group of loans with similar risk characteristics. Determining the ACL involves the use of significant management judgement and estimates, which are subject to change based on management’s ongoing 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 PD, (ii) the estimated LGD, 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 expected 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 an originated 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 expected to be collected. The ACL for credit facilities is determined by discounting estimates for cash flows not expected to be collected. Probability of Default The PD for investor loans secured by real estate 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 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. This model also incorporates assumptions for PD at a loan’s maturity. Significant loan and property level attributes include: loan-to-value (“LTV”) ratios, debt service coverage, loan size, loan vintage, and property types. The PD for business loans secured by real estate and 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 these loans, the PD assigned to them also changes. As with investor loans secured by real estate, the PD for business loans secured by real estate and 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 for loans in the Company’s loan portfolio, such as: LTVs, estimated time to resolution, property size, and current and estimated future market price changes for underlying collateral. The LGD is highly dependent upon LTV 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 index for CRE pricing, GDP growth rate, unemployment rates, and the Consumer Price Index. 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 segment, 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 is 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. Economic Forecasts 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 a loan. The Company uses macroeconomic scenarios from an independent third party. These scenarios are based on past events, current conditions, and the likelihood of future events occurring. These scenarios typically are comprised of: a base-case scenario, an upside scenario, representing slightly better economic conditions than currently experienced, and a downside scenario, representing recessionary conditions. Management periodically evaluates appropriateness of 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 likelihood that the economy would perform better than each scenario, 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. The Company’s ACL model at September 30, 2022 includes assumptions concerning the rising interest rate environment, ongoing inflationary pressures throughout the U.S. economy, higher energy prices, the potential impact of the ongoing war between Russia and Ukraine, general uncertainty concerning future economic conditions, and the potential for recessionary conditions. The Company currently forecasts PDs and LGDs based on economic scenarios over a two-year period, which we believe is a reasonable and supportable period. Beyond this point, PDs and LGDs 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 the Company does not expect to collect for each loan. It is important to note that the Company’s ACL model relies on multiple economic variables, which are used in 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. These key economic variables include the U.S. unemployment rate, U.S. real GDP growth, CRE prices, and the 10-year U.S. Treasury yield. Qualitative Adjustments The Company recognizes that historical information used as the basis for determining future expected credit losses may not always, by itself, provide a sufficient basis for determining future expected credit losses. The Company, therefore, considers the need for qualitative adjustments to the ACL on a quarterly basis. 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, 2022, qualitative adjustments primarily relate to certain segments of the loan portfolio deemed by management to be of a higher-risk profile where management believes the quantitative component of the Company’s ACL model may not have fully captured the associated impact to the ACL. In addition, qualitative adjustments also relate to heightened uncertainty as to future macroeconomic conditions and the related impact on |
Equity Investments | Equity Investments. Equity investments that have readily determinable fair values are carried at fair value with changes in fair value recognized in current period earnings as a component of noninterest income. Equity investments that do not have readily determinable fair values are carried at cost, adjusted for any observable price changes in orderly transactions for identical or similar investments of the same issuer. Such investments are also recorded net of any previously recognized impairment. Certain equity securities the Company holds, such as investments in the stock of the Federal Home Loan Bank and the Federal Reserve Bank of San Francisco are carried at cost, less any previously recognized impairment. Investment in these securities is restricted to member banks and the securities are not actively traded on an exchange. Dividends received on equity securities are included in interest income on investment securities and other interest earning assets in the consolidated statements of income. |
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 for the foreseeable future or until their maturity. These loans are carried at amortized cost, net of discounts and premiums on acquired and purchased 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 in interest income as an adjustment of yield, using the interest method, over the contractual life of the loans. Amortization of deferred loan fees or costs, as well as any purchase discounts and premiums, are discontinued for loans that are placed on nonaccrual. Any remaining discounts, premiums, deferred fees or costs, and prepayment fees associated with loan payoffs prior to contractual maturity are included in interest income on loans 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 based on the contractual terms of the loan or when, in the opinion of management, there is reasonable doubt as to the collection of principal and/or interest. When loans are placed on nonaccrual status, all previously accrued and uncollected interest is promptly reversed against current period interest income, and therefore 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 deemed 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, changes in market rents, and vacancy of the underlying property, any of 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. • 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 origination efforts on single homes and infill multifamily and commercial 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 (“QSR”). These loans are primarily underwritten based on the cash flows of the business and secondarily on the real estate. Risks associated with these loans include material decreases in the value of real estate being held as collateral, and the borrower’s inability to pay as a result of increases in interest rates or decreases in cash flow from the underlying business. • 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. government. 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 to businesses, secured by business assets including inventory, receivables, and machinery and equipment. Loan types include revolving lines of 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, and occasionally upon other borrower assets and guarantor assets. The fair value of the collateral securing these loans may fluctuate 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. Retail Loans: • One-to-four family - Although we do not originate first lien single family loans, we have acquired them 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 to banking clients, 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. When the Company acquires loans through purchase or a business combination, an assessment is first performed to 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 or otherwise classified as non-PCD loans. All acquired loans are recorded at their fair value as of the date of acquisition. Any resulting discount or premium on acquired loans is accreted or amortized into interest income over the remaining life of the loans 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. 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. As with non-PCD loans, 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. Subsequent to acquisition, the ACL for both non-PCD and PCD loans are measured with the use of the Company’s ACL methodology in the same manner as all other loans. |
Troubled Debt Restructurings | Troubled Debt Restructurings. 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, and the borrower’s performance under the modified terms of the loan agreement and the ultimate collectability of all contractual amounts due under the modified terms 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 estimated expected fair value of the underlying collateral, less costs to sell. |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets. Goodwill assets originate from business combinations where the Company has acquired other financial institutions, and is 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 that are determined to have indefinite useful lives are not amortized, but are tested for impairment at least annually or more frequently if events and circumstances lead management to believe the value of those assets 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. Management’s assessment of goodwill is performed in accordance with ASC 350-20 - Intangibles - Goodwill and Other - Goodwill , which allows the Company to first perform a qualitative assessment of goodwill to determine if it is more likely than not the fair value of the Company’s equity is below its carrying value. However, GAAP also allows the Company, at its option, to unconditionally forego the qualitative assessment and proceed directly to a quantitative assessment. When performing a qualitative assessment of goodwill, should the results of such analysis indicate it is more likely than not the fair value of the Company’s equity is below its carrying value, the Company then performs the 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 recognize the amount of impairment as the amount by which the reporting unit’s carrying value exceeds its fair value, limited to the total amount of goodwill allocated to the reporting unit. Impairment losses are recorded as a charge to noninterest expense. The Company’s annual impairment test of goodwill is performed in the fourth quarter of each year. The Company performed a qualitative assessment of goodwill in the fourth quarter of 2021, the results of which indicated the value of goodwill assets could be supported and were not impaired. There have been no changes since the most recent assessment. Other intangible assets include core deposit and customer relationship intangible assets arising from the acquisition of other financial institutions and are amortized on a basis reflecting the pattern in which the economic benefits of the intangible assets are consumed or otherwise used up, or on a straight-line basis over their estimated useful lives, which range from 6 to 11 years. GAAP requires that intangible assets other than goodwill be tested for impairment when events and circumstances change, indicating that their carrying value may not be recoverable. For intangible assets other than goodwill, the Company first performs a qualitative assessment to determine if the carrying value of such assets may not be recoverable. A quantitative assessment is followed to determine the amount of impairment in the event the carrying value of such assets are deemed not recoverable. Impairment is measured as the amount by which their carrying value exceeds their estimated fair value. The Company tests intangible assets for impairment in the fourth quarter of each year, the results of which indicated the value of intangible assets could be supported and were not impaired. |
Derivatives as Part of Designated Accounting Hedges | Derivatives as Part of Designated Accounting Hedges. The Company applies hedge accounting to certain derivative instruments used for risk management purposes, primarily interest rate risk. To qualify for hedge accounting, a derivative instrument must be highly effective at reducing the risk associated with the hedged exposure, and the hedging relationship must be formally documented at its inception. The Company uses regression analysis to assess the effectiveness of each hedging relationship, unless the hedge qualifies for other methods of assessing effectiveness (e.g., shortcut or critical terms match), both at inception and throughout the life of the hedge transaction. The Company currently has derivative instruments designated as part of fair value accounting hedges. These derivatives consist of pay-fixed, receive-floating interest rate swaps, and were entered into to hedge changes in the fair value of fixed-rate loans for specific risks, such as interest rate risk resulting from changes in a benchmark interest rate. In a qualifying fair value hedge, the Company records periodic changes in the fair value of the derivative instrument in current period earnings. Simultaneously, periodic changes in the fair value of the hedged risk are also recorded in current period earnings. Together, these periodic changes in the fair value of the derivative instrument and the fair value of the hedged risk are included in the same line item of the statements of income associated with the hedged item (i.e. interest income), and largely offset each other. Interest accruals on both the derivative instrument and the hedged item are also recorded in the same line item, which effectively converts the designated fixed-rate loans to floating-rate loans. The Company structures these swaps to match the critical terms of the hedged items (i.e. the fixed-rate loans), thereby maximizing the economic and accounting effectiveness of the hedging relationships and resulting in the expectation that the hedging relationship will be highly effective. If a fair value hedging relationship ceases to qualify for hedge accounting, hedge accounting is discontinued and future changes in the fair value of the derivative instrument are recognized in current period earnings, until the derivative is settled with the counterparty. In addition, all remaining basis adjustments resulting from the cumulative change in the fair value of the hedged risk, previously recorded to the carrying amount of the hedged item, are amortized or accreted into interest income using the interest method over the remaining life of the hedged item. |
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 right-of-use 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 contractual 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 future lease payments on operating leases are reduced by periodic contractual lease payments net of periodic interest accretion on the lease liability. 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 operating leases is recorded on a straight-line basis. As of September 30, 2022, 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. |
Revenue Recognition | Revenue Recognition. The Company accounts for certain of its revenue streams deemed to arise from contracts with customers 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 (“OREO”) and property, premises and equipment. These revenue streams are included in noninterest income in the Company’s consolidated statements of income. 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. Revenue is measured as the amount of consideration the Company expects to receive in exchange for the transfer of goods or services to the associated customer. 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, such as a deposit account agreement, which can be canceled at any time, or a service provided to a customer at a point in time. 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 GAAP. |
Stock-Based Compensation | Stock-Based Compensation . The Company issues various forms of stock-based compensation awards annually to officers and directors of the Company, including stock options, restricted stock awards, and restricted stock units. The related compensation costs are based on the grant-date fair value and are recognized in the income statement over the period they are expected to vest, net of estimates for forfeitures. Estimates for forfeitures are based on the Company’s historical experience for each award type. A Black-Scholes model is utilized to estimate the fair value of stock options on the grant date. The Black-Scholes model uses certain assumptions to determine grant date fair value such as: expected volatility, expected term of the option, expected risk-free rate of interest, and expected dividend yield on the Corporation’s common stock. The market price of the Corporation’s common stock at the grant date is used for restricted stock awards in determining the grant date fair value for those awards. The Company has not granted any stock option awards during 2022. Restricted stock awards and restricted stock units are granted to employees of the Company, and represent stock-based compensation awards that when ultimately settled, result in the issuance of shares of the Corporation’s common stock to the grantee. As with other stock-based compensation awards, compensation cost for restricted stock awards and restricted stock units is recognized over the period in which the awards are expected to vest. Certain of the Corporation’s restricted stock units contain vesting conditions which are based on pre-determined performance targets. The level at which the associated performance targets are achieved can impact the ultimate settlement of the award with the grantee and thus the level of compensation expense ultimately recognized. Certain of these awards contain a market-based condition whereby the vesting of the award is based on the Company’s performance, such as total shareholder return, relative to its peers over a specified period of time. The grant date fair value of restricted stock units with a market-based condition is determined through an independent third party which employs the use of a Monte Carlo simulation. The Monte Carlo simulation estimates grant date fair value using input assumptions similar to those used in the Black-Scholes model, however, it also incorporates into the grant date fair value calculation the probability that the performance targets will be achieved. The grant date fair value of restricted stock units that do not contain a market-based condition for vesting is based on the price of the Corporation’s common stock on the grant date. Holders of restricted stock awards are entitled to receive cash dividends. Holders of restricted stock units are entitled to receive dividend equivalents during the vesting period commensurate with dividends declared and paid on the Corporation’s common stock. As restricted stock awards contain rights to receive non-forfeitable dividends prior to the awards being vested, such awards are considered participating securities. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) . Comprehensive income (loss) is reported in addition to net income for all periods presented. Comprehensive income (loss) is a more inclusive financial reporting methodology that includes disclosure of other comprehensive income (loss) that historically has not been recognized in the calculation of net income. Unrealized gains and losses on the Company’s available-for-sale investment securities are required to be included in other comprehensive income (loss). Total comprehensive income (loss) and the components of accumulated other comprehensive income (loss) are presented in the Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Comprehensive Income. |
