Heritage Commerce (HTBK) 10-Q 9 May 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2019	Apr. 30, 2019
Document and Entity Information [Abstract]
Entity Registrant Name	HERITAGE COMMERCE CORP
Entity Central Index Key	0001053352
Document Type	10-Q
Document Period End Date	Mar. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		43,338,253
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q1

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Cash and due from banks	$ 38,699	$ 30,273
Other investments and interest-bearing deposits in other financial institutions	196,278	134,295
Total cash and cash equivalents	234,977	164,568
Securities available-for-sale, at fair value	452,521	459,043
Securities held-to-maturity, at amortized cost (fair value of $362,581 at March 31, 2019 and $366,175 at December 31, 2018)	367,023	377,198
Loans held-for-sale - SBA, at lower of cost or fair value, including deferred costs	3,216	2,649
Loans, net of deferred fees	1,848,318	1,886,405
Allowance for loan losses	(27,318)	(27,848)
Loans, net	1,821,000	1,858,557
Federal Home Loan Bank and Federal Reserve Bank stock and other investments, at cost	25,221	25,216
Company-owned life insurance	62,189	61,859
Premises and equipment, net	6,998	7,137
Goodwill	83,753	83,753
Other intangible assets	11,454	12,007
Accrued interest receivable and other assets	47,525	44,575
Total assets	3,115,877	3,096,562
Deposits:
Demand, noninterest-bearing	1,016,770	1,021,582
Demand, interest-bearing	704,996	702,000
Savings and money market	759,306	754,277
Time deposits - under $250	56,385	58,661
Time deposits - $250 and over	90,042	86,114
CDARS - interest-bearing demand, money market and time deposits	12,745	14,898
Total deposits	2,640,244	2,637,532
Subordinated debt, net of issuance costs	39,414	39,369
Accrued interest payable and other liabilities	57,703	52,195
Total liabilities	2,737,361	2,729,096
Shareholders' equity:
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding at March 31, 2019 and December 31, 2018
Common stock, no par value; 60,000,000 shares authorized; 43,323,753 shares issued and outstanding at March 31, 2019 and 43,288,750 shares issued and outstanding at December 31, 2018	301,550	300,844
Retained earnings	85,953	79,003
Accumulated other comprehensive loss	(8,987)	(12,381)
Total shareholders' equity	378,516	367,466
Total liabilities and shareholders' equity	$ 3,115,877	$ 3,096,562

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Securities held-to-maturity
Securities held-to-maturity, fair value (in dollars)	$ 362,581	$ 366,175
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	0	0
Preferred stock, outstanding (in shares)	0	0
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	43,323,753	43,288,750
Common stock, shares outstanding	43,323,753	43,288,750

CONSOLIDATED STATEMENTS OF INCO

CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest income:
Loans, including fees	$ 26,807	$ 22,284
Securities, taxable	4,509	3,862
Securities, exempt from Federal tax	548	560
Other investments, interest-bearing deposits in other financial institutions and Federal funds sold	1,585	1,171
Total interest income	33,449	27,877
Interest expense:
Deposits	1,836	958
Subordinated debt	571	571
Total interest expense	2,407	1,529
Net interest income before provision for loan losses	31,042	26,348
Provision (credit) for loan losses	(1,061)	506
Net interest income after provision for loan losses	32,103	25,842
Noninterest income:
Service charges and fees on deposit accounts	1,161	902
Increase in cash surrender value of life insurance	330	363
Servicing income	191	181
Gain on sales of SBA loans	139	235
Gain on sales of securities		87
Other	647	427
Total noninterest income	2,468	2,195
Noninterest expense:
Salaries and employee benefits	10,770	9,777
Occupancy and equipment	1,506	1,106
Professional fees	818	684
Other	4,824	4,423
Total noninterest expense	17,918	15,990
Income before income taxes	16,653	12,047
Income tax expense	4,507	3,238
Net income	$ 12,146	$ 8,809
Earnings per common share:
Basic (in dollars per share)	$ 0.28	$ 0.23
Diluted (in dollars per share)	$ 0.28	$ 0.23

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 12,146	$ 8,809
Other comprehensive income:
Change in net unrealized holding (losses) gains on available-for-sale securities and I/O strips	4,871	(7,985)
Deferred income taxes	(1,467)	2,315
Change in net unamortized unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity	(26)	(11)
Deferred income taxes	8	3
Reclassification adjustment for losses (gains) realized in income		(87)
Deferred income taxes		26
Change in unrealized (losses) gains on securities and I/O strips, net of deferred income taxes	3,386	(5,739)
Change in net pension and other benefit plan liability adjustment	12	50
Deferred income taxes	(4)	(15)
Change in pension and other benefit plan liability, net of deferred income taxes	8	35
Other comprehensive income (loss)	3,394	(5,704)
Total comprehensive income	$ 15,540	$ 3,105

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income / (Loss)	Total
Balance at Dec. 31, 2017	$ 218,355	$ 62,136	$ (9,252)	$ 271,239
Balance (in shares) at Dec. 31, 2017	38,200,883
Increase (Decrease) in Shareholders' Equity
Net income		8,809		8,809
Other comprehensive income (loss)			(5,704)	(5,704)
Amortization of restricted stock awards, net of forfeitures	$ 228			228
Cash dividend declared		(4,206)		(4,206)
Stock option expense, net of forfeitures	176			176
Stock options exercised	$ 449			449
Stock options exercised (in shares)	68,906
Balance at Mar. 31, 2018	$ 219,208	66,739	(14,956)	270,991
Balance (in shares) at Mar. 31, 2018	38,269,789
Balance at Dec. 31, 2018	$ 300,844	79,003	(12,381)	367,466
Balance (in shares) at Dec. 31, 2018	43,288,750
Increase (Decrease) in Shareholders' Equity
Net income		12,146		12,146
Other comprehensive income (loss)			3,394	3,394
Amortization of restricted stock awards, net of forfeitures	$ 271			271
Cash dividend declared		(5,196)		(5,196)
Stock option expense, net of forfeitures	166			166
Stock options exercised	$ 269			269
Stock options exercised (in shares)	35,003
Balance at Mar. 31, 2019	$ 301,550	$ 85,953	$ (8,987)	$ 378,516
Balance (in shares) at Mar. 31, 2019	43,323,753

CONSOLIDATED STATEMENTS OF CH_2

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
Cash dividend declared per share (in dollars per share)	$ 0.12	$ 0.11

