Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Jul. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HERITAGE COMMERCE CORP | |
Entity Central Index Key | 1,053,352 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 32,295,563 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q2 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and due from banks | $ 30,820 | $ 24,112 |
Interest-bearing deposits in other financial institutions | 128,024 | 319,980 |
Total cash and cash equivalents | 158,844 | 344,092 |
Securities available-for-sale, at fair value | 390,435 | 385,079 |
Securities held-to-maturity, at amortized cost (fair value of $214,624 at June 30, 2016 and $109,821 at December 31, 2015) | 210,170 | 109,311 |
Loans held-for-sale - SBA, at lower of cost or fair value, including deferred costs | 4,879 | 7,297 |
Loans, net of deferred fees | 1,464,114 | 1,358,716 |
Allowance for loan losses | (19,921) | (18,926) |
Loans, net | 1,444,193 | 1,339,790 |
Federal Home Loan Bank and Federal Reserve Bank stock and other investments, at cost | 15,190 | 12,694 |
Company owned life insurance | 58,765 | 60,021 |
Premises and equipment, net | 7,542 | 7,773 |
Goodwill | 45,664 | 45,664 |
Other intangible assets | 7,734 | 8,518 |
Accrued interest receivable and other assets | 34,876 | 41,340 |
Total assets | 2,378,292 | 2,361,579 |
Deposits: | ||
Demand, noninterest-bearing | 834,590 | 821,405 |
Demand, interest-bearing | 499,512 | 496,278 |
Savings and money market | 480,677 | 496,843 |
Time deposits-under $250 | 60,761 | 62,026 |
Time deposits-$250 and over | 182,591 | 160,815 |
Time deposits-brokered | 6,079 | 17,825 |
CDARS - money market and time deposits | 9,574 | 7,583 |
Total deposits | 2,073,784 | 2,062,775 |
Short-term borrowings | 3,000 | |
Accrued interest payable and other liabilities | 46,995 | 50,368 |
Total liabilities | 2,120,779 | 2,116,143 |
Shareholders' equity: | ||
Preferred stock, no par value; 10,000,000 shares authorized Series C convertible perpetual preferred stock, 21,004 shares issued and outstanding at June 30, 2016 and December 31, 2015 (liquidation preference of $21,004 at June 30, 2016 and December 31, 2015) | 19,519 | 19,519 |
Common stock, no par value; 60,000,000 shares authorized; 32,294,063 shares issued and outstanding at June 30, 2016 and 32,113,479 shares issued and outstanding at December 31, 2015 | 194,765 | 193,364 |
Retained earnings | 45,371 | 38,773 |
Accumulated other comprehensive loss | (2,142) | (6,220) |
Total shareholders' equity | 257,513 | 245,436 |
Total liabilities and shareholders' equity | $ 2,378,292 | $ 2,361,579 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Securities held-to-maturity | ||
Securities held-to-maturity, fair value (in dollars) | $ 214,624 | $ 109,821 |
Preferred stock | ||
Preferred stock, par value (in dollars per share) | $ 0 | $ 0 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 21,004 | 21,004 |
Preferred stock, outstanding (in shares) | 21,004 | 21,004 |
Preferred stock, liquidation preference (in dollars) | $ 21,004 | $ 21,004 |
Common stock | ||
Common stock, par value (in dollars per share) | $ 0 | $ 0 |
Common stock, shares authorized | 60,000,000 | 60,000,000 |
Common stock, shares issued | 32,294,063 | 32,113,479 |
Common stock, shares outstanding | 32,294,063 | 32,113,479 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Interest income: | ||||
Loans, including fees | $ 19,735 | $ 15,643 | $ 38,923 | $ 30,647 |
Securities, taxable | 2,829 | 1,554 | 5,603 | 3,157 |
Securities, exempt from Federal tax | 575 | 515 | 1,154 | 1,021 |
Other investments and interest-bearing deposits in other financial institutions | 365 | 463 | 886 | 716 |
Total interest income | 23,504 | 18,175 | 46,566 | 35,541 |
Interest expense: | ||||
Deposits | 760 | 533 | 1,518 | 1,041 |
Total interest expense | 760 | 533 | 1,518 | 1,041 |
Net interest income before provision for loan losses | 22,744 | 17,642 | 45,048 | 34,500 |
Provision (credit) for loan losses | 351 | 22 | 752 | (38) |
Net interest income after provision for loan losses | 22,393 | 17,620 | 44,296 | 34,538 |
Noninterest income: | ||||
Gain on proceeds from company owned life insurance | 1,019 | 1,019 | ||
Service charges and fees on deposit accounts | 783 | 715 | 1,550 | 1,338 |
Increase in cash surrender value of life insurance | 440 | 396 | 889 | 796 |
Servicing income | 371 | 299 | 742 | 605 |
Gain on sales of securities | 347 | 527 | ||
Gain on sales of SBA loans | 279 | 186 | 584 | 393 |
Other | 421 | 568 | 963 | 958 |
Total noninterest income | 3,660 | 2,164 | 6,274 | 4,090 |
Noninterest expense: | ||||
Salaries and employee benefits | 8,742 | 7,712 | 17,689 | 15,754 |
Occupancy and equipment | 1,081 | 1,036 | 2,157 | 2,072 |
Professional fees | 708 | 239 | 1,533 | 333 |
Other | 3,850 | 3,630 | 7,687 | 6,734 |
Total noninterest expense | 14,381 | 12,617 | 29,066 | 24,893 |
Income before income taxes | 11,672 | 7,167 | 21,504 | 13,735 |
Income tax expense | 4,377 | 2,690 | 8,103 | 5,120 |
Net income | 7,295 | 4,477 | 13,401 | 8,615 |
Dividends on preferred stock | (504) | (448) | (1,008) | (896) |
Net income available to common shareholders | $ 6,791 | $ 4,029 | $ 12,393 | $ 7,719 |
Earnings per common share: | ||||
Basic (in dollars per share) | $ 0.19 | $ 0.14 | $ 0.35 | $ 0.27 |
Diluted (in dollars per share) | $ 0.19 | $ 0.14 | $ 0.35 | $ 0.27 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 7,295 | $ 4,477 | $ 13,401 | $ 8,615 |
Other comprehensive income (loss): | ||||
Change in net unrealized holding gains on available-for-sale securities and I/O strips | 2,723 | (3,404) | 7,562 | (2,516) |
Deferred income taxes | (1,144) | 1,430 | (3,176) | 1,056 |
Change in net unamortized unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity | (76) | (14) | (90) | (28) |
Deferred income taxes | 32 | 6 | 38 | 12 |
Reclassification adjustment for gains on sales of securities realized in income | (347) | (527) | ||
Deferred income taxes | 146 | 221 | ||
Change in unrealized gains on securities and I/O strips, net of deferred income taxes | 1,334 | (1,982) | 4,028 | (1,476) |
Change in net pension and other benefit plan liabilities adjustment | 38 | 48 | 86 | 96 |
Deferred income taxes | (16) | (20) | (36) | (40) |
Change in pension and other benefit plan liabilities net of deferred income taxes | 22 | 28 | 50 | 56 |
Other comprehensive income (loss) | 1,356 | (1,954) | 4,078 | (1,420) |
Total comprehensive income | $ 8,651 | $ 2,523 | $ 17,479 | $ 7,195 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income / (Loss) | Total |
Balance at Dec. 31, 2014 | $ 19,519 | $ 133,676 | $ 33,014 | $ (1,851) | $ 184,358 |
Balance (in shares) at Dec. 31, 2014 | 21,004 | 26,503,505 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 8,615 | 8,615 | |||
Other comprehensive loss (income) | (1,420) | (1,420) | |||
Issuance of restricted stock awards, net (in shares) | 68,855 | ||||
Amortization of restricted stock awards, net of forfeitures and taxes | $ 34 | 34 | |||
Cash dividend declared per share | (5,145) | (5,145) | |||
Stock option expense, net of forfeitures and taxes | 475 | 475 | |||
Stock options exercised | $ 122 | 122 | |||
Stock options exercised (in shares) | 23,734 | ||||
Balance at Jun. 30, 2015 | $ 19,519 | $ 134,307 | 36,484 | (3,271) | 187,039 |
Balance (in shares) at Jun. 30, 2015 | 21,004 | 26,596,094 | |||
Balance at Dec. 31, 2015 | $ 19,519 | $ 193,364 | 38,773 | (6,220) | 245,436 |
Balance (in shares) at Dec. 31, 2015 | 21,004 | 32,113,479 | |||
Increase (Decrease) in Shareholders' Equity | |||||
Net income | 13,401 | 13,401 | |||
Other comprehensive loss (income) | 4,078 | 4,078 | |||
Issuance of restricted stock awards, net (in shares) | 82,372 | ||||
Amortization of restricted stock awards, net of forfeitures and taxes | $ 296 | 296 | |||
Cash dividend declared per share | (6,803) | (6,803) | |||
Stock option expense, net of forfeitures and taxes | 482 | 482 | |||
Stock options exercised | $ 623 | 623 | |||
Stock options exercised (in shares) | 98,212 | ||||
Balance at Jun. 30, 2016 | $ 19,519 | $ 194,765 | $ 45,371 | $ (2,142) | $ 257,513 |
Balance (in shares) at Jun. 30, 2016 | 21,004 | 32,294,063 |
CONSOLIDATED STATEMENTS OF CHA7
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ||
Cash dividend declared per share (in dollars per share) | $ 0.18 | $ 0.16 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 13,401 | $ 8,615 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Amortization of discounts and premiums on securities | 1,746 | 662 |
Gain on sale of securities available-for-sale | (527) | |
Gain on sale of SBA loans | (584) | (393) |
Proceeds from SBA loans originated for sale | 8,398 | 4,767 |
SBA loans originated for sale | (8,187) | (6,996) |
Provision (credit) for loan losses | 752 | (38) |
Increase in cash surrender value of life insurance | (889) | (796) |
Depreciation and amortization | 361 | 366 |
Amortization of intangible assets | 784 | 378 |
Gain on sale of foreclosed assets, net | (106) | |
Stock option expense, net | 482 | 475 |
Amortization of restricted stock awards, net | 296 | 34 |
Gain on proceeds from company owned life insurance | (1,019) | |
Effect of changes in: | ||
Accrued interest receivable and other assets | 3,280 | (831) |
Accrued interest payable and other liabilities | (3,359) | 1,051 |
Net cash provided by operating activities | 14,935 | 7,188 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of securities available-for-sale | (75,803) | (19,953) |
Purchase of securities held-to-maturity | (109,934) | (6,153) |
Maturities/paydowns/calls of securities available-for-sale | 27,789 | 14,195 |
Maturities/paydowns/calls of securities held-to-maturity | 8,591 | 1,786 |
Proceeds from sale of securities available-for-sale | 49,171 | |
Net change in loans | (102,413) | (43,308) |
Change in Federal Home Loan Bank and Federal Reserve Bank stock and other investments | (2,496) | (25) |
Purchase of premises and equipment | (130) | (164) |
Proceeds from sale of foreclosed assets | 49 | 1,571 |
Proceeds from company owned life insurance | 3,164 | |
Net cash used in investing activities | (202,012) | (52,051) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Net change in deposits | 11,009 | 58,751 |
Exercise of stock options | 623 | 122 |
Repayments of short-term borrowings | (3,000) | |
Payment of cash dividends | (6,803) | (5,145) |
Net cash provided by financing activities | 1,829 | 53,728 |
Net (decrease) increase in cash and cash equivalents | (185,248) | 8,865 |
Cash and cash equivalents, beginning of period | 344,092 | 122,403 |
Cash and cash equivalents, end of period | 158,844 | 131,268 |
Supplemental disclosures of cash flow information: | ||
Interest paid | 1,512 | 1,057 |
Income taxes paid | 4,955 | 3,860 |
Due to broker for securities purchased, settling after year-end | 730 | |
Supplemental schedule of non-cash investing activity: | ||
Transfer of loans held for sale to loan portfolio | 2,791 | |
Loans transferred to foreclosed assets | $ 49 | $ 1,236 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation | |
Basis of Presentation | 1) Basis of Presentation The unaudited consolidated financial statements of Heritage Commerce Corp (the "Company" or "HCC") and its wholly owned subsidiary, Heritage Bank of Commerce ("HBC"), have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements are not included herein. The interim statements should be read in conjunction with the consolidated financial statements and notes that were included in the Company's Form 10-K for the year ended December 31, 2015. The Company acquired BVF/CSNK Acquisition Corp., a Delaware corporation ("BVF/CSNK") on November 1, 2014, the parent company of CSNK Working Capital Finance Corp. dba Bay View Funding ("Bay View Funding"). BVF/CSNK was subsequently merged into Bay View Funding and Bay View Funding became a wholly owned subsidiary of HBC. The Company acquired Focus Business Bank ("Focus") on August 20, 2015. Focus was merged with HBC, with HBC as the surviving bank. Focus's results of operations have been included in the Company's results of operations beginning August 21, 2015. HBC is a commercial bank serving customers primarily located in Santa Clara, Alameda, Contra Costa, and San Benito counties of California. Bay View Funding provides business-essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10 percent of revenue for HBC or the Company. With the acquisition of Bay View Funding, the Company now has two reportable segments consisting of Banking and Factoring. The Company's management uses segment results in its operating and strategic planning. In management's opinion, all adjustments necessary for a fair presentation of these consolidated financial statements have been included and are of a normal and recurring nature. All intercompany transactions and balances have been eliminated. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from these estimates. The results for the three and six months ended June 30, 2016 are not necessarily indicative of the results expected for any subsequent period or for the entire year ending December 31, 2016. Reclassifications Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the Company's consolidated financial position, results of operations or net change in cash and cash equivalents. Adoption of New Accounting Standards In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustment. This update applies to all entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer's record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company has evaluated the adoption of the new guidance and has determined it did not have a material impact on the consolidated financial statements. Newly Issued, but not yet Effective Accounting Standards In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Recognition and Measurement of Financial Assets and Liabilities . The new guidance is intended to improve the recognition and measurement of financial instruments by requiring: equity investments (other than equity method or consolidation) to be measured at fair value with changes in fair value recognized in net income; public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial assets (i.e. securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities; eliminating the requirement for non-public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is to be required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from the change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact. In February 2016, the FASB issued ASU No. 2016-02, Leases . The standard requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. Reasonably certain is a high threshold that is consistent with and intended to be applied in the same way as the reasonably assured threshold in the previous leases guidance. In addition, also consistent with the previous leases guidance, a lessee (and a lessor) should exclude most variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation : Improvements to Employee Share-Based Payment Accounting . The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. The threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions. Cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. A nonpublic entity can make an accounting policy election to apply a practical expedient to estimate the expected term for all awards with performance or service conditions that meet certain conditions. A nonpublic entity can make a one-time accounting policy election to switch from measuring all liability-classified awards at fair value to intrinsic value. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments . The standard is the final guidance on the new current expected credit loss ("CECL") model. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate future credit loss estimates. As CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization's reasonable and supportable estimate of expected credit losses extends to held to maturity ("HTM") debt securities. The update amends the accounting for credit losses on available-for-sale securities ("AFS"), whereby credit losses will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Lastly, the amendment requires enhanced disclosures on the significant estimates and judgments used to estimate credit losses, as well as on the credit quality and underwriting standards of an organization's portfolio. These disclosures require organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. The guidance allows for a modified retrospective approach with a cumulative effect adjustment to the balance sheet upon adoption (charge to retained earnings instead of the income statement). The new guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share | |
Earnings Per Share | 2) Earnings Per Share Basic earnings per common share is computed by dividing net income, less dividends and discount accretion on preferred stock, by the weighted average common shares outstanding. The Series C Preferred Stock participates in the earnings of the Company and, therefore, the shares issued on the conversion of the Series C Preferred Stock are considered outstanding under the two class method of computing basic earnings per common share during periods of earnings. Diluted earnings per share reflect potential dilution from outstanding stock options using the treasury stock method. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands, except per share amounts) Net income available to common shareholders $ $ $ $ Less: undistributed earnings allocated to Series C Preferred Stock ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributed and undistributed earnings allocated to common shareholders $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding for basic earnings per common share Dilutive effect of stock options oustanding, using the the treasury stock method ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares used in computing diluted earnings per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) (''AOCI'') | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) ("AOCI") | |
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 3) Accumulated Other Comprehensive Income (Loss) ("AOCI") The following table reflects the changes in AOCI by component for the periods indicated: Three Months Ended June 30, 2016 and 2015 Unrealized Gains on Available- for-Sale Securities and I/O Strips Unamortized Unrealized Gain on Available- for-Sale Securities Reclassified to Held-to- Maturity Defined Benefit Pension Plan Items Total (Dollars in thousands) Beginning balance April 1, 2016, net of taxes $ $ $ ) $ ) Other comprehensive income (loss) before reclassification, net of taxes — ) Amounts reclassified from other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprensive income (loss), net of taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2016, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance April 1, 2015, net of taxes $ $ $ ) $ ) Other comprehensive loss before reclassification, net of taxes ) — ) ) Amounts reclassified from other comprehensive income (loss), net of taxes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2015, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 and 2015 Unrealized Gains on Available- for-Sale Securities and I/O Strips Unamortized Unrealized Gain on Available- for-Sale Securities Reclassified to Held-to- Maturity Defined Benefit Pension Plan Items Total (Dollars in thousands) Beginning balance January 1, 2016, net of taxes $ $ $ ) $ ) Other comprehensive income (loss) before reclassification, net of taxes — ) Amounts reclassified from other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprensive income (loss), net of taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2016, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance January 1, 2015, net of taxes $ $ $ ) $ ) Other comprehensive loss before reclassification, net of taxes ) — ) ) Amounts reclassified from other comprehensive income (loss), net of taxes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2015, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Amounts Reclassified from AOCI Three Months Ended June 30, Affected Line Item Where Net Income is Presented Details About AOCI Components 2016 2015 (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ $ — Gains on sale of securities ) — Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ — Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity Interest income on taxable securities ) ) Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of defined benefit pension plan items(1) Prior transition obligation Actuarial losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Salaries and employee benefits Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassification for the period $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 9—Benefit Plans) and includes split-dollar life insurance benefit plan. Amounts Reclassified from AOCI Six Months Ended June 30, Affected Line Item Where Net Income is Presented Details About AOCI Components 2016 2015 (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ $ — Gains on sale of securities ) — Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ — Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity Interest income on taxable securities ) ) Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of defined benefit pension plan items(1) Prior transition obligation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Actuarial losses ) ) Salaries and employee benefits Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassification for the period $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 9—Benefit Plans) and includes split-dollar life insurance benefit plan. |