Use of Estimates | Use of Estimates. The preparation of financial statements in conformity with 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. While management believes the Company’s valuation methodologies are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The Company’s valuation methodologies may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. 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. AFS 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 marketplace 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 these securities within Level 2 of the fair value hierarchy. Equity Securities with readily determinable fair values – The Company’s equity securities with readily determinable fair values consist of investments in public companies and qualify for CRA purposes. The fair value is based on the closing price on nationally recognized securities exchanges at the end of each period and classified as Level 1 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 Company also enters into interest rate swap contracts with institutional counterparties to hedge against certain fixed-rate loans. 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. The Company incorporates credit value adjustments on derivatives to properly reflect the respective counterparty’s nonperformance risk in the fair value measurements of its derivatives. The Company has determined that the observable nature of the majority of inputs used in deriving the fair value of these derivative contracts fall within Level 2 of the fair value hierarchy, and the credit valuation adjustments are not significant to the overall valuation of its derivative financial instruments. As a result, the valuation of interest rate swaps is classified as Level 2 of the fair value hierarchy. Equity Warrant Assets – The Company acquired equity warrant assets as a result of the 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. Foreign Exchange Contracts – The Company enters into foreign exchange contracts to accommodate the business needs of its customers. Company also enters into offsetting contracts with institutional counterparties to mitigate the Company’s foreign exchange exposure with its customers, or enters into bilateral collateral and master netting agreements with certain customer counterparties to manage its credit exposure. The Company measures the fair value of foreign exchange contracts based on quoted prices for identical instruments in active markets, a Level 1 measurement. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis Individually Evaluated Loans – 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 and it does not share similar risk characteristics with other loans. 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 costs. The fair value of individually evaluated loans were determined using Level 3 assumptions, and represents individually evaluated loan balances for which a specific reserve has been established and/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 then discounts the valuation to cover both market price fluctuations and selling costs, typically ranging from 7% to 10% of the collateral value, that the Company expects 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. |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Estimated Fair Value of Securities | The amortized cost and estimated fair value of investment securities available-for-sale were as follows: (Dollars in thousands) Amortized Gross Unrealized Gross Unrealized Estimated AFS investment securities: September 30, 2022 U.S. Treasury $ 48,926 $ — $ (2,152) $ 46,774 Agency 486,111 — (55,248) 430,863 Corporate debt 602,058 — (46,308) 555,750 Collateralized mortgage obligations 856,867 24 (65,776) 791,115 Mortgage-backed securities 991,429 — (154,852) 836,577 Total AFS investment securities $ 2,985,391 $ 24 $ (324,336) $ 2,661,079 December 31, 2021 U.S. Treasury $ 57,708 $ 614 $ (456) $ 57,866 Agency 440,183 2,081 (10,129) 432,135 Corporate debt 451,621 6,096 (3,856) 453,861 Municipal bonds 1,061,985 32,209 (4,281) 1,089,913 Collateralized mortgage obligations 680,686 2,012 (6,055) 676,643 Mortgage-backed securities 1,586,406 3,220 (26,180) 1,563,446 Total AFS investment securities $ 4,278,589 $ 46,232 $ (50,957) $ 4,273,864 The carrying amount and estimated fair value of investment securities held-to-maturity were as follows: (Dollars in thousands) Amortized Allowance for Credit Losses Net Carrying Amount Gross Unrecognized Gross Unrecognized Estimated HTM investment securities: September 30, 2022 Municipal bonds $ 1,148,234 $ (91) $ 1,148,143 $ — $ (294,439) $ 853,704 Mortgage-backed securities 235,937 — 235,937 — (35,876) 200,061 Other 1,422 — 1,422 — — 1,422 Total HTM investment securities $ 1,385,593 $ (91) $ 1,385,502 $ — $ (330,315) $ 1,055,187 December 31, 2021 Municipal bonds $ 368,344 $ (22) $ 368,322 $ 3,834 $ (1,649) $ 370,507 Mortgage-backed securities 11,843 — 11,843 564 — 12,407 Other 1,509 — 1,509 — — 1,509 Total HTM investment securities $ 381,696 $ (22) $ 381,674 $ 4,398 $ (1,649) $ 384,423 |
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 summarizes the number, fair value, and gross unrealized holding losses of the Company’s AFS investment securities in an unrealized loss position for which an allowance for credit losses has not been recorded as of the dates indicated, aggregated by investment category and length of time in a continuous loss position. September 30, 2022 Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Number Fair Gross Number Fair Gross Number Fair Gross AFS investment securities: U.S. Treasury 5 $ 33,865 $ (125) 1 $ 12,909 $ (2,027) 6 $ 46,774 $ (2,152) Agency 8 80,049 (1,118) 35 350,814 (54,130) 43 430,863 (55,248) Corporate debt 49 468,523 (28,413) 8 87,227 (17,895) 57 555,750 (46,308) Collateralized mortgage obligations 44 543,696 (35,355) 36 239,916 (30,421) 80 783,612 (65,776) Mortgage-backed securities. 16 103,048 (8,957) 66 733,529 (145,895) 82 836,577 (154,852) Total AFS investment securities 122 $ 1,229,181 $ (73,968) 146 $ 1,424,395 $ (250,368) 268 $ 2,653,576 $ (324,336) December 31, 2021 Less than 12 Months 12 Months or Longer Total (Dollars in thousands) Number Fair Gross Number Fair Gross Number Fair Gross AFS investment securities: U.S. Treasury 3 $ 47,235 $ (456) — $ — $ — 3 $ 47,235 $ (456) Agency 19 278,078 (5,634) 16 119,750 (4,495) 35 397,828 (10,129) Corporate debt 17 166,563 (849) 3 57,274 (3,007) 20 223,837 (3,856) Municipal bonds 36 277,564 (4,079) 2 6,596 (202) 38 284,160 (4,281) Collateralized mortgage obligations 26 226,763 (3,738) 15 121,185 (2,317) 41 347,948 (6,055) Mortgage-backed securities 103 1,306,455 (20,417) 15 173,121 (5,763) 118 1,479,576 (26,180) Total AFS investment securities 204 $ 2,302,658 $ (35,173) 51 $ 477,926 $ (15,784) 255 $ 2,780,584 $ (50,957) |
Schedule of Allowance for Credit Losses on Company's Held-to-maturity Debt Securities | The following table presents a rollforward by major security type of the allowance for credit losses on the Company's HTM debt securities as of and for the periods indicated: Three Months Ended September 30, 2022 (Dollars in thousands) Balance, June 30, 2022 Provision for Credit Losses Balance, September 30, 2022 HTM investment securities: Municipal bonds $ 109 $ (18) $ 91 Three Months Ended September 30, 2021 (Dollars in thousands) Balance, Provision for Credit Losses Balance, HTM investment securities: Municipal bonds $ — $ 11 $ 11 Nine Months Ended September 30, 2022 (Dollars in thousands) Balance, Provision for Credit Losses Balance, September 30, 2022 HTM investment securities: Municipal bonds $ 22 $ 69 $ 91 Nine Months Ended September 30, 2021 (Dollars in thousands) Balance, Provision for Credit Losses Balance, HTM investment securities: Municipal bonds $ — $ 11 $ 11 |
Schedule of Realized Gain (Loss) on Investments | The following table presents the amortized cost of securities sold with related gross realized gains, gross realized losses, and net realized (losses) gains for the periods indicated: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Amortized cost of AFS investment securities sold $ 231,076 $ 45,121 $ 161,597 $ 934,703 $ 617,116 Gross realized gains $ — $ 7 $ 4,190 $ 13,645 $ 18,462 Gross realized (losses) (393) (38) — (11,935) (5,141) Net realized (losses) gains on sales of AFS investment securities $ (393) $ (31) $ 4,190 $ 1,710 $ 13,321 |
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, 2022, by contractual maturity, are shown in the table below. Due in One Year Due after One Year Due after Five Years Due after Total (Dollars in thousands) Amortized Fair Amortized Fair Amortized Fair Amortized Fair Amortized Fair AFS investment securities: U.S. Treasury $ 9,648 $ 9,639 $ 24,342 $ 24,226 $ 14,936 $ 12,909 $ — $ — $ 48,926 $ 46,774 Agency 25,583 25,329 326,627 298,271 96,469 79,143 37,432 28,120 486,111 430,863 Corporate debt — — 298,578 289,014 303,480 266,736 — — 602,058 555,750 Collateralized mortgage obligations 34,661 34,426 70,542 68,834 213,821 192,325 537,843 495,530 856,867 791,115 Mortgage-backed securities — — 35,049 34,770 549,549 468,798 406,831 333,009 991,429 836,577 Total AFS investment securities 69,892 69,394 755,138 715,115 1,178,255 1,019,911 982,106 856,659 2,985,391 2,661,079 HTM investment securities: Municipal bonds — — 10,484 9,749 50,556 43,410 1,087,194 800,545 1,148,234 853,704 Mortgage-backed securities — — — — — — 235,937 200,061 235,937 200,061 Other — — — — — — 1,422 1,422 1,422 1,422 Total HTM investment securities — — 10,484 9,749 50,556 43,410 1,324,553 1,002,028 1,385,593 1,055,187 Total investment securities $ 69,892 $ 69,394 $ 765,622 $ 724,864 $ 1,228,811 $ 1,063,321 $ 2,306,659 $ 1,858,687 $ 4,370,984 $ 3,716,266 |
Loans Held for Investment (Tabl
Loans Held for Investment (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Receivables [Abstract] | |
Schedule of Components of Loans Held for Investment | The following table presents the composition of the loan portfolio for the periods indicated: September 30, December 31, (Dollars in thousands) 2022 2021 Investor loans secured by real estate CRE non-owner-occupied $ 2,771,272 $ 2,771,137 Multifamily 6,199,581 5,891,934 Construction and land 373,194 277,640 SBA secured by real estate 42,998 46,917 Total investor loans secured by real estate 9,387,045 8,987,628 Business loans secured by real estate CRE owner-occupied 2,477,530 2,251,014 Franchise real estate secured 383,468 380,381 SBA secured by real estate 64,002 69,184 Total business loans secured by real estate 2,925,000 2,700,579 Commercial loans Commercial and industrial 2,164,623 2,103,112 Franchise non-real estate secured 409,773 392,576 SBA non-real estate secured 11,557 11,045 Total commercial loans 2,585,953 2,506,733 Retail loans Single family residential 75,176 95,292 Consumer 3,761 5,665 Total retail loans 78,937 100,957 Loans held for investment before basis adjustment (1) 14,976,935 14,295,897 Basis adjustment associated with fair value hedge (2) (68,124) — Loans held for investment 14,908,811 14,295,897 Allowance for credit losses for loans held for investment (195,549) (197,752) Loans held for investment, net $ 14,713,262 $ 14,098,145 Total unfunded loan commitments $ 2,823,555 $ 2,507,911 Loans held for sale, at lower of cost or fair value 2,163 10,869 ______________________________ (1) Includes net deferred origination fees of $3.0 million and $3.5 million, and unaccreted fair value net purchase discounts of $59.0 million and $77.1 million as of September 30, 2022 and December 31, 2021, respectively. (2) Represents the basis adjustment associated with the application of hedge accounting on certain loans. Refer to Note 11 – Derivative Instruments for additional information. |
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, 2022: Term Loans by Vintage (Dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied Pass $ 500,592 $ 619,259 $ 223,908 $ 362,597 $ 318,172 $ 711,998 $ — $ — $ 2,736,526 Special mention — — — — 7,537 3,965 — — 11,502 Substandard — — — 16,393 194 6,182 — 475 23,244 Multifamily Pass 1,193,692 2,225,146 796,705 922,115 292,670 759,311 388 — 6,190,027 Substandard — 6,074 — 2,732 — 748 — — 9,554 Construction and land Pass 154,286 152,548 38,569 18,817 1,853 7,121 — — 373,194 SBA secured by real estate Pass 6,596 130 494 5,466 7,575 14,833 — — 35,094 Substandard — — — — 2,422 5,482 — — 7,904 Total investor loans secured by real estate 1,855,166 3,003,157 1,059,676 1,328,120 630,423 1,509,640 388 475 9,387,045 Business loans secured by real estate CRE owner-occupied Pass 589,994 737,861 252,950 248,513 121,626 489,097 5,510 — 2,445,551 Special mention — — 504 — — 9,393 — — 9,897 Substandard — — 4,656 2,442 4,718 10,266 — — 22,082 Franchise real estate secured Pass 56,586 147,304 33,874 45,173 33,203 60,255 — — 376,395 Substandard 981 — — 6,092 — — — — 7,073 SBA secured by real estate Pass 10,015 7,038 2,332 6,486 4,968 27,076 — — 57,915 Substandard — — — — 1,362 4,725 — — 6,087 Total loans secured by business real estate 657,576 892,203 294,316 308,706 165,877 600,812 5,510 — 2,925,000 Commercial loans Commercial and industrial Pass 251,964 306,145 61,872 161,641 90,096 149,371 1,107,645 2,601 2,131,335 Special mention 15,375 — — — — — 3,764 — 19,139 Substandard 1,437 1,132 — 4,899 615 1,230 4,786 50 14,149 Franchise non-real estate secured Pass 91,787 146,650 19,005 64,017 32,914 35,933 779 — 391,085 Substandard 1,775 400 2,983 2,276 — 11,254 — — 18,688 SBA non-real estate secured Pass 3,212 444 472 1,679 707 3,723 — — 10,237 Substandard — — — 133 231 349 — 607 1,320 Total commercial loans 365,550 454,771 84,332 234,645 124,563 201,860 1,116,974 3,258 2,585,953 Term Loans by Vintage (Dollars in thousands) 2022 2021 2020 2019 2018 Prior Revolving Revolving Converted to Term During the Period Total September 30, 2022 Retail loans Single family residential Pass $ — $ 303 $ 178 $ — $ 23 $ 50,648 $ 23,982 $ — $ 75,134 Substandard — — — — — 42 — — 42 Consumer loans Pass — 7 19 13 — 1,113 2,609 — 3,761 Total retail loans — 310 197 13 23 51,803 26,591 — 78,937 Loans held for investment before basis adjustment (1) $ 2,878,292 $ 4,350,441 $ 1,438,521 $ 1,871,484 $ 920,886 $ 2,364,115 $ 1,149,463 $ 3,733 $ 14,976,935 ______________________________ (1) Excludes the basis adjustment of $68.1 million to the carrying amount of certain loans included in fair value hedging relationships. Refer to Note 11 – Derivative Instruments for additional information. The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of December 31, 2021: Term Loans by Vintage (Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Revolving Converted to Term During the Period Total December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied Pass $ 708,560 $ 269,944 $ 393,097 $ 387,923 $ 218,388 $ 730,736 $ 9,353 $ — $ 2,718,001 Special mention — — 16,166 7,682 — — — — 23,848 Substandard — — 25,777 — — 2,998 513 — 29,288 Multifamily Pass 2,260,708 952,127 1,199,505 444,904 479,029 554,067 286 — 5,890,626 Substandard — — — 543 — 765 — — 1,308 Construction and land Pass 119,532 97,721 40,556 12,415 3,857 3,559 — — 277,640 SBA secured by real estate Pass 130 497 6,259 9,074 12,070 9,198 — — 37,228 Special mention — — — 957 — 544 — — 1,501 Substandard — — — 2,343 3,679 2,166 — — 8,188 Total investor loans secured by real estate 3,088,930 1,320,289 1,681,360 865,841 717,023 1,304,033 10,152 — 8,987,628 Term Loans by Vintage (Dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Revolving Converted to Term During the Period Total December 31, 2021 Business loans secured by real estate CRE owner-occupied Pass $ 853,044 $ 273,469 $ 287,249 $ 161,636 $ 187,130 $ 464,271 $ 6,738 $ 292 $ 2,233,829 Substandard — — 2,553 6,074 2,966 5,592 — — 17,185 Franchise real estate secured Pass 156,381 36,335 55,091 40,047 56,288 34,878 1,361 — 380,381 SBA secured by real estate Pass 6,379 2,364 7,331 9,125 10,734 24,627 — — 60,560 Special mention — — — — — 62 — — 62 Substandard — — — 2,062 2,690 3,810 — — 8,562 Total loans secured by business real estate 1,015,804 312,168 352,224 218,944 259,808 533,240 8,099 292 2,700,579 Commercial loans Commercial and industrial Pass 425,683 79,635 200,234 117,471 123,345 70,789 1,032,053 3,371 2,052,581 Special mention — — 146 — — 152 14,814 178 15,290 Substandard 1,772 — 14 2,683 863 1,150 27,684 1,075 35,241 Franchise non-real estate secured Pass 163,865 23,943 85,206 45,061 23,672 31,163 — — 372,910 Substandard — — 1,589 3,627 13,346 1,104 — — 19,666 SBA non-real estate secured Pass 474 564 1,292 666 2,806 2,148 — — 7,950 Special mention — — 681 114 — — — — 795 Substandard — — 76 339 685 547 653 — 2,300 Total commercial loans 591,794 104,142 289,238 169,961 164,717 107,053 1,075,204 4,624 2,506,733 Retail loans Single family residential Pass 313 211 — 32 2,008 68,759 23,920 — 95,243 Substandard — — — — — 49 — — 49 Consumer loans Pass 11 28 49 19 11 1,394 4,113 — 5,625 Substandard — — 5 — — 35 — — 40 Total retail loans 324 239 54 51 2,019 70,237 28,033 — 100,957 Loans held for investment $ 4,696,852 $ 1,736,838 $ 2,322,876 $ 1,254,797 $ 1,143,567 $ 2,014,563 $ 1,121,488 $ 4,916 $ 14,295,897 |
Schedule of Delinquencies in the Company's Loan Portfolio | The following tables stratify loans held for investment by delinquencies in the Company’s loan portfolio at the dates indicated: Days Past Due (Dollars in thousands) Current 30-59 60-89 90+ Total September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied $ 2,754,403 $ — $ — $ 16,869 $ 2,771,272 Multifamily 6,193,507 — — 6,074 6,199,581 Construction and land 373,194 — — — 373,194 SBA secured by real estate 42,998 — — — 42,998 Total investor loans secured by real estate 9,364,102 — — 22,943 9,387,045 Business loans secured by real estate CRE owner-occupied 2,466,281 — 6,398 4,851 2,477,530 Franchise real estate secured 383,468 — — — 383,468 SBA secured by real estate 62,675 1,244 — 83 64,002 Total business loans secured by real estate 2,912,424 1,244 6,398 4,934 2,925,000 Commercial loans Commercial and industrial 2,159,494 240 135 4,754 2,164,623 Franchise non-real estate secured 409,773 — — — 409,773 SBA not secured by real estate 10,950 — — 607 11,557 Total commercial loans 2,580,217 240 135 5,361 2,585,953 Retail loans Single family residential 75,176 — — — 75,176 Consumer loans 3,759 — 2 — 3,761 Total retail loans 78,935 — 2 — 78,937 Loans held for investment before basis adjustment (1) $ 14,935,678 $ 1,484 $ 6,535 $ 33,238 $ 14,976,935 December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied $ 2,760,882 $ — $ — $ 10,255 $ 2,771,137 Multifamily 5,890,704 1,230 — — 5,891,934 Construction and land 277,640 — — — 277,640 SBA secured by real estate 46,580 — — 337 46,917 Total investor loans secured by real estate 8,975,806 1,230 — 10,592 8,987,628 Business loans secured by real estate CRE owner-occupied 2,246,062 — — 4,952 2,251,014 Franchise real estate secured 380,381 — — — 380,381 SBA secured by real estate 68,743 — — 441 69,184 Total business loans secured by real estate 2,695,186 — — 5,393 2,700,579 Commercial loans Commercial and industrial 2,101,558 92 — 1,462 2,103,112 Franchise non-real estate secured 392,576 — — — 392,576 SBA not secured by real estate 10,319 73 — 653 11,045 Total commercial loans 2,504,453 165 — 2,115 2,506,733 Retail loans Single family residential 95,292 — — — 95,292 Consumer loans 5,665 — — — 5,665 Total retail loans 100,957 — — — 100,957 Loans held for investment $ 14,276,402 $ 1,395 $ — $ 18,100 $ 14,295,897 ______________________________ (1) Excludes the basis adjustment of $68.1 million to the carrying amount of certain loans included in fair value hedging relationships. Refer to Note 11 – Derivative Instruments for additional information. |