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 12,146	$ 8,809
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of discounts and premiums on securities	516	1,131
(Gain) loss on sale of securities available-for-sale		(87)
Gain on sale of SBA loans	(139)	(235)
Proceeds from sale of SBA loans originated for sale	1,935	3,041
SBA loans originated for sale	(2,363)	(2,246)
Provision (credit) for loan losses	(1,061)	506
Increase in cash surrender value of life insurance	(330)	(363)
Depreciation and amortization	188	196
Amortization of other intangible assets	553	241
Stock option expense, net	166	176
Amortization of restricted stock awards, net	271	228
Amortization of subordinated debt issuance costs	45	46
Effect of changes in:
Accrued interest receivable and other assets	5,145	3,288
Accrued interest payable and other liabilities	(4,062)	(2,297)
Net cash provided by operating activities	13,010	12,434
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities available-for-sale		(15,193)
Purchase of securities held-to-maturity		(5,022)
Maturities/paydowns/calls of securities available-for-sale	11,242	14,957
Maturities/paydowns/calls of securities held-to-maturity	9,808	13,002
Proceeds from sales of securities available-for-sale		38,754
Net change in loans	38,618	(8,559)
Changes in Federal Home Loan Bank stock and other investments	(5)	(6)
Purchase of premises and equipment	(49)	(46)
Net cash provided by investing activities	59,614	37,887
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposits	2,712	(60,797)
Exercise of stock options	269	449
Payment of cash dividends	(5,196)	(4,206)
Net cash used in financing activities	(2,215)	(64,554)
Net increase (decrease) in cash and cash equivalents	70,409	(14,233)
Cash and cash equivalents, beginning of period	164,568	316,222
Cash and cash equivalents, end of period	234,977	301,989
Supplemental disclosures of cash flow information:
Interest paid	1,724	977
Income taxes paid	8	4
Supplemental schedule of non-cash activity:
Due to broker for securities purchased		$ 5,439
Recording of right to use assets in exchange for lease obligations	$ 9,566

Basis of Presentation

Basis of Presentation	3 Months Ended
	Mar. 31, 2019
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, 2018. HBC is a commercial bank serving customers primarily located in Santa Clara, Alameda, Contra Costa, San Benito, and San Mateo counties of California. CSNK Working Capital Finance Corp. a California corporation, dba Bay View Funding (“Bay View Funding”) is a wholly owned subsidiary of HBC, and provides business-essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10% of revenue for HBC or the Company. The Company reports its results for two segments: 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 months ended March 31, 2019 are not necessarily indicative of the results expected for any subsequent period or for the entire year ending December 31, 2019. Business Combinations The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill. Goodwill and Other Intangible Assets Goodwill resulted from the acquisition of Tri-Valley Bank (“Tri-Valley”) on April 6, 2018 and United American Bank (“United American”) on May 4, 2018, and from acquisitions in prior years. Goodwill represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. Other intangible assets consist of core deposit intangible assets and a below market value lease intangible asset, arising from the United American and Tri-Valley acquisitions. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposit intangible assets from the acquisitions of United American and Tri-Valley are being amortized on an accelerated method over ten years. The below market value lease intangible assets are being amortized on the straight line method over three years for United American and eleven years for Tri-Valley. 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 February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This update became effective for the Company on January 1, 2019. In July 2018, the FASB issued supplementary ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides for an additional transition method allowing for a modified retrospective adoption approach where the guidance would only be applied to existing leases in effect at the adoption date and new leases going forward, with a cumulative effect adjustment to retained earnings as of the adoption date and additional required disclosures regarding leasing arrangements only for those periods after adoption. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company has elected the practical expedients permitted by ASU 2018-11. The Company adopted the new guidance on January 1, 2019. At the adoption date, the Company reported increase assets and liabilities of approximately $9.6 million on its consolidated balance sheet as a result of recognizing right-of-use assets and lease liabilities related to non-cancellable operating lease agreements for office space. The adoption of this guidance did not have a material impact to its Consolidated Statetements of Income or Cash Flows. See Note 17 – Leases for more information. In March 2017, the FASB issued ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities. This update shortens the amortization period of certain callable debt securities held at a premium to the earliest call date. The amendments in this update were effective for the Company on January 1, 2019. The amendments are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and the Company is required to provide change in accounting principle disclosures. The Company adopted the new guidance on January 1, 2019, and there was no material impact to the financial statements and no cumulative adjustments were made. Newly Issued, but not yet Effective Accounting Standards 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 debt securities. 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. While early application is permitted for fiscal years beginning after December 15, 2018, the Company plans to adopt this standard on January 1, 2020. The Company has established a company-wide, cross-functional governance structure, which oversees overall strategy for implementation of CECL. We are currently evaluating various loss methodologies to determine their correlation to our various loan categories historical performance. The project plan is targeting the data and model validation completion during the second quarter of 2019, with parallel processing of our existing allowance for loan loss model with CECL prior to implementation. The Company is focused on completing data and model validation, refining assumptions and continued review of the models. The Company also continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. The Company also continues to believe that the adoption of the standard will result in an overall increase in the allowance for loan losses to cover credit losses over the estimated life of the financial assets. However, the magnitude of the increase in its allowance for loan losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time. In January 2017, the FASB issued accounting standards ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The provisions of the update eliminate the existing second step of the goodwill impairment test which provides for the allocation of reporting unit fair value among existing assets and liabilities, with the net remaining amount representing the implied fair value of goodwill. In replacement of the existing goodwill impairment rule, the update will provide that impairment should be recognized as the excess of any of the reporting unit’s goodwill over the fair value of the reporting unit. Under the provisions of this update, the amount of the impairment is limited to the carrying value of the reporting unit’s goodwill. For public business entities that are SEC filers, the amendments of the update will become effective in fiscal years beginning after December 15, 2019. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

Shareholders' Equity and Earnin

Shareholders' Equity and Earnings Per Share	3 Months Ended
	Mar. 31, 2019
Shareholders' Equity and Earnings Per Share.
Shareholders' Equity and Earnings Per Share	2) Shareholders’ Equity and Earnings Per Share Basic earnings per common share is computed by dividing net income by the weighted average common shares outstanding. Diluted earnings per share reflect potential dilution from outstanding stock options using the treasury stock method. There were 539,000 and 275,000 stock options for the three months ended March 31, 2019 and 2018, respectively, considered to be antidilutive and excluded from the computation of diluted earnings per share. A reconciliation of these factors used in computing basic and diluted earnings per common share is as follows: Three Months Ended March 31, 2019 2018 (Dollars in thousands, except per share amounts) Net income $ 12,146 $ 8,809 Weighted average common shares outstanding for basic earnings per common share 43,108,208 38,240,495 Dilutive potential common shares 562,133 574,227 Shares used in computing diluted earnings per common share 43,670,341 38,814,722 Basic earnings per share $ 0.28 $ 0.23 Diluted earnings per share $ 0.28 $ 0.23