Securities
Securities | 6 Months Ended |
Jun. 30, 2016 | |
Securities | |
Securities | 4) Securities The amortized cost and estimated fair value of securities at June 30, 2016 and December 31, 2015 were as follows: June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ $ — $ Trust preferred securities — Corporate bonds — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Agency mortgage-backed securities $ $ $ ) $ Municipals—exempt from Federal tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ $ ) $ U.S. Treasury — ) Trust preferred securities — U.S. Government sponsored entities ) Corporate bonds — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Municipals—exempt from Federal tax $ $ $ ) $ Agency mortgage-backed securities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities with unrealized losses at June 30, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position are as follows: Less Than 12 Months 12 Months or More Total June 30, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ $ ) $ $ ) $ $ ) Municipals—exempt from Federal tax — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less Than 12 Months 12 Months or More Total December 31, 2015 Fair Value Unrealized (Losses) Fair Value Unrealized (Losses) Fair Value Unrealized (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ ) $ $ ) $ $ ) U.S. Treasury ) — — ) U.S. Government sponsored entities ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Municipals—exempt from Federal tax $ $ ) $ $ ) $ $ ) Agency mortgage-backed securities ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ There were no holdings of securities of any one issuer, other than the U.S. Government and its sponsored entities, in an amount greater than 10% of shareholders' equity. At June 30, 2016, the Company held 462 securities (184 available-for-sale and 278 held-to-maturity), of which 9 had fair values below amortized cost. At June 30, 2016, there were $2,224,000 of municipal bonds held-to-maturity, and $2,137,000 of agency mortgage-backed securities held-to-maturity carried with an unrealized loss for 12 months or more. The total unrealized loss for securities 12 months or more was $49,000 at June 30, 2016. The unrealized losses were due to higher interest rates. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. The Company does not consider these securities to be other than temporarily impaired at June 30, 2016. At December 31, 2015, the Company held 460 securities (193 available-for-sale and 267 held-to-maturity), of which 193 had fair values below amortized cost. At December 31, 2015, there were $2,165,000 of agency mortgage-backed securities available-for-sale, $4,409,000 of agency mortgage-backed securities held-to-maturity and $24,412,000 of municipals bonds held-to-maturity carried with an unrealized loss for 12 months or greater. The total unrealized loss for securities 12 months or greater was $910,000 at December 31, 2015. The unrealized losses were due to higher interest rates. The issuers are of high credit quality and all principal amounts are expected to be paid when securities mature. The fair value is expected to recover as the securities approach their maturity date and/or market rates decline. The Company does not believe that it is more likely than not that the Company will be required to sell a security in an unrealized loss position prior to recovery in value. The Company does not consider these securities to be other-than-temporarily impaired at December 31, 2015. The proceeds from sales of securities and the resulting gains and losses were as follows for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Proceeds $ $ — $ $ — Gross gains — — Gross losses ) — ) — The amortized cost and estimated fair values of securities as of June 30, 2016, are shown by contractual maturity below. The expected maturities will differ from contractual maturities if borrowers have the right to call or pre-pay obligations with or without call or pre-payment penalties. Securities not due at a single maturity date are shown separately. Available-for-sale Amortized Cost Estimated Fair Value (Dollars in thousands) Due after one through five years $ $ Due after ten years Agency mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-maturity Amortized Cost Estimated Fair Value (Dollars in thousands) Due 3 months or less $ $ Due after 3 months through one year Due after one through five years Due after five through ten years Due after ten years Agency mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Loans
Loans | 6 Months Ended |
Jun. 30, 2016 | |
Loans | |
Loans | 5) Loans Loans were as follows for the periods indicated: June 30, 2016 December 31, 2015 (Dollars in thousands) Loans held-for-investment: Commercial $ $ Real estate: Commercial Land and construction Home equity Residential mortgages — Consumer ​ ​ ​ ​ ​ ​ ​ ​ Loans Deferred loan origination fees, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loans, net of deferred fees Allowance for loan losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loans, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ At June 30, 2016 and December 31, 2015, total net loans included in the table above include $117,655,000, and $141,343,000, respectively, of the loans acquired in the Focus transaction that were not purchased credit impaired loans. During the second quarter of 2016, the Company purchased $35,014,000 of jumbo single family residential mortgage loans all of which are domiciled in California. The average loan principal amount is approximately $850,000, and the average yield on the portfolio is 3.11%, net of servicing fees of 25 basis points. Residential mortgages outstanding at June 30, 2016 totaled $32,852,000. Changes in the allowance for loan losses were as follows for the periods indicated: Three Months Ended June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries — Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries Provision (credit) for loan losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries — Provision (credit) for loan losses ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) ) — ) Recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries Provision (credit) for loan losses ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, based on the impairment method at the following period-ends: June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ $ $ — $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: Individually evaluated for impairment $ $ $ $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loan balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ $ $ — $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: Individually evaluated for impairment $ $ $ $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loan balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents loans held-for-investment individually evaluated for impairment by class of loans as of June 30, 2016 and December 31, 2015. The recorded investment included in the following table represents loan principal net of any partial charge-offs recognized on the loans. The unpaid principal balance represents the recorded balance prior to any partial charge-offs. The recorded investment in consumer loans collateralized by residential real estate property that are in process of foreclosure according to local requirements of the applicable jurisdiction are not material as of June 30, 2016 and December 31, 2015. June 30, 2016 December 31, 2015 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ $ $ — $ $ $ — Real estate: Commercial — — Land and construction — — Home Equity — — Consumer — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total with no related allowance recorded — — With an allowance recorded: Commercial Real estate: Home Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total with an allowance recorded ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following tables present interest recognized and cash-basis interest earned on impaired loans for the periods indicated: Three Months Ended June 30, 2016 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Three Months Ended June 30, 2015 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Six Months Ended June 30, 2016 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Six Months Ended June 30, 2015 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Nonperforming loans include both smaller dollar balance homogenous loans that are collectively evaluated for impairment and individually classified loans. Nonperforming loans were as follows at period-end: June 30, December 31, 2015 2016 2015 (Dollars in thousands) Nonaccrual loans—held-for-investment $ $ $ Restructured and loans over 90 days past due and still accruing — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans Other restructured loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans, excluding loans held-for-sale $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents the nonperforming loans by class for the periods indicated: June 30, 2016 December 31, 2015 Nonaccrual Restructured and Loans Over 90 Days Past Due and Still Accruing Total Nonaccrual Restructured and Loans Over 90 Days Past Due and Still Accruing Total (Dollars in thousands) Commercial $ $ — $ $ $ $ Real estate: Commercial — — Land and construction — — Home equity — Consumer — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ — $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following tables present the aging of past due loans by class for the periods indicated: June 30, 2016 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Loans Not Past Due Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial — — Land and construction — — Home equity Residential mortgages — — — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Loans Not Past Due Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial — — — — Land and construction — — Home equity — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Past due loans 30 days or greater totaled $10,097,000 and $5,754,000 at June 30, 2016 and December 31, 2015, respectively, of which $3,542,000 and $591,000 were on nonaccrual. At June 30, 2016, there were also $818,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. At December 31, 2015, there were also $4,125,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. Management's classification of a loan as "nonaccrual" is an indication that there is reasonable doubt as to the full recovery of principal or interest on the loan. At that point, the Company stops accruing interest income, and reverses any uncollected interest that had been accrued as income. The Company begins recognizing interest income only as cash interest payments are received and it has been determined the collection of all outstanding principal is not in doubt. The loans may or may not be collateralized, and collection efforts are pursued. Credit Quality Indicators Concentrations of credit risk arise when a number of customers are engaged in similar business activities, or activities in the same geographic region, or have similar features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. The Company's loan portfolio is concentrated in commercial (primarily manufacturing, wholesale, and service) and real estate lending, with the balance in consumer loans. While no specific industry concentration is considered significant, the Company's lending operations are located in the Company's market areas that are dependent on the technology and real estate industries and their supporting companies. Thus, the Company's borrowers could be adversely impacted by a downturn in these sectors of the economy which could reduce the demand for loans and adversely impact the borrowers' ability to repay their loans. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Nonclassified loans generally include those loans that are expected to be repaid in accordance with contractual loans terms. Classified loans are those loans that are assigned a substandard, substandard-nonaccrual, or doubtful risk rating using the following definitions: Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Substandard-Nonaccrual. Loans classified as substandard-nonaccrual are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any, and it is probable that the Company will not receive payment of the full contractual principal and interest. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. In addition, the Company no longer accrues interest on the loan because of the underlying weaknesses. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, 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. Loans classified as loss are considered uncollectable or of so little value that their continuance as assets is not warranted. This classification does not necessarily mean that a loan has no recovery or salvage value; but rather, there is much doubt about whether, how much, or when the recovery would occur. Loans classified as loss are immediately charged off against the allowance for loan losses. Therefore, there is no balance to report at June 30, 2016 and December 31, 2015. The following table provides a summary of the loan portfolio by loan type and credit quality classification at period end: June 30, 2016 December 31, 2015 Nonclassified Classified Total Nonclassified Classified Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial Land and construction Home equity Residential mortgages — — — — Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company's underwriting policy. The book balance of troubled debt restructurings at June 30, 2016 was $145,000, which included $3,000 of nonaccrual loans and $141,000 of accruing loans. The book balance of troubled debt restructurings at December 31, 2015 was $153,000, which included $4,000 of nonaccrual loans and $149,000 of accruing loans. Approximately $2,000 and $3,000 in specific reserves were established with respect to these loans as of June 30, 2016 and December 31, 2015, respectively. As of June 30, 2016 and December 31, 2015, the Company had no additional amounts committed on any loan classified as a troubled debt restructuring. There were no new loans modified as troubled debt restructurings during the three and six month periods ended June 30, 2016 and 2015. A loan is considered to be in payment default when it is 30 days contractually past due under the modified terms. There were no defaults on troubled debt restructurings, within twelve months following the modification, during the three and six month periods ended June 30, 2016 and 2015. A loan that is a troubled debt restructuring on nonaccrual status may return to accruing status after a period of at least six months of consecutive payments in accordance with the modified terms. |
Business Combinations
Business Combinations | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations | |
Business Combinations | 6) Business Combinations Bay View Funding On November 1, 2014, HBC acquired all of the outstanding common stock from the stockholders of BVF/CSNK Acquisition Corp., a Delaware corporation for an aggregate purchase price of $22,520,000. CSNK Working Capital Finance Corp. dba Bay View Funding ("Bay View Funding") its wholly-owned subsidiary provides business essential working capital factoring financing to various industries throughout the United States. BVF/CSNK was subsequently merged into Bay View Funding and Bay View Funding became a wholly owned subsidiary of HBC. Focus Business Bank On April 23, 2015, the Company and Focus entered into a definitive agreement and plan of merger and reorganization whereby Focus would merge into HBC. The Company completed the merger of its wholly-owned bank subsidiary HBC with Focus on August 20, 2015 for an aggregate transaction value of $66,558,000. Shareholders of Focus received a fixed exchange ratio at closing of 1.8235 shares of the Company's common stock for each share of Focus common stock. Upon closing of the transaction, the Company issued 5,456,713 shares of the Company's common stock to Focus shareholders for a total value of $58,278,000, based on the Company's closing stock price of $10.68 on August 20, 2015. In addition, the Company paid cash to the Focus holders of in-the-money stock options on August 20, 2015 totaling $8,280,000. Focus's results of operations have been included in the Company's results of operations beginning August 21, 2015. Pre-tax severance, retention, acquisition and integration costs totaled $423,000 for the second quarter of 2015, $542,000 for the first six months of 2015, and $6,398,000 for the year ended December 31, 2015. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. (Dollars in thousands) Assets acquired: Cash and cash item $ Federal funds sold and deposits in other financial institutions Securities available-for-sale Securities held-to-maturity Loans held-for-sale Net loans Goodwill Core deposit intangible asset Corporate owned life insurance Other assets, net ​ ​ ​ ​ ​ Total assets acquired Liabilities asssumed: Deposits Other liabilities ​ ​ ​ ​ ​ Total liabilities ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The fair value of net assets acquired includes fair value adjustments to certain receivables of which some were considered impaired and some were not considered impaired as of the acquisition date. The fair value adjustments were determined using discounted contractual cash flows, adjusted for expected losses and prepayments, where appropriate. The gross contractual amount of four purchased credit impaired loans as of the acquisition date totaled $1,124,000. As of that date, contractual cash flows not expected to be collected on the purchased credit impaired loans totaled $819,000, which represents 72.9% of their gross outstanding principal balances. The receivables that were not considered impaired at the acquisition date were not subject to the guidance relating to purchased credit impaired loans, which have shown evidence of credit deterioration since origination. Receivables acquired that were not subject to these requirements include nonimpaired loans with a fair value and gross contractual amounts receivable of $170,048,000 and $174,660,000 respectively, on the date of acquisition. As of the acquisition date, the purchase discount on these nonimpaired loans totaled $4,612,000, which represents 2.6% of their gross outstanding principal balances. Goodwill of $32,620,000 arising from the acquisition is largely attributable to synergies and cost savings resulting from combining the operations of the companies. As this transaction was structured as a taxfree exchange, the goodwill will not be deductible for tax purposes. The fair values of assets acquired and liabilities assumed are subject to adjustment during the first twelve months after the acquisition date if additional information becomes available to indicate a more accurate or appropriate value for an asset or liability. The loans with a fair value of $170,353,000 and $1,758,000 of income tax attributes, on the acquisition date, related to the purchase accounting adjustments and Focus' legacy deferred tax assets are subject to change pending receipt of the final valuations and analyses. Loan valuations may be adjusted based on new information obtained by the Company in future periods that may reflect conditions or events that existed on the acquisition date. Deferred tax assets may be adjusted for purchase accounting adjustments. The following table summarizes the consideration paid for Focus: August 20, 2015 (Dollars in thousands) Cash paid for Focus in-the-money stock options $ Common stock issued to Focus shareholders at $10.68 per share ​ ​ ​ ​ ​ Total consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table presents pro forma financial information as if the acquisition had occurred on January 1, 2015, which includes the pre-acquisition period for Focus. The historical unaudited pro forma financial information has been adjusted to reflect supportable items that are directly attributable to the acquisition and expected to have a continuing impact on consolidated results of operations, as such, one-time acquisition costs are not included. The unaudited pro forma financial information is provided for informational purposes only. The unaudited pro forma financial information is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the acquisition been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined consolidated financial statements and related adjustments required management to make certain assumptions and estimates. UNAUDITED Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 (Dollars in thousands, except per share amounts) Net interest income $ $ Provision for loan losses Noninterest income Noninterest expense ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share—basic $ $ Net income per share—diluted $ $ |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | (7) Goodwill and Other Intangible Assets Goodwill At June 30, 2016, the carrying value of goodwill was $45,664,000, which included $13,044,000 