Summary of Nonaccrual Loans | The following tables provide a summary of nonaccrual loans as of the dates indicated: Nonaccrual Loans (1) Collateral Dependent Loans Non-Collateral Dependent Loans Total Nonaccrual Loans Nonaccrual Loans with No ACL (Dollars in thousands) Balance ACL Balance ACL September 30, 2022 Investor loans secured by real estate CRE non-owner-occupied $ 23,050 $ 2,640 $ — $ — $ 23,050 $ 6,656 Multifamily 8,806 — — — 8,806 8,806 SBA secured by real estate 547 — — — 547 547 Total investor loans secured by real estate 32,403 2,640 — — 32,403 16,009 Business loans secured by real estate CRE owner-occupied 11,249 1,742 — — 11,249 9,507 SBA secured by real estate 197 — — — 197 197 Total business loans secured by real estate 11,446 1,742 — — 11,446 9,704 Commercial loans Commercial and industrial 4,754 — — — 4,754 4,754 Franchise non-real estate secured — — 11,254 — 11,254 11,254 SBA non-real estate secured 607 — — — 607 607 Total commercial loans 5,361 — 11,254 — 16,615 16,615 Total nonaccrual loans $ 49,210 $ 4,382 $ 11,254 $ — $ 60,464 $ 42,328 December 31, 2021 Investor loans secured by real estate CRE non-owner-occupied $ 10,255 $ 1,455 $ — $ — $ 10,255 $ 2,640 SBA secured by real estate 937 — — — 937 937 Total investor loans secured by real estate 11,192 1,455 — — 11,192 3,577 Business loans secured by real estate CRE owner-occupied 4,952 — — — 4,952 4,952 SBA secured by real estate 589 — — — 589 589 Total business loans secured by real estate 5,541 — — — 5,541 5,541 Commercial loans Commercial and industrial 1,462 — 336 — 1,798 1,797 Franchise non-real estate secured — — 12,079 — 12,079 12,079 SBA non-real estate secured 653 — — — 653 653 Total commercial loans 2,115 — 12,415 — 14,530 14,529 Retail loans Single family residential 10 — — — 10 10 Total retail loans 10 — — — 10 10 Total nonaccrual loans $ 18,858 $ 1,455 $ 12,415 $ — $ 31,273 $ 23,657 ______________________________ (1) The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent; otherwise, the ACL for collateral dependent nonaccrual loans is determined based on the estimated fair value of the underlying collateral. |
Schedule of Collateral Dependent Loans by Collateral Type | The following tables summarize collateral dependent loans by collateral type as of the dates indicated: (Dollars in thousands) Office Properties Industrial Properties Retail Properties Land Properties Hotel Properties Multifamily Properties Other CRE Properties Business Assets Total September 30, 2022 Investor loan secured by real estate CRE non-owner-occupied $ 6,181 $ — $ 475 $ — $ — $ — $ 16,394 $ — $ 23,050 Multifamily — — — — — 8,806 — — 8,806 SBA secured by real estate — — — — 547 — — — 547 Total investor loans secured by real estate 6,181 — 475 — 547 8,806 16,394 — 32,403 Business loans secured by real estate CRE owner-occupied 4,656 — — 4,851 — — 1,742 — 11,249 SBA secured by real estate 114 83 — — — — — — 197 Total business loans secured by real estate 4,770 83 — 4,851 — — 1,742 — 11,446 Commercial loans Commercial and industrial — — — 240 — — — 4,514 4,754 SBA non-real estate secured — — — — — — — 607 607 Total commercial loans — — — 240 — — — 5,121 5,361 Total collateral dependent loans $ 10,951 $ 83 $ 475 $ 5,091 $ 547 $ 8,806 $ 18,136 $ 5,121 $ 49,210 (Dollars in thousands) Office Properties Industrial Properties Retail Properties Land Properties Hotel Properties Residential Properties Business Assets Total December 31, 2021 Investor loan secured by real estate CRE non-owner-occupied $ — $ — $ 513 $ — $ 9,742 $ — $ — $ 10,255 SBA secured by real estate — — — — 937 — — 937 Total investor loans secured by real estate — — 513 — 10,679 — — 11,192 Business loans secured by real estate CRE owner-occupied — — — 4,952 — — — 4,952 SBA secured by real estate 148 441 — — — — — 589 Total business loans secured by real estate 148 441 — 4,952 — — — 5,541 Commercial loans Commercial and industrial — — — 245 — — 1,217 1,462 SBA non-real estate secured — — — — — — 653 653 Total commercial loans — — — 245 — — 1,870 2,115 Retail loans Single family residential — — — — — 10 — 10 Total retail loans — — — — — 10 — 10 Total collateral dependent loans $ 148 $ 441 $ 513 $ 5,197 $ 10,679 $ 10 $ 1,870 $ 18,858 |
Allowance for Credit Losses (Ta
Allowance for Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Provision for Loan and Lease Losses [Abstract] | |
Summary of Allocation of the Allowance for Loan Losses | The following tables provide 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 periods indicated: Three Months Ended September 30, 2022 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 37,221 $ (1,128) $ — $ 1,011 $ 37,104 Multifamily 56,293 — — (207) 56,086 Construction and land 5,436 — — 1,004 6,440 SBA secured by real estate 2,865 — — 90 2,955 Business loans secured by real estate CRE owner-occupied 31,461 — 19 346 31,826 Franchise real estate secured 6,530 — — 180 6,710 SBA secured by real estate 5,149 — — (364) 4,785 Commercial loans Commercial and industrial 37,048 (190) 143 (1,503) 35,498 Franchise non-real estate secured 13,124 — — 70 13,194 SBA non-real estate secured 452 — 26 (38) 440 Retail loans Single family residential 278 — 58 (40) 296 Consumer loans 218 — — (3) 215 Totals $ 196,075 $ (1,318) $ 246 $ 546 $ 195,549 Nine Months Ended September 30, 2022 Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending (Dollars in thousands) Investor loans secured by real estate CRE non-owner occupied $ 37,380 $ (1,128) $ — $ 852 $ 37,104 Multifamily 55,209 — — 877 56,086 Construction and land 5,211 — — 1,229 6,440 SBA secured by real estate 3,201 (70) — (176) 2,955 Business loans secured by real estate CRE owner-occupied 29,575 — 33 2,218 31,826 Franchise real estate secured 7,985 — — (1,275) 6,710 SBA secured by real estate 4,866 — — (81) 4,785 Commercial loans Commercial and industrial 38,136 (7,750) 2,517 2,595 35,498 Franchise non-real estate secured 15,084 (448) — (1,442) 13,194 SBA non-real estate secured 565 (50) 44 (119) 440 Retail loans Single family residential 255 — 91 (50) 296 Consumer loans 285 (2) — (68) 215 Totals $ 197,752 $ (9,448) $ 2,685 $ 4,560 $ 195,549 Three Months Ended September 30, 2021 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 47,112 $ — $ — $ (4,645) $ 42,467 Multifamily 59,059 — — (6,895) 52,164 Construction and land 9,548 — — (1,531) 8,017 SBA secured by real estate 4,681 (158) — (644) 3,879 Business loans secured by real estate CRE owner-occupied 35,747 — 14 (2,082) 33,679 Franchise real estate secured 11,436 — — (1,810) 9,626 SBA secured by real estate 6,317 — 50 (1,263) 5,104 Commercial loans Commercial and industrial 39,879 (84) 729 (2,929) 37,595 Franchise non-real estate secured 17,313 (2,398) 80 2,523 17,518 SBA non-real estate secured 730 — 15 (113) 632 Retail loans Single family residential 670 — 2 (143) 529 Consumer loans 282 — — (11) 271 Totals $ 232,774 $ (2,640) $ 890 $ (19,543) $ 211,481 Nine Months Ended September 30, 2021 (Dollars in thousands) Beginning ACL Balance Charge-offs Recoveries Provision for Credit Losses Ending Investor loans secured by real estate CRE non-owner occupied $ 49,176 $ (154) $ — $ (6,555) $ 42,467 Multifamily 62,534 — — (10,370) 52,164 Construction and land 12,435 — — (4,418) 8,017 SBA secured by real estate 5,159 (423) — (857) 3,879 Business loans secured by real estate CRE owner-occupied 50,517 — 44 (16,882) 33,679 Franchise real estate secured 11,451 — — (1,825) 9,626 SBA secured by real estate 6,567 (98) 130 (1,495) 5,104 Commercial loans Commercial and industrial 46,964 (4,653) 3,428 (8,144) 37,595 Franchise non-real estate secured 20,525 (2,554) 80 (533) 17,518 SBA non-real estate secured 995 — 19 (382) 632 Retail loans Single family residential 1,204 — 3 (678) 529 Consumer loans 491 — — (220) 271 Totals $ 268,018 $ (7,882) $ 3,704 $ (52,359) $ 211,481 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The following table summarizes the change in the balance of goodwill for the periods indicated below: September 30, September 30, (Dollars in thousands) 2022 2021 Beginning balance $ 901,312 $ 898,569 Purchase accounting adjustments — 2,743 Ending balance $ 901,312 $ 901,312 Accumulated impairment losses at end of period $ — $ — |
Schedule of Finite-lived Intangible Assets | The following table summarizes the change in the balance of core deposit intangibles and customer relationship intangibles, and the related accumulated amortization for the periods indicated below: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Gross amount of intangible assets: Beginning balance $ 145,212 $ 145,212 $ 145,212 $ 145,212 $ 145,212 Additions due to acquisitions — — — — — Ending balance 145,212 145,212 145,212 145,212 145,212 Accumulated amortization: Beginning balance (82,712) (79,234) (67,849) (75,641) (59,705) Amortization (3,472) (3,478) (3,912) (10,543) (12,056) Ending balance (86,184) (82,712) (71,761) (86,184) (71,761) Net intangible assets $ 59,028 $ 62,500 $ 73,451 $ 59,028 $ 73,451 |
Subordinated Debentures (Tables
Subordinated Debentures (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Subordinated Debentures | The following table summarizes our outstanding subordinated debentures as of the dates indicated: Carrying Value (Dollars in thousands) Stated Maturity Current Interest Rate Current Principal Balance September 30, 2022 December 31, 2021 Subordinated notes Subordinated notes due 2024, 5.75% per annum September 3, 2024 5.75 % $ 60,000 $ 59,761 $ 59,671 Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter May 15, 2029 4.875 % 125,000 123,323 123,132 Subordinated notes due 2030, 5.375% per annum until June 15, 2025, 3-month SOFR +5.170% thereafter June 15, 2030 5.375 % 150,000 147,961 147,764 Total subordinated debentures $ 335,000 $ 331,045 $ 330,567 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 (Dollars in thousands, except per share data) September 30, 2022 June 30, 2022 September 30, 2021 Basic Net income $ 73,363 $ 69,803 $ 90,088 Less: dividends and undistributed earnings allocated to participating securities (917) (867) (937) Net income allocated to common stockholders $ 72,446 $ 68,936 $ 89,151 Weighted average common shares outstanding 93,793,502 93,765,264 93,549,639 Basic earnings per common share $ 0.77 $ 0.74 $ 0.95 Diluted Net income allocated to common stockholders $ 72,446 $ 68,936 $ 89,151 Weighted average common shares outstanding 93,793,502 93,765,264 93,549,639 Dilutive effect of share-based compensation 327,135 275,427 511,085 Weighted average diluted common shares 94,120,637 94,040,691 94,060,724 Diluted earnings per common share $ 0.77 $ 0.73 $ 0.95 Nine Months Ended (Dollars in thousands, except per share data) September 30, 2022 September 30, 2021 Basic Net income $ 210,070 $ 255,058 Less: dividends and undistributed earnings allocated to participating securities (2,467) (2,641) Net income allocated to common stockholders $ 207,603 $ 252,417 Weighted average common shares outstanding 93,687,230 93,571,468 Basic earnings per common share $ 2.22 $ 2.70 Diluted Net income allocated to common stockholders $ 207,603 $ 252,417 Weighted average common shares outstanding 93,687,230 93,571,468 Dilutive effect of share-based compensation 367,886 518,939 Weighted average diluted common shares 94,055,116 94,090,407 Diluted earnings per common share $ 2.21 $ 2.68 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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, 2022 Fair Value Measurement Using Total Fair Value (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets AFS investment securities: U.S. Treasury $ — $ 46,774 $ — $ 46,774 Agency — 430,863 — 430,863 Corporate debt — 555,750 — 555,750 Collateralized mortgage obligations — 791,115 — 791,115 Mortgage-backed securities — 836,577 — 836,577 Total AFS investment securities $ — $ 2,661,079 $ — $ 2,661,079 Equity securities with readily determinable fair values $ 1,035 $ — $ — $ 1,035 Derivative assets: Foreign exchange contracts $ 15 $ — $ — $ 15 Interest rate swaps (1) — 8,033 — 8,033 Equity warrants — — 1,911 1,911 Total derivative assets $ 15 $ 8,033 $ 1,911 $ 9,959 Financial liabilities Derivative liabilities: Foreign exchange $ 7 $ — $ — $ 7 Interest rate swaps — 12,766 — 12,766 Total derivative liabilities $ 7 $ 12,766 $ — $ 12,773 ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. See Note 11 – Derivative Instruments for additional information. December 31, 2021 Fair Value Measurement Using Total Fair Value (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets AFS investment securities: U.S. Treasury $ — $ 57,866 $ — $ 57,866 Agency — 432,135 — 432,135 Corporate debt — 453,861 — 453,861 Municipal bonds — 1,089,913 — 1,089,913 Collateralized mortgage obligations — 676,643 — 676,643 Mortgage-backed securities — 1,563,446 — 1,563,446 Total AFS investment securities $ — $ 4,273,864 $ — $ 4,273,864 Derivative assets: Interest rate swaps $ — $ 10,100 $ — $ 10,100 Equity warrants — — 1,889 1,889 Total derivative assets $ — $ 10,100 $ 1,889 $ 11,989 Financial liabilities Derivative liabilities: Interest rate swaps $ — $ 5,263 $ — $ 5,263 |
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: Three Months Ended Nine Months Ended September 30, June 30, September 30, September 30, September 30, (Dollars in thousands) 2022 2022 2021 2022 2021 Beginning balance $ 1,906 $ 1,908 $ 1,903 $ 1,889 $ 1,914 Change in fair value (1) 5 (2) (8) 22 (19) Ending balance $ 1,911 $ 1,906 $ 1,895 $ 1,911 $ 1,895 ______________________________ (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 fair value measurements for assets measured at fair value on a recurring basis at the dates indicated. September 30, 2022 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Equity warrants $ 1,911 Black-Scholes Volatility 30.00% 3.92% 5.50% 35.00% 4.25% 16.00% 31.17% 4.00% 13.55% December 31, 2021 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Equity warrants $ 1,889 Black-Scholes Volatility 30.00% 0.39% 6.00% 35.00% 0.97% 16.00% 31.14% 0.52% 13.61% The following table presents quantitative information about Level 3 fair value measurements for assets measured at fair value on a nonrecurring basis at the dates indicated. September 30, 2022 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Investor loans secured by real estate CRE non-owner-occupied $ 13,754 Fair value of collateral Collateral discount and cost to sell 7.00% 7.00% 7.00% Commercial loans Commercial and industrial 4,514 Fair value of collateral Collateral discount and cost to sell 6.00% 6.00% 6.00% Total individually evaluated loans $ 18,268 December 31, 2021 Range (Dollars in thousands) Fair Value Valuation Technique(s) Unobservable Input(s) Min Max Weighted Average Investor loans secured by real estate SBA secured by real estate (1) $ 937 Fair value of collateral Collateral discount and cost to sell 10.00% 10.00% 10.00% Total individually evaluated loans $ 937 ______________________________ (1) SBA loans that are collateralized by hotel/motel real property. |
Schedule of Company's Financial Instruments Measured at Fair Value on a Nonrecurring Basis | The following table presents our assets measured at fair value on a nonrecurring basis at the dates indicated. September 30, 2022 Fair Value Measurement Using Total (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets Collateral dependent loans $ — $ — $ 18,268 $ 18,268 December 31, 2021 Fair Value Measurement Using Total (Dollars in thousands) Level 1 Level 2 Level 3 Financial assets Collateral dependent loans $ — $ — $ 937 $ 937 |
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, 2022 (Dollars in thousands) Carrying Level 1 Level 2 Level 3 Estimated Assets Cash and cash equivalents $ 739,211 $ 739,211 $ — $ — $ 739,211 Interest-bearing time deposits with financial institutions 1,733 1,733 — — 1,733 Investment securities held-to-maturity 1,385,502 — 1,055,187 — 1,055,187 Investment securities available-for-sale 2,661,079 — 2,661,079 — 2,661,079 Equity securities with readily determinable fair values 1,035 1,035 — — 1,035 Loans held for sale 2,163 — 2,261 — 2,261 Loans held for investment, net 14,908,811 — — 14,207,668 14,207,668 Derivative assets (1) 9,959 15 8,033 1,911 9,959 Accrued interest receivable 66,192 — 66,192 — 66,192 Liabilities Deposit accounts $ 17,746,374 $ — $ 17,724,242 $ — $ 17,724,242 FHLB advances 600,000 — 582,313 — 582,313 Subordinated debentures 331,045 — 330,742 — 330,742 Derivative liabilities 12,773 7 12,766 — 12,773 Accrued interest payable 8,785 — 8,785 — 8,785 ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. See Note 11 – Derivative Instruments for additional information. At December 31, 2021 (Dollars in thousands) Carrying Level 1 Level 2 Level 3 Estimated Assets Cash and cash equivalents $ 304,703 $ 304,703 $ — $ — $ 304,703 Interest-bearing time deposits with financial institutions 2,216 2,216 — — 2,216 Investment securities held-to-maturity 381,674 — 384,423 — 384,423 Investment securities available-for-sale 4,273,864 — 4,273,864 — 4,273,864 Loans held for sale 10,869 — 11,959 — 11,959 Loans held for investment, net 14,295,897 — — 14,392,684 14,392,684 Derivative assets 11,989 — 10,100 1,889 11,989 Accrued interest receivable 65,728 65,728 — — 65,728 Liabilities Deposit accounts $ 17,115,589 $ 16,057,316 $ 1,058,822 $ — $ 17,116,138 FHLB advances 550,000 — 550,093 — 550,093 Other borrowings 8,000 — 8,000 — 8,000 Subordinated debentures 330,567 — 350,359 — 350,359 Derivative liabilities 5,263 — 5,263 — 5,263 Accrued interest payable 2,366 2,366 — — 2,366 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments in Statement of Financial Condition and Statements of Income Related to Cumulative Basis Adjustment for Fair Value Hedges | The following amounts were recorded on the consolidated statement of financial condition related to cumulative basis adjustment for fair value hedges as of the dates indicated: Line Item in the Statement of Financial Position in Which the Hedged Item is Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Dollars in thousands) September 30, 2022 December 31, 2021 September 30, 2022 December 31, 2021 Loans held for investment (1) $ 1,131,876 $ 1,194,702 $ (68,124) $ (5,298) Total $ 1,131,876 $ 1,194,702 $ (68,124) $ (5,298) ______________________________ (1) These amounts include the amortized cost basis of closed portfolios used to designate hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At September 30, 2022 and December 31, 2021, the amortized cost basis of the closed portfolios used in these hedging relationships was $3.24 billion and $3.61 billion, respectively, the cumulative basis adjustments associated with these hedging relationships was $(68.1) million and $(5.3) million, respectively; and the amounts of the designated hedged items were $1.20 billion and $1.20 billion, respectively. The following table presents the effect of fair value hedge accounting on the consolidated statements of income: Three Months Ended Nine Months Ended (Dollars in thousands) Location of Gain (Loss) Recognized in Income on Derivative Instruments September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Gain (loss) on fair value hedging relationships: Hedged items Interest Income $ (17,037) $ (11,866) $ (1,027) $ (62,826) $ (1,027) Derivatives designated as hedging instruments Interest Income 21,582 12,082 932 65,921 932 |