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss) (“AOCI”)	3 Months Ended
	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) (“AOCI”)
Accumulated Other Comprehensive Income (“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 March 31, 2019 and 2018 Unamortized Unrealized Unrealized Gain on Gains (Losses) on Available- Available- for-Sale Defined for-Sale Securities Benefit Securities Reclassified Pension and I/O to Held-to- Plan Strips(1) Maturity Items Total (Dollars in thousands) Beginning balance January 1, 2019, net of taxes $ (5,007) $ 344 $ (7,718) $ (12,381) Other comprehensive income (loss) before reclassification, net of taxes 3,404 — (7) 3,397 Amounts reclassified from other comprehensive income (loss), net of taxes — (18) 15 (3) Net current period other comprehensive income (loss), net of taxes 3,404 (18) 8 3,394 Ending balance March 31, 2019, net of taxes $ (1,603) $ 326 $ (7,710) $ (8,987) Beginning balance January 1, 2018, net of taxes $ (362) $ 375 $ (9,265) $ (9,252) Other comprehensive income (loss) before reclassification, net of taxes (5,670) — (5) (5,675) Amounts reclassified from other comprehensive income (loss), net of taxes (61) (8) 40 (29) Net current period other comprehensive income (loss), net of taxes (5,731) (8) 35 (5,704) Ending balance March 31, 2018, net of taxes $ (6,093) $ 367 $ (9,230) $ (14,956) Amounts Reclassified from AOCI(1) Three Months Ended March 31, Affected Line Item Where Details About AOCI Components 2019 2018 Net Income is Presented (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ — $ 87 Gain on sales of securities — (26) Income tax expense — 61 Net of tax Amortization of unrealized gain on securities available- for-sale that were reclassified to securities held-to-maturity 26 11 Interest income on taxable securities (8) (3) Income tax expense 18 8 Net of tax Amortization of defined benefit pension plan items (1) Prior transition obligation 25 16 Actuarial losses (46) (73) (21) (57) Salaries and employee benefits 6 17 Income tax benefit (15) (40) Net of tax Total reclassification for the year $ 3 $ 29 (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	3 Months Ended
	Mar. 31, 2019
Securities
Securities	4) Securities The amortized cost and estimated fair value of securities at March 31, 2019 and December 31, 2018 were as follows: Gross Gross Estimated Amortized Unrealized Unrealized Fair March 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 299,847 $ 343 $ (4,612) $ 295,578 U.S. Treasury 148,095 1,387 — 149,482 U.S. Government sponsored entities 7,447 14 — 7,461 Total $ 455,389 $ 1,744 $ (4,612) $ 452,521 Securities held-to-maturity: Agency mortgage-backed securities $ 281,102 $ 281 $ (4,758) $ 276,625 Municipals - exempt from Federal tax 85,921 683 (648) 85,956 Total $ 367,023 $ 964 $ (5,406) $ 362,581 Gross Gross Estimated Amortized Unrealized Unrealized Fair December 31, 2018 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 311,523 $ 98 $ (8,767) $ 302,854 U.S. Treasury 147,823 930 — 148,753 U.S. Government sponsored entities 7,433 4 (1) 7,436 Total $ 466,779 $ 1,032 $ (8,768) $ 459,043 Securities held-to-maturity: Agency mortgage-backed securities $ 291,241 $ 59 $ (9,153) $ 282,147 Municipals - exempt from Federal tax 85,957 312 (2,241) 84,028 Total $ 377,198 $ 371 $ (11,394) $ 366,175 Securities with unrealized losses at March 31, 2019 and December 31, 2018, 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 Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2019 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ — $ — $ 269,629 $ (4,612) $ 269,629 $ (4,612) Total $ — $ — $ 269,629 $ (4,612) $ 269,629 $ (4,612) Securities held-to-maturity: Agency mortgage-backed securities $ — $ — $ 250,516 $ (4,758) $ 250,516 $ (4,758) Municipals - exempt from Federal tax — — 32,440 (648) 32,440 (648) Total $ — $ — $ 282,956 $ (5,406) $ 282,956 $ (5,406) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 3,868 $ (21) $ 281,082 $ (8,746) $ 284,950 $ (8,767) U.S. Government sponsored entities 3,974 (1) — — 3,974 (1) Total $ 7,842 $ (22) $ 281,082 $ (8,746) $ 288,924 $ (8,768) Securities held-to-maturity: Agency mortgage-backed securities $ 16,088 $ (103) $ 255,917 $ (9,050) $ 272,005 $ (9,153) Municipals - exempt from Federal tax 5,019 (27) 57,301 (2,214) 62,320 (2,241) Total $ 21,107 $ (130) $ 313,218 $ (11,264) $ 334,325 $ (11,394) 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 March 31, 2019, the Company held 525 securities (202 available-for-sale and 323 held‑to‑maturity), of which 288 had fair values below amortized cost. At March 31, 2019, there were $269,629,000 of agency mortgage-back securities available-for-sale, $250,516,000 of agency mortgage-backed securities held-to-maturity, and $32,440,000 of municipal bonds held-to-maturity, carried with an unrealized loss for 12 months or more. The total unrealized loss for securities 12 months or more was $10,018,000 at March 31, 2019. 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 March 31, 2019. The proceeds from sales of securities and the resulting gains and losses were as follows for the periods indicated: Three Months Ended March 31, 2019 2018 (Dollars in thousands) Proceeds $ — $ 38,754 Gross gains — 1,050 Gross losses — (963) The amortized cost and estimated fair values of securities as of March 31, 2019 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 Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 5,468 $ 5,475 Due after one through five years 150,074 151,468 Agency mortgage-backed securities 299,847 295,578 Total $ 455,389 $ 452,521 Held-to-maturity Amortized Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 770 $ 771 Due after one through five years 4,941 5,038 Due after five through ten years 27,670 27,988 Due after ten years 52,540 52,159 Agency mortgage-backed securities 281,102 276,625 Total $ 367,023 $ 362,581 Securities with amortized cost of $34,806,000 and $36,229,000 as of March 31, 2019 and December 31, 2018 were pledged to secure public deposits and for other purposes as required or permitted by law or contract.