of goodwill related to its acquisition of Bay View Funding and $32,620,000 from its acquisition of Focus. During the fourth quarter of 2015, adjustments were made to the purchase price allocations for the Focus transaction that affected the amounts allocated to goodwill and other assets. Goodwill impairment exists when a reporting unit's carrying value exceeds its fair value, which is determined through a qualitative assessment whether it is more likely than not that the fair value of equity of the reporting unit exceeds the carrying value ("Step Zero"). If the qualitative assessment indicates it is more likely than not that the fair value of equity of a reporting unit is less than book value, than a quantitative two-step impairment test is required. Step 1 includes the determination of the carrying value of the Company's single reporting unit, including the existing goodwill and intangible assets, and estimating the fair value of the reporting unit. If the carrying amount of a reporting unit exceeds its fair value, the Company is required to perform a second step to the impairment test. Step 2 requires that the implied fair value of the reporting unit goodwill be compared to the carrying amount of that goodwill. If the carrying amount of the reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss shall be recognized in an amount equal to that excess. The Company tests goodwill for impairment on an annual basis as of November 30. Goodwill is also tested for impairment on an interim basis if an event occurs or circumstances change between annual tests that would more-likely-than-not reduce the fair value of the reporting unit below its carrying value. The Company completed its annual impairment analysis on goodwill as of November 30, 2015 with the assistance of an independent valuation firm. Based on the qualitative analysis performed, the Company determined that it is more likely than not that the fair value of the reporting unit exceeded its reported book value of equity at November 30, 2015. As such, no impairment was indicated and no further testing was required. Other Intangible Assets Core deposit and customer relationship intangible assets acquired in the 2007 acquisition of Diablo Valley Bank were $5,049,000 and $276,000, respectively. These assets are amortized over their estimated useful lives of 10 years. The customer relationship intangible asset was fully amortized at December 31, 2014. Accumulated amortization of these intangible assets was $4,917,000 and $4,703,000 at June 30, 2016 and December 31, 2015, respectively. The core deposit intangible asset acquired in the acquisition of Focus in August 2015 was $6,285,000. This asset is amortized over its estimated useful lives of 10 years. Accumulated amortization of this intangible asset was $704,000 and $288,000 at June 30, 2016 and December 31, 2015, respectively. Other intangible assets acquired in the acquisition of Bay View Funding in November 2014 included: a below market value lease intangible asset of $109,000 (amortized over 3 years), customer relationship and brokered relationship intangible assets of $1,900,000, (amortized over the 10 year estimated useful lives), and a non-compete agreement intangible asset of $250,000 (amortized over 3 years). Accumulated amortization of these intangible assets was $515,000 and $360,000 at June 30, 2016 and December 31, 2015, respectively. Estimated amortization expense for 2016 and each of the next five years following 2016: Bay View Funding Year Diablo Valley Bank Core Deposit Intangible Focus Core Deposit Intangible Below Market Value Lease Intangible Customer & Brokered Relationship Intangible Non-Compete Agreement Intangible Total Amortization Expense (Dollars in thousands) 2016 $ $ $ $ $ $ 2017 2018 — — — 2019 — — — 2020 — — — 2021 — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impairment testing of the intangible assets is performed at the individual asset level. Impairment exists if the carrying amount of the asset is not recoverable and exceeds its fair value at the date of the impairment test. For intangible assets, estimates of expected future cash flows (cash inflows less cash outflows) that are directly associated with an intangible asset are used to determine the fair value of that asset. Management makes certain estimates and assumptions in determining the expected future cash flows from core deposit and customer relationship intangibles including account attrition, expected lives, discount rates, interest rates, servicing costs and other factors. Significant changes in these estimates and assumptions could adversely impact the valuation of these intangible assets. If an impairment loss exists, the carrying amount of the intangible asset is adjusted to a new cost basis. The new cost basis is then amortized over the remaining useful life of the asset. Based on its assessment, management concluded that there was no impairment of intangible assets at June 30, 2016 and December 31, 2015. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Income Taxes | 8) Income Taxes Some items of income and expense are recognized in different years for tax purposes than when applying generally accepted accounting principles, leading to timing differences between the Company's actual current tax liability and the amount accrued for this liability based on book income. These temporary differences comprise the "deferred" portion of the Company's tax expense or benefit, which is accumulated on the Company's books as a deferred tax asset or deferred tax liability until such time as they reverse. Under generally accepted accounting principles, a valuation allowance is required if it is "more likely than not" that a deferred tax asset will not be realized. The determination of the realizability of the deferred tax assets is highly subjective and dependent upon judgment concerning management's evaluation of both positive and negative evidence, including forecasts of future income, cumulative losses, applicable tax planning strategies, and assessments of current and future economic and business conditions. In accordance with Accounting Standards Codification (ASC) 740-10 Accounting for Uncertainty in Income Taxes, the Company estimated the need for a reserve for income taxes of $71,000, net of Federal benefit, for uncertain state income tax positions of Bay View Funding as of June 30, 2016. The Company does not expect this amount to significantly increase or decrease in the next twelve months. The Company had net deferred tax assets of $20,299,000, and $22,218,000, at June 30, 2016, and December 31, 2015, respectively. After consideration of the matters in the preceding paragraph, the Company determined that it is more likely than not that the net deferred tax asset at June 30, 2016 and December 31, 2015 will be fully realized in future years. The Company adopted the proportional amortization method of accounting for its low income housing investments in the third quarter of 2014. The low income housing investment losses, net of the tax benefits received, are included in income tax expense for all periods reflected on the consolidated income statements. The following table reflects the carry amounts of the low income housing investments included in accrued interest receivable and other assets, and the future commitments included in accrued interest payable and other liabilities as of June 30, 2016 and December 31, 2015: June 30, 2016 December 31, 2015 (Dollars in thousands) Low income housing investments $ $ Future commitments $ $ The Company expects $283,000 of the future commitments to be paid in 2016, $14,000 in 2017, and $83,000 in 2018 through 2023. For tax purposes, the Company had low income housing tax credits of $111,000 and $180,000 for the three months ended June 30, 2016 and June 30, 2015, respectively, and low income housing investment losses of $118,000 and $228,000, respectively. For tax purposes, the Company had low income housing tax credits of $222,000 and $360,000 for the six months ended June 30, 2016 and June 30, 2015, respectively, and low income housing investment losses of $235,000 and $457,000, respectively. The Company recognized low income housing investment expense as a component of income tax expense. |
Benefit Plans
Benefit Plans | 6 Months Ended |
Jun. 30, 2016 | |
Benefit Plans | |
Benefit Plans | 9) Benefit Plans Supplemental Retirement Plan The Company has a supplemental retirement plan (the "Plan") covering some current and some former key employees and directors. The Plan is a nonqualified defined benefit plan. Benefits are unsecured as there are no Plan assets. The following table presents the amount of periodic cost recognized for the periods indicated: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Components of net periodic benefit cost: Service cost $ $ $ $ Interest cost Amortization of net actuarial loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Split-Dollar Life Insurance Benefit Plan The Company maintains life insurance policies for some current and some former directors and officers that are subject to split-dollar life insurance agreements. The following table sets forth the funded status of the split-dollar life insurance benefits for the periods indicated: June 30, 2016 December 31, 2015 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Interest cost Amortization of net actuarial loss — ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ June 30, 2016 December 31, 2015 (Dollars in thousands) Net actuarial loss $ $ Prior transition obligation ​ ​ ​ ​ ​ ​ ​ ​ Accumulated other comprehensive loss $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Amortization of prior transition obligation $ ) $ ) $ ) $ ) Interest cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Equity
Equity | 6 Months Ended |
Jun. 30, 2016 | |
Equity | |
Equity | 10) Equity Series C Preferred Stock On June 21, 2010, the Company issued to various institutional investors 21,004 shares of Series C Convertible Perpetual Preferred Stock ("Series C Preferred Stock"). The Series C Preferred Stock is mandatorily convertible into common stock at a conversion price of $3.75 per share upon a subsequent transfer of the Series C Preferred Stock to third parties not affiliated with the holder in a widely dispersed offering. The 21,004 shares of Series C Preferred Stock are convertible into 5,601,000 shares of common stock. The Series C Preferred Stock is non-voting except in the case of certain transactions that would affect the rights of the holders of the Series C Preferred Stock or applicable law. The holders of Series C Preferred Stock receive dividends on an as converted basis when dividends are also declared for holders of common stock. The Series C Preferred Stock is not redeemable by the Company or by the holders and has a liquidation preference of $1,000 per share. The Series C Preferred Stock ranks senior to the Company's common stock. The holders of the Series C Preferred Stock applied for and received the approval of the Federal Reserve and California Department of Business Oversight to exchange the 21,004 shares of Series C Preferred Stock for 5,601,000 common stock (the as converted equivalent). The Company has indicated to the holders that if such approval were obtained the Company would agree to enter into an exchange agreement to effect the exchange. The Company expects to enter into agreements and complete the transactions during the third quarter of 2016. |
Fair Value
Fair Value | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value | |
Fair Value | 11) Fair Value Accounting guidance establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data (for example, interest rates and yield curves observable at commonly quoted intervals, prepayment speeds, credit risks, and default rates). Level 3: Significant unobservable inputs that reflect a reporting entity's own assumptions about the assumptions that market participants would use in pricing an asset or liability. Financial Assets and Liabilities Measured on a Recurring Basis The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). The fair value of interest-only ("I/O") strip receivable assets is based on a valuation model used by a third party. The Company is able to compare the valuation model inputs and results to widely available published industry data for reasonableness (Level 2 inputs). Fair Value Measurements Using Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Dollars in thousands) Assets at June 30, 2016: Available-for-sale securities: Agency mortgage-backed securities $ — $ — Trust preferred securities $ — $ — Corporate bonds $ — $ — I/O strip receivables $ — $ — Assets at December 31, 2015: Available-for-sale securities: Agency mortgage-backed securities $ — $ — U.S. Treasury $ $ — — Trust preferred securities $ — $ — U.S. Government sponsored entities $ — $ — Corporate bonds $ — $ — I/O strip receivables $ — $ — There were no transfers between Level 1 and Level 2 during the period for assets measured at fair value on a recurring basis. Assets and Liabilities Measured on a Non-Recurring Basis The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. The appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Foreclosed assets are valued at the time the loan is foreclosed upon and the asset is transferred to foreclosed assets. The fair value is based primarily on third party appraisals, less costs to sell. The appraisals may utilize a single valuation approach or a combination of approaches including the comparable sales and income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value. Fair Value Measurements Using Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Dollars in thousands) Assets at June 30, 2016: Impaired loans—held-for-investment: Commercial $ — — $ Real estate: Commercial — — Land and construction — — Home equity — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at December 31, 2015: Impaired loans—held-for-investment: Commercial $ — — $ Real estate: Commercial — — Land and construction — — Home equity — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The following table shows the detail of the impaired loans held-for-investment and the impaired loans held-for-investment carried at fair value for the periods indicated: June 30, 2016 December 31, 2015 (Dollars in thousands) Impaired loans held-for-investment: Book value of impaired loans held-for-investment carried at fair value $ $ Book value of impaired loans held-for-investment carried at cost ​ ​ ​ ​ ​ ​ ​ ​ Total impaired loans held-for-investment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans held-for-investment carried at fair value: Book value of impaired loans held-for-investment carried at fair value $ $ Specific valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans held-for-investment carried at fair value, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans held-for-investment which are measured primarily for impairment using the fair value of the collateral were $4,501,000 at June 30, 2016. In addition, these loans had a specific valuation allowance of $318,000 at June 30, 2016. Impaired loans held-for-investment totaling $1,540,000 at June 30, 2016, were carried at fair value as a result of the aforementioned partial charge-offs and specific valuation allowances at period-end. The remaining $2,961,000 of impaired loans were carried at cost at June 30, 2016, as the fair value of the collateral exceeded the cost basis of each respective loan. Partial charge-offs and changes in specific valuation allowances during the first six months of 2016 on impaired loans held-for-investment carried at fair value at June 30, 2016 resulted in an additional provision for loan losses of $207,000. At June 30, 2016, foreclosed assets had a carrying amount of $313,000, with no valuation allowance at June 30, 2016. Impaired loans held-for-investment were $6,527,000 at December 31, 2015. There were no partial charge-offs at December 31, 2015. In addition, these loans had a specific valuation allowance of $286,000 at December 31, 2015. Impaired loans held-for-investment totaling $2,988,000 at December 31, 2015 were carried at fair value as a result of the aforementioned partial charge-offs and specific valuation allowances at year-end. The remaining $3,539,000 of impaired loans were carried at cost at December 31, 2015, as the fair value of the collateral exceeded the cost basis of each respective loan. Partial charge-offs and changes in specific valuation allowances during 2015 on impaired loans held-for-investment carried at fair value at December 31, 2015 resulted in an additional provision for loan losses of $156,000. At December 31, 2015, foreclosed assets had a carrying amount of $364,000, with no valuation allowance at December 31, 2015. The following table presents quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at the periods indicated: June 30, 2016 Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average) (Dollars in thousands) Impaired loans—held-for-investment: Commercial $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Real estate: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) Land and construction $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Home equity $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) December 31, 2015 Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average) (Dollars in thousands) Impaired loans—held-for-investment: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 5% (5%) Real estate: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) Land and construction $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Home equity $ Market Approach Discount adjustment for differences between comparable sales 0% to 2% (2%) The Company obtains third party appraisals on its impaired loans held-for-investment and foreclosed assets to determine fair value. Generally, the third party appraisals apply the "market approach," which is a valuation technique that uses prices and other relevant information generated by market transactions involving identical or comparable (that is, similar) assets, liabilities, or a group of assets and liabilities, such as a business. Adjustments are then made based on the type of property, age of appraisal, current status of property and other related factors to estimate the current value of collateral. The carrying amounts and estimated fair values of financial instruments at June 30, 2016 are as follows: Estimated Fair Value Carrying Amounts Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available-for-sale — — Securities held-to-maturity — — Loans (including loans held-for-sale), net — FHLB and FRB stock — — — N/A Accrued interest receivable — I/O strips receivables — — Liabilities: Time deposits $ $ — $ $ — $ Other deposits — — Accrued interest payable — — The carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2015: Estimated Fair Value Carrying Amounts Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available-for-sale — Securities held-to-maturity — — Loans (including loans held-for-sale), net — FHLB stock, FRB stock, and other investments — — — N/A Accrued interest receivable I/O strips receivables — — Liabilities: Time deposits $ $ — $ $ — $ Other deposits — — Short-term borrowings — — Accrued interest payable — — The methods and assumptions, not previously discussed, used to estimate the fair value are described as follows: Cash and Cash Equivalents The carrying amounts of cash on hand, noninterest and interest bearing due from bank accounts, and Fed funds sold approximate fair values and are classified as Level 1. Loans The fair value of loans held-for-sale is estimated based upon binding contracts and quotes from third parties resulting in a Level 2 classification. Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. FHLB and FRB Stock It was not practical to determine the fair value of FHLB and FRB stock due to restrictions placed on their transferability. Accrued Interest Receivable/Payable The carrying amounts of accrued interest approximate fair value resulting in a Level 2 or Level 3 classification. Deposits The fair values disclosed for demand deposits (e.g., interest and noninterest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 2 classification. The carrying amounts of variable rate, fixed-term money market accounts approximate their fair values at the reporting date resulting in a Level 2 classification. The carrying amounts of variable rate, certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification. Short-term Borrowings The carrying amount approximates the fair value of short-term borrowings that reprice frequently and fully. Off-balance Sheet Instruments Fair values for off-balance sheet, credit-related financial instruments are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. The fair value of commitments is not material. Limitations Fair value estimates are made at a specific point in time, based on relevant market information about the financial instruments. These estimates do not reflect any premium or discount that could result from offering for sale at one time the entire holdings of a particular financial instrument. Fair value estimates are based on judgments regarding future expected loss experience, 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 estimates. |
Equity Plan
Equity Plan | 6 Months Ended |
Jun. 30, 2016 | |