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, 2022 Derivative Assets Derivative Liabilities (Dollars in thousands) Notional Fair Value Notional Fair Value Derivative instruments designated as hedging instruments: Fair value hedge - interest rate swap contracts $ 1,200,000 $ 69,169 $ — $ — Total derivative designated as hedging instruments 1,200,000 69,169 — — Derivative instruments not designated as hedging instruments: Foreign exchange contracts 835 15 528 7 Interest rate swaps contracts 113,632 12,765 113,632 12,766 Equity warrants — 1,911 — — Total derivative not designated as hedging instruments 114,467 14,691 114,160 12,773 Total derivatives $ 1,314,467 83,860 $ 114,160 12,773 Netting adjustments - cleared positions (1) 73,901 — Total derivatives in the Balance Sheet $ 9,959 $ 12,773 ______________________________ (1) Netting adjustments represents the variation margin payments that are considered legal settlements of derivative exposure and applied to net the fair value of the respective derivative contracts in accordance with the applicable accounting guidance on the settle-to-market rule for cleared derivatives. December 31, 2021 Derivative Assets Derivative Liabilities (Dollars in thousands) Notional Fair Value Notional Fair Value Derivative instruments designated as hedging instruments: Fair value hedge - interest rate swap contracts $ 1,100,000 $ 4,874 $ 100,000 $ 33 Total derivative designated as hedging instruments 1,100,000 4,874 100,000 33 Derivative instruments not designated as hedging instruments: Interest rate swaps contracts 132,056 5,226 132,056 5,230 Equity warrants — 1,889 — — Total derivative not designated as hedging instruments 132,056 7,115 132,056 5,230 Total derivatives $ 1,232,056 $ 11,989 $ 232,056 $ 5,263 The following table summarizes the effect of the derivatives not designated as hedging instruments in the consolidated statements of income. (Dollars in thousands) Three Months Ended Nine Months Ended Derivatives Not Designated as Hedging Instruments: Location of Gain (Loss) Recognized in Income on Derivative Instruments September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Foreign exchange contracts Other income $ 141 $ 77 $ 22 $ 264 $ 32 Interest rate products Other income 1 2 1 4 9 Equity warrants Other income 5 (2) (8) 22 (19) Total $ 147 $ 77 $ 15 $ 290 $ 22 |
Balance Sheet Offsetting (Table
Balance Sheet Offsetting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 (Dollars in thousands) Gross Amounts Recognized (1) Gross Amounts Offset in the Consolidated Statements of Financial Condition Net Amounts Presented in the Consolidated Statements of Financial Condition Financial Instruments Cash Collateral (2) Net Amount September 30, 2022 Derivative assets: Interest rate swaps $ 8,033 $ — $ 8,033 $ — $ (3,990) $ 4,043 Total $ 8,033 $ — $ 8,033 $ — $ (3,990) $ 4,043 Derivative liabilities: Interest rate swaps $ 12,766 $ — $ 12,766 $ — $ — $ 12,766 Total $ 12,766 $ — $ 12,766 $ — $ — $ 12,766 December 31, 2021 Derivative assets: Interest rate swaps $ 10,100 $ — $ 10,100 $ — $ — $ 10,100 Total $ 10,100 $ — $ 10,100 $ — $ — $ 10,100 Derivative liabilities: Interest rate swaps $ 5,263 $ — $ 5,263 $ (4,377) $ (886) $ — Total $ 5,263 $ — $ 5,263 $ (4,377) $ (886) $ — ______________________________ (1) Represents amounts after the application of variation margin payments as settlements with central counterparties, where applicable. (2) Represents cash collateral received from or pledged with counterparty bank. Amounts are limited to the derivative asset or liability balance and, accordingly, do not include excess collateral, if any, received or pledged. |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 (Dollars in thousands) September 30, 2022 June 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021 Operating lease $ 4,603 $ 4,614 $ 4,826 $ 13,955 $ 14,725 Short-term lease 495 388 433 1,373 1,263 Total lease expense $ 5,098 $ 5,002 $ 5,259 $ 15,328 $ 15,988 |
Schedule of Supplemental Information | The following table presents supplemental information related to operating leases as of and for nine months ended: (Dollars in thousands) September 30, 2022 December 31, 2021 Balance Sheet: Operating lease right-of-use assets $ 54,062 $ 64,009 Operating lease liabilities 61,852 72,541 Nine Months Ended (Dollars in thousands) September 30, 2022 September 30, 2021 Cash Flows: Operating cash outflow from operating leases $ 15,024 $ 15,512 |
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: (Dollars in thousands) 2022 2023 2024 2025 2026 Thereafter Total September 30, 2022 Operating leases $ 4,954 $ 19,383 $ 17,368 $ 11,657 $ 5,996 $ 9,619 $ 68,977 Short-term leases 53 40 — — — — 93 Total contractual base rents (1) $ 5,007 $ 19,423 $ 17,368 $ 11,657 $ 5,996 $ 9,619 $ 69,070 Total liability to make lease payments $ 61,852 Difference in undiscounted and discounted future lease payments 7,125 Weighted average discount rate 5.07 % Weighted average remaining lease term (years) 4.3 ______________________________ (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. |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
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 statements of financial condition and maximum exposure to loss as of September 30, 2022 and December 31, 2021 that relate to variable interests in non-consolidated VIEs. September 30, 2022 December 31, 2021 (Dollars in thousands) Maximum Loss Assets Liabilities Maximum Loss Assets Liabilities Multifamily loan securitization: Investment securities (1) $ 57,525 $ 57,525 $ — $ 81,103 $ 81,103 $ — Reimbursement obligation (2) 50,901 — 338 50,901 — 338 Affordable housing partnership: Other investments (3) 60,692 76,201 — 68,765 85,994 — Unfunded equity commitments (2) — — 15,509 — — 17,229 Total $ 169,118 $ 133,726 $ 15,847 $ 200,769 $ 167,097 $ 17,567 ______________________________ (1) Included in investment securities AFS on the consolidated statement of financial condition. (2) Included in accrued expenses and other liabilities on the consolidated statement of financial condition. |
Significant Accounting Polici_3
Significant Accounting Policies (Details) | 9 Months Ended |
Sep. 30, 2022 shares | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Stock options award granted (in shares) | 0 |
Minimum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Weighted average useful life (in years) | 6 years |
Maximum | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Weighted average useful life (in years) | 11 years |
Investment Securities - Amortiz
Investment Securities - Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
AFS investment securities: | ||
Amortized Cost | $ 2,985,391 | $ 4,278,589 |
Gross Unrealized Gain | 24 | 46,232 |
Gross Unrealized Loss | (324,336) | (50,957) |
Estimated Fair Value | 2,661,079 | 4,273,864 |
HTM investment securities: | ||
Amortized Cost | 1,385,593 | 381,696 |
Allowance for Credit Losses | (91) | (22) |
Net Carrying Amount | 1,385,502 | 381,674 |
Gross Unrecognized Gain | 0 | 4,398 |
Gross Unrecognized Loss | (330,315) | (1,649) |
Estimated Fair Value | 1,055,187 | 384,423 |
U.S. Treasury | ||
AFS investment securities: | ||
Amortized Cost | 48,926 | 57,708 |
Gross Unrealized Gain | 0 | 614 |
Gross Unrealized Loss | (2,152) | (456) |
Estimated Fair Value | 46,774 | 57,866 |
Agency | ||
AFS investment securities: | ||
Amortized Cost | 486,111 | 440,183 |
Gross Unrealized Gain | 0 | 2,081 |
Gross Unrealized Loss | (55,248) | (10,129) |
Estimated Fair Value | 430,863 | 432,135 |
Corporate debt | ||
AFS investment securities: | ||
Amortized Cost | 602,058 | 451,621 |
Gross Unrealized Gain | 0 | 6,096 |
Gross Unrealized Loss | (46,308) | (3,856) |
Estimated Fair Value | 555,750 | 453,861 |
Municipal bonds | ||
AFS investment securities: | ||
Amortized Cost | 1,061,985 | |
Gross Unrealized Gain | 32,209 | |
Gross Unrealized Loss | (4,281) | |
Estimated Fair Value | 1,089,913 | |
HTM investment securities: | ||
Amortized Cost | 1,148,234 | 368,344 |
Allowance for Credit Losses | (91) | (22) |
Net Carrying Amount | 1,148,143 | 368,322 |
Gross Unrecognized Gain | 0 | 3,834 |
Gross Unrecognized Loss | (294,439) | (1,649) |
Estimated Fair Value | 853,704 | 370,507 |
Collateralized mortgage obligations | ||
AFS investment securities: | ||
Amortized Cost | 856,867 | 680,686 |
Gross Unrealized Gain | 24 | 2,012 |
Gross Unrealized Loss | (65,776) | (6,055) |
Estimated Fair Value | 791,115 | 676,643 |
Mortgage-backed securities | ||
AFS investment securities: | ||
Amortized Cost | 991,429 | 1,586,406 |
Gross Unrealized Gain | 0 | 3,220 |
Gross Unrealized Loss | (154,852) | (26,180) |
Estimated Fair Value | 836,577 | 1,563,446 |
HTM investment securities: | ||
Amortized Cost | 235,937 | 11,843 |
Allowance for Credit Losses | 0 | 0 |
Net Carrying Amount | 235,937 | 11,843 |
Gross Unrecognized Gain | 0 | 564 |
Gross Unrecognized Loss | (35,876) | 0 |
Estimated Fair Value | 200,061 | 12,407 |
Other | ||
HTM investment securities: | ||
Amortized Cost | 1,422 | 1,509 |
Allowance for Credit Losses | 0 | 0 |
Net Carrying Amount | 1,422 | 1,509 |
Gross Unrecognized Gain | 0 | 0 |
Gross Unrecognized Loss | 0 | 0 |
Estimated Fair Value | $ 1,422 | $ 1,509 |
Investment Securities - Narrati
Investment Securities - Narrative (Details) | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2022 USD ($) investment_security | Jun. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Jun. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) investment_security | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) investment_security | Jun. 30, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Investment Securities | |||||||||
Securities transferred from available-for-sale to held-to-maturity | $ 0 | ||||||||
Net carrying amount of securities transferred from available-for-sale to held-to-maturity | $ 1,019,472,000 | $ 154,456,000 | |||||||
Accumulated other comprehensive loss, net of tax | (281,113,000) | (281,113,000) | $ (7,862,000) | ||||||
Investments held-to-maturity, allowance for credit losses | 91,000 | $ 109,000 | $ 11,000 | $ 109,000 | 91,000 | 11,000 | 22,000 | $ 0 | $ 0 |
Investments held-to-maturity, provision (recapture) for credit losses | (18,000) | 11,000 | 69,000 | 11,000 | |||||
Allowance for credit losses on debt securities, Available-for-sale | 0 | 0 | $ 0 | ||||||
Available-for-sale securities, provision for credit losses | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Available-for-sale and held-to-maturity securities in nonaccrual status | investment_security | 0 | 0 | 0 | ||||||
Available-for-sale and held-to-maturity securities purchased with deterioration in credit quality | investment_security | 0 | 0 | 0 | ||||||
Available-for-sale and held-to-maturity collateral dependent | investment_security | 0 | 0 | 0 | ||||||
FHLB stock | $ 19,400,000 | $ 19,400,000 | $ 17,300,000 | ||||||
FRB stock | 74,700,000 | 74,700,000 | 74,500,000 | ||||||
Other stock | 24,700,000 | 24,700,000 | 25,700,000 | ||||||
Impairment loss on investments in FHLB, FRB and other stock | 0 | ||||||||
AOCI, Accumulated Gain (Loss), Debt Securities, Available-for-sale, Parent | |||||||||
Investment Securities | |||||||||
Accumulated other comprehensive loss before tax amount | (324,300,000) | (324,300,000) | (4,700,000) | ||||||
Accumulated other comprehensive loss, net of tax | (231,700,000) | (231,700,000) | (3,300,000) | ||||||
Public deposits, Other Borrowings, and Other Purposes | Asset Pledged as Collateral | |||||||||
Investment Securities | |||||||||
Investments at carrying value | 194,000,000 | 194,000,000 | $ 130,700,000 | ||||||
Municipal bonds | |||||||||
Investment Securities | |||||||||
Securities transferred from available-for-sale to held-to-maturity | 831,400,000 | ||||||||
Net carrying amount of securities transferred from available-for-sale to held-to-maturity | 780,700,000 | ||||||||
Debt securities, held-to-maturity, transfer, unrealized loss | (50,800,000) | ||||||||
Accumulated other comprehensive loss before tax amount | (69,200,000) | (69,200,000) | |||||||
Accumulated other comprehensive loss, net of tax | $ (49,400,000) | $ (49,400,000) | |||||||
Mortgage-backed securities | |||||||||
Investment Securities | |||||||||
Securities transferred from available-for-sale to held-to-maturity | 255,000,000 | ||||||||
Net carrying amount of securities transferred from available-for-sale to held-to-maturity | 238,800,000 | ||||||||
Debt securities, held-to-maturity, transfer, unrealized loss | $ (16,200,000) |
Investment Securities - Investm
Investment Securities - Investment Category and Length of Time (Details) $ in Thousands | Sep. 30, 2022 USD ($) investment_security | Dec. 31, 2021 USD ($) investment_security |
Less than 12 Months | ||
Number | investment_security | 122 | 204 |
Fair Value | $ 1,229,181 | $ 2,302,658 |
Gross Unrealized Losses | $ (73,968) | $ (35,173) |
12 Months or Longer | ||
Number | investment_security | 146 | 51 |
Fair Value | $ 1,424,395 | $ 477,926 |
Gross Unrealized Losses | $ (250,368) | $ (15,784) |
Total | ||
Number | investment_security | 268 | 255 |
Fair Value | $ 2,653,576 | $ 2,780,584 |
Gross Unrealized Losses | $ (324,336) | $ (50,957) |
U.S. Treasury | ||
Less than 12 Months | ||
Number | investment_security | 5 | 3 |
Fair Value | $ 33,865 | $ 47,235 |
Gross Unrealized Losses | $ (125) | $ (456) |
12 Months or Longer | ||
Number | investment_security | 1 | 0 |
Fair Value | $ 12,909 | $ 0 |
Gross Unrealized Losses | $ (2,027) | $ 0 |
Total | ||
Number | investment_security | 6 | 3 |
Fair Value | $ 46,774 | $ 47,235 |
Gross Unrealized Losses | $ (2,152) | $ (456) |
Agency | ||
Less than 12 Months | ||
Number | investment_security | 8 | 19 |
Fair Value | $ 80,049 | $ 278,078 |
Gross Unrealized Losses | $ (1,118) | $ (5,634) |
12 Months or Longer | ||
Number | investment_security | 35 | 16 |
Fair Value | $ 350,814 | $ 119,750 |
Gross Unrealized Losses | $ (54,130) | $ (4,495) |
Total | ||
Number | investment_security | 43 | 35 |
Fair Value | $ 430,863 | $ 397,828 |
Gross Unrealized Losses | $ (55,248) | $ (10,129) |
Corporate debt | ||
Less than 12 Months | ||
Number | investment_security | 49 | 17 |
Fair Value | $ 468,523 | $ 166,563 |
Gross Unrealized Losses | $ (28,413) | $ (849) |
12 Months or Longer | ||
Number | investment_security | 8 | 3 |
Fair Value | $ 87,227 | $ 57,274 |
Gross Unrealized Losses | $ (17,895) | $ (3,007) |
Total | ||
Number | investment_security | 57 | 20 |
Fair Value | $ 555,750 | $ 223,837 |
Gross Unrealized Losses | $ (46,308) | $ (3,856) |
Municipal bonds | ||
Less than 12 Months | ||
Number | investment_security | 36 | |
Fair Value | $ 277,564 | |
Gross Unrealized Losses | $ (4,079) | |
12 Months or Longer | ||
Number | investment_security | 2 | |
Fair Value | $ 6,596 | |
Gross Unrealized Losses | $ (202) | |
Total | ||
Number | investment_security | 38 | |
Fair Value | $ 284,160 | |
Gross Unrealized Losses | $ (4,281) | |
Collateralized mortgage obligations | ||
Less than 12 Months | ||
Number | investment_security | 44 | 26 |
Fair Value | $ 543,696 | $ 226,763 |
Gross Unrealized Losses | $ (35,355) | $ (3,738) |
12 Months or Longer | ||
Number | investment_security | 36 | 15 |
Fair Value | $ 239,916 | $ 121,185 |
Gross Unrealized Losses | $ (30,421) | $ (2,317) |
Total | ||
Number | investment_security | 80 | 41 |
Fair Value | $ 783,612 | $ 347,948 |
Gross Unrealized Losses | $ (65,776) | $ (6,055) |
Mortgage-backed securities | ||
Less than 12 Months | ||
Number | investment_security | 16 | 103 |
Fair Value | $ 103,048 | $ 1,306,455 |
Gross Unrealized Losses | $ (8,957) | $ (20,417) |
12 Months or Longer | ||
Number | investment_security | 66 | 15 |
Fair Value | $ 733,529 | $ 173,121 |
Gross Unrealized Losses | $ (145,895) | $ (5,763) |
Total | ||
Number | investment_security | 82 | 118 |
Fair Value | $ 836,577 | $ 1,479,576 |
Gross Unrealized Losses | $ (154,852) | $ (26,180) |
Investment Securities - Schedul
Investment Securities - Schedule of Allowance for Credit Losses on Held-to-Maturity Debt Securities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | ||||
Balance, June 30, 2022 | $ 109 | $ 0 | $ 22 | $ 0 |
Provision for Credit Losses | (18) | 11 | 69 | 11 |
Balance, September 30, 2022 | $ 91 | $ 11 | $ 91 | $ 11 |
Investment Securities - Realize
Investment Securities - Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Amortized cost of AFS investment securities sold | $ 231,076 | $ 45,121 | $ 161,597 | $ 934,703 | $ 617,116 |
Gross realized gains | 0 | 7 | 4,190 | 13,645 | 18,462 |
Gross realized (losses) | (393) | (38) | 0 | (11,935) | (5,141) |
Net realized (losses) gains on sales of AFS investment securities | $ (393) | $ (31) | $ 4,190 | $ 1,710 | $ 13,321 |
Investment Securities - By Cont
Investment Securities - By Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Due in One Year or Less | $ 69,892 | |
Due after One Year through Five Years | 755,138 | |
Due after Five Years through Ten Years | 1,178,255 | |
Due after Ten Years | 982,106 | |
Amortized Cost | 2,985,391 | $ 4,278,589 |
Fair Value | ||
Due in One Year or Less | 69,394 | |
Due after One Year through Five Years | 715,115 | |
Due after Five Years through Ten Years | 1,019,911 | |
Due after Ten Years | 856,659 | |
Total | 2,661,079 | 4,273,864 |
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 10,484 | |
Due after Five Years through Ten Years | 50,556 | |
Due after Ten Years | 1,324,553 | |
Total | 1,385,593 | 381,696 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 9,749 | |
Due after Five Years through Ten Years | 43,410 | |
Due after Ten Years | 1,002,028 | |
Total | 1,055,187 | 384,423 |
Amortized Cost | ||
Due in One Year or Less | 69,892 | |
Due after One Year through Five Years | 765,622 | |
Due after Five Years through Ten Years | 1,228,811 | |
Due after Ten Years | 2,306,659 | |
Total | 4,370,984 | |
Fair Value | ||
Due in One Year or Less | 69,394 | |
Due after One Year through Five Years | 724,864 | |
Due after Five Years through Ten Years | 1,063,321 | |
Due after Ten Years | 1,858,687 | |
Total | 3,716,266 | |
U.S. Treasury | ||
Amortized Cost | ||
Due in One Year or Less | 9,648 | |
Due after One Year through Five Years | 24,342 | |
Due after Five Years through Ten Years | 14,936 | |
Due after Ten Years | 0 | |
Amortized Cost | 48,926 | 57,708 |
Fair Value | ||
Due in One Year or Less | 9,639 | |
Due after One Year through Five Years | 24,226 | |
Due after Five Years through Ten Years | 12,909 | |
Due after Ten Years | 0 | |
Total | 46,774 | 57,866 |
Agency | ||
Amortized Cost | ||
Due in One Year or Less | 25,583 | |
Due after One Year through Five Years | 326,627 | |
Due after Five Years through Ten Years | 96,469 | |
Due after Ten Years | 37,432 | |
Amortized Cost | 486,111 | 440,183 |
Fair Value | ||
Due in One Year or Less | 25,329 | |
Due after One Year through Five Years | 298,271 | |
Due after Five Years through Ten Years | 79,143 | |
Due after Ten Years | 28,120 | |
Total | 430,863 | 432,135 |
Corporate debt | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 298,578 | |
Due after Five Years through Ten Years | 303,480 | |
Due after Ten Years | 0 | |
Amortized Cost | 602,058 | 451,621 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 289,014 | |
Due after Five Years through Ten Years | 266,736 | |
Due after Ten Years | 0 | |
Total | 555,750 | 453,861 |
Municipal bonds | ||
Amortized Cost | ||
Amortized Cost | 1,061,985 | |
Fair Value | ||
Total | 1,089,913 | |
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 10,484 | |
Due after Five Years through Ten Years | 50,556 | |
Due after Ten Years | 1,087,194 | |
Total | 1,148,234 | 368,344 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 9,749 | |
Due after Five Years through Ten Years | 43,410 | |
Due after Ten Years | 800,545 | |
Total | 853,704 | 370,507 |
Collateralized mortgage obligations | ||
Amortized Cost | ||
Due in One Year or Less | 34,661 | |
Due after One Year through Five Years | 70,542 | |
Due after Five Years through Ten Years | 213,821 | |
Due after Ten Years | 537,843 | |
Amortized Cost | 856,867 | 680,686 |
Fair Value | ||
Due in One Year or Less | 34,426 | |
Due after One Year through Five Years | 68,834 | |
Due after Five Years through Ten Years | 192,325 | |
Due after Ten Years | 495,530 | |
Total | 791,115 | 676,643 |
Mortgage-backed securities | ||
Amortized Cost | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 35,049 | |
Due after Five Years through Ten Years | 549,549 | |
Due after Ten Years | 406,831 | |
Amortized Cost | 991,429 | 1,586,406 |
Fair Value | ||
Due in One Year or Less | 0 | |
Due after One Year through Five Years | 34,770 | |
Due after Five Years through Ten Years | 468,798 | |
Due after Ten Years | 333,009 | |
Total | 836,577 | 1,563,446 |
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 | 235,937 | |
Total | 235,937 | 11,843 |
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 | 200,061 | |
Total | 200,061 | $ 12,407 |