Loans

Loans	3 Months Ended
	Mar. 31, 2019
Loans
Loans	5) Loans Loans were as follows for the periods indicated: March 31, December 31, 2019 2018 (Dollars in thousands) Loans held-for-investment: Commercial $ 559,718 $ 597,763 Real estate: CRE 1,012,641 994,067 Land and construction 98,222 122,358 Home equity 118,448 109,112 Residential mortgages 49,786 50,979 Consumer 9,690 12,453 Loans 1,848,505 1,886,732 Deferred loan fees, net (187) (327) Loans, net of deferred fees 1,848,318 1,886,405 Allowance for loan losses (27,318) (27,848) Loans, net $ 1,821,000 $ 1,858,557 At March 31, 2019, total net loans included in the table above include $34,433,000, $103,540,000 and $174,328,000, of the loans acquired in the Focus Business Bank (“Focus”), Tri-Valley, and United American acquisitions that were not purchased credit impaired loans, respectively. At December 31, 2018, total net loans included in the table above include $36,958,000, $111,952,000 and $181,453,000, of the loans acquired in the Focus, Tri-Valley, and United American acquisitions, respectively, that were not purchased credit impaired loans. There was a ($1,061,000) credit to the provision for loan losses for the first quarter of 2019, compared to a provision for loan losses of $506,000 for the first quarter of 2018. Net recoveries totaled $531,000 for the first quarter of 2019, compared to net charge-offs of ($25,000) for the first quarter of 2018. Changes in the allowance for loan losses were as follows for the periods indicated: Three Months Ended March 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 Charge-offs (226) — — (226) Recoveries 715 42 — 757 Net recoveries 489 42 — 531 Provision (credit) for loan losses (1,993) 958 (26) (1,061) End of year balance $ 15,557 $ 11,671 $ 90 $ 27,318 Three Months Ended March 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 10,608 $ 8,950 $ 100 $ 19,658 Charge-offs (245) — — (245) Recoveries 157 63 — 220 Net (charge-offs) recoveries (88) 63 — (25) Provision (credit) for loan losses 645 (155) 16 506 End of period balance $ 11,165 $ 8,858 $ 116 $ 20,139 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: March 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 6,467 $ 897 $ — $ 7,364 Collectively evaluated for impairment 9,090 10,774 90 19,954 Total allowance balance $ 15,557 $ 11,671 $ 90 $ 27,318 Loans: Individually evaluated for impairment $ 8,536 $ 8,980 $ — $ 17,516 Collectively evaluated for impairment 551,182 1,270,117 9,690 1,830,989 Total loan balance $ 559,718 $ 1,279,097 $ 9,690 $ 1,848,505 December 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 6,944 $ — $ — $ 6,944 Collectively evaluated for impairment 10,117 10,671 116 20,904 Total allowance balance $ 17,061 $ 10,671 $ 116 $ 27,848 Loans: Individually evaluated for impairment $ 9,495 $ 5,645 $ — $ 15,140 Collectively evaluated for impairment 588,268 1,270,871 12,453 1,871,592 Total loan balance $ 597,763 $ 1,276,516 $ 12,453 $ 1,886,732 The following table presents loans held-for-investment individually evaluated for impairment by class of loans as of March 31, 2019 and December 31, 2018. 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 the periods indicated: March 31, 2019 December 31, 2018 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ 1,615 $ 1,615 $ — $ 1,849 $ 1,849 $ — Real estate: CRE — — — 5,094 5,094 — Land and construction — — — — — — Home Equity 538 538 — 551 551 — Total with no related allowance recorded 2,153 2,153 — 7,494 7,494 — With an allowance recorded: Commercial 6,921 6,921 6,467 7,646 7,646 6,944 Real estate: Commercial 8,442 8,442 897 — — — Total with an allowance recorded 15,363 15,363 7,364 7,646 7,646 6,944 Total $ 17,516 $ 17,516 $ 7,364 $ 15,140 $ 15,140 $ 6,944 The following tables present interest recognized and cash‑basis interest earned on impaired loans for the periods indicated: Three Months Ended March 31, 2019 Real Estate Land and Home Commercial CRE Construction Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ 9,016 $ 6,768 $ — $ 544 $ — $ 16,328 Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest recognized $ — $ — $ — $ — $ — $ — Three Months Ended March 31, 2018 Real Estate Land and Home Commercial CRE Construction Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ 2,474 $ 501 $ 59 $ 371 $ 1 $ 3,406 Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest recognized $ — $ — $ — $ — $ — $ — 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: March 31, December 31, 2019 2018 2018 (Dollars in thousands) Nonaccrual loans - held-for-investment $ 15,958 $ 3,637 $ 13,699 Restructured and loans over 90 days past due and still accruing 1,357 158 1,188 Total nonperforming loans 17,315 3,795 14,887 Other restructured loans 201 241 253 Total impaired loans $ 17,516 $ 4,036 $ 15,140 The following table presents the nonperforming loans by class for the periods indicated: March 31, 2019 December 31, 2018 Restructured Restructured and Loans and Loans over 90 Days over 90 Days Past Due Past Due and Still and Still Nonaccrual Accruing Total Nonaccrual Accruing Total (Dollars in thousands) Commercial $ 7,203 $ 1,132 $ 8,335 $ 8,279 $ 963 $ 9,242 Real estate: CRE 8,442 — 8,442 5,094 — 5,094 Home equity 313 225 538 326 225 551 Total $ 15,958 $ 1,357 $ 17,315 $ 13,699 $ 1,188 $ 14,887 The following tables present the aging of past due loans by class for the periods indicated: March 31, 2019 30 - 59 60 - 89 90 Days or Days Days Greater Total Loans Not Past Due Past Due Past Due Past Due Past Due Total (Dollars in thousands) Commercial $ 4,207 $ 6,948 $ 2,014 $ 13,169 $ 546,549 $ 559,718 Real estate: CRE — 6,192 2,251 8,443 1,004,198 1,012,641 Land and construction — — — — 98,222 98,222 Home equity 168 — — 168 118,280 118,448 Residential mortgages — — — — 49,786 49,786 Consumer — — — — 9,690 9,690 Total $ 4,375 $ 13,140 $ 4,265 $ 21,780 $ 1,826,725 $ 1,848,505 December 31, 2018 30 - 59 60 - 89 90 Days or Days Days Greater Total Loans Not Past Due Past Due Past Due Past Due Past Due Total (Dollars in thousands) Commercial $ 5,698 $ 1,916 $ 1,258 $ 8,872 $ 588,891 $ 597,763 Real estate: CRE — — — — 994,067 994,067 Land and construction — — — — 122,358 122,358 Home equity — — — 109,112 109,112 Residential mortgages — — — — 50,979 50,979 Consumer 1 — — 1 12,452 12,453 Total $ 5,699 $ 1,916 $ 1,258 $ 8,873 $ 1,877,859 $ 1,886,732 Past due loans 30 days or greater totaled $21,780,000 and $8,873,000 at March 31, 2019 and December 31, 2018, respectively, of which $15,089,000 and $430,000 were on nonaccrual, respectively. At March 31, 2019, there were also $869,000 of loans less than 30 days past due included in nonaccrual loans held-for-investment. At December 31, 2018, there were also $13,269,000 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 remaining 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 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 as of March 31, 2019 and December 31, 2018. The following table provides a summary of the loan portfolio by loan type and credit quality classification at period end: March 31, 2019 December 31, 2018 Nonclassified Classified Total Nonclassified Classified Total (Dollars in thousands) Commercial $ 545,151 14,567 $ 559,718 $ 584,845 $ 12,918 $ 597,763 Real estate: CRE 1,003,770 8,871 1,012,641 985,193 8,874 994,067 Land and construction 98,222 — 98,222 122,358 — 122,358 Home equity 116,710 1,738 118,448 107,495 1,617 109,112 Residential mortgages 49,786 — 49,786 50,979 — 50,979 Consumer 9,690 — 9,690 12,453 — 12,453 Total $ 1,823,329 $ 25,176 $ 1,848,505 $ 1,863,323 $ 23,409 $ 1,886,732 Classified loans were $25.2 million, or 0.81% of total assets, at March 31, 2019, compared to $30.8 million, or 1.07% of total assets, at March 31, 2018 and $23.4 million, or 0.76% of total assets, at December 31, 2018. 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 March 31, 2019 was $580,000, accruing loans. The book balance of troubled debt restructurings at December 31, 2018 was $649,000, which included $36,000 of nonaccrual loans and $613,000 of accruing loans. Approximately $1,000 and $38,000 of specific reserves were established with respect to these loans as of March 31, 2019 and December 31, 2018, respectively. There were no new loans modified as troubled debt restructurings during the three months ended March 31, 2019 and 2018. During the three months ended March 31, 2019, there were no new loans modified as troubled debt restructurings in which the amount of principal or accrued interest owed from the borrower was forgiven or which resulted in a charge-off or change to the allowance for loan losses. 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 ended March 31, 2019 and 2018. 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	3 Months Ended
	Mar. 31, 2019
Business Combinations
Business Combinations	6) Business Combinations On April 6, 2018, the Company completed its acquisition of Tri-Valley for a transaction value of $32,320,000. At closing the Company issued 1,889,613 shares of the Company’s common stock with an aggregate market value of $30,725,000 on the date of closing. The number of shares issued was based on a fixed exchange ratio of 0.0489 of a share of the Company’s common stock for each outstanding share of Tri-Valley common stock. In addition, at closing the Company paid cash to the holder of a stock warrant and holders of outstanding stock options and related fees and fractional shares totaling $1,595,000. The following table summarizes the consideration paid for Tri-Valley: (Dollars in thousands) Cash paid for: Warrant $ 889 Options 615 Other 91 Total cash paid 1,595 Issuance of 1,889,613 shares of common stock to Tri- Valley shareholders at $16.26 per share at Closing 30,725 Total consideration $ 32,320 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. As As Recorded Fair Recorded by Value at Tri-Valley Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 21,757 $ 1,153 (a) $ 22,910 Loans 123,532 (2,563) (b) 120,969 Allowance for loan losses (1,969) 1,969 (c) — Other intangible assets — 1,978 (d) 1,978 Other assets, net 9,939 (2,894) (e) 7,045 Total assets acquired $ 153,259 $ (357) 152,902 Liabilities assumed: Deposits $ 135,351 $ 37 (f) 135,388 Other liabilities 608 — 608 Total liabilities assumed $ 135,959 $ 37 135,996 Net assets acquired 16,906 Purchase price 30,725 Goodwill recorded in the merger $ 13,819 Explanation of certain fair value related adjustments for the Tri-Valley acquisition: (a) Represents the cash acquired in the merger, the disposition of other real estate owned of $1,132,000, a gain on the sale of securities of $53,000, partially offset by invoices paid after closing for services prior to closing of $29,000, and cash paid for fractional shares in the transaction of $3,000. The remaining $1,592,000 of cash paid for the transaction is an adjustment to prepaid assets included in other assets, net. (b) (c) (d) (e) (f) Represents the fair value adjustment on time deposits, which was be accreted as a reduction of interest expense. Tri-Valley’s results of operations have been included in the Company’s results of operations beginning April 7, 2018. On May 4, 2018, the Company completed its acquisition of United American for a transaction value of $56,417,000. At closing the Company issued 2,826,032 shares of the Company’s common stock with an aggregate market value of $47,280,000 on the date of closing. The number of shares issued was based on a fixed exchange ratio of 2.1644 of a share of the Company’s common stock for each outstanding share of United American common stock and each common stock equivalent underlying the United American Series D Preferred Stock and Series E Preferred Stock. The shareholders of the United American Series A Preferred Stock and Series B Preferred Stock received $1,000 cash for each share totaling $8,700,000 and $435,000, respectively. In addition, the Company paid $2,000 in cash for fractional shares, for total cash consideration of $9,137,000. The following table summarizes the consideration paid for United American: (Dollars in thousands) Consideration paid: Cash paid for: Series A Preferred Stock $ 8,700 Series B Preferred Stock 435 Other 2 Total cash paid 9,137 Issuance of 2,826,032 shares of common stock to United American shareholders at $16.73 per share at Closing 47,280 Total consideration $ 56,417 The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. As As Recorded Fair Recorded by Value at United American Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 45,638 $ (32,520) (a) $ 13,118 Securities available-for-sale 64,144 (421) (b) 63,723 Loans 196,694 18,783 (c) 215,477 Allowance for loan losses (2,952) 2,952 (d) — Other intangible assets — 6,383 (e) 6,383 Other assets, net 9,119 (1,078) (f) 8,041 Total assets acquired $ 312,643 $ (5,901) 306,742 Liabilities assumed: Deposits $ 281,189 $ 51 (g) 281,240 Other borrowings 62 — 62 Other liabilities 2,617 (187) (h) 2,430 Total liabilities $ 283,868 $ (136) 283,732 Net assets acquired 23,010 Purchase price 47,280 Goodwill recorded in the merger $ 24,270 Explanation of certain fair value related adjustments for the United American acquisition: (a) Represents the cash acquired in the merger, net of cash paid for the transaction of $9,137,000, the repurchase of $23,732,000 loan participations from ATBancorp, and $51,000 for invoices paid after closing for services prior to closing, partially offset by a tax refund of $400,000. (b) Represents the fair value adjustment on investment securities available-for-sale. (c) Represents the repurchase of $23,732,000 loan participations from ATBancorp, partially offset by the fair value adjustment to the net book value of loans of $4,680,000, which includes an interest rate mark and credit mark adjustment, and net charge-offs of $269,000 subsequent to closing. (d) Represents the elimination of United American’s allowance for loan losses. (e) Represents intangible assets recorded to reflect the fair value of core deposits and a below market lease. The core deposit intangible asset was recorded as an identifiable intangible asset and is amortized on an accelerated basis over the estimated average life of the deposit base. The below market lease intangible assets are amortized on the straight line method over three years. (f) Represents an adjustment to net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangible assets recorded. (g) Represents the fair value adjustment on time deposits, which was be accreted as a reduction of interest expense. (h) Represents the reversal of accrued accounts payable. United American’s results of operations have been included in the Company’s results of operations beginning May 5, 2018. The Company believed the mergers provide the opportunity to combine three independent business banking franchises with similar philosophies and cultures into a combined $3.1 billion business bank based in San Jose, California. The pooling of the three banks’ resources and knowledge enhanced the Company’s capabilities, operational efficiencies, and community outreach. The Company also believed the combined bank will be much better positioned to meet the needs of the Company’s customers, shareholders and the community. Pre-tax acquisition and integration costs of $615,000 for the first quarter of 2018 was included in other noninterest expense. 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 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. There were no PCI loans at March 31, 2019 and December 31, 2018. Goodwill of $13,819,000 arising from the Tri-Valley acquisition and $24,270,000 from the United American acquisition is largely attributable to synergies and cost savings resulting from combining the operations of the companies. As these transactions were structured as a tax-free exchange, the goodwill will not be deductible for tax purposes. As of April 6, 2019 and May 4, 2019 the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of Tri-Valley and United American, respectively, resulting in no material changes to acquisition accounting adjustments.