Equity Plan | |
Equity Plan | 12) Equity Plan The Company maintained an Amended and Restated 2004 Equity Plan (the "2004 Plan") for directors, officers, and key employees. The 2004 Plan was terminated on May 23, 2013. On May 23, 2013, the Company's shareholders approved the 2013 Equity Incentive Plan (the "2013 Plan"). The equity plans provide for the grant of incentive and nonqualified stock options and restricted stock. The equity plans provide that the option price for both incentive and nonqualified stock options will be determined by the Board of Directors at no less than the fair value at the date of grant. Options granted vest on a schedule determined by the Board of Directors at the time of grant. Generally options vest over four years. All options expire no later than ten years from the date of grant. Restricted stock is subject to time vesting. For the six months ended June 30, 2016, the Company granted 295,500 shares of nonqualified stock options and 85,024 shares of restricted stock. There were 569,141 shares available for the issuance of equity awards under the 2013 Plan as of June 30, 2016. Stock option activity under the equity plans is as follows: Total Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 $ Granted $ Exercised ) $ Forfeited or expired ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at June 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested or expected to vest $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at June 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2016, there was $1,910,000 of total unrecognized compensation cost related to nonvested stock options granted under the equity plans. That cost is expected to be recognized over a weighted-average period of approximately 2.88 years. Restricted stock activity under the equity plans is as follows: Total Restricted Stock Award Number of Shares Weighted Average Grant Date Fair Value Nonvested shares at January 1, 2016 $ Granted $ Vested ) $ Forfeited or expired ) $ ​ ​ ​ ​ ​ ​ ​ ​ Nonvested shares at June 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ As of June 30, 2016, there was $1,942,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the equity plans. The cost is expected to be recognized over a weighted-average period of approximately 2.88 years. |
Capital Requirements
Capital Requirements | 6 Months Ended |
Jun. 30, 2016 | |
Capital Requirements | |
Capital Requirements | 13) Capital Requirements The Company and its subsidiary bank are subject to various regulatory capital requirements administered by the banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Company's financial statements and operations. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and HBC must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. As of January 1, 2015, HCC and HBC along with other community banking organizations became subject to new capital requirements. The implementation of the capital conservation buffer began on January 1, 2016 at 0.625% and will be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Federal Banking regulators approved the new rules to implement the revised capital adequacy standards of the Basel Committee on Banking Supervision, commonly called Basel III, and address relevant provisions of The Dodd Frank Wall Street Reform and Consumer Protection Act of 2010, as amended. The Company's consolidated capital ratios and the Bank's capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at June 30, 2016. Quantitative measures established by regulation to help ensure capital adequacy require the Company and HBC to maintain minimum amounts and ratios (set forth in the tables below) of total, Tier 1 capital, and common equity Tier 1 capital (as defined in the regulations) to risk weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Management believes that, as of June 30, 2016 and December 31, 2015, the Company and HBC met all capital adequacy guidelines to which they were subject. The Company's consolidated capital amounts and ratios are presented in the following table, together with capital adequacy requirements, under the Basel III regulatory requirements as of June 30, 2016, and December 31, 2015. Actual Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio(1) (Dollars in thousands) As of June 30, 2016: Total Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to average assets) (1) Includes 0.625% capital conservation buffer, effective January 1, 2016, except the Tier 1 Capital to average assets ratio. Actual Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2015: Total Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to average assets) HBC's actual capital amounts and ratios are presented in the following table, together with capital adequacy requirements, under the Basel III regulatory requirements as of June 30, 2016, and December 31, 2015. Actual To Be Well-Capitalized Under Basel III Regulatory Requirements Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio Amount Ratio(1) (Dollars in thousands) As of June 30, 2016: Total Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to average assets) (1) Includes 0.625% capital conservation buffer, effective January 1, 2016, except the Tier 1 Capital to average assets ratio. Actual To Be Well-Capitalized Under Basel III Regulatory Requirements Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2015: Total Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to average assets) HCC is dependent upon dividends from HBC. Under California General Corporation Law, the holders of common stock are entitled to receive dividends when and as declared by the Board of Directors, out of funds legally available. The California Financial Code provides that a state licensed bank may not make a cash distribution to its shareholders in excess of the lesser of the following: (i) the bank's retained earnings; or (ii) the bank's net income for its last three fiscal years, less the amount of any distributions made by the bank to its shareholders during such period. However, a bank, with the prior approval of the Commissioner of the California Department of Business Oversight—Division of Financial Institutions ("DBO") may make a distribution to its shareholders of an amount not to exceed the greater of (i) a bank's retained earnings; (ii) its net income for its last fiscal year; or (iii) its net income for the current fiscal year. Also with the prior approval of the Commissioner of the DBO and the shareholders of the bank, the bank may make a distribution to its shareholders, as a reduction in capital of the bank. In the event that the Commissioner determines that the shareholders' equity of a bank is inadequate or that the making of a distribution by a bank would be unsafe or unsound, the Commissioner may order a bank to refrain from making such a proposed distribution. As of June 30, 2016, HBC would not be required to obtain regulatory approval, and the amount available for cash divideneds is $12,361,000. Similar restrictions applied to the amount and sum of loan advances and other transfers of funds from HBC to the parent company. During the second and first quarters of 2016, HBC distributed dividends of $4,000,000 and $6,000,000, respectively, for a total of $10,000,000 during the first six months of 2016. |
Loss Contingencies
Loss Contingencies | 6 Months Ended |
Jun. 30, 2016 | |
Loss Contingencies | |
Loss Contingencies | 14) Loss Contingencies The Company's policy is to accrue for legal costs associated with both asserted and unasserted claims when it is probable that such costs will be incurred and such costs can be reasonably estimated. A number of parties have filed complaints in the Superior Court of California for the County of Santa Clara asserting certain claims against the Company arising from the transfer of funds. The complaints have been consolidated for trial, which is set for trial in early 2017. The Company has reached a tentative settlement on one of the complaints, which is not considered to be material. As to all claims, it is not possible to determine the amount of the loss, if any, arising from the claim in excess of the legal expenses expected to be incurred in defense of the litigation. The Company intends to vigorously defend the litigation. |
Noninterest Expense
Noninterest Expense | 6 Months Ended |
Jun. 30, 2016 | |
Noninterest Expense | |
Noninterest Expense | 15) Noninterest Expense The following table sets forth the various components of the Company's noninterest expense for the periods indicated: Three Months Ended June 30, 2016 2015 (Dollars in thousands) Salaries and employee benefits $ $ Occupancy and equipment Professional fees Amortizaton of intangible assets Software subscriptions Data processing FDIC deposit insurance premiums Insurance expense Foreclosed assets ) Acquisition and integration related costs — Other ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 2015 (Dollars in thousands) Salaries and employee benefits $ $ Occupancy and equipment Professional fees Amortizaton of intangible assets Software subscriptions Data processing FDIC deposit insurance premiums Insurance expense Foreclosed assets ) Acquisition and integration related costs — Other ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Segment Information
Business Segment Information | 6 Months Ended |
Jun. 30, 2016 | |
Business Segment Information | |
Business Segment Information | 16) Business Segment Information The following presents the Company's operating segments. The Company operates through two business segments: Banking segment and Factoring segment. Transactions between segments consist primarily of borrowed funds. Intersegment interest expense is allocated to the Factoring segment based on the Company's prime rate and funding costs. The provision for loan loss is allocated based on the segment's allowance for loan loss determination which considers the effects of charge-offs. Noninterest income and expense directly attributable to a segment are assigned to it. Taxes are paid on a consolidated basis and allocated for segment purposes. The Factoring segment includes only factoring originated by Bay View Funding. Three Months Ended June 30, 2016 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ $ $ (1) Includes the holding company's results of operations Three Months Ended June 30, 2015 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ — $ $ (1) Includes the holding company's results of operations Six Months Ended June 30, 2016 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ $ $ (1) Includes the holding company's results of operations Six Months Ended June 30, 2015 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision (credit) for loan losses ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ — $ $ (1) Includes the holding company's results of operations |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events | |
Subsequent Events | 17) Subsequent Events On July 28, 2016, the Company announced that its Board of Directors declared a $0.09 per share quarterly cash dividend to holders of common stock and Series C Preferred Stock (on an as converted basis). The dividend will be paid on August 24, 2016, to shareholders of record on August 9, 2016. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2016 | |
Basis of Presentation | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements of Heritage Commerce Corp (the "Company" or "HCC") and its wholly owned subsidiary, Heritage Bank of Commerce ("HBC"), have been prepared pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly, certain information and notes required by accounting principles generally accepted in the United States of America ("GAAP") for annual financial statements are not included herein. The interim statements should be read in conjunction with the consolidated financial statements and notes that were included in the Company's Form 10-K for the year ended December 31, 2015. The Company acquired BVF/CSNK Acquisition Corp., a Delaware corporation ("BVF/CSNK") on November 1, 2014, the parent company of CSNK Working Capital Finance Corp. dba Bay View Funding ("Bay View Funding"). BVF/CSNK was subsequently merged into Bay View Funding and Bay View Funding became a wholly owned subsidiary of HBC. The Company acquired Focus Business Bank ("Focus") on August 20, 2015. Focus was merged with HBC, with HBC as the surviving bank. Focus's results of operations have been included in the Company's results of operations beginning August 21, 2015. HBC is a commercial bank serving customers primarily located in Santa Clara, Alameda, Contra Costa, and San Benito counties of California. Bay View Funding provides business-essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10 percent of revenue for HBC or the Company. With the acquisition of Bay View Funding, the Company now has two reportable segments consisting of Banking and Factoring. The Company's management uses segment results in its operating and strategic planning. In management's opinion, all adjustments necessary for a fair presentation of these consolidated financial statements have been included and are of a normal and recurring nature. All intercompany transactions and balances have been eliminated. 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ significantly from these estimates. The results for the three and six months ended June 30, 2016 are not necessarily indicative of the results expected for any subsequent period or for the entire year ending December 31, 2016. |
Reclassifications | Reclassifications Certain reclassifications of prior year balances have been made to conform to the current year presentation. These reclassifications had no impact on the Company's consolidated financial position, results of operations or net change in cash and cash equivalents. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In September 2015, the FASB issued ASU No. 2015-16, Simplifying the Accounting for Measurement Period Adjustment. This update applies to all entities that have reported provisional amounts for items in a business combination for which the accounting is incomplete by the end of the reporting period in which the combination occurs and during the measurement period have an adjustment to provisional amounts recognized. The amendments in this update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this update require that the acquirer's record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments in this update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date. The amendments in this update are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The Company has evaluated the adoption of the new guidance and has determined it did not have a material impact on the consolidated financial statements. Newly Issued, but not yet Effective Accounting Standards In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments—Recognition and Measurement of Financial Assets and Liabilities . The new guidance is intended to improve the recognition and measurement of financial instruments by requiring: equity investments (other than equity method or consolidation) to be measured at fair value with changes in fair value recognized in net income; public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; separate presentation of financial assets and financial liabilities by measurement category and form of financial assets (i.e. securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; eliminating the requirement to disclose the fair value of financial instruments measured at amortized cost for organizations that are not public business entities; eliminating the requirement for non-public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is to be required to be disclosed for financial instruments measured at amortized cost on the balance sheet; and requiring a reporting organization to present separately in other comprehensive income the portion of the total change in fair value of a liability resulting from the change in the instrument-specific credit risk (also referred to as "own credit") when the organization has elected to measure the liability at fair value in accordance with the fair value option for financial instruments. The new guidance is effective for public business entities for fiscal years beginning after December 15, 2017. We are currently evaluating the impact of adopting the new guidance on the consolidated financial statements, but it is not expected to have a material impact. In February 2016, the FASB issued ASU No. 2016-02, Leases . The standard requires a lessee to recognize assets and liabilities on the balance sheet for leases with lease terms greater than 12 months. A lessee should recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term. When measuring assets and liabilities arising from a lease, a lessee (and a lessor) should include payments to be made in optional periods only if the lessee is reasonably certain to exercise an option to extend the lease or not to exercise an option to terminate the lease. Similarly, optional payments to purchase the underlying asset should be included in the measurement of lease assets and lease liabilities only if the lessee is reasonably certain to exercise that purchase option. Reasonably certain is a high threshold that is consistent with and intended to be applied in the same way as the reasonably assured threshold in the previous leases guidance. In addition, also consistent with the previous leases guidance, a lessee (and a lessor) should exclude most variable lease payments in measuring lease assets and lease liabilities, other than those that depend on an index or a rate or are in substance fixed payments. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. If a lessee makes this election, it should recognize lease expense for such leases generally on a straight-line basis over the lease term. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation : Improvements to Employee Share-Based Payment Accounting . The standard is intended to simplify several areas of accounting for share-based compensation arrangements, including the income tax impact, classification on the statement of cash flows and forfeitures. All excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. Excess tax benefits should be classified along with other income tax cash flows as an operating activity. An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current GAAP) or account for forfeitures when they occur. The threshold to qualify for equity classification permits withholding up to the maximum statutory tax rates in the applicable jurisdictions. Cash paid by an employer when directly withholding shares for tax withholding purposes should be classified as a financing activity. A nonpublic entity can make an accounting policy election to apply a practical expedient to estimate the expected term for all awards with performance or service conditions that meet certain conditions. A nonpublic entity can make a one-time accounting policy election to switch from measuring all liability-classified awards at fair value to intrinsic value. The new guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments . The standard is the final guidance on the new current expected credit loss ("CECL") model. The amendments in this update replace the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to estimate future credit loss estimates. As CECL encompasses all financial assets carried at amortized cost, the requirement that reserves be established based on an organization's reasonable and supportable estimate of expected credit losses extends to held to maturity ("HTM") debt securities. The update amends the accounting for credit losses on available-for-sale securities ("AFS"), whereby credit losses will be presented as an allowance as opposed to a write-down. In addition, CECL will modify the accounting for purchased loans with credit deterioration since origination, so that reserves are established at the date of acquisition for purchased loans. Lastly, the amendment requires enhanced disclosures on the significant estimates and judgments used to estimate credit losses, as well as on the credit quality and underwriting standards of an organization's portfolio. These disclosures require organizations to present the currently required credit quality disclosures disaggregated by the year of origination or vintage. The guidance allows for a modified retrospective approach with a cumulative effect adjustment to the balance sheet upon adoption (charge to retained earnings instead of the income statement). The new guidance is effective for public business entities for fiscal years, and interim periods within those years, beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the impact of adopting the new guidance on our consolidated financial statements. |
Earning Per Share (Tables)
Earning Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share | |
Schedule of reconciliation of factors used in computing basic and diluted earnings per common share | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands, except per share amounts) Net income available to common shareholders $ $ $ $ Less: undistributed earnings allocated to Series C Preferred Stock ) ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Distributed and undistributed earnings allocated to common shareholders $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted average common shares outstanding for basic earnings per common share Dilutive effect of stock options oustanding, using the the treasury stock method ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Shares used in computing diluted earnings per common share ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Basic earnings per share $ $ $ $ Diluted earnings per share $ $ $ $ |