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 | 1,422 | |
Total | 1,422 | |
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 | 1,422 | |
Total | $ 1,422 |
Loans Held for Investment - Com
Loans Held for Investment - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Loans Held for Investment | ||||||
Total | $ 14,908,811 | $ 14,295,897 | ||||
Loans held for investment before basis adjustment | 14,976,935 | |||||
Allowance for credit losses for loans held for investment | (195,549) | $ (196,075) | (197,752) | $ (211,481) | $ (232,774) | $ (268,018) |
Loans held for investment, net | 14,713,262 | 14,098,145 | ||||
Loans held for sale, at lower of cost or fair value | 2,163 | 10,869 | ||||
Net deferred origination fees (costs) | 3,000 | 3,500 | ||||
Unaccreted mark-to-market discount | 59,000 | 77,100 | ||||
Basis adjustment associated with fair value hedge | ||||||
Loans Held for Investment | ||||||
Loans held for investment before basis adjustment | 14,976,935 | 14,295,897 | ||||
Basis adjustment associated with fair value hedge | (68,124) | 0 | ||||
Total unfunded loan commitments | ||||||
Loans Held for Investment | ||||||
Total | 2,823,555 | 2,507,911 | ||||
Investor loans secured by real estate | ||||||
Loans Held for Investment | ||||||
Total | 9,387,045 | 8,987,628 | ||||
Loans held for investment before basis adjustment | 9,387,045 | |||||
Investor loans secured by real estate | CRE non-owner-occupied | ||||||
Loans Held for Investment | ||||||
Total | 2,771,272 | 2,771,137 | ||||
Loans held for investment before basis adjustment | 2,771,272 | |||||
Allowance for credit losses for loans held for investment | (37,104) | (37,221) | (37,380) | (42,467) | (47,112) | (49,176) |
Investor loans secured by real estate | Multifamily | ||||||
Loans Held for Investment | ||||||
Total | 6,199,581 | 5,891,934 | ||||
Loans held for investment before basis adjustment | 6,199,581 | |||||
Allowance for credit losses for loans held for investment | (56,086) | (56,293) | (55,209) | (52,164) | (59,059) | (62,534) |
Investor loans secured by real estate | Construction and land | ||||||
Loans Held for Investment | ||||||
Total | 373,194 | 277,640 | ||||
Loans held for investment before basis adjustment | 373,194 | |||||
Allowance for credit losses for loans held for investment | (6,440) | (5,436) | (5,211) | (8,017) | (9,548) | (12,435) |
Investor loans secured by real estate | SBA secured by real estate | ||||||
Loans Held for Investment | ||||||
Total | 42,998 | 46,917 | ||||
Loans held for investment before basis adjustment | 42,998 | |||||
Allowance for credit losses for loans held for investment | (2,955) | (2,865) | (3,201) | (3,879) | (4,681) | (5,159) |
Business loans secured by real estate | ||||||
Loans Held for Investment | ||||||
Total | 2,925,000 | 2,700,579 | ||||
Loans held for investment before basis adjustment | 2,925,000 | |||||
Business loans secured by real estate | SBA secured by real estate | ||||||
Loans Held for Investment | ||||||
Total | 64,002 | 69,184 | ||||
Loans held for investment before basis adjustment | 64,002 | |||||
Allowance for credit losses for loans held for investment | (4,785) | (5,149) | (4,866) | (5,104) | (6,317) | (6,567) |
Business loans secured by real estate | CRE owner-occupied | ||||||
Loans Held for Investment | ||||||
Total | 2,477,530 | 2,251,014 | ||||
Loans held for investment before basis adjustment | 2,477,530 | |||||
Allowance for credit losses for loans held for investment | (31,826) | (31,461) | (29,575) | (33,679) | (35,747) | (50,517) |
Business loans secured by real estate | Franchise real estate secured | ||||||
Loans Held for Investment | ||||||
Total | 383,468 | 380,381 | ||||
Loans held for investment before basis adjustment | 383,468 | |||||
Allowance for credit losses for loans held for investment | (6,710) | (6,530) | (7,985) | (9,626) | (11,436) | (11,451) |
Commercial loans | ||||||
Loans Held for Investment | ||||||
Total | 2,585,953 | 2,506,733 | ||||
Loans held for investment before basis adjustment | 2,585,953 | |||||
Commercial loans | Commercial and industrial | ||||||
Loans Held for Investment | ||||||
Total | 2,164,623 | 2,103,112 | ||||
Loans held for investment before basis adjustment | 2,164,623 | |||||
Allowance for credit losses for loans held for investment | (35,498) | (37,048) | (38,136) | (37,595) | (39,879) | (46,964) |
Commercial loans | Franchise non-real estate secured | ||||||
Loans Held for Investment | ||||||
Total | 409,773 | 392,576 | ||||
Loans held for investment before basis adjustment | 409,773 | |||||
Allowance for credit losses for loans held for investment | (13,194) | (13,124) | (15,084) | (17,518) | (17,313) | (20,525) |
Commercial loans | SBA non-real estate secured | ||||||
Loans Held for Investment | ||||||
Total | 11,557 | 11,045 | ||||
Loans held for investment before basis adjustment | 11,557 | |||||
Allowance for credit losses for loans held for investment | (440) | (452) | (565) | (632) | (730) | (995) |
Retail loans | ||||||
Loans Held for Investment | ||||||
Total | 78,937 | 100,957 | ||||
Loans held for investment before basis adjustment | 78,937 | |||||
Retail loans | Single family residential | ||||||
Loans Held for Investment | ||||||
Total | 75,176 | 95,292 | ||||
Loans held for investment before basis adjustment | 75,176 | |||||
Allowance for credit losses for loans held for investment | (296) | (278) | (255) | (529) | (670) | (1,204) |
Retail loans | Consumer | ||||||
Loans Held for Investment | ||||||
Total | 3,761 | 5,665 | ||||
Loans held for investment before basis adjustment | 3,761 | |||||
Allowance for credit losses for loans held for investment | $ (215) | $ (218) | $ (285) | $ (271) | $ (282) | $ (491) |
Loans Held for Investment - Nar
Loans Held for Investment - Narrative (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 USD ($) | Sep. 30, 2022 USD ($) loan | Sep. 30, 2021 loan | Sep. 30, 2022 USD ($) loan area grade | Sep. 30, 2021 loan | Dec. 31, 2021 USD ($) loan | |
Loans Held for Investment | ||||||
Servicing rights retained from guaranteed portion of SBA loans sold | $ 3,400,000 | $ 3,400,000 | $ 3,800,000 | |||
Accrued expenses and other liabilities | 206,386,000 | 206,386,000 | 203,962,000 | |||
Unpaid principal balance for loans and participations serviced for others | 491,000,000 | 491,000,000 | 565,800,000 | |||
Secured loans limit to one borrower | 813,100,000 | 813,100,000 | ||||
Unsecured loans limit to one borrower | 487,900,000 | 487,900,000 | ||||
Aggregate outstanding balance of loans to one borrower of secured credit | 257,300,000 | $ 257,300,000 | ||||
Number of areas where the entity's credit quality is maintained and credit risk managed | area | 2 | |||||
Number of pass scale grades | grade | 6 | |||||
Individually evaluated loans | 60,500,000 | $ 60,500,000 | 31,300,000 | |||
ACL attributable to individually evaluated loans | 4,400,000 | $ 4,400,000 | $ 1,500,000 | |||
Number of loans modified | loan | 5 | 6 | ||||
Total recorded balance of loans modified as TDR | 16,300,000 | $ 16,300,000 | $ 17,300,000 | |||
Total nonaccrual loans | 60,464,000 | 60,464,000 | 31,273,000 | |||
Loans 90 days or more past due and still accruing | 0 | 0 | 0 | |||
Consumer mortgage loans collateralized by residential real estate, foreclosure proceedings in process | 0 | 0 | 0 | |||
Financial Asset Acquired with Credit Deterioration | ||||||
Loans Held for Investment | ||||||
Loans held for investment | 451,600,000 | 451,600,000 | 567,600,000 | |||
Discounted Cash Flow Approach | ||||||
Loans Held for Investment | ||||||
Individually evaluated loans | 11,300,000 | 11,300,000 | 12,400,000 | |||
Underlying Value of the Collateral | ||||||
Loans Held for Investment | ||||||
Individually evaluated loans | $ 49,200,000 | $ 49,200,000 | 18,900,000 | |||
Multifamily Loan Securitization, Liability | Variable Interest Entity, Not Primary Beneficiary | ||||||
Loans Held for Investment | ||||||
Maximum loss, percentage of loans | 10% | 10% | ||||
Accrued expenses and other liabilities | $ 338,000 | $ 338,000 | 338,000 | |||
Multifamily Loan Securitization | ||||||
Loans Held for Investment | ||||||
Unpaid principal balance for loans and participations serviced for others | 57,400,000 | 57,400,000 | 78,100,000 | |||
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 | 328,600,000 | 328,600,000 | 365,600,000 | |||
CRE owner-occupied & Commercial and industrial | ||||||
Loans Held for Investment | ||||||
Total recorded balance of loans modified as TDR | $ 5,100,000 | $ 5,100,000 | $ 5,200,000 | |||
CRE owner-occupied | ||||||
Loans Held for Investment | ||||||
Number of loans modified | loan | 3 | 3 | ||||
Number of loans, subsequent default | loan | 3 | 3 | 3 | 3 | ||
Commercial and industrial | ||||||
Loans Held for Investment | ||||||
Number of loans modified | loan | 1 | 1 | ||||
Number of loans, subsequent default | loan | 1 | 1 | 1 | 1 | ||
Franchise non-real estate secured | ||||||
Loans Held for Investment | ||||||
Number of loans modified | loan | 1 | 2 | ||||
Total recorded balance of loans modified as TDR | $ 11,200,000 | $ 11,200,000 | $ 12,100,000 |
Loans Held for Investment - Int
Loans Held for Investment - Internal Risk Grading System under ASC 326 (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | $ 2,878,292 | $ 4,696,852 |
Fiscal Year before Current Fiscal Year | 4,350,441 | 1,736,838 |
Two Years before Current Fiscal Year | 1,438,521 | 2,322,876 |
Three Years before Current Fiscal Year | 1,871,484 | 1,254,797 |
Four Years before Current Fiscal Year | 920,886 | 1,143,567 |
Prior | 2,364,115 | 2,014,563 |
Revolving | 1,149,463 | 1,121,488 |
Revolving Converted to Term During the Period | 3,733 | 4,916 |
Total | 14,976,935 | |
Total | 14,908,811 | 14,295,897 |
Fair value hedging relationships | (68,124) | (5,298) |
Investor loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 1,855,166 | 3,088,930 |
Fiscal Year before Current Fiscal Year | 3,003,157 | 1,320,289 |
Two Years before Current Fiscal Year | 1,059,676 | 1,681,360 |
Three Years before Current Fiscal Year | 1,328,120 | 865,841 |
Four Years before Current Fiscal Year | 630,423 | 717,023 |
Prior | 1,509,640 | 1,304,033 |
Revolving | 388 | 10,152 |
Revolving Converted to Term During the Period | 475 | 0 |
Total | 9,387,045 | |
Total | 9,387,045 | 8,987,628 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,771,272 | |
Total | 2,771,272 | 2,771,137 |
Investor loans secured by real estate | CRE non-owner-occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 500,592 | 708,560 |
Fiscal Year before Current Fiscal Year | 619,259 | 269,944 |
Two Years before Current Fiscal Year | 223,908 | 393,097 |
Three Years before Current Fiscal Year | 362,597 | 387,923 |
Four Years before Current Fiscal Year | 318,172 | 218,388 |
Prior | 711,998 | 730,736 |
Revolving | 0 | 9,353 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 2,736,526 | |
Total | 2,718,001 | |
Investor loans secured by real estate | CRE non-owner-occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 16,166 |
Three Years before Current Fiscal Year | 0 | 7,682 |
Four Years before Current Fiscal Year | 7,537 | 0 |
Prior | 3,965 | 0 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 11,502 | |
Total | 23,848 | |
Investor loans secured by real estate | CRE non-owner-occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 25,777 |
Three Years before Current Fiscal Year | 16,393 | 0 |
Four Years before Current Fiscal Year | 194 | 0 |
Prior | 6,182 | 2,998 |
Revolving | 0 | 513 |
Revolving Converted to Term During the Period | 475 | 0 |
Total | 23,244 | |
Total | 29,288 | |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 6,199,581 | |
Total | 6,199,581 | 5,891,934 |
Investor loans secured by real estate | Multifamily | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 1,193,692 | 2,260,708 |
Fiscal Year before Current Fiscal Year | 2,225,146 | 952,127 |
Two Years before Current Fiscal Year | 796,705 | 1,199,505 |
Three Years before Current Fiscal Year | 922,115 | 444,904 |
Four Years before Current Fiscal Year | 292,670 | 479,029 |
Prior | 759,311 | 554,067 |
Revolving | 388 | 286 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 6,190,027 | |
Total | 5,890,626 | |
Investor loans secured by real estate | Multifamily | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 6,074 | 0 |
Two Years before Current Fiscal Year | 0 | 0 |
Three Years before Current Fiscal Year | 2,732 | 543 |
Four Years before Current Fiscal Year | 0 | 0 |
Prior | 748 | 765 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 9,554 | |
Total | 1,308 | |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 373,194 | |
Total | 373,194 | 277,640 |
Investor loans secured by real estate | Construction and land | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 154,286 | 119,532 |
Fiscal Year before Current Fiscal Year | 152,548 | 97,721 |
Two Years before Current Fiscal Year | 38,569 | 40,556 |
Three Years before Current Fiscal Year | 18,817 | 12,415 |
Four Years before Current Fiscal Year | 1,853 | 3,857 |
Prior | 7,121 | 3,559 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 373,194 | |
Total | 277,640 | |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 42,998 | |
Total | 42,998 | 46,917 |
Investor loans secured by real estate | SBA secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 6,596 | 130 |
Fiscal Year before Current Fiscal Year | 130 | 497 |
Two Years before Current Fiscal Year | 494 | 6,259 |
Three Years before Current Fiscal Year | 5,466 | 9,074 |
Four Years before Current Fiscal Year | 7,575 | 12,070 |
Prior | 14,833 | 9,198 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 35,094 | |
Total | 37,228 | |
Investor loans secured by real estate | SBA secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 0 | |
Three Years before Current Fiscal Year | 957 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 544 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 1,501 | |
Investor loans secured by real estate | SBA secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 0 |
Three Years before Current Fiscal Year | 0 | 2,343 |
Four Years before Current Fiscal Year | 2,422 | 3,679 |
Prior | 5,482 | 2,166 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 7,904 | |
Total | 8,188 | |
Business loans secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 657,576 | 1,015,804 |
Fiscal Year before Current Fiscal Year | 892,203 | 312,168 |
Two Years before Current Fiscal Year | 294,316 | 352,224 |
Three Years before Current Fiscal Year | 308,706 | 218,944 |
Four Years before Current Fiscal Year | 165,877 | 259,808 |
Prior | 600,812 | 533,240 |
Revolving | 5,510 | 8,099 |
Revolving Converted to Term During the Period | 0 | 292 |
Total | 2,925,000 | |
Total | 2,925,000 | 2,700,579 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 64,002 | |
Total | 64,002 | 69,184 |
Business loans secured by real estate | SBA secured by real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 10,015 | 6,379 |
Fiscal Year before Current Fiscal Year | 7,038 | 2,364 |
Two Years before Current Fiscal Year | 2,332 | 7,331 |
Three Years before Current Fiscal Year | 6,486 | 9,125 |
Four Years before Current Fiscal Year | 4,968 | 10,734 |
Prior | 27,076 | 24,627 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 57,915 | |
Total | 60,560 | |
Business loans secured by real estate | SBA secured by real estate | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 0 | |
Three Years before Current Fiscal Year | 0 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 62 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 62 | |
Business loans secured by real estate | SBA secured by real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 0 |
Three Years before Current Fiscal Year | 0 | 2,062 |
Four Years before Current Fiscal Year | 1,362 | 2,690 |
Prior | 4,725 | 3,810 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 6,087 | |
Total | 8,562 | |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,477,530 | |
Total | 2,477,530 | 2,251,014 |
Business loans secured by real estate | CRE owner-occupied | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 589,994 | 853,044 |
Fiscal Year before Current Fiscal Year | 737,861 | 273,469 |
Two Years before Current Fiscal Year | 252,950 | 287,249 |
Three Years before Current Fiscal Year | 248,513 | 161,636 |
Four Years before Current Fiscal Year | 121,626 | 187,130 |
Prior | 489,097 | 464,271 |
Revolving | 5,510 | 6,738 |
Revolving Converted to Term During the Period | 0 | 292 |
Total | 2,445,551 | |
Total | 2,233,829 | |
Business loans secured by real estate | CRE owner-occupied | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 504 | |
Three Years before Current Fiscal Year | 0 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 9,393 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 9,897 | |
Business loans secured by real estate | CRE owner-occupied | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 4,656 | 2,553 |
Three Years before Current Fiscal Year | 2,442 | 6,074 |
Four Years before Current Fiscal Year | 4,718 | 2,966 |
Prior | 10,266 | 5,592 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 22,082 | |
Total | 17,185 | |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 383,468 | |
Total | 383,468 | 380,381 |
Business loans secured by real estate | Franchise real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 56,586 | 156,381 |
Fiscal Year before Current Fiscal Year | 147,304 | 36,335 |
Two Years before Current Fiscal Year | 33,874 | 55,091 |
Three Years before Current Fiscal Year | 45,173 | 40,047 |
Four Years before Current Fiscal Year | 33,203 | 56,288 |
Prior | 60,255 | 34,878 |
Revolving | 0 | 1,361 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 376,395 | |
Total | 380,381 | |
Business loans secured by real estate | Franchise real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 981 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 0 | |
Three Years before Current Fiscal Year | 6,092 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 7,073 | |
Commercial loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 365,550 | 591,794 |
Fiscal Year before Current Fiscal Year | 454,771 | 104,142 |
Two Years before Current Fiscal Year | 84,332 | 289,238 |
Three Years before Current Fiscal Year | 234,645 | 169,961 |
Four Years before Current Fiscal Year | 124,563 | 164,717 |
Prior | 201,860 | 107,053 |
Revolving | 1,116,974 | 1,075,204 |
Revolving Converted to Term During the Period | 3,258 | 4,624 |
Total | 2,585,953 | |
Total | 2,585,953 | 2,506,733 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 2,164,623 | |
Total | 2,164,623 | 2,103,112 |
Commercial loans | Commercial and industrial | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 251,964 | 425,683 |
Fiscal Year before Current Fiscal Year | 306,145 | 79,635 |
Two Years before Current Fiscal Year | 61,872 | 200,234 |
Three Years before Current Fiscal Year | 161,641 | 117,471 |
Four Years before Current Fiscal Year | 90,096 | 123,345 |
Prior | 149,371 | 70,789 |
Revolving | 1,107,645 | 1,032,053 |
Revolving Converted to Term During the Period | 2,601 | 3,371 |
Total | 2,131,335 | |
Total | 2,052,581 | |
Commercial loans | Commercial and industrial | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 15,375 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 146 |
Three Years before Current Fiscal Year | 0 | 0 |
Four Years before Current Fiscal Year | 0 | 0 |
Prior | 0 | 152 |
Revolving | 3,764 | 14,814 |
Revolving Converted to Term During the Period | 0 | 178 |
Total | 19,139 | |
Total | 15,290 | |
Commercial loans | Commercial and industrial | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 1,437 | 1,772 |
Fiscal Year before Current Fiscal Year | 1,132 | 0 |
Two Years before Current Fiscal Year | 0 | 14 |
Three Years before Current Fiscal Year | 4,899 | 2,683 |
Four Years before Current Fiscal Year | 615 | 863 |
Prior | 1,230 | 1,150 |
Revolving | 4,786 | 27,684 |
Revolving Converted to Term During the Period | 50 | 1,075 |