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	3 Months Ended
	Mar. 31, 2019
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets	7) Goodwill and Other Intangible Assets Goodwill At March 31, 2019, the carrying value of goodwill was $83,753,000, which included $13,044,000 of goodwill related to its acquisition of Bay View Funding, $32,620,000 from its acquisition of Focus, $13,819,000 from its acquisition of Tri-Valley and $24,270,000 from its acquisition of United American. 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, then 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 completed its annual goodwill impairment analysis as of November 30, 2018 with the assistance of an independent valuation firm. No events or circumstances since the November 30, 2018 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists. Other Intangible Assets Other intangible assets acquired in the acquisition of United American in May 2018 included a core deposit intangible asset of $5,723,000, amortized on an accelerated method over its estimated useful life of 10 years, and a below market value lease intangible asset of $660,000, amortized over its estimated useful life of 3 years. Accumulated amortization of the core deposit intangible and below market lease was $1,014,000 and $756,000 at March 31, 2019 and December 31, 2018, respectively. Other intangible assets acquired in the acquisition of Tri-Valley in April 2018 include a core deposit intangible asset of $1,768,000, amortized on an accelerated method over its estimated useful life of 10 years, and a below market value lease intangible asset of $210,000, amortized over its estimated useful life of 11 years. Accumulated amortization of the core deposit intangible and below market lease was $287,000 and $222,000 at March 31, 2019 and December 31, 2018, respectively. The core deposit intangible asset acquired in the acquisition of Focus in August 2015 was $6,285,000. This asset is amortized on an accelerated method over its estimated useful life of 10 years. Accumulated amortization of this intangible asset was $2,953,000 and $2,770,000 at March 31, 2019 and December 31, 2018, respectively. Other intangible assets acquired in the acquisition of Bay View Funding in November 2014 included a below market value lease intangible assets of $109,000, a non-compete agreement intangible asset of $250,000, and a customer relationship and brokered relationship intangible assets of $1,900,000, amortized over the 10 year estimated useful lives. Accumulated amortization of the customer relationship and brokered relationship intangible assets was $838,000 and $791,000 at March 31, 2019 and December 31, 2018, respectively. The below market lease and non-compete agreement intangible assets were fully amortized at December 31, 2017. Estimated amortization expense for 2019, the next five years and thereafter is as follows: United United Bay View Funding American American Tri-Valley Tri-Valley Focus Customer & Core Below Core Below Core Brokered Total Deposit Market Deposit Market Deposit Relationship Amortization Year Intangible Lease Intangible Lease Intangible Intangible Expense (Dollars in thousands) 2019 $ 777 $ 255 $ 240 $ 18 $ 734 $ 190 $ 2,214 2020 665 235 208 18 716 190 2,032 2021 602 — 184 18 596 190 1,590 2022 553 — 167 18 502 190 1,430 2023 521 — 158 18 420 190 1,307 2024 499 — 152 18 346 159 1,174 Thereafter 1,520 — 451 88 201 — 2,260 $ 5,137 $ 490 $ 1,560 $ 196 $ 3,515 $ 1,109 $ 12,007 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 March 31, 2019 and December 31, 2018.