Accumulated Other Comprehensi28
Accumulated Other Comprehensive Income (Loss) (''AOCI'') (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) ("AOCI") | |
Schedule of changes in AOCI by component | Three Months Ended June 30, 2016 and 2015 Unrealized Gains on Available- for-Sale Securities and I/O Strips Unamortized Unrealized Gain on Available- for-Sale Securities Reclassified to Held-to- Maturity Defined Benefit Pension Plan Items Total (Dollars in thousands) Beginning balance April 1, 2016, net of taxes $ $ $ ) $ ) Other comprehensive income (loss) before reclassification, net of taxes — ) Amounts reclassified from other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprensive income (loss), net of taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2016, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance April 1, 2015, net of taxes $ $ $ ) $ ) Other comprehensive loss before reclassification, net of taxes ) — ) ) Amounts reclassified from other comprehensive income (loss), net of taxes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2015, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 and 2015 Unrealized Gains on Available- for-Sale Securities and I/O Strips Unamortized Unrealized Gain on Available- for-Sale Securities Reclassified to Held-to- Maturity Defined Benefit Pension Plan Items Total (Dollars in thousands) Beginning balance January 1, 2016, net of taxes $ $ $ ) $ ) Other comprehensive income (loss) before reclassification, net of taxes — ) Amounts reclassified from other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprensive income (loss), net of taxes ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2016, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Beginning balance January 1, 2015, net of taxes $ $ $ ) $ ) Other comprehensive loss before reclassification, net of taxes ) — ) ) Amounts reclassified from other comprehensive income (loss), net of taxes — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net current period other comprehensive income (loss), net of taxes ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ending balance June 30, 2015, net of taxes $ $ $ ) $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of reclassifications out of AOCI into net income | Amounts Reclassified from AOCI Three Months Ended June 30, Affected Line Item Where Net Income is Presented Details About AOCI Components 2016 2015 (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ $ — Gains on sale of securities ) — Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ — Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity Interest income on taxable securities ) ) Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of defined benefit pension plan items(1) Prior transition obligation Actuarial losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Salaries and employee benefits Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassification for the period $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 9—Benefit Plans) and includes split-dollar life insurance benefit plan. Amounts Reclassified from AOCI Six Months Ended June 30, Affected Line Item Where Net Income is Presented Details About AOCI Components 2016 2015 (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ $ — Gains on sale of securities ) — Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ — Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity Interest income on taxable securities ) ) Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Amortization of defined benefit pension plan items(1) Prior transition obligation ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ Actuarial losses ) ) Salaries and employee benefits Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ) ) Net of tax ​ ​ ​ ​ ​ ​ ​ ​ ​ Total reclassification for the period $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 9—Benefit Plans) and includes split-dollar life insurance benefit plan. |
Securities (Tables)
Securities (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Securities | |
Schedule of amortized cost and estimated fair value of securities | June 30, 2016 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ $ — $ Trust preferred securities — Corporate bonds — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Agency mortgage-backed securities $ $ $ ) $ Municipals—exempt from Federal tax ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ $ ) $ U.S. Treasury — ) Trust preferred securities — U.S. Government sponsored entities ) Corporate bonds — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Municipals—exempt from Federal tax $ $ $ ) $ Agency mortgage-backed securities ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of securities with unrealized losses | Less Than 12 Months 12 Months or More Total June 30, 2016 Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ $ ) $ $ ) $ $ ) Municipals—exempt from Federal tax — — ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less Than 12 Months 12 Months or More Total December 31, 2015 Fair Value Unrealized (Losses) Fair Value Unrealized (Losses) Fair Value Unrealized (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ $ ) $ $ ) $ $ ) U.S. Treasury ) — — ) U.S. Government sponsored entities ) — — ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Securities held-to-maturity: Municipals—exempt from Federal tax $ $ ) $ $ ) $ $ ) Agency mortgage-backed securities ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ) $ $ ) $ $ ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of proceeds from sales of securities and the resulting gains and losses | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Proceeds $ $ — $ $ — Gross gains — — Gross losses ) — ) — |
Schedule of amortized cost and estimated fair values of securities, by contractual maturity | Available-for-sale Amortized Cost Estimated Fair Value (Dollars in thousands) Due after one through five years $ $ Due after ten years Agency mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Held-to-maturity Amortized Cost Estimated Fair Value (Dollars in thousands) Due 3 months or less $ $ Due after 3 months through one year Due after one through five years Due after five through ten years Due after ten years Agency mortgage-backed securities ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Loans (Tables)
Loans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Loans | |
Schedule of loans | June 30, 2016 December 31, 2015 (Dollars in thousands) Loans held-for-investment: Commercial $ $ Real estate: Commercial Land and construction Home equity Residential mortgages — Consumer ​ ​ ​ ​ ​ ​ ​ ​ Loans Deferred loan origination fees, net ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loans, net of deferred fees Allowance for loan losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ Loans, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of changes in allowance for loan losses | Three Months Ended June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries — Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Three Months Ended June 30, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries Provision (credit) for loan losses ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) — — ) Recoveries — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries — Provision (credit) for loan losses ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Balance, beginning of period $ $ $ $ Charge-offs ) ) — ) Recoveries ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net recoveries Provision (credit) for loan losses ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance, end of period $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method | June 30, 2016 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ $ $ — $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: Individually evaluated for impairment $ $ $ $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loan balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ $ $ — $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total allowance balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Loans: Individually evaluated for impairment $ $ $ $ Collectively evaluated for impairment Acquired with deterioriated credit quality — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total loan balance $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of loans held-for-investment individually evaluated for impairment by class of loans | June 30, 2016 December 31, 2015 Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ $ $ — $ $ $ — Real estate: Commercial — — Land and construction — — Home Equity — — Consumer — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total with no related allowance recorded — — With an allowance recorded: Commercial Real estate: Home Equity ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total with an allowance recorded ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of average impaired loans with interest recognized and cash-basis interest earned on impaired loans | Three Months Ended June 30, 2016 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Three Months Ended June 30, 2015 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Six Months Ended June 30, 2016 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — Six Months Ended June 30, 2015 Real Estate Commercial Commercial Land and Construction Home Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ $ $ $ $ $ Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest earned $ — $ — $ — $ — $ — $ — |
Schedule of nonperforming loans | June 30, December 31, 2015 2016 2015 (Dollars in thousands) Nonaccrual loans—held-for-investment $ $ $ Restructured and loans over 90 days past due and still accruing — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total nonperforming loans Other restructured loans ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans, excluding loans held-for-sale $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of nonperforming loans by class | June 30, 2016 December 31, 2015 Nonaccrual Restructured and Loans Over 90 Days Past Due and Still Accruing Total Nonaccrual Restructured and Loans Over 90 Days Past Due and Still Accruing Total (Dollars in thousands) Commercial $ $ — $ $ $ $ Real estate: Commercial — — Land and construction — — Home equity — Consumer — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ — $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of aging of past due loans by class of loans | June 30, 2016 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Loans Not Past Due Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial — — Land and construction — — Home equity Residential mortgages — — — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2015 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Loans Not Past Due Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial — — — — Land and construction — — Home equity — — Consumer — — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of loan portfolio by loan type and credit quality classification | June 30, 2016 December 31, 2015 Nonclassified Classified Total Nonclassified Classified Total (Dollars in thousands) Commercial $ $ $ $ $ $ Real estate: Commercial Land and construction Home equity Residential mortgages — — — — Consumer ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Combinations (Tables)
Business Combinations (Tables) - Focus Business Bank | 6 Months Ended |
Jun. 30, 2016 | |
Business Combinations | |
Summary of the estimated fair values of the assets acquired and liabilities assumed | (Dollars in thousands) Assets acquired: Cash and cash item $ Federal funds sold and deposits in other financial institutions Securities available-for-sale Securities held-to-maturity Loans held-for-sale Net loans Goodwill Core deposit intangible asset Corporate owned life insurance Other assets, net ​ ​ ​ ​ ​ Total assets acquired Liabilities asssumed: Deposits Other liabilities ​ ​ ​ ​ ​ Total liabilities ​ ​ ​ ​ ​ Net assets acquired $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Summary of consideration paid | August 20, 2015 (Dollars in thousands) Cash paid for Focus in-the-money stock options $ Common stock issued to Focus shareholders at $10.68 per share ​ ​ ​ ​ ​ Total consideration $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of unaudited pro forma combined consolidated financial statements and related adjustments | UNAUDITED Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 (Dollars in thousands, except per share amounts) Net interest income $ $ Provision for loan losses Noninterest income Noninterest expense ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income per share—basic $ $ Net income per share—diluted $ $ |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Goodwill and Other Intangible Assets | |
Schedule of estimated amortization expense | Estimated amortization expense for 2016 and each of the next five years following 2016: Bay View Funding Year Diablo Valley Bank Core Deposit Intangible Focus Core Deposit Intangible Below Market Value Lease Intangible Customer & Brokered Relationship Intangible Non-Compete Agreement Intangible Total Amortization Expense (Dollars in thousands) 2016 $ $ $ $ $ $ 2017 2018 — — — 2019 — — — 2020 — — — 2021 — — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ $ $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Income Taxes | |
Summary of carrying amount of income tax housing investment | June 30, 2016 December 31, 2015 (Dollars in thousands) Low income housing investments $ $ Future commitments $ $ |
Benefit Plans (Tables)
Benefit Plans (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Supplemental Retirement Plan | |
Benefit plans | |
Schedule of components of net periodic benefit cost | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Components of net periodic benefit cost: Service cost $ $ $ $ Interest cost Amortization of net actuarial loss ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Split-Dollar Life Insurance Benefit Plan | |
Benefit plans | |
Schedule of components of net periodic benefit cost | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 (Dollars in thousands) Amortization of prior transition obligation $ ) $ ) $ ) $ ) Interest cost ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net periodic benefit cost $ $ ) $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of change in projected benefit obligation | June 30, 2016 December 31, 2015 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ $ Interest cost Amortization of net actuarial loss — ​ ​ ​ ​ ​ ​ ​ ​ Projected benefit obligation at end of period $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of amounts recognized in accumulated other comprehensive loss | June 30, 2016 December 31, 2015 (Dollars in thousands) Net actuarial loss $ $ Prior transition obligation ​ ​ ​ ​ ​ ​ ​ ​ Accumulated other comprehensive loss $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Fair Value (Tables)
Fair Value (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value | |
Schedule of financial assets and liabilities measured on a recurring basis | Fair Value Measurements Using Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Dollars in thousands) Assets at June 30, 2016: Available-for-sale securities: Agency mortgage-backed securities $ — $ — Trust preferred securities $ — $ — Corporate bonds $ — $ — I/O strip receivables $ — $ — Assets at December 31, 2015: Available-for-sale securities: Agency mortgage-backed securities $ — $ — U.S. Treasury $ $ — — Trust preferred securities $ — $ — U.S. Government sponsored entities $ — $ — Corporate bonds $ — $ — I/O strip receivables $ — $ — |
Schedule of assets and liabilities measured on a non-recurring basis | Fair Value Measurements Using Balance Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) (Dollars in thousands) Assets at June 30, 2016: Impaired loans—held-for-investment: Commercial $ — — $ Real estate: Commercial — — Land and construction — — Home equity — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Assets at December 31, 2015: Impaired loans—held-for-investment: Commercial $ — — $ Real estate: Commercial — — Land and construction — — Home equity — — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ — — $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of impaired loans held-for-investment and impaired loans held-for-investment carried at fair value | June 30, 2016 December 31, 2015 (Dollars in thousands) Impaired loans held-for-investment: Book value of impaired loans held-for-investment carried at fair value $ $ Book value of impaired loans held-for-investment carried at cost ​ ​ ​ ​ ​ ​ ​ ​ Total impaired loans held-for-investment $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans held-for-investment carried at fair value: Book value of impaired loans held-for-investment carried at fair value $ $ Specific valuation allowance ) ) ​ ​ ​ ​ ​ ​ ​ ​ Impaired loans held-for-investment carried at fair value, net $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | June 30, 2016 Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average) (Dollars in thousands) Impaired loans—held-for-investment: Commercial $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Real estate: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) Land and construction $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Home equity $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) December 31, 2015 Fair Value Valuation Techniques Unobservable Inputs Range (Weighted Average) (Dollars in thousands) Impaired loans—held-for-investment: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 5% (5%) Real estate: Commercial $ Market Approach Discount adjustment for differences between comparable sales 0% to 3% (3%) Land and construction $ Market Approach Discount adjustment for differences between comparable sales Less than 1% Home equity $ Market Approach Discount adjustment for differences between comparable sales 0% to 2% (2%) |
Schedule of carrying amounts and estimated fair values of financial instruments | The carrying amounts and estimated fair values of financial instruments at June 30, 2016 are as follows: Estimated Fair Value Carrying Amounts Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available-for-sale — — Securities held-to-maturity — — Loans (including loans held-for-sale), net — FHLB and FRB stock — — — N/A Accrued interest receivable — I/O strips receivables — — Liabilities: Time deposits $ $ — $ $ — $ Other deposits — — Accrued interest payable — — The carrying amounts and estimated fair values of the Company's financial instruments at December 31, 2015: Estimated Fair Value Carrying Amounts Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ $ $ — $ — $ Securities available-for-sale — Securities held-to-maturity — — Loans (including loans held-for-sale), net — FHLB stock, FRB stock, and other investments — — — N/A Accrued interest receivable I/O strips receivables — — Liabilities: Time deposits $ $ — $ $ — $ Other deposits — — Short-term borrowings — — Accrued interest payable — — |
Equity Plan (Tables)
Equity Plan (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Equity Plan | |
Schedule of stock option activity under the equity plans | Total Stock Options Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (Years) Aggregate Intrinsic Value Outstanding at January 1, 2016 $ Granted $ Exercised ) $ Forfeited or expired ) $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Outstanding at June 30, 2016 $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vested or expected to vest $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercisable at June 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Schedule of restricted stock activity under the equity plans | Total Restricted Stock Award Number of Shares Weighted Average Grant Date Fair Value Nonvested shares at January 1, 2016 $ Granted $ Vested ) $ Forfeited or expired ) $ ​ ​ ​ ​ ​ ​ ​ ​ Nonvested shares at June 30, 2016 $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Capital Requirements (Tables)
Capital Requirements (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Requirements | |
Schedule of actual capital and required amounts and ratios | Actual Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio(1) (Dollars in thousands) As of June 30, 2016: Total Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to average assets) (1) Includes 0.625% capital conservation buffer, effective January 1, 2016, except the Tier 1 Capital to average assets ratio. Actual Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2015: Total Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % (to average assets) |
HBC (Wholly-owned Subsidiary) | |
Capital Requirements | |