Total | 14,149 | |
Total | 35,241 | |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 409,773 | |
Total | 409,773 | 392,576 |
Commercial loans | Franchise non-real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 91,787 | 163,865 |
Fiscal Year before Current Fiscal Year | 146,650 | 23,943 |
Two Years before Current Fiscal Year | 19,005 | 85,206 |
Three Years before Current Fiscal Year | 64,017 | 45,061 |
Four Years before Current Fiscal Year | 32,914 | 23,672 |
Prior | 35,933 | 31,163 |
Revolving | 779 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 391,085 | |
Total | 372,910 | |
Commercial loans | Franchise non-real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 1,775 | 0 |
Fiscal Year before Current Fiscal Year | 400 | 0 |
Two Years before Current Fiscal Year | 2,983 | 1,589 |
Three Years before Current Fiscal Year | 2,276 | 3,627 |
Four Years before Current Fiscal Year | 0 | 13,346 |
Prior | 11,254 | 1,104 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 18,688 | |
Total | 19,666 | |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 11,557 | |
Total | 11,557 | 11,045 |
Commercial loans | SBA non-real estate secured | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 3,212 | 474 |
Fiscal Year before Current Fiscal Year | 444 | 564 |
Two Years before Current Fiscal Year | 472 | 1,292 |
Three Years before Current Fiscal Year | 1,679 | 666 |
Four Years before Current Fiscal Year | 707 | 2,806 |
Prior | 3,723 | 2,148 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 10,237 | |
Total | 7,950 | |
Commercial loans | SBA non-real estate secured | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 681 | |
Three Years before Current Fiscal Year | 114 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 0 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | 795 | |
Commercial loans | SBA non-real estate secured | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 76 |
Three Years before Current Fiscal Year | 133 | 339 |
Four Years before Current Fiscal Year | 231 | 685 |
Prior | 349 | 547 |
Revolving | 0 | 653 |
Revolving Converted to Term During the Period | 607 | 0 |
Total | 1,320 | |
Total | 2,300 | |
Retail loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 324 |
Fiscal Year before Current Fiscal Year | 310 | 239 |
Two Years before Current Fiscal Year | 197 | 54 |
Three Years before Current Fiscal Year | 13 | 51 |
Four Years before Current Fiscal Year | 23 | 2,019 |
Prior | 51,803 | 70,237 |
Revolving | 26,591 | 28,033 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 78,937 | |
Total | 78,937 | 100,957 |
Retail loans | Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 75,176 | |
Total | 75,176 | 95,292 |
Retail loans | Single family residential | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 313 |
Fiscal Year before Current Fiscal Year | 303 | 211 |
Two Years before Current Fiscal Year | 178 | 0 |
Three Years before Current Fiscal Year | 0 | 32 |
Four Years before Current Fiscal Year | 23 | 2,008 |
Prior | 50,648 | 68,759 |
Revolving | 23,982 | 23,920 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 75,134 | |
Total | 95,243 | |
Retail loans | Single family residential | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 0 |
Fiscal Year before Current Fiscal Year | 0 | 0 |
Two Years before Current Fiscal Year | 0 | 0 |
Three Years before Current Fiscal Year | 0 | 0 |
Four Years before Current Fiscal Year | 0 | 0 |
Prior | 42 | 49 |
Revolving | 0 | 0 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | 42 | |
Total | 49 | |
Retail loans | Consumer | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Total | 3,761 | |
Total | 3,761 | 5,665 |
Retail loans | Consumer | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | 11 |
Fiscal Year before Current Fiscal Year | 7 | 28 |
Two Years before Current Fiscal Year | 19 | 49 |
Three Years before Current Fiscal Year | 13 | 19 |
Four Years before Current Fiscal Year | 0 | 11 |
Prior | 1,113 | 1,394 |
Revolving | 2,609 | 4,113 |
Revolving Converted to Term During the Period | 0 | 0 |
Total | $ 3,761 | |
Total | 5,625 | |
Retail loans | Consumer | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Current Fiscal Year | 0 | |
Fiscal Year before Current Fiscal Year | 0 | |
Two Years before Current Fiscal Year | 5 | |
Three Years before Current Fiscal Year | 0 | |
Four Years before Current Fiscal Year | 0 | |
Prior | 35 | |
Revolving | 0 | |
Revolving Converted to Term During the Period | 0 | |
Total | $ 40 |
Loans Held for Investment - Del
Loans Held for Investment - Delinquencies (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | $ 14,976,935 | |
Loans held for investment | 14,908,811 | $ 14,295,897 |
Fair value hedging relationships | (68,124) | (5,298) |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 14,935,678 | |
Loans held for investment | 14,276,402 | |
30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 1,484 | |
Loans held for investment | 1,395 | |
60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,535 | |
Loans held for investment | 0 | |
90+ | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 33,238 | |
Loans held for investment | 18,100 | |
Investor loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 9,387,045 | |
Loans held for investment | 9,387,045 | 8,987,628 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,771,272 | |
Loans held for investment | 2,771,272 | 2,771,137 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,199,581 | |
Loans held for investment | 6,199,581 | 5,891,934 |
Investor loans secured by real estate | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 373,194 | |
Loans held for investment | 373,194 | 277,640 |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 42,998 | |
Loans held for investment | 42,998 | 46,917 |
Investor loans secured by real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 9,364,102 | |
Loans held for investment | 8,975,806 | |
Investor loans secured by real estate | Current | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,754,403 | |
Loans held for investment | 2,760,882 | |
Investor loans secured by real estate | Current | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,193,507 | |
Loans held for investment | 5,890,704 | |
Investor loans secured by real estate | Current | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 373,194 | |
Loans held for investment | 277,640 | |
Investor loans secured by real estate | Current | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 42,998 | |
Loans held for investment | 46,580 | |
Investor loans secured by real estate | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 1,230 | |
Investor loans secured by real estate | 30-59 | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 30-59 | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 1,230 | |
Investor loans secured by real estate | 30-59 | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 30-59 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 60-89 | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 60-89 | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 60-89 | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 60-89 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 90+ | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 22,943 | |
Loans held for investment | 10,592 | |
Investor loans secured by real estate | 90+ | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 16,869 | |
Loans held for investment | 10,255 | |
Investor loans secured by real estate | 90+ | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,074 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 90+ | Construction and land | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Investor loans secured by real estate | 90+ | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 337 | |
Business loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,925,000 | |
Loans held for investment | 2,925,000 | 2,700,579 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 64,002 | |
Loans held for investment | 64,002 | 69,184 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,477,530 | |
Loans held for investment | 2,477,530 | 2,251,014 |
Business loans secured by real estate | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 383,468 | |
Loans held for investment | 383,468 | 380,381 |
Business loans secured by real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,912,424 | |
Loans held for investment | 2,695,186 | |
Business loans secured by real estate | Current | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 62,675 | |
Loans held for investment | 68,743 | |
Business loans secured by real estate | Current | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,466,281 | |
Loans held for investment | 2,246,062 | |
Business loans secured by real estate | Current | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 383,468 | |
Loans held for investment | 380,381 | |
Business loans secured by real estate | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 1,244 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 30-59 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 1,244 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 30-59 | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 30-59 | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,398 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 60-89 | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 60-89 | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 6,398 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 60-89 | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Business loans secured by real estate | 90+ | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 4,934 | |
Loans held for investment | 5,393 | |
Business loans secured by real estate | 90+ | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 83 | |
Loans held for investment | 441 | |
Business loans secured by real estate | 90+ | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 4,851 | |
Loans held for investment | 4,952 | |
Business loans secured by real estate | 90+ | Franchise real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,585,953 | |
Loans held for investment | 2,585,953 | 2,506,733 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,164,623 | |
Loans held for investment | 2,164,623 | 2,103,112 |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 409,773 | |
Loans held for investment | 409,773 | 392,576 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 11,557 | |
Loans held for investment | 11,557 | 11,045 |
Commercial loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,580,217 | |
Loans held for investment | 2,504,453 | |
Commercial loans | Current | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2,159,494 | |
Loans held for investment | 2,101,558 | |
Commercial loans | Current | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 409,773 | |
Loans held for investment | 392,576 | |
Commercial loans | Current | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 10,950 | |
Loans held for investment | 10,319 | |
Commercial loans | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 240 | |
Loans held for investment | 165 | |
Commercial loans | 30-59 | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 240 | |
Loans held for investment | 92 | |
Commercial loans | 30-59 | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Commercial loans | 30-59 | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 73 | |
Commercial loans | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 135 | |
Loans held for investment | 0 | |
Commercial loans | 60-89 | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 135 | |
Loans held for investment | 0 | |
Commercial loans | 60-89 | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Commercial loans | 60-89 | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Commercial loans | 90+ | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 5,361 | |
Loans held for investment | 2,115 | |
Commercial loans | 90+ | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 4,754 | |
Loans held for investment | 1,462 | |
Commercial loans | 90+ | Franchise non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Commercial loans | 90+ | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 607 | |
Loans held for investment | 653 | |
Retail loans | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 78,937 | |
Loans held for investment | 78,937 | 100,957 |
Retail loans | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 75,176 | |
Loans held for investment | 75,176 | 95,292 |
Retail loans | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 3,761 | |
Loans held for investment | 3,761 | 5,665 |
Retail loans | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 78,935 | |
Loans held for investment | 100,957 | |
Retail loans | Current | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 75,176 | |
Loans held for investment | 95,292 | |
Retail loans | Current | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 3,759 | |
Loans held for investment | 5,665 | |
Retail loans | 30-59 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 30-59 | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 30-59 | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 60-89 | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2 | |
Loans held for investment | 0 | |
Retail loans | 60-89 | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 60-89 | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 2 | |
Loans held for investment | 0 | |
Retail loans | 90+ | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 90+ | Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | 0 | |
Loans held for investment | 0 | |
Retail loans | 90+ | Consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment before basis adjustment | $ 0 | |
Loans held for investment | $ 0 |
Loans Held for Investment - Non
Loans Held for Investment - Nonaccrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | $ 49,210 | $ 18,858 |
Collateral Dependent Loans, ACL | 4,382 | 1,455 |
Non-Collateral Dependent Loans, Balance | 11,254 | 12,415 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 60,464 | 31,273 |
Nonaccrual Loans with No ACL | 42,328 | 23,657 |
Investor loans secured by real estate | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 32,403 | 11,192 |
Collateral Dependent Loans, ACL | 2,640 | 1,455 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 32,403 | 11,192 |
Nonaccrual Loans with No ACL | 16,009 | 3,577 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 23,050 | 10,255 |
Collateral Dependent Loans, ACL | 2,640 | 1,455 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 23,050 | 10,255 |
Nonaccrual Loans with No ACL | 6,656 | 2,640 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 8,806 | |
Collateral Dependent Loans, ACL | 0 | |
Non-Collateral Dependent Loans, Balance | 0 | |
Non-Collateral Dependent Loans, ACL | 0 | |
Total Nonaccrual Loans | 8,806 | |
Nonaccrual Loans with No ACL | 8,806 | |
Investor loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 547 | 937 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 547 | 937 |
Nonaccrual Loans with No ACL | 547 | 937 |
Business loans secured by real estate | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 11,446 | 5,541 |
Collateral Dependent Loans, ACL | 1,742 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 11,446 | 5,541 |
Nonaccrual Loans with No ACL | 9,704 | 5,541 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 197 | 589 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 197 | 589 |
Nonaccrual Loans with No ACL | 197 | 589 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 11,249 | 4,952 |
Collateral Dependent Loans, ACL | 1,742 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 11,249 | 4,952 |
Nonaccrual Loans with No ACL | 9,507 | 4,952 |
Commercial loans | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 5,361 | 2,115 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 11,254 | 12,415 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 16,615 | 14,530 |
Nonaccrual Loans with No ACL | 16,615 | 14,529 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 4,754 | 1,462 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 336 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 4,754 | 1,798 |
Nonaccrual Loans with No ACL | 4,754 | 1,797 |
Commercial loans | Franchise non-real estate secured | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 0 | 0 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 11,254 | 12,079 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 11,254 | 12,079 |
Nonaccrual Loans with No ACL | 11,254 | 12,079 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 607 | 653 |
Collateral Dependent Loans, ACL | 0 | 0 |
Non-Collateral Dependent Loans, Balance | 0 | 0 |
Non-Collateral Dependent Loans, ACL | 0 | 0 |
Total Nonaccrual Loans | 607 | 653 |
Nonaccrual Loans with No ACL | $ 607 | 653 |
Retail loans | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 10 | |
Collateral Dependent Loans, ACL | 0 | |
Non-Collateral Dependent Loans, Balance | 0 | |
Non-Collateral Dependent Loans, ACL | 0 | |
Total Nonaccrual Loans | 10 | |
Nonaccrual Loans with No ACL | 10 | |
Retail loans | Single family residential | ||
Financing Receivable, Nonaccrual [Line Items] | ||
Collateral Dependent Loans , Balance | 10 | |
Collateral Dependent Loans, ACL | 0 | |
Non-Collateral Dependent Loans, Balance | 0 | |
Non-Collateral Dependent Loans, ACL | 0 | |
Total Nonaccrual Loans | 10 | |
Nonaccrual Loans with No ACL | $ 10 |
Loans Held for Investment - Col
Loans Held for Investment - Collateral Dependent Loans by Collateral Type (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | $ 49,210 | $ 18,858 |
Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 10,951 | 148 |
Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 83 | 441 |
Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 475 | 513 |
Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 5,091 | 5,197 |
Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 547 | 10,679 |
Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 8,806 | |
Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 18,136 | |
Residential Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 10 | |
Business Assets | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 5,121 | 1,870 |
Investor loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 32,403 | 11,192 |
Investor loans secured by real estate | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 6,181 | 0 |
Investor loans secured by real estate | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 475 | 513 |
Investor loans secured by real estate | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 547 | 10,679 |
Investor loans secured by real estate | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 8,806 | |
Investor loans secured by real estate | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 16,394 | |
Investor loans secured by real estate | Residential Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Business Assets | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 23,050 | 10,255 |
Investor loans secured by real estate | CRE non-owner-occupied | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 6,181 | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 475 | 513 |
Investor loans secured by real estate | CRE non-owner-occupied | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | CRE non-owner-occupied | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 9,742 |
Investor loans secured by real estate | CRE non-owner-occupied | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | CRE non-owner-occupied | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 16,394 | |
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 | 0 |
Investor loans secured by real estate | Multifamily | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 8,806 | |