Income Taxes

Income Taxes	3 Months Ended
	Mar. 31, 2019
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. The Company had net deferred tax assets of $24,263,000, and $27,089,000, at March 31, 2019 and December 31, 2018, 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 assets at March 31, 2019 and December 31, 2018 will be fully realized in future years. 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 for the periods indicated: March 31, December 31, 2019 2018 (Dollars in thousands) Low income housing investments $ 3,253 $ 3,172 Future commitments $ 273 $ 273 The Company expects $14,000 of the future commitments to be paid in 2019, $14,000 in 2020, and $245,000 in 2021 through 2023. For tax purposes, the Company had low income housing tax credits of $106,000 for the three months ended March 31, 2019 and March 31, 2018, and low income housing investment expense of $109,000 and $119,000, respectively. The Company recognized low income housing investment expense as a component of income tax expense.

Benefit Plans

Benefit Plans	3 Months Ended
	Mar. 31, 2019
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 March 31, 2019 2018 Components of net periodic benefit cost: Service cost $ 55 $ 62 Interest cost 264 237 Amortization of net actuarial loss 46 73 Net periodic benefit cost $ 365 $ 372 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: March 31, December 31, 2019 2018 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 6,903 $ 6,711 Interest cost 70 227 Actuarial loss (gain) — (35) Projected benefit obligation at end of period $ 6,973 $ 6,903 March 31, December 31, 2019 2018 (Dollars in thousands) Net actuarial loss $ 2,620 $ 2,573 Prior transition obligation 1,126 1,149 Accumulated other comprehensive loss $ 3,746 $ 3,722 Three Months Ended March 31, 2019 2018 Amortization of prior transition obligation $ (25) $ (16) Interest cost 70 57 Net periodic benefit cost $ 45 $ 41

Fair Value

Fair Value	3 Months Ended
	Mar. 31, 2019
Fair Value
Fair Value	10) 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 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance (Level 1) (Level 2) (Level 3) (Dollars in thousands) Assets at March 31, 2019 Available-for-sale securities: Agency mortgage-backed securities $ 295,578 — $ 295,578 — U.S. Treasury 149,482 149,482 — — U.S. Government sponsored entities 7,461 — 7,461 — I/O strip receivables 571 — 571 — Assets at December 31, 2018 Available-for-sale securities: Agency mortgage-backed securities $ 302,854 — $ 302,854 — U.S. Treasury 148,753 148,753 — — U.S. Government sponsored entities 7,436 — 7,436 — I/O strip receivables 568 — 568 — 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 Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance (Level 1) (Level 2) (Level 3) (Dollars in thousands) Assets at March 31, 2019 Impaired loans - held-for-investment: Commercial $ 454 — — $ 454 Real estate: CRE 7,546 — — 7,546 $ 8,000 — — $ 8,000 Assets at December 31, 2018 Impaired loans - held-for-investment: Commercial $ 702 — — $ 702 $ 702 — — $ 702 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: March 31, 2019 December 31, 2018 (Dollars in thousands) Impaired loans held-for-investment: Book value of impaired loans held-for-investment carried at fair value $ 15,364 $ 7,646 Book value of impaired loans held-for-investment carried at cost 2,152 7,494 Total impaired loans held-for-investment $ 17,516 $ 15,140 Impaired loans held-for-investment carried at fair value: Book value of impaired loans held-for-investment carried at fair value $ 15,364 $ 7,646 Specific valuation allowance (7,364) (6,944) Impaired loans held-for-investment carried at fair value, net $ 8,000 $ 702 Impaired loans held‑for‑investment which are measured primarily for impairment using the fair value of the collateral were $17,516,000 at March 31, 2019. In addition, these loans had a specific valuation allowance of $7,364,000 at March 31, 2019. Impaired loans held‑for‑investment totaling $15,364,000 at March 31, 2019, were carried at fair value as a result of partial charge‑offs and specific valuation allowances at period‑end. The remaining $2,152,000 of impaired loans were carried at cost at March 31, 2019, 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 three months of 2019 on impaired loans held‑for‑investment carried at fair value at March 31, 2019 resulted in an additional provision for loan losses of $288,000. At March 31, 2019, there were no foreclosed assets. Impaired loans held‑for‑investment were $15,140,000 at December 31, 2018. In addition, these loans had a specific valuation allowance of $6,944,000 at December 31, 2018. Impaired loans held‑for‑investment totaling $7,646,000 at December 31, 2018 were carried at fair value as a result of partial charge‑offs and specific valuation allowances at year‑end. The remaining $7,494,000 of impaired loans were carried at cost at December 31, 2018, 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 2018 on impaired loans held‑for‑investment carried at fair value at December 31, 2018 resulted in an additional provision for loan losses of $7,042,000. At December 31, 2018, there were no foreclosed assets. 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: March 31, 2019 Valuation Unobservable Range Fair Value Techniques Inputs (Weighted Average) (Dollars in thousands) Impaired loans - held-for-investment: Commercial $ 454 Market Approach Discount adjustment for differences between comparable sales 0% to 1% (1%) Real estate: CRE 7,546 Market Approach Discount adjustment for differences between comparable sales 0% to 13% (5%) December 31, 2018 Valuation Unobservable Range Fair Value Techniques Inputs (Weighted Average) (Dollars in thousands) Impaired loans - held-for-investment: Commercial $ 702 Market Approach Discount adjustment for differences between comparable sales 0% to 1% 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 March 31, 2019 are as follows: Estimated Fair Value Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amounts (Level 1) (Level 2) (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ 234,977 $ 234,977 $ — $ — $ 234,977 Securities available-for-sale 452,521 149,482 303,039 — 452,521 Securities held-to-maturity 367,023 — 362,581 — 362,581 Loans (including loans held-for-sale), net 1,824,216 — 3,216 1,799,945 1,803,161 FHLB stock, FRB stock, and other investments 25,221 — — — N/A Accrued interest receivable 9,014 876 2,229 6,785 9,890 I/O strips receivables 571 — 571 — 571 Liabilities: Time deposits $ 148,969 $ — $ 149,347 $ — $ 149,347 Other deposits 2,491,275 — 2,491,275 — 2,491,275 Subordinated debt 39,414 — 39,064 — 39,064 Accrued interest payable 1,135 — 1,135 — 1,135 The carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2018: Estimated Fair Value Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amounts (Level 1) (Level 2) (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ 164,568 $ 164,568 $ — $ — $ 164,568 Securities available-for-sale 459,043 148,753 310,290 — 459,043 Securities held-to-maturity 377,198 — 366,175 — 366,175 Loans (including loans held-for-sale), net 1,861,206 — 2,649 1,826,654 1,829,303 FHLB stock, FRB stock, and other investments 25,216 — — — N/A Accrued interest receivable 9,577 597 2,274 6,706 9,577 I/O strips receivables 568 — 568 — 568 Liabilities: Time deposits $ 147,560 $ — $ 147,916 $ — $ 147,916 Other deposits 2,489,972 — 2,489,972 — 2,489,972 Subordinated debt 39,369 — 38,969 — 38,969 Accrued interest payable 497 — 497 — 497 In accordance with our adoption of ASU 2016-01 in 2018, the methods utilized to measure the fair value of financial instruments at March 31, 2019 and December 31, 2018 represent an approximation of exit price, however, an actual exit price may differ.