Schedule of actual capital and required amounts and ratios | Actual To Be Well-Capitalized Under Basel III Regulatory Requirements Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio Amount Ratio(1) (Dollars in thousands) As of June 30, 2016: Total Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to average assets) (1) Includes 0.625% capital conservation buffer, effective January 1, 2016, except the Tier 1 Capital to average assets ratio. Actual To Be Well-Capitalized Under Basel III Regulatory Requirements Required For Capital Adequacy Purposes Under Basel III Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) As of December 31, 2015: Total Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Common Equity Tier 1 Capital $ % $ % $ % (to risk-weighted assets) Tier 1 Capital $ % $ % $ % (to average assets) |
Noninterest Expense (Tables)
Noninterest Expense (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Noninterest Expense | |
Schedule of noninterest expense | Three Months Ended June 30, 2016 2015 (Dollars in thousands) Salaries and employee benefits $ $ Occupancy and equipment Professional fees Amortizaton of intangible assets Software subscriptions Data processing FDIC deposit insurance premiums Insurance expense Foreclosed assets ) Acquisition and integration related costs — Other ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Six Months Ended June 30, 2016 2015 (Dollars in thousands) Salaries and employee benefits $ $ Occupancy and equipment Professional fees Amortizaton of intangible assets Software subscriptions Data processing FDIC deposit insurance premiums Insurance expense Foreclosed assets ) Acquisition and integration related costs — Other ​ ​ ​ ​ ​ ​ ​ ​ Total noninterest expense $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Business Segment Information | |
Schedule of information by operating segment | Three Months Ended June 30, 2016 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ $ $ (1) Includes the holding company's results of operations Three Months Ended June 30, 2015 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ — $ $ (1) Includes the holding company's results of operations Six Months Ended June 30, 2016 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision for loan losses ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ $ $ (1) Includes the holding company's results of operations Six Months Ended June 30, 2015 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ $ $ Intersegment interest allocations ) — Total interest expense — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income Provision (credit) for loan losses ) ) ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net interest income after provision Noninterest income Noninterest expense Intersegment expense allocations ) — ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Income before income taxes Income tax expense ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net income $ $ $ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total assets $ $ $ Loans, net of deferred fees $ $ $ Goodwill $ — $ $ (1) Includes the holding company's results of operations |
Basis of Presentation (Details)
Basis of Presentation (Details) | 6 Months Ended |
Jun. 30, 2016segmentcustomer | |
Segment Reporting | |
Number of customers accounting for more than 10 percent of revenue for HBC or the Company | customer | 0 |
Number of operating segments | segment | 2 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Reconciliation of factors used in computing basic and diluted earnings per common share | ||||
Net income available to common shareholders | $ 6,791 | $ 4,029 | $ 12,393 | $ 7,719 |
Less: undistributed earnings allocated to Series C Preferred Stock | (576) | (331) | (979) | (605) |
Distributed and undistributed earnings allocated to common shareholders | $ 6,215 | $ 3,698 | $ 11,414 | $ 7,114 |
Weighted average common shares outstanding for basic earnings per common share (in shares) | 32,243,935 | 26,573,909 | 32,184,825 | 26,541,816 |
Dilutive effect of stock options outstanding, using the treasury stock method (in shares) | 268,676 | 193,346 | 260,691 | 182,444 |
Shares used in computing diluted earnings per common share (in shares) | 32,512,611 | 26,767,255 | 32,445,516 | 26,724,260 |
Basic earnings per share (in dollars per share) | $ 0.19 | $ 0.14 | $ 0.35 | $ 0.27 |
Diluted earnings per share (in dollars per share) | $ 0.19 | $ 0.14 | $ 0.35 | $ 0.27 |
Accumulated Other Comprehensi42
Accumulated Other Comprehensive Income (Loss) (''AOCI'') - Changes in AOCI by Component (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes in AOCI by Component | ||||
Balance at the beginning of the period, net of taxes | $ (6,220) | |||
Net current period other comprehensive income (loss), net of taxes | $ 1,356 | $ (1,954) | 4,078 | $ (1,420) |
Balance at the end of the period, net of taxes | (2,142) | (2,142) | ||
Accumulated Other Comprehensive Income / (Loss) | ||||
Changes in AOCI by Component | ||||
Balance at the beginning of the period, net of taxes | (3,498) | (1,317) | (6,220) | (1,851) |
Other comprehensive income (loss) before reclassification, net of taxes | 1,574 | (1,976) | 4,381 | (1,483) |
Amounts reclassified from other comprehensive income (loss), net of taxes | (218) | 22 | (303) | 63 |
Net current period other comprehensive income (loss), net of taxes | 1,356 | (1,954) | 4,078 | (1,420) |
Balance at the end of the period, net of taxes | (2,142) | (3,271) | (2,142) | (3,271) |
Unrealized Gains on Available-for-Sale Securities and I/O Strips | ||||
Changes in AOCI by Component | ||||
Balance at the beginning of the period, net of taxes | 3,792 | 4,180 | 1,090 | 3,666 |
Other comprehensive income (loss) before reclassification, net of taxes | 1,579 | (1,974) | 4,386 | (1,460) |
Amounts reclassified from other comprehensive income (loss), net of taxes | (201) | (306) | ||
Net current period other comprehensive income (loss), net of taxes | 1,378 | (1,974) | 4,080 | (1,460) |
Balance at the end of the period, net of taxes | 5,170 | 2,206 | 5,170 | 2,206 |
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | ||||
Changes in AOCI by Component | ||||
Balance at the beginning of the period, net of taxes | 395 | 427 | 403 | 435 |
Amounts reclassified from other comprehensive income (loss), net of taxes | (44) | (8) | (52) | (16) |
Net current period other comprehensive income (loss), net of taxes | (44) | (8) | (52) | (16) |
Balance at the end of the period, net of taxes | 351 | 419 | 351 | 419 |
Defined Benefit Pension Plan Items | ||||
Changes in AOCI by Component | ||||
Balance at the beginning of the period, net of taxes | (7,685) | (5,924) | (7,713) | (5,952) |
Other comprehensive income (loss) before reclassification, net of taxes | (5) | (2) | (5) | (23) |
Amounts reclassified from other comprehensive income (loss), net of taxes | 27 | 30 | 55 | 79 |
Net current period other comprehensive income (loss), net of taxes | 22 | 28 | 50 | 56 |
Balance at the end of the period, net of taxes | $ (7,663) | $ (5,896) | $ (7,663) | $ (5,896) |
Accumulated Other Comprehensi43
Accumulated Other Comprehensive Income (Loss) (''AOCI'') - Amount Reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Amount Reclassified from AOCI | ||||
Gains on sale of securities | $ 347 | $ 527 | ||
Interest income on taxable securities | 2,829 | $ 1,554 | 5,603 | $ 3,157 |
Income tax expense | (4,377) | (2,690) | (8,103) | (5,120) |
Net income | 7,295 | 4,477 | 13,401 | 8,615 |
Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Net of tax | 218 | (22) | 303 | (63) |
Unrealized Gains on Available-for-Sale Securities and I/O Strips | ||||
Amount Reclassified from AOCI | ||||
Net of tax | 201 | 306 | ||
Unrealized Gains on Available-for-Sale Securities and I/O Strips | Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Gains on sale of securities | 347 | 527 | ||
Income tax expense | (146) | (221) | ||
Net income | 201 | 306 | ||
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | ||||
Amount Reclassified from AOCI | ||||
Net of tax | 44 | 8 | 52 | 16 |
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Interest income on taxable securities | 76 | 14 | 90 | 28 |
Income tax expense | (32) | (6) | (38) | (12) |
Net income | 44 | 8 | 52 | 16 |
Defined Benefit Pension Plan Items | ||||
Amount Reclassified from AOCI | ||||
Net of tax | (27) | (30) | (55) | (79) |
Defined Benefit Pension Plan Items | Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Income before income tax | (47) | (52) | (94) | (136) |
Income tax benefit | 20 | 22 | 39 | 57 |
Net of tax | (27) | (30) | (55) | (79) |
Prior transition obligation | Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Income before income tax | 13 | 44 | 26 | 56 |
Actuarial losses | Amount Reclassified from AOCI | ||||
Amount Reclassified from AOCI | ||||
Income before income tax | $ (60) | $ (96) | $ (120) | $ (192) |
Securities - Amortized Cost and
Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Securities available-for-sale: | ||
Amortized Cost | $ 382,686 | $ 384,578 |
Gross Unrealized Gains | 7,749 | 2,863 |
Gross Unrealized Losses | (2,362) | |
Securities available-for-sale | 390,435 | 385,079 |
Agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | 366,690 | 324,077 |
Gross Unrealized Gains | 6,770 | 2,457 |
Gross Unrealized Losses | (2,304) | |
Securities available-for-sale | 373,460 | 324,230 |
U.S. Treasury | ||
Securities available-for-sale: | ||
Amortized Cost | 30,047 | |
Gross Unrealized Losses | (44) | |
Securities available-for-sale | 30,003 | |
Trust preferred securities | ||
Securities available-for-sale: | ||
Amortized Cost | 15,000 | 15,000 |
Gross Unrealized Gains | 938 | 132 |
Securities available-for-sale | 15,938 | 15,132 |
U.S. Government sponsored entities | ||
Securities available-for-sale: | ||
Amortized Cost | 9,042 | |
Gross Unrealized Gains | 13 | |
Gross Unrealized Losses | (14) | |
Securities available-for-sale | 9,041 | |
Corporate bonds | ||
Securities available-for-sale: | ||
Amortized Cost | 996 | 6,412 |
Gross Unrealized Gains | 41 | 261 |
Securities available-for-sale | $ 1,037 | $ 6,673 |
Securities - Amortized Cost a45
Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Held-to-maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Securities held-to-maturity: | ||
Amortized Cost | $ 210,170 | $ 109,311 |
Gross Unrealized Gains | 4,504 | 1,541 |
Gross Unrealized Losses | (50) | (1,031) |
Securities held-to-maturity | 214,624 | 109,821 |
Agency mortgage-backed securities | ||
Securities held-to-maturity: | ||
Amortized Cost | 118,779 | 15,793 |
Gross Unrealized Gains | 1,262 | 24 |
Gross Unrealized Losses | (9) | (168) |
Securities held-to-maturity | 120,032 | 15,649 |
Municipals - exempt from Federal tax | ||
Securities held-to-maturity: | ||
Amortized Cost | 91,391 | 93,518 |
Gross Unrealized Gains | 3,242 | 1,517 |
Gross Unrealized Losses | (41) | (863) |
Securities held-to-maturity | $ 94,592 | $ 94,172 |
Securities - Securities with Un
Securities - Securities with Unrealized Losses at Year End - Securities Available-for-sale (Details) $ in Thousands | Dec. 31, 2015USD ($) |
Available-for-sale, Fair Value | |
Less Than 12 Months | $ 276,050 |
12 Months or More | 2,165 |
Total | 278,215 |
Available-for-sale, Unrealized Losses | |
Less Than 12 Months | (2,316) |
12 Months or More | (46) |
Total | (2,362) |
Agency mortgage-backed securities | |
Available-for-sale, Fair Value | |
Less Than 12 Months | 241,067 |
12 Months or More | 2,165 |
Total | 243,232 |
Available-for-sale, Unrealized Losses | |
Less Than 12 Months | (2,258) |
12 Months or More | (46) |
Total | (2,304) |
U.S. Treasury | |
Available-for-sale, Fair Value | |
Less Than 12 Months | 30,003 |
Total | 30,003 |
Available-for-sale, Unrealized Losses | |
Less Than 12 Months | (44) |
Total | (44) |
U.S. Government sponsored entities | |
Available-for-sale, Fair Value | |
Less Than 12 Months | 4,980 |
Total | 4,980 |
Available-for-sale, Unrealized Losses | |
Less Than 12 Months | (14) |
Total | $ (14) |
Securities - Securities with 47
Securities - Securities with Unrealized Losses at Year End - Securities Held-to-maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Held-to-maturity, Fair Value | ||
Less Than 12 Months | $ 763 | $ 17,072 |
12 Months or More | 4,361 | 28,821 |
Total | 5,124 | 45,893 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | (1) | (167) |
12 Months or More | (49) | (864) |
Total | (50) | (1,031) |
Municipals - exempt from Federal tax | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 9,920 | |
12 Months or More | 2,224 | 24,412 |
Total | 2,224 | 34,332 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | (78) | |
12 Months or More | (41) | (785) |
Total | (41) | (863) |
Agency mortgage-backed securities | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 763 | 7,152 |
12 Months or More | 2,137 | 4,409 |
Total | 2,900 | 11,561 |
Held-to-maturity, Unrealized Losses | ||
Less Than 12 Months | (1) | (89) |
12 Months or More | (8) | (79) |
Total | $ (9) | $ (168) |
Securities - Additional Informa
Securities - Additional Information (Details) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016USD ($)security | Dec. 31, 2015USD ($)security | |
Additional Information | ||
The number of holdings of securities of any one issuer other than the U.S. Government and its sponsored entities | 0 | |
Holdings of securities as percentage of shareholders' equity, considered as threshold for disclosure purpose | 10.00% | |
Number of securities held | 462 | 460 |
Number of available for sale securities held | 184 | 193 |
Number of held to maturity securities held | 278 | 267 |
Number of securities with fair values below amortized cost | 9 | 193 |
Total unrealized loss for securities 12 months or more | $ | $ 49 | $ 910 |
Securities - Proceeds from Sale
Securities - Proceeds from Sales of Securities and the Resulting Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2016 | Jun. 30, 2016 | |
Proceeds from Sales of Securities and the Resulting Gains and Losses | ||
Proceeds | $ 43,573 | $ 49,171 |
Gross gains | 364 | 544 |
Gross losses | $ (17) | $ (17) |
Securities - Amortized Cost a50
Securities - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity - Securities Available-for-sale (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Available-for-sale, Amortized Cost | ||
Due after one through five years | $ 996 | |
Due after ten years | 15,000 | |
Agency mortgage-backed securities | 366,690 | |
Total | 382,686 | |
Available-for-sale, Estimated Fair Value | ||
Due after one through five years | 1,037 | |
Due after ten years | 15,938 | |
Agency mortgage-backed securities | 373,460 | |
Estimated Fair Value | $ 390,435 | $ 385,079 |
Securities - Amortized Cost a51
Securities - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity - Securities Held-to-maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Held-to-maturity, Amortized Cost | ||
Due 3 months or less | $ 498 | |
Due after 3 months through one year | 503 | |
Due after one through five years | 4,721 | |
Due after five through ten years | 14,970 | |
Due after ten years | 70,699 | |
Agency mortgage-backed securities | 118,779 | |
Total | 210,170 | $ 109,311 |
Held-to-maturity, Estimated Fair Value | ||
Due 3 months or less | 499 | |
Due after 3 months through one year | 506 | |
Due after one through five years | 4,815 | |
Due after five through ten years | 15,941 | |
Due after ten years | 72,831 | |
Agency mortgage-backed securities | 120,032 | |
Estimated Fair Value | $ 214,624 | $ 109,821 |
Loans - Loan Balances (Details)
Loans - Loan Balances (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Loans held-for-investment: | ||||||
Total loan balance | $ 1,464,855 | $ 1,359,458 | ||||
Deferred loan origination fees, net | (741) | (742) | ||||
Loans, net of deferred fees | 1,464,114 | 1,358,716 | $ 1,133,603 | |||
Allowance for loan losses | (19,921) | $ (19,458) | (18,926) | (18,757) | $ (18,554) | $ (18,379) |
Loans, net | 1,444,193 | 1,339,790 | ||||
Commercial | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 610,385 | 556,522 | ||||
Allowance for loan losses | (11,528) | (11,279) | (10,748) | (11,193) | (10,856) | (11,187) |
Real estate | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 834,433 | 786,926 | ||||
Allowance for loan losses | (8,277) | (8,068) | (8,076) | (7,450) | (7,554) | (7,070) |
Real estate | Commercial | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 619,539 | 625,665 | ||||
Real estate | Land and construction | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 103,710 | 84,428 | ||||
Real estate | Home equity | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 78,332 | 76,833 | ||||
Real estate | Residential mortgages | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 32,852 | |||||
Consumer | ||||||
Loans held-for-investment: | ||||||
Total loan balance | 20,037 | 16,010 | ||||
Allowance for loan losses | $ (116) | $ (111) | $ (102) | $ (114) | $ (144) | $ (122) |
Loans - Additional Information
Loans - Additional Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Loans | ||
Loans | $ 1,464,855 | $ 1,359,458 |
Real estate | ||
Loans | ||
Loans | 834,433 | 786,926 |
Real estate | Residential mortgages | ||
Loans | ||
Jumbo single family residential mortgage loans purchased | 35,014 | |
Average loan principal amount | $ 850 | |
Average portfolio yield | 3.11% | |
Servicing fees (as a percent) | 25.00% | |
Loans | $ 32,852 | |
Focus Business Bank | ||
Loans | ||
Loans acquired in the Focus transaction | $ 117,655 | $ 141,343 |
Loans - Changes in the Allowanc
Loans - Changes in the Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Changes in the Allowance for Loan Losses | ||||
Balance, beginning of period | $ 19,458 | $ 18,554 | $ 18,926 | $ 18,379 |
Charge-offs | (23) | (9) | (140) | (223) |
Recoveries | 135 | 190 | 383 | 639 |
Net recoveries | 112 | 181 | 243 | 416 |
Provision (credit) for loan losses | 351 | 22 | 752 | (38) |
Balance, end of period | 19,921 | 18,757 | 19,921 | 18,757 |
Commercial | ||||
Changes in the Allowance for Loan Losses | ||||
Balance, beginning of period | 11,279 | 10,856 | 10,748 | 11,187 |
Charge-offs | (23) | (9) | (140) | (221) |
Recoveries | 129 | 46 | 161 | 482 |
Net recoveries | 106 | 37 | 21 | 261 |
Provision (credit) for loan losses | 143 | 300 | 759 | (255) |
Balance, end of period | 11,528 | 11,193 | 11,528 | 11,193 |
Real estate | ||||
Changes in the Allowance for Loan Losses | ||||
Balance, beginning of period | 8,068 | 7,554 | 8,076 | 7,070 |
Charge-offs | (2) | |||
Recoveries | 6 | 114 | 222 | 127 |
Net recoveries | 6 | 114 | 222 | 125 |
Provision (credit) for loan losses | 203 | (218) | (21) | 255 |
Balance, end of period | 8,277 | 7,450 | 8,277 | 7,450 |
Consumer | ||||
Changes in the Allowance for Loan Losses | ||||
Balance, beginning of period | 111 | 144 | 102 | 122 |
Recoveries | 30 | 30 | ||
Net recoveries | 30 | 30 | ||
Provision (credit) for loan losses | 5 | (60) | 14 | (38) |
Balance, end of period | $ 116 | $ 114 | $ 116 | $ 114 |
Loans - Balance in the Allowanc
Loans - Balance in the Allowance for Loan Losses and the Recorded Investment in Loans by Portfolio Segment, Based on the Impairment Method (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 |
Balance in the Allowance for Loan Losses and the Recorded Investment in Loans by Portfolio Segment, Based on the Impairment Method | ||||||
Allowance for loan losses, Individually evaluated for impairment | $ 318 | $ 286 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 19,603 | 18,640 | ||||
Total allowance balance | 19,921 | $ 19,458 | 18,926 | $ 18,757 | $ 18,554 | $ 18,379 |
Loans, Individually evaluated for impairment | 4,256 | 6,290 | ||||
Loans, Collectively evaluated for impairment | 1,460,354 | 1,352,931 | ||||
Loans, Acquired with deteriorated credit quality | 245 | 237 | ||||
Total loan balance | 1,464,855 | 1,359,458 | ||||
Commercial | ||||||
Balance in the Allowance for Loan Losses and the Recorded Investment in Loans by Portfolio Segment, Based on the Impairment Method | ||||||
Allowance for loan losses, Individually evaluated for impairment | 207 | 174 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 11,321 | 10,574 | ||||
Total allowance balance | 11,528 | 11,279 | 10,748 | 11,193 | 10,856 | 11,187 |
Loans, Individually evaluated for impairment | 440 | 2,014 | ||||
Loans, Collectively evaluated for impairment | 609,700 | 554,271 | ||||
Loans, Acquired with deteriorated credit quality | 245 | 237 | ||||
Total loan balance | 610,385 | 556,522 | ||||
Real estate | ||||||
Balance in the Allowance for Loan Losses and the Recorded Investment in Loans by Portfolio Segment, Based on the Impairment Method | ||||||
Allowance for loan losses, Individually evaluated for impairment | 111 | 112 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 8,166 | 7,964 | ||||
Total allowance balance | 8,277 | 8,068 | 8,076 | 7,450 | 7,554 | 7,070 |
Loans, Individually evaluated for impairment | 3,813 | 4,272 | ||||
Loans, Collectively evaluated for impairment | 830,620 | 782,654 | ||||
Total loan balance | 834,433 | 786,926 | ||||
Consumer | ||||||
Balance in the Allowance for Loan Losses and the Recorded Investment in Loans by Portfolio Segment, Based on the Impairment Method | ||||||
Allowance for loan losses, Collectively evaluated for impairment | 116 | 102 | ||||
Total allowance balance | 116 | $ 111 | 102 | $ 114 | $ 144 | $ 122 |
Loans, Individually evaluated for impairment | 3 | 4 | ||||
Loans, Collectively evaluated for impairment | 20,034 | 16,006 | ||||
Total loan balance | $ 20,037 | $ 16,010 |