Investor loans secured by real estate | Multifamily | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 8,806 | |
Investor loans secured by real estate | Multifamily | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | Multifamily | 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 | 547 | 937 |
Investor loans secured by real estate | SBA secured by real estate | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | SBA secured by real estate | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | SBA secured by real estate | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | SBA secured by real estate | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Investor loans secured by real estate | SBA secured by real estate | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 547 | 937 |
Investor loans secured by real estate | SBA secured by real estate | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Investor loans secured by real estate | SBA secured by real estate | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
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 | 0 |
Business loans secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 11,446 | 5,541 |
Business loans secured by real estate | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 4,770 | 148 |
Business loans secured by real estate | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 83 | 441 |
Business loans secured by real estate | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 4,851 | 4,952 |
Business loans secured by real estate | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Business loans secured by real estate | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 1,742 | |
Business loans secured by real estate | Residential Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Business loans secured by real estate | Business Assets | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | SBA secured by real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 197 | 589 |
Business loans secured by real estate | SBA secured by real estate | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 114 | 148 |
Business loans secured by real estate | SBA secured by real estate | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 83 | 441 |
Business loans secured by real estate | SBA secured by real estate | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | SBA secured by real estate | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | SBA secured by real estate | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | SBA secured by real estate | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Business loans secured by real estate | SBA secured by real estate | Other CRE 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 | 0 | |
Business loans secured by real estate | SBA secured by real estate | Business Assets | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | CRE owner-occupied | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 11,249 | 4,952 |
Business loans secured by real estate | CRE owner-occupied | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 4,656 | 0 |
Business loans secured by real estate | CRE owner-occupied | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | CRE owner-occupied | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | CRE owner-occupied | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 4,851 | 4,952 |
Business loans secured by real estate | CRE owner-occupied | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Business loans secured by real estate | CRE owner-occupied | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Business loans secured by real estate | CRE owner-occupied | Other CRE Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 1,742 | |
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 | 0 |
Commercial loans | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 5,361 | 2,115 |
Commercial loans | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 240 | 245 |
Commercial loans | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Commercial loans | Other CRE 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 | 5,121 | 1,870 |
Commercial loans | Commercial and industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 4,754 | 1,462 |
Commercial loans | Commercial and industrial | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Commercial and industrial | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Commercial and industrial | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Commercial and industrial | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 240 | 245 |
Commercial loans | Commercial and industrial | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | Commercial and industrial | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Commercial loans | Commercial and industrial | Other CRE 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 | 4,514 | 1,217 |
Commercial loans | SBA non-real estate secured | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 607 | 653 |
Commercial loans | SBA non-real estate secured | Office Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | SBA non-real estate secured | Industrial Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | SBA non-real estate secured | Retail Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | SBA non-real estate secured | Land Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | SBA non-real estate secured | Hotel Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | 0 |
Commercial loans | SBA non-real estate secured | Multifamily Properties | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 0 | |
Commercial loans | SBA non-real estate secured | Other CRE 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 | $ 607 | 653 |
Retail loans | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | 10 | |
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 | 10 | |
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 | 10 | |
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 | 10 | |
Retail loans | Single family residential | Business Assets | ||
Financing Receivable, Past Due [Line Items] | ||
Collateral dependent loans | $ 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, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | $ 196,075 | $ 232,774 | $ 197,752 | $ 268,018 |
Charge-offs | (1,318) | (2,640) | (9,448) | (7,882) |
Recoveries | 246 | 890 | 2,685 | 3,704 |
Provision for Credit Losses | 546 | (19,543) | 4,560 | (52,359) |
Ending ACL Balance | 195,549 | 211,481 | 195,549 | 211,481 |
Investor loans secured by real estate | CRE non-owner-occupied | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 37,221 | 47,112 | 37,380 | 49,176 |
Charge-offs | (1,128) | 0 | (1,128) | (154) |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | 1,011 | (4,645) | 852 | (6,555) |
Ending ACL Balance | 37,104 | 42,467 | 37,104 | 42,467 |
Investor loans secured by real estate | Multifamily | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 56,293 | 59,059 | 55,209 | 62,534 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | (207) | (6,895) | 877 | (10,370) |
Ending ACL Balance | 56,086 | 52,164 | 56,086 | 52,164 |
Investor loans secured by real estate | Construction and land | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 5,436 | 9,548 | 5,211 | 12,435 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | 1,004 | (1,531) | 1,229 | (4,418) |
Ending ACL Balance | 6,440 | 8,017 | 6,440 | 8,017 |
Investor loans secured by real estate | SBA secured by real estate | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 2,865 | 4,681 | 3,201 | 5,159 |
Charge-offs | 0 | (158) | (70) | (423) |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | 90 | (644) | (176) | (857) |
Ending ACL Balance | 2,955 | 3,879 | 2,955 | 3,879 |
Business loans secured by real estate | SBA secured by real estate | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 5,149 | 6,317 | 4,866 | 6,567 |
Charge-offs | 0 | 0 | 0 | (98) |
Recoveries | 0 | 50 | 0 | 130 |
Provision for Credit Losses | (364) | (1,263) | (81) | (1,495) |
Ending ACL Balance | 4,785 | 5,104 | 4,785 | 5,104 |
Business loans secured by real estate | CRE owner-occupied | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 31,461 | 35,747 | 29,575 | 50,517 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 19 | 14 | 33 | 44 |
Provision for Credit Losses | 346 | (2,082) | 2,218 | (16,882) |
Ending ACL Balance | 31,826 | 33,679 | 31,826 | 33,679 |
Business loans secured by real estate | Franchise real estate secured | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 6,530 | 11,436 | 7,985 | 11,451 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | 180 | (1,810) | (1,275) | (1,825) |
Ending ACL Balance | 6,710 | 9,626 | 6,710 | 9,626 |
Commercial loans | Commercial and industrial | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 37,048 | 39,879 | 38,136 | 46,964 |
Charge-offs | (190) | (84) | (7,750) | (4,653) |
Recoveries | 143 | 729 | 2,517 | 3,428 |
Provision for Credit Losses | (1,503) | (2,929) | 2,595 | (8,144) |
Ending ACL Balance | 35,498 | 37,595 | 35,498 | 37,595 |
Commercial loans | Franchise non-real estate secured | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 13,124 | 17,313 | 15,084 | 20,525 |
Charge-offs | 0 | (2,398) | (448) | (2,554) |
Recoveries | 0 | 80 | 0 | 80 |
Provision for Credit Losses | 70 | 2,523 | (1,442) | (533) |
Ending ACL Balance | 13,194 | 17,518 | 13,194 | 17,518 |
Commercial loans | SBA non-real estate secured | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 452 | 730 | 565 | 995 |
Charge-offs | 0 | 0 | (50) | 0 |
Recoveries | 26 | 15 | 44 | 19 |
Provision for Credit Losses | (38) | (113) | (119) | (382) |
Ending ACL Balance | 440 | 632 | 440 | 632 |
Retail loans | Single family residential | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 278 | 670 | 255 | 1,204 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 58 | 2 | 91 | 3 |
Provision for Credit Losses | (40) | (143) | (50) | (678) |
Ending ACL Balance | 296 | 529 | 296 | 529 |
Retail loans | Consumer | ||||
Allocation of allowance as well as the activity in allowance | ||||
Beginning ACL Balance | 218 | 282 | 285 | 491 |
Charge-offs | 0 | 0 | (2) | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Credit Losses | (3) | (11) | (68) | (220) |
Ending ACL Balance | $ 215 | $ 271 | $ 215 | $ 271 |
Allowance for Credit Losses - N
Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | |
Provision for Loan and Lease Losses [Abstract] | ||||||
Increase (decrease) in ACL during period | $ (526) | $ (21,300) | $ (2,200) | $ (56,500) | ||
Net charge-offs | 1,100 | 1,800 | 6,800 | 4,200 | ||
Provision for Credit Losses | 546 | $ (19,543) | 4,560 | $ (52,359) | ||
Allowance for off-balance sheet commitments | 24,700 | 24,700 | $ 24,100 | $ 27,400 | ||
Provision for credit losses for off-balance sheet commitments | $ 549 | $ 2,600 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||||
Goodwill | $ 901,312 | $ 901,312 | $ 901,312 | $ 898,569 | |
Purchase accounting adjustments to goodwill | 0 | 2,743 | |||
Net intangible assets | $ 59,028 | 73,451 | $ 62,500 | 69,600 | |
Estimated amortization expense for remainder of fiscal year | 14,000 | ||||
Estimated amortization expense for 2023 | 12,300 | ||||
Estimated amortization expense for 2024 | 11,100 | ||||
Estimated amortization expense for 2025 | 10,000 | ||||
Estimated amortization expense for 2026 | 8,900 | ||||
Minimum | |||||
Goodwill [Line Items] | |||||
Weighted average useful life (in years) | 6 years | ||||
Maximum | |||||
Goodwill [Line Items] | |||||
Weighted average useful life (in years) | 11 years | ||||
Core Deposits | |||||
Goodwill [Line Items] | |||||
Net intangible assets | $ 56,600 | 66,900 | |||
Core Deposits | Minimum | |||||
Goodwill [Line Items] | |||||
Weighted average useful life (in years) | 6 years | ||||
Core Deposits | Maximum | |||||
Goodwill [Line Items] | |||||
Weighted average useful life (in years) | 11 years | ||||
Customer Relationships | |||||
Goodwill [Line Items] | |||||
Net intangible assets | $ 2,400 | $ 2,700 | |||
Opus Bank | |||||
Goodwill [Line Items] | |||||
Purchase accounting adjustments to goodwill | $ 2,700 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Goodwill Roll Forward (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 901,312 | $ 898,569 |
Purchase accounting adjustments | 0 | 2,743 |
Ending balance | 901,312 | 901,312 |
Accumulated impairment losses at end of period | $ 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, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Gross amount of intangible assets: | ||||||
Beginning balance | $ 145,212 | $ 145,212 | $ 145,212 | $ 145,212 | $ 145,212 | |
Additions due to acquisitions | 0 | 0 | 0 | 0 | 0 | |
Ending balance | 145,212 | 145,212 | 145,212 | 145,212 | 145,212 | |
Accumulated amortization: | ||||||
Beginning balance | (82,712) | (79,234) | (67,849) | (75,641) | (59,705) | |
Amortization | (3,472) | (3,478) | (3,912) | (10,543) | (12,056) | |
Ending balance | (86,184) | (82,712) | (71,761) | (86,184) | (71,761) | |
Net intangible assets | $ 59,028 | $ 62,500 | $ 73,451 | $ 59,028 | $ 73,451 | $ 69,600 |
Subordinated Debentures - Narra
Subordinated Debentures - Narrative (Details) $ in Thousands | Sep. 30, 2022 USD ($) note | Dec. 31, 2021 USD ($) |
Debt Instrument [Line Items] | ||
Subordinated debentures | $ 331,045 | $ 330,567 |
Subordinated notes | ||
Debt Instrument [Line Items] | ||
Number of notes/securities | note | 3 | |
Subordinated debentures | $ 331,045 | $ 330,567 |
Weighted interest rate (as a percent) | 5.32% | 5.33% |
Subordinated Debentures - Summa
Subordinated Debentures - Summary (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Carrying Value | $ 331,045,000 | $ 330,567,000 |
Subordinated notes | ||
Debt Instrument [Line Items] | ||
Face amount of debt instrument | 335,000,000 | |
Carrying Value | $ 331,045,000 | 330,567,000 |
Subordinated notes | Subordinated notes due 2024, 5.75% per annum | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 5.75% | |
Current Interest Rate (as a percent) | 5.75% | |
Face amount of debt instrument | $ 60,000,000 | |
Carrying Value | $ 59,761,000 | 59,671,000 |
Subordinated notes | Subordinated notes due 2029, 4.875% per annum until May 15, 2024, 3-month LIBOR +2.5% thereafter | ||
Debt Instrument [Line Items] | ||
Fixed interest rate (as a percent) | 4.875% | |
Current Interest Rate (as a percent) | 4.875% | |
Face amount of debt instrument | $ 125,000,000 | |
Carrying Value | $ 123,323,000 | 123,132,000 |
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 (as a percent) | 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] | ||
Fixed interest rate (as a percent) | 5.375% | |
Current Interest Rate (as a percent) | 5.375% | |
Face amount of debt instrument | $ 150,000,000 | |
Carrying Value | $ 147,961,000 | $ 147,764,000 |
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 (as a percent) | 5.17% |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Basic | |||||
Net income | $ 73,363 | $ 69,803 | $ 90,088 | $ 210,070 | $ 255,058 |
Less: dividends and undistributed earnings allocated to participating securities | (917) | (867) | (937) | (2,467) | (2,641) |
Net income allocated to common stockholders | $ 72,446 | $ 68,936 | $ 89,151 | $ 207,603 | $ 252,417 |
Weighted average common shares outstanding (in shares) | 93,793,502 | 93,765,264 | 93,549,639 | 93,687,230 | 93,571,468 |
Basic earnings per common share (in dollars per share) | $ 0.77 | $ 0.74 | $ 0.95 | $ 2.22 | $ 2.70 |
Diluted | |||||
Net income allocated to common stockholders | $ 72,446 | $ 68,936 | $ 89,151 | $ 207,603 | $ 252,417 |
Weighted average common shares outstanding (in shares) | 93,793,502 | 93,765,264 | 93,549,639 | 93,687,230 | 93,571,468 |
Dilutive effect of share-based compensation (in shares) | 327,135 | 275,427 | 511,085 | 367,886 | 518,939 |
Weighted average diluted common shares (in shares) | 94,120,637 | 94,040,691 | 94,060,724 | 94,055,116 | 94,090,407 |
Diluted earnings per common share (in dollars per share) | $ 0.77 | $ 0.73 | $ 0.95 | $ 2.21 | $ 2.68 |
Weighted-average shares of anti-dilutive RSUs excluded from diluted EPS computation | 0 | 0 | 0 | 0 | 0 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Hierarchy Table on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Financial assets | ||
Investment securities available-for-sale, at fair value | $ 2,661,079 | $ 4,273,864 |
Total derivative assets | 83,860 | 11,989 |
Financial liabilities | ||
Total derivative liabilities | 12,773 | 5,263 |
U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 46,774 | 57,866 |
Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 430,863 | 432,135 |
Corporate debt | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 555,750 | 453,861 |
Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,089,913 | |
Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 791,115 | 676,643 |
Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 836,577 | 1,563,446 |
Level 1 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Equity securities with readily determinable fair values | 1,035 | |
Total derivative assets | 15 | 0 |
Financial liabilities | ||
Total derivative liabilities | 7 | 0 |
Level 2 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 0 | |
Total derivative assets | 8,033 | 10,100 |
Financial liabilities | ||
Total derivative liabilities | 12,766 | 5,263 |
Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Equity securities with readily determinable fair values | 0 | |
Total derivative assets | 1,911 | 1,889 |
Financial liabilities | ||
Total derivative liabilities | 0 | 0 |
Recurring | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 1,035 | |
Total derivative assets | 9,959 | 11,989 |
Financial liabilities | ||
Total derivative liabilities | 12,773 | |
Recurring | Foreign exchange contracts | ||
Financial assets | ||
Total derivative assets | 15 | |
Financial liabilities | ||
Total derivative liabilities | 7 | |
Recurring | Interest rate swaps contracts | ||
Financial assets | ||
Total derivative assets | 8,033 | 10,100 |
Financial liabilities | ||
Total derivative liabilities | 12,766 | 5,263 |
Recurring | Equity warrants | ||
Financial assets | ||
Total derivative assets | 1,911 | 1,889 |
Recurring | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 46,774 | 57,866 |
Recurring | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 430,863 | 432,135 |
Recurring | Corporate debt | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 555,750 | 453,861 |
Recurring | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,089,913 | |
Recurring | Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 791,115 | 676,643 |
Recurring | Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 836,577 | 1,563,446 |
Recurring | Level 1 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Equity securities with readily determinable fair values | 1,035 | |
Total derivative assets | 15 | 0 |
Financial liabilities | ||
Total derivative liabilities | 7 | |
Recurring | Level 1 | Foreign exchange contracts | ||
Financial assets | ||
Total derivative assets | 15 | |
Financial liabilities | ||
Total derivative liabilities | 7 | |
Recurring | Level 1 | Interest rate swaps contracts | ||
Financial assets | ||
Total derivative assets | 0 | 0 |
Financial liabilities | ||
Total derivative liabilities | 0 | 0 |
Recurring | Level 1 | Equity warrants | ||
Financial assets | ||
Total derivative assets | 0 | 0 |
Recurring | Level 1 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Recurring | Level 1 | Corporate debt | ||
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 | |
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 | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 0 | |
Total derivative assets | 8,033 | 10,100 |
Financial liabilities | ||
Total derivative liabilities | 12,766 | |
Recurring | Level 2 | Foreign exchange contracts | ||
Financial assets | ||
Total derivative assets | 0 | |
Financial liabilities | ||