Equity Plan

Equity Plan	3 Months Ended
	Mar. 31, 2019
Equity Plan
Equity Plan	11) 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”). On May 25, 2017, the shareholders approved an amendment to the Heritage Commerce Corp 2013 Equity Incentive Plan to increase the number of shares available from 1,750,000 to 3,000,000 shares. 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. There were 1,172,592 shares available for the issuance of equity awards under the 2013 Plan as of March 31, 2019. Stock option activity under the equity plans is as follows: Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic Total Stock Options of Shares Price Life (Years) Value Outstanding at January 1, 2019 1,570,603 $ 10.76 Exercised (35,003) $ 7.66 Forfeited or expired (9,086) $ 15.02 Outstanding at March 31, 2019 1,526,514 $ 10.81 6.29 $ 3,932,974 Vested or expected to vest 1,434,923 6.29 $ 3,696,996 Exercisable at March 31, 2019 1,083,415 5.37 $ 3,806,137 Information related to the equity plans for the periods indicated: Three Months Ended March 31, 2019 2018 Intrinsic value of options exercised $ 197,994 $ 560,332 Cash received from option exercise $ 268,691 $ 449,294 Tax benefit realized from option exercises $ 26,578 $ 164,978 Weighted average fair value of options granted $ 3.24 $ 3.00 As of March 31, 2019, there was $1,199,000 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 2.53 years. The fair value of each option grant is estimated on the date of grant using the Black Scholes option pricing model that uses the assumptions noted in the following table, including the weighted average assumptions for the option grants for the periods indicated: Three Months Ended March 31, 2019 2018 Expected life in months(1) N/A 72 Volatility(1) N/A 22 % Weighted average risk-free interest rate(2) N/A 2.58 % Expected dividends(3) N/A 2.51 % (1) The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding based on historical experience. Volatility is based on the historical volatility of the stock price over the same period of the expected life of the option. (2) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the option granted. (3) Each grant’s dividend yield is calculated by annualizing the most recent quarterly cash dividend and dividing that amount by the market price of the Company’s common stock as of the grant date Restricted stock activity under the equity plans is as follows: Weighted Average Grant Number Date Fair Total Restricted Stock Award of Shares Value Nonvested shares at January 1, 2019 193,298 $ 11.04 Vested (1,250) $ 14.01 Nonvested shares at March 31, 2019 192,048 $ 11.04 As of March 31, 2019, there was $1,817,000 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 2.46 years.

Subordinated Debt

Subordinated Debt	3 Months Ended
	Mar. 31, 2019
Subordinated Debt
Subordinated Debt	12) Subordinated Debt On May 26, 2017, the Company completed an underwritten public offering of $40,000,000 aggregate principal amount of its fixed-to-floating rate subordinated notes (“Subordinated Debt”) due June 1, 2027. The Subordinated Debt initially bears a fixed interest rate of 5.25% per year. Commencing on June 1, 2022, the interest rate on the Subordinated Debt resets quarterly to the three-month LIBOR rate plus a spread of 336.5 basis points, payable quarterly in arrears. Interest on the Subordinated Debt is payable semi-annually on June 1 st and December 1 st of each year through June 1, 2022 and quarterly thereafter on March 1 st , June 1 st , September 1 st and December 1 st of each year through the maturity date or early redemption date. The Company at its option may redeem the Subordinated Debt, in whole or in part, on any interest payment date on or after June 1, 2022 without a premium.

Capital Requirements

Capital Requirements	3 Months Ended
	Mar. 31, 2019
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. There are no conditions or events since March 31, 2019, that management believes have changed the categorization of the Company or HBC as “well-capitalized.” As of January 1, 2015, HCC and HBC along with other community banking organizations became subject to new capital requirements and certain provisions of the new rules will be phased in from 2015 through 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 new capital rules establish a “capital conservation buffer,” which must consist entirely of common equity Tier 1 capital. The capital conservation buffer is to be phased-in over four years beginning on January 1, 2016. The buffer was 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and is 2.5% for 2019 and thereafter. The Company and HBC must maintain a capital conservation buffer above the minimum risk-based capital requirements in order to avoid certain limitations on capital distributions, stock repurchases and discretionary bonus payments to executive officers. 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 March 31, 2019. 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 March 31, 2019 and December 31, 2018, 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 March 31, 2019 and December 31, 2018. Required For Capital Adequacy Purposes Actual Under Basel III Amount Ratio Amount Ratio (1) (Dollars in thousands) As of March 31, 2019 Total Capital $ 352,830 15.6 % $ 237,991 10.5 % (to risk-weighted assets) Tier 1 Capital $ 285,417 12.6 % $ 192,660 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 285,417 12.6 % $ 158,661 7.0 % (to risk-weighted assets) Tier 1 Capital $ 285,417 9.5 % $ 120,576 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, effective January 1, 2019, except the Tier 1 Capital to average assets ratio. Required For Capital Adequacy Purposes Actual Under Basel III Amount Ratio Amount Ratio (1) (Dollars in thousands) As of December 31, 2018 Total Capital $ 344,597 15.0 % $ 227,514 9.875 % (to risk-weighted assets) Tier 1 Capital $ 276,675 12.0 % $ 181,435 7.875 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 276,675 12.0 % $ 146,876 6.375 % (to risk-weighted assets) Tier 1 Capital $ 276,675 8.9 % $ 124,726 4.000 % (to average assets) (1) Includes 1.875% capital conservation buffer, effective January 1, 2018 except the Tier 1 Capital to average assets ratio. 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 March 31, 2019, and December 31, 2018. Required For Capital To Be Well-Capitalized Adequacy Under Basel III PCA Regulatory Purposes Actual Requirements Under Basel III Amount Ratio Amount Ratio Amount Ratio (1) (Dollars in thousands) As of March 31, 2019 Total Capital $ 330,915 14.6 % $ 226,530 10.0 % $ 237,856 10.5 % (to risk-weighted assets) Tier 1 Capital $ 302,917 13.4 % $ 181,224 8.0 % $ 192,550 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 302,917 13.4 % $ 147,244 6.5 % $ 158,571 7.0 % (to risk-weighted assets) Tier 1 Capital $ 302,917 10.1 % $ 150,656 5.0 % $ 120,525 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, effective January 1, 2018, except the Tier 1 Capital to average assets ratio. Required For Capital To Be Well-Capitalized Adequacy Under Basel III PCA Regulatory Purposes Actual Requirements Under Basel III Amount Ratio Amount Ratio Amount Ratio (1) (Dollars in thousands) As of December 31, 2018 Total Capital $ 322,283 14.0 % $ 230,275 10.0 % $ 227,397 9.875 % (to risk-weighted assets) Tier 1 Capital $ 293,730 12.8 % $ 184,220 8.0 % $ 181,342 7.875 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 293,730 12.8 % $ 149,679 6.5 % $ 146,800 6.375 % (to risk-weighted assets) Tier 1 Capital $ 293,730 9.4 % $ 155,832 5.0 % $ 124,666 4.000 % (to average assets) (1) Includes 1.875% capital conservation buffer, effective January 1, 2018, except the Tier 1 Capital to average assets ratio. The Subordinated Debt, net of unamortized issuance costs, totaled $39,414,000 at March 31, 2019, and qualifies as Tier 2 capital for the Company under the guidelines established by the Federal Reserve Bank. 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 March 31, 2019, HBC would not be required to obtain regulatory approval, and the amount available for cash dividends is $38,136,000. Similar restrictions applied to the amount and sum of loan advances and other transfers of funds from HBC to the parent company. During the first quarter of 2019, HBC distributed to HCC dividends of $5,000,000.