Loans - Loans Held for Investme
Loans - Loans Held for Investment Individually Evaluated for Impairment by Class of Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Unpaid Principal Balance | |||
Total with no related allowance recorded | $ 4,506 | $ 5,139 | |
Total with an allowance recorded | 872 | 2,265 | |
Total | 5,378 | 7,404 | |
Recorded Investment | |||
Total with no related allowance recorded | 3,629 | 4,262 | |
Total with an allowance recorded | 872 | 2,265 | |
Total | 4,501 | 6,527 | $ 4,990 |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 318 | 286 | |
Commercial | |||
Unpaid Principal Balance | |||
Total with no related allowance recorded | 285 | 745 | |
Total with an allowance recorded | 400 | 1,506 | |
Recorded Investment | |||
Total with no related allowance recorded | 285 | 745 | |
Total with an allowance recorded | 400 | 1,506 | |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 207 | 174 | |
Consumer | |||
Unpaid Principal Balance | |||
Total with no related allowance recorded | 3 | 4 | |
Recorded Investment | |||
Total with no related allowance recorded | 3 | 4 | |
Commercial | Real estate | |||
Unpaid Principal Balance | |||
Total with no related allowance recorded | 3,708 | 3,851 | |
Recorded Investment | |||
Total with no related allowance recorded | 2,849 | 2,992 | |
Land and construction | Real estate | |||
Unpaid Principal Balance | |||
Total with no related allowance recorded | 225 | 237 | |
Recorded Investment | |||
Total with no related allowance recorded | 207 | 219 | |
Home equity | Real estate | |||
Unpaid Principal Balance | |||
Total with no related allowance recorded | 285 | 302 | |
Total with an allowance recorded | 472 | 759 | |
Recorded Investment | |||
Total with no related allowance recorded | 285 | 302 | |
Total with an allowance recorded | 472 | 759 | |
Total with an allowance recorded, Allowance for Loan Losses Allocated | $ 111 | $ 112 |
Loans - Interest Recognized and
Loans - Interest Recognized and Cash Basis Interest Earned on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | $ 4,415 | $ 5,943 | $ 5,119 | $ 5,970 |
Commercial | ||||
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | 560 | 1,058 | 1,124 | 1,606 |
Consumer | ||||
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | 3 | 5 | 3 | 5 |
Commercial | Real estate | ||||
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | 2,880 | 3,655 | 2,917 | 2,987 |
Land and construction | Real estate | ||||
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | 210 | 895 | 213 | 1,037 |
Home equity | Real estate | ||||
Interest Recognized and Cash Basis Interest Earned on Impaired Loans | ||||
Average of impaired loans during the period | $ 762 | $ 330 | $ 862 | $ 335 |
Loans - Nonperforming Loans (De
Loans - Nonperforming Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Loans | |||
Nonaccrual loans | $ 4,360 | $ 4,716 | $ 4,832 |
Restructured and loans over 90 days past due and still accruing | 1,662 | ||
Total nonperforming loans | 4,360 | 6,378 | 4,832 |
Other restructured loans | 141 | 149 | 158 |
Total | $ 4,501 | $ 6,527 | $ 4,990 |
Loans - Nonperforming Loans by
Loans - Nonperforming Loans by Class (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | $ 4,360 | $ 4,716 | $ 4,832 |
Restructured and Loans Over 90 Days Past Due and Still Accruing | 1,662 | ||
Total | 4,360 | 6,378 | $ 4,832 |
Commercial | |||
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | 544 | 724 | |
Restructured and Loans Over 90 Days Past Due and Still Accruing | 1,378 | ||
Total | 544 | 2,102 | |
Consumer | |||
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | 3 | 4 | |
Total | 3 | 4 | |
Commercial | Real estate | |||
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | 2,849 | 2,992 | |
Total | 2,849 | 2,992 | |
Land and construction | Real estate | |||
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | 207 | 219 | |
Total | 207 | 219 | |
Home equity | Real estate | |||
Nonperforming Loans by Class | |||
Past due loans 30 day or greater | 757 | 777 | |
Restructured and Loans Over 90 Days Past Due and Still Accruing | 284 | ||
Total | $ 757 | $ 1,061 |
Loans - Aging of Past Due Loans
Loans - Aging of Past Due Loans by Class of Loans - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | $ 10,097 | $ 5,754 |
Loans Not Past Due | 1,454,758 | 1,353,704 |
Total loan balance | 1,464,855 | 1,359,458 |
30-59 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 7,858 | 3,504 |
60-89 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 1,991 | 262 |
90 Days or Greater Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 248 | 1,988 |
Commercial | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 6,746 | 5,251 |
Loans Not Past Due | 603,639 | 551,271 |
Total loan balance | 610,385 | 556,522 |
Commercial | 30-59 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 5,187 | 3,285 |
Commercial | 60-89 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 1,519 | 262 |
Commercial | 90 Days or Greater Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 40 | 1,704 |
Real estate | ||
Aging of Past Due Loans by Class of Loans | ||
Total loan balance | 834,433 | 786,926 |
Consumer | ||
Aging of Past Due Loans by Class of Loans | ||
Loans Not Past Due | 20,037 | 16,010 |
Total loan balance | 20,037 | 16,010 |
Commercial | Real estate | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 2,387 | |
Loans Not Past Due | 617,152 | 625,665 |
Total loan balance | 619,539 | 625,665 |
Commercial | Real estate | 30-59 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 2,387 | |
Land and construction | Real estate | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 207 | 219 |
Loans Not Past Due | 103,503 | 84,209 |
Total loan balance | 103,710 | 84,428 |
Land and construction | Real estate | 30-59 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 219 | |
Land and construction | Real estate | 90 Days or Greater Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 207 | |
Home equity | Real estate | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 757 | 284 |
Loans Not Past Due | 77,575 | 76,549 |
Total loan balance | 78,332 | 76,833 |
Home equity | Real estate | 30-59 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 284 | |
Home equity | Real estate | 60-89 Days Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 472 | |
Home equity | Real estate | 90 Days or Greater Past Due | ||
Aging of Past Due Loans by Class of Loans | ||
Total Past Due | 1 | $ 284 |
Residential mortgages | Real estate | ||
Aging of Past Due Loans by Class of Loans | ||
Loans Not Past Due | 32,852 | |
Total loan balance | $ 32,852 |
Loans - Aging of Past Due Loa61
Loans - Aging of Past Due Loans by Class of Loans - Additional Information (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 |
Aging of Past Due Loans by Class of Loans | |||
Past due loans 30 day or greater | $ 10,097 | $ 5,754 | |
Nonaccrual loans | 4,360 | 4,716 | $ 4,832 |
30 days or greater past due | |||
Aging of Past Due Loans by Class of Loans | |||
Nonaccrual loans | 3,542 | 591 | |
Less than 30 days past due | |||
Aging of Past Due Loans by Class of Loans | |||
Nonaccrual loans | $ 818 | $ 4,125 |
Loans - Credit Quality Indicato
Loans - Credit Quality Indicators (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Credit Quality Indicators | ||
Balance to report | $ 1,444,193 | $ 1,339,790 |
Loan classified as loss | ||
Credit Quality Indicators | ||
Recovery value | 0 | |
Balance to report | $ 0 | $ 0 |
Loans - Summary of the Loan Por
Loans - Summary of the Loan Portfolio by Loan Type and Credit Quality Classification (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | $ 1,464,855 | $ 1,359,458 |
Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 1,442,357 | 1,340,826 |
Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 22,498 | 18,632 |
Commercial | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 610,385 | 556,522 |
Commercial | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 594,610 | 547,536 |
Commercial | Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 15,775 | 8,986 |
Real estate | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 834,433 | 786,926 |
Consumer | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 20,037 | 16,010 |
Consumer | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 19,882 | 15,705 |
Consumer | Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 155 | 305 |
Commercial | Real estate | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 619,539 | 625,665 |
Commercial | Real estate | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 614,270 | 617,865 |
Commercial | Real estate | Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 5,269 | 7,800 |
Land and construction | Real estate | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 103,710 | 84,428 |
Land and construction | Real estate | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 103,503 | 84,209 |
Land and construction | Real estate | Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 207 | 219 |
Home equity | Real estate | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 78,332 | 76,833 |
Home equity | Real estate | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 77,240 | 75,511 |
Home equity | Real estate | Classified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 1,092 | $ 1,322 |
Residential mortgages | Real estate | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | 32,852 | |
Residential mortgages | Real estate | Nonclassified | ||
Summary of the Loan Portfolio by Loan Type and Credit Quality Classification | ||
Total | $ 32,852 |
Loans - Troubled Debt Restructu
Loans - Troubled Debt Restructurings (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Loans | ||
Recorded investment of troubled debt restructurings | $ 145 | $ 153 |
Troubled debt restructurings, nonaccrual loans | 3 | 4 |
Troubled debt restructurings, accruing loans | 141 | 149 |
Specific reserves | 2 | 3 |
Additional amount of loan classified as a troubled debt restructurings | $ 0 | $ 0 |
Loans - Troubled Debt Restruc65
Loans - Troubled Debt Restructurings by Class (Details) - contract | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Loans | ||||
Number of Contracts | 0 | 0 | 0 | 0 |
Loans - Defaults on Troubled De
Loans - Defaults on Troubled Debt Restructurings (Details) - item | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Loans | ||||
Default period contractually past due under modified terms (in days) | 30 days | |||
Number of defaults on troubled debt restructurings | 0 | 0 | 0 | 0 |
Period of consecutive payments (in months) | 6 months |
Business Combinations - Bay Vie
Business Combinations - Bay View Funding and Focus Business Bank - Consideration Paid (Details) $ / shares in Units, $ in Thousands | Aug. 20, 2015USD ($)$ / sharesshares | Nov. 01, 2014USD ($) |
BVF/CSNK | ||
Consideration Paid | ||
Aggregate purchase price | $ 22,520 | |
Focus Business Bank | ||
Consideration Paid | ||
Aggregate purchase price | $ 66,558 | |
Fixed exchange ratio of company's common stock | 1.8235 | |
Shares issued in acquisition | shares | 5,456,713 | |
Common stock issued to acquire Focus Business Bank | $ 58,278 | |
Stock price (in dollars per share) | $ / shares | $ 10.68 | |
Purchase consideration paid in cash | $ 8,280 |
Business Combinations - Focus B
Business Combinations - Focus Business Bank - Acquisition and Integration Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2015 | |
Focus Business Bank | |||
Acquisition and Integration Costs | |||
Pre-tax severance, retention, acquisition and integration costs | $ 423 | $ 542 | $ 6,398 |
Business Combinations - Focus69
Business Combinations - Focus Business Bank - Estimated Fair Values of the Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 | Aug. 20, 2015 | Jun. 30, 2015 |
Assets acquired: | ||||
Goodwill | $ 45,664 | $ 45,664 | $ 13,055 | |
Focus Business Bank | ||||
Assets acquired: | ||||
Cash and cash item | $ 5,651 | |||
Federal funds sold and deposits in other financial institutions | 168,415 | |||
Securities available-for-sale | 53,940 | |||
Securities held-to-maturity | 8,665 | |||
Loans held-for-sale | 4,416 | |||
Net loans | 170,353 | |||
Goodwill | 32,620 | |||
Core deposit intangible asset | 6,285 | |||
Corporate owned life insurance | 7,067 | |||
Other assets, net | 20,250 | |||
Total assets acquired | 477,662 | |||
Liabilities assumed: | ||||
Deposits | 405,123 | |||
Other liabilities | 5,981 | |||
Total liabilities | 411,104 | |||
Net assets acquired | $ 66,558 |
Business Combinations - Focus70
Business Combinations - Focus Business Bank - Acquired Receivables and Goodwill (Details) $ in Thousands | Aug. 20, 2015USD ($)loan | Jun. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) |
Goodwill | ||||
Goodwill | $ 45,664 | $ 45,664 | $ 13,055 | |
Focus Business Bank | ||||
Acquired Receivables | ||||
Fair value, nonimpaired loans | $ 117,655 | $ 141,343 | ||
Goodwill | ||||
Goodwill | $ 32,620 | |||
Income tax attributes related to the purchase accounting adjustments | $ 1,758 | |||
Focus Business Bank | Loans receivable | ||||
Acquired Receivables | ||||
Purchased credit impaired loans acquired, number | loan | 4 | |||
Gross contractual amount, impaired loans | $ 1,124 | |||
Contractual cash flows not expected to be collected on the purchased credit impaired loans | $ 819 | |||
Contractual cash flows not expected to be collected on the purchased credit impaired loans as a percentage of gross outstanding principal (as a percent) | 72.90% | |||
Fair value, nonimpaired loans | $ 170,048 | |||
Gross contractual amount, nonimpaired loans | 174,660 | |||
Purchase discount | $ 4,612 | |||
Purchase discount (as a percentage) | 2.60% | |||
Fair value of loans | $ 170,353 |
Business Combinations - Focus71
Business Combinations - Focus Business Bank - Consideration Paid Summary (Details) - Focus Business Bank $ / shares in Units, $ in Thousands | Aug. 20, 2015USD ($)$ / shares |
Consideration Paid | |
Cash paid for Focus in-the-money stock options | $ 8,280 |
Common stock issued to Focus shareholders at $10.68 per share | 58,278 |
Total consideration | $ 66,558 |
Stock price (in dollars per share) | $ / shares | $ 10.68 |
Business Combinations - Focus72
Business Combinations - Focus Business Bank - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2015 | Jun. 30, 2015 | |
Pro Forma Information | ||
Net interest income | $ 20,665 | $ 40,757 |
Provision for loan losses | 22 | 12 |
Noninterest income | 2,603 | 5,705 |
Noninterest expense | 14,917 | 30,335 |
Income before income taxes | 8,329 | 16,115 |
Income tax expense | 3,203 | 6,126 |
Net income | $ 5,126 | $ 9,989 |
Net income per share - basic (in dollars per share) | $ 0.14 | $ 0.27 |
Net income per share - diluted (in dollars per share) | $ 0.13 | $ 0.26 |
Goodwill and Other Intangible73
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | |||
Jun. 30, 2016 | Dec. 31, 2015 | Aug. 20, 2015 | Jun. 30, 2015 | |
Goodwill | ||||
Goodwill | $ 45,664 | $ 45,664 | $ 13,055 | |
BVF/CSNK | ||||
Goodwill | ||||
Goodwill acquired | 13,044 | |||
Focus Business Bank | ||||
Goodwill | ||||
Goodwill | $ 32,620 | |||
Goodwill acquired | $ 32,620 |
Goodwill and Other Intangible74
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Aug. 20, 2015 | Nov. 01, 2014 | Jun. 30, 2007 | Jun. 30, 2016 | Dec. 31, 2015 |
Diablo Valley Bank | |||||
Other Intangible Assets | |||||
Accumulated amortization | $ 4,917 | $ 4,703 | |||
Diablo Valley Bank | Core deposit | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 5,049 | ||||
Useful life, amortization period | 10 years | ||||
Diablo Valley Bank | Customer relationship | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 276 | ||||
Useful life, amortization period | 10 years | ||||
Focus Business Bank | Core deposit | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 6,285 | ||||
Accumulated amortization | 704 | 288 | |||
Useful life, amortization period | 10 years | ||||
BVF/CSNK | |||||
Other Intangible Assets | |||||
Accumulated amortization | $ 515 | $ 360 | |||
BVF/CSNK | Below market-value lease | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 109 | ||||
Useful life, amortization period | 3 years | ||||
BVF/CSNK | Customer relationship and brokered relationship | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 1,900 | ||||
Useful life, amortization period | 10 years | ||||
BVF/CSNK | Non-compete agreement | |||||
Other Intangible Assets | |||||
Intangible assets acquired | $ 250 | ||||
Useful life, amortization period | 3 years |
Goodwill and Other Intangible75
Goodwill and Other Intangible Assets - Estimated Amortization Expense (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Estimated Amortization Expense | |
2,016 | $ 1,567 |
2,017 | 1,361 |
2,018 | 965 |
2,019 | 924 |
2,020 | 906 |
2,021 | 786 |
Total | 6,509 |
Diablo Valley Bank | Core deposit | |
Estimated Amortization Expense | |
2,016 | 427 |
2,017 | 195 |
Total | 622 |
Focus Business Bank | Core deposit | |
Estimated Amortization Expense | |
2,016 | 831 |
2,017 | 875 |
2,018 | 775 |
2,019 | 734 |
2,020 | 716 |
2,021 | 596 |
Total | 4,527 |
BVF/CSNK | Below market-value lease | |
Estimated Amortization Expense | |
2,016 | 36 |
2,017 | 31 |
Total | 67 |
BVF/CSNK | Customer relationship and brokered relationship | |
Estimated Amortization Expense | |
2,016 | 190 |
2,017 | 190 |
2,018 | 190 |
2,019 | 190 |
2,020 | 190 |
2,021 | 190 |
Total | 1,140 |
BVF/CSNK | Non-compete agreement | |
Estimated Amortization Expense | |
2,016 | 83 |
2,017 | 70 |
Total | $ 153 |
Goodwill and Other Intangible76
Goodwill and Other Intangible Assets - Impairment of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Impairment of Intangible Assets | ||
Impairment of intangible assets | $ 0 | $ 0 |
Income Taxes - Liability for Un
Income Taxes - Liability for Uncertain Tax Positions (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Income Taxes | |
Reserve for income taxes, net of Federal benefit for uncertain tax positions | $ 71 |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Net deferred tax assets | ||
Net deferred tax assets | $ 20,299 | $ 22,218 |
Income Taxes - Carry Amounts of
Income Taxes - Carry Amounts of the Low Income Housing Investments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Income Taxes | ||
Low income housing investments | $ 4,116 | $ 4,304 |
Income Taxes - Future Commitmen
Income Taxes - Future Commitments of the Low Income Housing Investments (Details) - Low income housing investments - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Future Commitments | ||
Future commitments | $ 380 | $ 1,271 |
2,016 | 283 | |
2,017 | 14 | |
2018 through 2023 | $ 83 |
Income Taxes - Components of Lo
Income Taxes - Components of Low Income Housing Investment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Income Taxes | ||||
Low income housing tax credits | $ 111 | $ 180 | $ 222 | $ 360 |
Low income housing investment losses | $ 118 | $ 228 | $ 235 | $ 457 |
Benefit Plans - Defined Benefit
Benefit Plans - Defined Benefit Plans - Nonqualified Defined Benefit Pension Plan (Details) $ in Thousands | Jun. 30, 2016USD ($) |
Supplemental Retirement Plan | |
Supplemental Retirement Plan | |
Plan assets associated with the plan | $ 0 |
Benefit Plans - Defined Benef83
Benefit Plans - Defined Benefit Plans - Components of Pension Cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Supplemental Retirement Plan | |||||
Components of net periodic benefit cost: | |||||
Service cost | $ 133 | $ 216 | $ 266 | $ 432 | |
Interest cost | 259 | 221 | 518 | 442 | |
Amortization of net actuarial loss | 60 | 96 | 120 | 192 | |
Net periodic benefit cost | 452 | 533 | 904 | 1,066 | |
Split-Dollar Life Insurance Benefit Plan | |||||
Components of net periodic benefit cost: | |||||
Amortization of prior transition obligation | (13) | (44) | (26) | (56) | |
Interest cost | 62 | 34 | 124 | 84 | $ 169 |
Net periodic benefit cost | $ 49 | $ (10) | $ 98 | $ 28 |
Benefit Plans - Defined Benef84
Benefit Plans - Defined Benefit Plans - Change in Projected Benefit Obligation (Details) - Split-Dollar Life Insurance Benefit Plan - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Change in projected benefit obligation: | |||||
Projected benefit obligation at beginning of year | $ 6,215 | $ 4,641 | $ 4,641 | ||
Interest cost | $ 62 | $ 34 | 124 | $ 84 | 169 |
Amortization of net actuarial loss | 1,405 | ||||
Projected benefit obligation at end of period | $ 6,339 | $ 6,339 | $ 6,215 |
Benefit Plans - Defined Benef85
Benefit Plans - Defined Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - Split-Dollar Life Insurance Benefit Plan - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Amounts Recognized in Accumulated Other Comprehensive Loss | ||
Net actuarial loss | $ 2,218 | $ 2,147 |
Prior transition obligation | 1,373 | 1,418 |
Accumulated other comprehensive loss | $ 3,591 | $ 3,565 |
Equity (Details)
Equity (Details) - Series C convertible perpetual preferred stock | Jun. 21, 2010$ / sharesshares |
Series C Preferred Stock | |
Preferred stock, shares issued | shares | 21,004 |
Conversion price (in dollars per share) | $ / shares | $ 3.75 |
Number of common stock into which preferred stock are convertible (in shares) | shares | 5,601,000 |
Liquidation preference (in dollars per share) | $ / shares | $ 1,000 |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | $ 390,435 | $ 385,079 |