Total derivative liabilities | 0 | |
Recurring | Level 2 | Interest rate swaps contracts | ||
Financial assets | ||
Total derivative assets | 8,033 | 10,100 |
Financial liabilities | ||
Total derivative liabilities | 12,766 | 5,263 |
Recurring | Level 2 | Equity warrants | ||
Financial assets | ||
Total derivative assets | 0 | 0 |
Recurring | Level 2 | U.S. Treasury | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 46,774 | 57,866 |
Recurring | Level 2 | Agency | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 430,863 | 432,135 |
Recurring | Level 2 | Corporate debt | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 555,750 | 453,861 |
Recurring | Level 2 | Municipal bonds | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 1,089,913 | |
Recurring | Level 2 | Collateralized mortgage obligations | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 791,115 | 676,643 |
Recurring | Level 2 | Mortgage-backed securities | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 836,577 | 1,563,446 |
Recurring | Level 3 | ||
Financial assets | ||
Investment securities available-for-sale, at fair value | 0 | 0 |
Equity securities with readily determinable fair values | 0 | |
Total derivative assets | 1,911 | 1,889 |
Financial liabilities | ||
Total derivative liabilities | 0 | |
Recurring | Level 3 | Foreign exchange contracts | ||
Financial assets | ||
Total derivative assets | 0 | |
Financial liabilities | ||
Total derivative liabilities | 0 | |
Recurring | Level 3 | Interest rate swaps contracts | ||
Financial assets | ||
Total derivative assets | 0 | 0 |
Financial liabilities | ||
Total derivative liabilities | 0 | 0 |
Recurring | Level 3 | Equity warrants | ||
Financial assets | ||
Total derivative assets | 1,911 | 1,889 |
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 debt | ||
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 | |
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, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||||
Beginning balance | $ 1,906 | $ 1,908 | $ 1,903 | $ 1,889 | $ 1,914 |
Change in fair value | 5 | (2) | (8) | 22 | (19) |
Ending balance | $ 1,911 | $ 1,906 | $ 1,895 | $ 1,911 | $ 1,895 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Quantitative Information for Level 3 Fair Value Measurements (Details) $ in Thousands | Sep. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 14,207,668 | $ 14,392,684 |
Recurring | Level 3 | Black-Scholes option pricing model | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants | $ 1,911 | $ 1,889 |
Recurring | Level 3 | Black-Scholes option pricing model | Volatility | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.3000 | 0.3000 |
Recurring | Level 3 | Black-Scholes option pricing model | Volatility | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.3500 | 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 | 0.3117 | 0.3114 |
Recurring | Level 3 | Black-Scholes option pricing model | Risk free interest rate | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0392 | 0.0039 |
Recurring | Level 3 | Black-Scholes option pricing model | Risk free interest rate | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0425 | 0.0097 |
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 | 0.0400 | 0.0052 |
Recurring | Level 3 | Black-Scholes option pricing model | Marketability Discount | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.0550 | 0.0600 |
Recurring | Level 3 | Black-Scholes option pricing model | Marketability Discount | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Equity warrants, input | 0.1600 | 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 | 0.1355 | 0.1361 |
Nonrecurring | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | $ 18,268 | $ 937 |
Nonrecurring | Level 3 | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, fair value | 18,268 | 937 |
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 | $ 13,754 | |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | Collateral discount and cost to sell | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0700 | |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | CRE non-owner-occupied | Collateral discount and cost to sell | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0700 | |
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 | 0.0700 | |
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 | $ 937 | |
Nonrecurring | Level 3 | Fair value of collateral | Investor loans secured by real estate | SBA secured by real estate | Collateral discount and cost to sell | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 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 | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 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 | |
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 | $ 4,514 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | Collateral discount and cost to sell | Minimum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0600 | |
Nonrecurring | Level 3 | Fair value of collateral | Commercial loans | Commercial and industrial | Collateral discount and cost to sell | Maximum | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Loans receivable, input | 0.0600 | |
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 | 0.0600 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Narrative (Details) - Discount Rate | Sep. 30, 2022 |
Minimum | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Other real estate owned, input | 0.07 |
Maximum | |
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 Nonrecurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
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 | 14,207,668 | 14,392,684 |
Nonrecurring | ||
Fair Value Disclosures | ||
Collateral dependent loans/Impaired loans | 18,268 | 937 |
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 | $ 18,268 | $ 937 |
Fair Value of Financial Instr_8
Fair Value of Financial Instruments - Fair Value Estimates (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Assets | ||
Investment securities held-to-maturity | $ 1,055,187 | $ 384,423 |
Investment securities available-for-sale | 2,661,079 | 4,273,864 |
Derivative Assets | 83,860 | 11,989 |
Accrued interest receivable | 66,192 | 65,728 |
Liabilities | ||
Derivative Liabilities | 12,773 | 5,263 |
Level 1 | ||
Assets | ||
Cash and cash equivalents | 739,211 | 304,703 |
Investment securities held-to-maturity | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Equity securities with readily determinable fair values | 1,035 | |
Loans held for sale | 0 | 0 |
Loans held for investment, net | 0 | 0 |
Derivative Assets | 15 | 0 |
Accrued interest receivable | 0 | 65,728 |
Liabilities | ||
Deposit accounts | 0 | 16,057,316 |
FHLB advances | 0 | 0 |
Other borrowings | 0 | |
Subordinated debentures | 0 | 0 |
Derivative Liabilities | 7 | 0 |
Accrued interest payable | 0 | 2,366 |
Level 1 | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | 1,733 | 2,216 |
Level 2 | ||
Assets | ||
Cash and cash equivalents | 0 | 0 |
Investment securities held-to-maturity | 1,055,187 | 384,423 |
Investment securities available-for-sale | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 0 | |
Loans held for sale | 2,261 | 11,959 |
Loans held for investment, net | 0 | 0 |
Derivative Assets | 8,033 | 10,100 |
Accrued interest receivable | 66,192 | 0 |
Liabilities | ||
Deposit accounts | 17,724,242 | 1,058,822 |
FHLB advances | 582,313 | 550,093 |
Other borrowings | 8,000 | |
Subordinated debentures | 330,742 | 350,359 |
Derivative Liabilities | 12,766 | 5,263 |
Accrued interest payable | 8,785 | 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 |
Investment securities held-to-maturity | 0 | 0 |
Investment securities available-for-sale | 0 | 0 |
Equity securities with readily determinable fair values | 0 | |
Loans held for sale | 0 | 0 |
Loans held for investment, net | 14,207,668 | 14,392,684 |
Derivative Assets | 1,911 | 1,889 |
Accrued interest receivable | 0 | 0 |
Liabilities | ||
Deposit accounts | 0 | 0 |
FHLB advances | 0 | 0 |
Other borrowings | 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 | 739,211 | 304,703 |
Investment securities held-to-maturity | 1,385,502 | 381,674 |
Investment securities available-for-sale | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 1,035 | |
Loans held for sale | 2,163 | 10,869 |
Loans held for investment, net | 14,908,811 | 14,295,897 |
Derivative Assets | 9,959 | 11,989 |
Accrued interest receivable | 66,192 | 65,728 |
Liabilities | ||
Deposit accounts | 17,746,374 | 17,115,589 |
FHLB advances | 600,000 | 550,000 |
Other borrowings | 8,000 | |
Subordinated debentures | 331,045 | 330,567 |
Derivative Liabilities | 12,773 | 5,263 |
Accrued interest payable | 8,785 | 2,366 |
Carrying Amount | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | 1,733 | 2,216 |
Estimated Fair Value | ||
Assets | ||
Cash and cash equivalents | 739,211 | 304,703 |
Investment securities held-to-maturity | 1,055,187 | 384,423 |
Investment securities available-for-sale | 2,661,079 | 4,273,864 |
Equity securities with readily determinable fair values | 1,035 | |
Loans held for sale | 2,261 | 11,959 |
Loans held for investment, net | 14,207,668 | 14,392,684 |
Derivative Assets | 9,959 | 11,989 |
Accrued interest receivable | 66,192 | 65,728 |
Liabilities | ||
Deposit accounts | 17,724,242 | 17,116,138 |
FHLB advances | 582,313 | 550,093 |
Other borrowings | 8,000 | |
Subordinated debentures | 330,742 | 350,359 |
Derivative Liabilities | 12,773 | 5,263 |
Accrued interest payable | 8,785 | 2,366 |
Estimated Fair Value | Interest-bearing time deposits with financial institutions | ||
Assets | ||
Cash and cash equivalents | $ 1,733 | $ 2,216 |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Derivative assets, notional | $ 1,314,467 | $ 1,232,056 |
Derivative assets | 83,860 | 11,989 |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,100,000 |
Derivative assets | 69,169 | 4,874 |
Designated as Hedging Instrument | Interest rate swaps contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,200,000 |
Not Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Derivative assets, notional | 114,467 | 132,056 |
Derivative assets | 14,691 | 7,115 |
Not Designated as Hedging Instruments | Interest rate swaps contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 113,632 | 132,056 |
Derivative assets | 12,765 | 5,226 |
Not Designated as Hedging Instruments | Equity warrants | ||
Derivative [Line Items] | ||
Derivative assets, notional | 0 | 0 |
Derivative assets | 1,911 | $ 1,889 |
Not Designated as Hedging Instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 835 | |
Derivative assets | $ 15 |
Derivative Instruments - Cumula
Derivative Instruments - Cumulative Basis Adjustment for Fair Value Hedges (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 1,131,876 | $ 1,194,702 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | (68,124) | (5,298) |
Derivative assets, notional | 1,314,467 | 1,232,056 |
Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,100,000 |
Designated as Hedging Instrument | Interest rate swaps contracts | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,200,000 |
Loans held for investment | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Carrying Amount of the Hedged Assets | 1,131,876 | 1,194,702 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | (68,124) | (5,298) |
Loans held for investment | Designated as Hedging Instrument | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amortized Cost used in hedging relationships | 3,240,000 | 3,610,000 |
Cumulative basis adjustments associated with hedging relationships | $ (68,100) | $ (5,300) |
Derivative Instruments - Summar
Derivative Instruments - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative [Line Items] | ||
Derivative assets, notional | $ 1,314,467 | $ 1,232,056 |
Derivative Assets | 83,860 | 11,989 |
Derivative asset, netting adjustments - cleared positions | 73,901 | |
Derivative asset, net derivatives in the balance sheet | 9,959 | |
Derivative liabilities, notional | 114,160 | 232,056 |
Derivative Liabilities | 12,773 | 5,263 |
Derivative liabilities netting adjustments - cleared positions | 0 | |
Derivative liabilities, net derivatives in the balance sheet | 12,773 | |
Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,100,000 |
Derivative Assets | 69,169 | 4,874 |
Derivative liabilities, notional | 0 | 100,000 |
Derivative Liabilities | 0 | 33 |
Designated as Hedging Instrument | Fair value hedge - interest rate swap contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,100,000 |
Derivative Assets | 69,169 | 4,874 |
Derivative liabilities, notional | 0 | 100,000 |
Derivative Liabilities | 0 | 33 |
Designated as Hedging Instrument | Interest rate swaps contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 1,200,000 | 1,200,000 |
Not Designated as Hedging Instruments | ||
Derivative [Line Items] | ||
Derivative assets, notional | 114,467 | 132,056 |
Derivative Assets | 14,691 | 7,115 |
Derivative liabilities, notional | 114,160 | 132,056 |
Derivative Liabilities | 12,773 | 5,230 |
Not Designated as Hedging Instruments | Foreign exchange contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 835 | |
Derivative Assets | 15 | |
Derivative liabilities, notional | 528 | |
Derivative Liabilities | 7 | |
Not Designated as Hedging Instruments | Interest rate swaps contracts | ||
Derivative [Line Items] | ||
Derivative assets, notional | 113,632 | 132,056 |
Derivative Assets | 12,765 | 5,226 |
Derivative liabilities, notional | 113,632 | 132,056 |
Derivative Liabilities | 12,766 | 5,230 |
Not Designated as Hedging Instruments | Equity warrants | ||
Derivative [Line Items] | ||
Derivative assets, notional | 0 | 0 |
Derivative Assets | 1,911 | 1,889 |
Derivative liabilities, notional | 0 | 0 |
Derivative Liabilities | $ 0 | $ 0 |
Derivative Instruments - The Ef
Derivative Instruments - The Effect of Fair Value Hedge Accounting on the Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Gain (loss) on fair value hedging relationships: | |||||
Derivatives designated as hedging instruments | $ 147 | $ 77 | $ 15 | $ 290 | $ 22 |
Interest Income | |||||
Gain (loss) on fair value hedging relationships: | |||||
Hedged items | (17,037) | (11,866) | (1,027) | (62,826) | (1,027) |
Derivatives designated as hedging instruments | 21,582 | 12,082 | 932 | 65,921 | 932 |
Other income | Foreign exchange contracts | |||||
Gain (loss) on fair value hedging relationships: | |||||
Derivatives designated as hedging instruments | 141 | 77 | 22 | 264 | 32 |
Other income | Interest rate products | |||||
Gain (loss) on fair value hedging relationships: | |||||
Derivatives designated as hedging instruments | 1 | 2 | 1 | 4 | 9 |
Other income | Equity warrants | |||||
Gain (loss) on fair value hedging relationships: | |||||
Derivatives designated as hedging instruments | $ 5 | $ (2) | $ (8) | $ 22 | $ (19) |
Balance Sheet Offsetting (Detai
Balance Sheet Offsetting (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivative assets: | ||
Gross Amounts Recognized | $ 8,033 | $ 10,100 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 8,033 | 10,100 |
Financial Instruments | 0 | 0 |
Cash Collateral | (3,990) | 0 |
Net Amount | 4,043 | 10,100 |
Derivative liabilities: | ||
Gross Amounts Recognized | 12,766 | 5,263 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 12,766 | 5,263 |
Financial Instruments | 0 | (4,377) |
Cash Collateral | 0 | (886) |
Net Amount | 12,766 | 0 |
Interest rate swaps contracts | ||
Derivative assets: | ||
Gross Amounts Recognized | 8,033 | 10,100 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 8,033 | 10,100 |
Financial Instruments | 0 | 0 |
Cash Collateral | (3,990) | 0 |
Net Amount | 4,043 | 10,100 |
Derivative liabilities: | ||
Gross Amounts Recognized | 12,766 | 5,263 |
Gross Amounts Offset in the Consolidated Statements of Financial Condition | 0 | 0 |
Net Amounts Presented in the Consolidated Statements of Financial Condition | 12,766 | 5,263 |
Financial Instruments | 0 | (4,377) |
Cash Collateral | 0 | (886) |
Net Amount | $ 12,766 | $ 0 |
Leases - Components of Lease Ex
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | |||||
Operating lease | $ 4,603 | $ 4,614 | $ 4,826 | $ 13,955 | $ 14,725 |
Short-term lease | 495 | 388 | 433 | 1,373 | 1,263 |
Total lease expense | $ 5,098 | $ 5,002 | $ 5,259 | $ 15,328 | $ 15,988 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Operating lease right-of-use assets | $ 54,062 | $ 64,009 | |
Operating lease liabilities | 61,852 | $ 72,541 | |
Operating cash outflow from operating leases | $ 15,024 | $ 15,512 | |
Operating lease right-of-use asset, statement of financial position [Extensible List] | Other assets | Other assets | |
Operating lease liability, statement of financial position [Extensible List] | Accrued expenses and other liabilities | Accrued expenses and other liabilities |
Leases - Minimum Contractual Le
Leases - Minimum Contractual Lease Payments and Other Information (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Operating leases | ||
2022 | $ 4,954 | |
2023 | 19,383 | |
2024 | 17,368 | |
2025 | 11,657 | |
2026 | 5,996 | |
Thereafter | 9,619 | |
Total | 68,977 | |
Short-term leases | ||
2022 | 53 | |
2023 | 40 | |
2024 | 0 | |
2025 | 0 | |
2026 | 0 | |
Thereafter | 0 | |
Total | 93 | |
Total contractual base rents | ||
2022 | 5,007 | |
2023 | 19,423 | |
2024 | 17,368 | |
2025 | 11,657 | |
2026 | 5,996 | |
Thereafter | 9,619 | |
Total | 69,070 | |
Total liability to make lease payments | 61,852 | $ 72,541 |
Difference in undiscounted and discounted future lease payments | $ 7,125 | |
Weighted average discount rate | 5.07% | |
Weighted average remaining lease term (years) | 4 years 3 months 18 days |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Leases [Abstract] | |||||
Rental income | $ 77 | $ 86 | $ 176 | $ 288 | $ 528 |
Variable Interest Entities - Su
Variable Interest Entities - Summary (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Investment securities available-for-sale | $ 2,661,079 | $ 4,273,864 |
Accrued expenses and other liabilities | 206,386 | 203,962 |
Other assets | 257,041 | 260,204 |
Assets | 21,619,201 | 21,094,429 |
Liabilities | 18,883,805 | 18,208,118 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | 169,118 | 200,769 |
Assets | 133,726 | 167,097 |
Liabilities | 15,847 | 17,567 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Asset | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | 57,525 | 81,103 |
Investment securities available-for-sale | 57,525 | 81,103 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | 50,901 | 50,901 |
Accrued expenses and other liabilities | 338 | 338 |
Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Partnership, Asset | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | 60,692 | 68,765 |
Other assets | 76,201 | 85,994 |
Variable Interest Entity, Not Primary Beneficiary | Affordable Housing Partnership, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | 0 | 0 |
Accrued expenses and other liabilities | $ 15,509 | $ 17,229 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Variable Interest Entity [Line Items] | ||
Accrued liabilities and other liabilities | $ 206,386 | $ 203,962 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Maximum Loss | $ 169,118 | 200,769 |
Variable Interest Entity, Not Primary Beneficiary | Multifamily Loan Securitization, Liability | ||
Variable Interest Entity [Line Items] | ||
Maximum loss, percentage of loans | 10% | |
Maximum Loss | $ 50,901 | 50,901 |
Accrued liabilities and other liabilities | $ 338 | $ 338 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | 3 Months Ended | 9 Months Ended | |||
Oct. 19, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Subsequent Event [Line Items] | |||||
Cash dividends declared (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.99 | $ 0.96 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Cash dividends declared (in dollars per share) | $ 0.33 |