Agency mortgage-backed securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 373,460 | 324,230 |
U.S. Treasury | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 30,003 | |
Trust preferred securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 15,938 | 15,132 |
U.S. Government sponsored entities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 9,041 | |
Corporate bonds | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 1,037 | 6,673 |
Recurring basis | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
I/O strip receivables | 1,154 | 1,367 |
Transfers between Level 1 and Level 2 | ||
Transfers between Level 1 and Level 2 | 0 | 0 |
Transfers between Level 2 and Level 1 | 0 | 0 |
Recurring basis | Agency mortgage-backed securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 373,460 | 324,230 |
Recurring basis | U.S. Treasury | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 30,003 | |
Recurring basis | Trust preferred securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 15,938 | 15,132 |
Recurring basis | U.S. Government sponsored entities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 9,041 | |
Recurring basis | Corporate bonds | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 1,037 | 6,673 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets (Level 1) | U.S. Treasury | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 30,003 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
I/O strip receivables | 1,154 | 1,367 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Agency mortgage-backed securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 373,460 | 324,230 |
Recurring basis | Significant Other Observable Inputs (Level 2) | Trust preferred securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 15,938 | 15,132 |
Recurring basis | Significant Other Observable Inputs (Level 2) | U.S. Government sponsored entities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 9,041 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Corporate bonds | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | $ 1,037 | $ 6,673 |
Fair Value - Financial Assets88
Fair Value - Financial Assets and Liabilities Measured on a Non-Recurring Basis (Details) - Non-recurring basis - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | $ 1,222 | $ 2,702 |
Significant Unobservable Inputs (Level 3) | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 1,222 | 2,702 |
Commercial | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 193 | 1,333 |
Commercial | Significant Unobservable Inputs (Level 3) | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 193 | 1,333 |
Commercial | Real estate | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 461 | 503 |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 461 | 503 |
Land and construction | Real estate | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 207 | 219 |
Land and construction | Real estate | Significant Unobservable Inputs (Level 3) | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 207 | 219 |
Home equity | Real estate | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | 361 | 647 |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | ||
Financial Assets and Liabilities Measured on a Non-Recurring Basis | ||
Impaired loans - held-for-investment: | $ 361 | $ 647 |
Fair Value - Impaired Loans Hel
Fair Value - Impaired Loans Held-for-investment - Tabular Disclosure (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | $ 4,501 | $ 6,527 |
Carried at fair value | ||
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | 1,540 | 2,988 |
Specific valuation allowance | (318) | (286) |
Impaired loans held-for-investment carried at fair value, net | 1,222 | 2,702 |
Portion carried at cost | ||
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | $ 2,961 | $ 3,539 |
Fair Value - Impaired Loans H90
Fair Value - Impaired Loans Held-for-investment - Additional Disclosures (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | $ 4,501 | $ 6,527 |
Additional provision (credit) for loan losses | 207 | 156 |
Valuation allowance on foreclosed assets | 0 | 0 |
Partial charge-offs | 0 | |
Carrying amount | ||
Impaired Loans Held-for-investment | ||
Foreclosed assets | 313 | 364 |
Carried at fair value | ||
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | 1,540 | 2,988 |
Specific valuation allowance | 318 | 286 |
Portion carried at cost | ||
Impaired Loans Held-for-investment | ||
Impaired loans held-for-investment | $ 2,961 | $ 3,539 |
Fair Value - Quantitative Infor
Fair Value - Quantitative Information about Level 3 Fair Value Measurements (Details) - Non-recurring basis - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2016 | Dec. 31, 2015 | |
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 1,222 | $ 2,702 |
Significant Unobservable Inputs (Level 3) | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 1,222 | 2,702 |
Commercial | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 193 | 1,333 |
Commercial | Significant Unobservable Inputs (Level 3) | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 193 | 1,333 |
Commercial | Significant Unobservable Inputs (Level 3) | Market Approach | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 193 | $ 1,333 |
Commercial | Significant Unobservable Inputs (Level 3) | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 0.00% | |
Commercial | Significant Unobservable Inputs (Level 3) | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | 5.00% |
Commercial | Significant Unobservable Inputs (Level 3) | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 5.00% | |
Commercial | Real estate | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 461 | $ 503 |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 461 | 503 |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 461 | $ 503 |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 0.00% | 0.00% |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 3.00% |
Commercial | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 3.00% |
Land and construction | Real estate | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 207 | $ 219 |
Land and construction | Real estate | Significant Unobservable Inputs (Level 3) | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 207 | 219 |
Land and construction | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 207 | $ 219 |
Land and construction | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 1.00% | 1.00% |
Home equity | Real estate | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 361 | $ 647 |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | 361 | 647 |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans - held-for-investment, Fair Value | $ 361 | $ 647 |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Minimum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 0.00% | 0.00% |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Maximum | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 2.00% |
Home equity | Real estate | Significant Unobservable Inputs (Level 3) | Market Approach | Weighted average | ||
Quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Discount adjustment for differences between comparable sales (as a percent) | 3.00% | 2.00% |
Fair Value - Carrying Amounts a
Fair Value - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2016 | Dec. 31, 2015 |
Assets | ||
Securities available-for-sale | $ 390,435 | $ 385,079 |
Securities held-to-maturity | 214,624 | 109,821 |
Carrying amount | ||
Assets | ||
Cash and cash equivalents | 158,844 | 344,092 |
Securities available-for-sale | 390,435 | 385,079 |
Securities held-to-maturity | 210,170 | 109,311 |
Loans (including loans held-for-sale), net | 1,449,072 | 1,347,087 |
FHLB and FRB stock and other investments | 15,190 | 12,694 |
Accrued interest receivable | 6,483 | 5,924 |
I/O strips receivables | 1,154 | 1,367 |
Liabilities | ||
Time deposits | 254,022 | 244,861 |
Other deposits | 1,819,762 | 1,817,914 |
Short-term borrowings | 3,000 | |
Accrued interest payable | 176 | 170 |
Carried at fair value | ||
Assets | ||
Cash and cash equivalents | 158,844 | 344,092 |
Securities available-for-sale | 390,435 | 385,079 |
Securities held-to-maturity | 189,184 | 109,821 |
Loans (including loans held-for-sale), net | 1,529,278 | 1,345,236 |
Accrued interest receivable | 6,483 | 5,924 |
I/O strips receivables | 1,154 | 1,367 |
Liabilities | ||
Time deposits | 254,373 | 245,279 |
Other deposits | 1,819,762 | 1,817,914 |
Short-term borrowings | 3,000 | |
Accrued interest payable | 176 | 170 |
Carried at fair value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 158,844 | 344,092 |
Securities available-for-sale | 30,003 | |
Accrued interest receivable | 14 | |
Carried at fair value | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Securities available-for-sale | 390,435 | 355,076 |
Securities held-to-maturity | 189,184 | 109,821 |
Loans (including loans held-for-sale), net | 4,879 | 7,297 |
Accrued interest receivable | 1,928 | 1,640 |
I/O strips receivables | 1,154 | 1,367 |
Liabilities | ||
Time deposits | 254,373 | 245,279 |
Other deposits | 1,819,762 | 1,817,914 |
Short-term borrowings | 3,000 | |
Accrued interest payable | 176 | 170 |
Carried at fair value | Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Loans (including loans held-for-sale), net | 1,524,399 | 1,337,939 |
Accrued interest receivable | $ 4,555 | $ 4,270 |
Equity Plan - General Disclosur
Equity Plan - General Disclosures (Details) | 6 Months Ended |
Jun. 30, 2016shares | |
2013 Plan | |
Equity Plan | |
Number of shares available for future grants | 569,141 |
Options | |
Equity Plan | |
Vesting period | 4 years |
Options | Maximum | |
Equity Plan | |
Expiration term | 10 years |
Restricted stock | |
Equity Plan | |
Number of equity awards issued (in shares) | 85,024 |
Nonqualified stock options | |
Equity Plan | |
Number of equity awards issued (in shares) | 295,500 |
Equity Plan - Stock Option Acti
Equity Plan - Stock Option Activity (Details) - Options | 6 Months Ended |
Jun. 30, 2016USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | 1,775,027 |
Granted (in shares) | 295,500 |
Exercised (in shares) | (98,212) |
Forfeited or expired (in shares) | (30,432) |
Outstanding at the end of the period (in shares) | 1,941,883 |
Vested or expected to vest (in shares) | 1,844,789 |
Exercisable at the end of the period (in shares) | 1,268,834 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 10.62 |
Granted (in dollars per share) | $ / shares | 10.35 |
Exercised (in dollars per share) | $ / shares | 6.34 |
Forfeited or expired (in dollars per share) | $ / shares | 18.10 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 10.67 |
Additional Information | |
Weighted Average Remaining Contractual Life - Outstanding at the end of the period (in years) | 6 years 1 month 6 days |
Weighted Average Remaining Contractual Life - Vested or expected to vest (in years) | 6 years 1 month 6 days |
Weighted Average Remaining Contractual Life - Exercisable at the end of the period (in years) | 4 years 7 months 6 days |
Aggregate Intrinsic Value - Outstanding at the end of the period (in dollars) | $ | $ 3,629,078 |
Aggregate Intrinsic Value - Vested or expected to vest (in dollars) | $ | 3,447,624 |
Aggregate Intrinsic Value - Exercisable at the end of the period (in dollars) | $ | $ 2,977,720 |
Equity Plan - Unrecognized Comp
Equity Plan - Unrecognized Compensation Cost - Nonvested Stock Options (Details) - Options $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Unrecognized Compensation Cost | |
Total unrecognized compensation cost related to nonvested stock options granted | $ 1,910 |
Expected weighted-average period for recognition of compensation costs related to nonvested stock options | 2 years 10 months 17 days |
Equity Plan - Restricted Stock
Equity Plan - Restricted Stock Activity (Details) - Restricted stock | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Number of Shares | |
Nonvested shares at the beginning of the period (in shares) | shares | 167,605 |
Granted (in shares) | shares | 85,024 |
Vested (in shares) | shares | (22,214) |
Forfeited or expired (in shares) | shares | (2,652) |
Nonvested shares at the end of the period (in shares) | shares | 227,763 |
Weighted Average Grant Date Fair Value | |
Nonvested shares at the beginning of the period (in dollars per share) | $ / shares | $ 9.28 |
Granted (in dollars per share) | $ / shares | 10.34 |
Vested (in dollars per share) | $ / shares | 9.12 |
Forfeited or expired (in dollars per share) | $ / shares | 9.36 |
Nonvested shares at the end of the period (in dollars per share) | $ / shares | $ 9.69 |
Equity Plan - Unrecognized Co97
Equity Plan - Unrecognized Compensation Cost - Nonvested Restricted Stock Awards (Details) - Restricted stock $ in Thousands | 6 Months Ended |
Jun. 30, 2016USD ($) | |
Unrecognized Compensation Cost | |
Total unrecognized compensation cost related to nonvested restricted stock awards | $ 1,942 |
Expected weighted-average period for recognition of compensation costs related to nonvested restricted stock awards | 2 years 10 months 17 days |
Capital Requirements - General
Capital Requirements - General Information (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Capital Requirements | |
Capital conservation buffer (as a percent) | 0.625% |
Phase-in period (in years) | 4 years |
Capital conservation buffer, end rate after annual increases (as a percent) | 2.50% |
HBC (Wholly-owned Subsidiary) | |
Capital Requirements | |
Capital conservation buffer (as a percent) | 0.625% |
Phase-in period (in years) | 4 years |
Capital conservation buffer, end rate after annual increases (as a percent) | 2.50% |
Capital Requirements - Tabular
Capital Requirements - Tabular Disclosure (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2016 | Dec. 31, 2015 | |
Total Capital (to risk-weighted assets) | ||
Actual, Amount | $ 226,820 | $ 218,915 |
Required For Capital Adequacy Purposes, Amount | $ 159,214 | $ 140,041 |
Actual, Ratio (as a percent) | 12.30% | 12.50% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.625% | 8.00% |
Capital conservation buffer (as a percent) | 0.625% | |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 206,181 | $ 199,299 |
Required For Capital Adequacy Purposes, Amount | $ 122,295 | $ 105,031 |
Actual, Ratio (as a percent) | 11.20% | 11.40% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 6.625% | 6.00% |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 187,426 | $ 181,221 |
Required For Capital Adequacy Purposes, Amount | $ 94,606 | $ 78,773 |
Actual, Ratio (as a percent) | 10.20% | 10.40% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 5.125% | 4.50% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | $ 206,181 | $ 199,299 |
Required For Capital Adequacy Purposes, Amount | $ 91,499 | $ 92,918 |
Actual, Ratio (as a percent) | 9.00% | 8.60% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
HBC (Wholly-owned Subsidiary) | ||
Total Capital (to risk-weighted assets) | ||
Actual, Amount | $ 224,712 | $ 219,943 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 184,576 | 175,022 |
Required For Capital Adequacy Purposes, Amount | $ 159,197 | $ 140,018 |
Actual, Ratio (as a percent) | 12.20% | 12.60% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 10.00% | 10.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.625% | 8.00% |
Capital conservation buffer (as a percent) | 0.625% | |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 204,073 | $ 200,327 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 147,661 | 140,018 |
Required For Capital Adequacy Purposes, Amount | $ 122,282 | $ 105,013 |
Actual, Ratio (as a percent) | 11.10% | 11.40% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 8.00% | 8.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 6.625% | 6.00% |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 204,073 | $ 200,327 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 119,974 | 113,764 |
Required For Capital Adequacy Purposes, Amount | $ 94,595 | $ 78,760 |
Actual, Ratio (as a percent) | 11.10% | 11.40% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 6.50% | 6.50% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 5.125% | 4.50% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | $ 204,073 | $ 200,327 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 114,363 | 116,112 |
Required For Capital Adequacy Purposes, Amount | $ 91,491 | $ 92,889 |
Actual, Ratio (as a percent) | 8.90% | 8.60% |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 5.00% | 5.00% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4.00% | 4.00% |
Capital Requirements - Dividend
Capital Requirements - Dividends to Parent (Details) - HCC (Parent) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2016 | Mar. 31, 2016 | Jun. 30, 2016 | |
Cash dividend | |||
Cash dividend available | $ 12,361 | $ 12,361 | |
Dividends paid to parent company | $ 4,000 | $ 6,000 | $ 10,000 |
Loss Contingencies (Details)
Loss Contingencies (Details) | 6 Months Ended |
Jun. 30, 2016complaint | |
Loss Contingencies | |
Number of complaints, tentative settlement | 1 |
Noninterest Expense (Details)
Noninterest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Noninterest Expense | ||||
Salaries and employee benefits | $ 8,742 | $ 7,712 | $ 17,689 | $ 15,754 |
Occupancy and equipment | 1,081 | 1,036 | 2,157 | 2,072 |
Professional fees | 708 | 239 | 1,533 | 333 |
Amortization of intangible assets | 392 | 189 | 784 | 378 |
Software subscriptions | 376 | 264 | 717 | 591 |
Data processing | 371 | 236 | 771 | 539 |
FDIC deposit insurance premiums | 327 | 238 | 658 | 476 |
Insurance expense | 307 | 291 | 606 | 582 |
Foreclosed assets | 2 | (36) | 4 | (206) |
Acquisition and integration related costs | 439 | 577 | ||
Other | 2,075 | 2,009 | 4,147 | 3,797 |
Total noninterest expense | $ 14,381 | $ 12,617 | $ 29,066 | $ 24,893 |
Business Segment Information -
Business Segment Information - Business Segments (Details) | 6 Months Ended |
Jun. 30, 2016segment | |
Business Segment Information | |
Number of business segments | 2 |
Business Segment Information104
Business Segment Information - Operating Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Operating Income (Loss) | |||||
Interest income | $ 23,504 | $ 18,175 | $ 46,566 | $ 35,541 | |
Total interest expense | 760 | 533 | 1,518 | 1,041 | |
Net interest income | 22,744 | 17,642 | 45,048 | 34,500 | |
Provision (credit) for loan losses | 351 | 22 | 752 | (38) | |
Net interest income after provision | 22,393 | 17,620 | 44,296 | 34,538 | |
Noninterest income | 3,660 | 2,164 | 6,274 | 4,090 | |
Noninterest expense | 14,381 | 12,617 | 29,066 | 24,893 | |
Income before income taxes | 11,672 | 7,167 | 21,504 | 13,735 | |
Income tax expense | 4,377 | 2,690 | 8,103 | 5,120 | |
Net income | 7,295 | 4,477 | 13,401 | 8,615 | |
Total assets | 2,378,292 | 1,680,206 | 2,378,292 | 1,680,206 | $ 2,361,579 |
Loans, net of deferred fees | 1,464,114 | 1,133,603 | 1,464,114 | 1,133,603 | 1,358,716 |
Goodwill | 45,664 | 13,055 | 45,664 | 13,055 | $ 45,664 |
Banking | |||||
Operating Income (Loss) | |||||
Interest income | 20,301 | 15,037 | 40,509 | 29,341 | |
Intersegment interest allocations | 304 | 274 | 549 | 542 | |
Total interest expense | 760 | 533 | 1,518 | 1,041 | |
Net interest income | 19,845 | 14,778 | 39,540 | 28,842 | |
Provision (credit) for loan losses | 325 | 21 | 712 | (37) | |
Net interest income after provision | 19,520 | 14,757 | 38,828 | 28,879 | |
Noninterest income | 3,497 | 1,921 | 5,909 | 3,712 | |
Noninterest expense | 12,602 | 10,809 | 25,654 | 21,314 | |
Intersegment expense allocations | 214 | 79 | 389 | 154 | |
Income before income taxes | 10,629 | 5,948 | 19,472 | 11,431 | |
Income tax expense | 3,940 | 2,178 | 7,250 | 4,152 | |
Net income | 6,689 | 3,770 | 12,222 | 7,279 | |
Total assets | 2,311,058 | 1,622,804 | 2,311,058 | 1,622,804 | |
Loans, net of deferred fees | 1,412,317 | 1,091,309 | 1,412,317 | 1,091,309 | |
Goodwill | 32,620 | 32,620 | |||
Factoring | |||||
Operating Income (Loss) | |||||
Interest income | 3,203 | 3,138 | 6,057 | 6,200 | |
Intersegment interest allocations | (304) | (274) | (549) | (542) | |
Net interest income | 2,899 | 2,864 | 5,508 | 5,658 | |
Provision (credit) for loan losses | 26 | 1 | 40 | (1) | |
Net interest income after provision | 2,873 | 2,863 | 5,468 | 5,659 | |
Noninterest income | 163 | 243 | 365 | 378 | |
Noninterest expense | 1,779 | 1,808 | 3,412 | 3,579 | |
Intersegment expense allocations | (214) | (79) | (389) | (154) | |
Income before income taxes | 1,043 | 1,219 | 2,032 | 2,304 | |
Income tax expense | 437 | 512 | 853 | 968 | |
Net income | 606 | 707 | 1,179 | 1,336 | |
Total assets | 67,234 | 57,402 | 67,234 | 57,402 | |
Loans, net of deferred fees | 51,797 | 42,294 | 51,797 | 42,294 | |
Goodwill | $ 13,044 | $ 13,055 | $ 13,044 | $ 13,055 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jul. 28, 2016 | Jun. 30, 2016 | Jun. 30, 2015 |
Subsequent Events | |||
Quarterly cash dividends declared to holders of common stock | $ 0.18 | $ 0.16 | |
Subsequent Event | |||
Subsequent Events | |||
Quarterly cash dividends declared to holders of common stock | $ 0.09 | ||
Subsequent Event | Series C convertible perpetual preferred stock | |||
Subsequent Events | |||
Quarterly cash dividends declared to holders of Series C preferred stock (on an as converted basis) | $ 0.09 |