Loss Contingencies

Loss Contingencies	3 Months Ended
	Mar. 31, 2019
Loss Contingencies
Loss Contingencies	14) Loss Contingencies The Company is involved in certain legal actions arising from normal business activities. Management, based upon the advice of legal counsel, believes the ultimate resolution of all pending legal actions will not have a material effect on the financial statements of the Company.

Revenue Recognition

Revenue Recognition	3 Months Ended
	Mar. 31, 2019
Revenue Recognition
Revenue Recognition	15) Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09 (Topic 606) and all subsequent ASUs that modified Topic 606. Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, gain on sale of securities, bank-owned life insurance, gain on sales of SBA loans, and certain credit card fees are also not in scope of the new guidance. Topic 606 is applicable to noninterest revenue streams such as deposit related fees, interchange fees, and merchant income. However, the recognition of these revenue streams did not change significantly upon adoption of Topic 606. Substantially all of the Company’s revenue is generated from contracts with customers. The following noninterest income revenue streams are in-scope of Topic 606: Service charges and fees on deposit accounts consist of account analysis fees (i.e., net fees earned on analyzed business and public checking accounts), monthly service fees, check orders, and other deposit account related fees. We sometimes charge customers fees that are not specifically related to the customer accessing its funds, such as account maintenance or dormancy fees. The amount of deposit fees assessed varies based on a number of factors, such as the type of customer and account, the quantity of transactions, and the size of the deposit balance. We charge, and in some circumstances do not charge, fees to earn additional revenue and influence certain customer behavior. An example would be where we do not charge a monthly service fee, or do not charge for certain transactions, for customers that have a high deposit balance. Deposit fees are considered either transactional in nature (such as wire transfers, nonsufficient fund fees, and stop payment orders) or non-transactional (such as account maintenance and dormancy fees). These fees are recognized as earned or as transactions occur and services are provided. Check orders and other deposit account related fees are largely transactional based and, therefore, the Company’s performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the periods indicated: Three Months Ended March 31, 2019 2018 (Dollars in thousands) Noninterest Income In-scope of Topic 606: Service charges and fees on deposit accounts $ 1,161 $ 902 Noninterest Income Out-of-scope of Topic 606 1,307 1,293 Total noninterest income $ 2,468 $ 2,195

Noninterest Expense

Noninterest Expense	3 Months Ended
	Mar. 31, 2019
Noninterest Expense
Noninterest Expense	16) Noninterest Expense The following table sets forth the various components of the Company’s noninterest expense for the periods indicated: Three Months Ended March 31, 2019 2018 Salaries and employee benefits $ 10,770 $ 9,777 Occupancy and equipment 1,506 1,106 Professional fees 818 684 Data processing 679 353 Software subscriptions 589 593 Amortization of intangible assets 553 241 Insurance expense 436 407 Other acquisition and integration related costs — 615 Other 2,567 2,214 Total $ 17,918 $ 15,990

Lease

Lease	3 Months Ended
	Mar. 31, 2019
Leases
Leases	17) Leases On January 1, 2019, the Company adopted ASU No. 2016-02, Leases (Topic 842) . Under the new guidance, the Company recognizes the following for all leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use (“ROU”) asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. While the new standard impacts lessors and lessees, the Company is impacted as a lessee of the offices and real estate used for operations. The Company's lease agreements include options to renew at the Company's discretion. The extensions are not reasonably certain to be exercised, therefore it was not considered in the calculation of the ROU asset and lease liability. Total assets and total liabilities increased $8.6 million on its consolidated statement of financial condition at March 31, 2019, as a result of recognizing right-of-use assets, included in other assets, and lease liabilities, included in other liabilities, related to non-cancelable operating lease agreements for office space. The following table presents the quantitative information for the Company’s leases: March 31, 2019 (Dollars in thousands) Operating Lease Cost (Cost resulting from lease payments) $ 1,050 Operating Lease - Operating Cash Flows (Fixed Payments) $ 1,013 Operating Lease - ROU assets $ 8,630 Operating Lease - Liabilities $ 8,630 Weighted Average Lease Term - Operating Leases 3.50 years Weighted Average Discount Rate - Operating Leases The following maturity analysis shows the undiscounted cash flows due on the Company’s operating lease liabilities: (Dollars in thousands) 2019 $ 3,040 2020 2,666 2021 1,351 2022 1,144 2023 605 Thereafter 691 Total undiscounted cash flows 9,497 Discount on cash flows (867) Total lease liability $ 8,630

Business Segment Information

Business Segment Information	3 Months Ended
	Mar. 31, 2019
Business Segment Information
Business Segment Information	18) 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 March 31, 2019 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ 30,496 2,953 $ 33,449 Intersegment interest allocations 314 (314) — Total interest expense 2,407 — 2,407 Net interest income 28,403 2,639 31,042 Provision (credit) for loan losses (892) (169) (1,061) Net interest income after provision 29,295 2,808 32,103 Noninterest income 2,232 236 2,468 Noninterest expense 16,201 1,717 17,918 Intersegment expense allocations 121 (121) — Income before income taxes 15,447 1,206 16,653 Income tax (benefit) expense 4,151 356 4,507 Net income $ 11,296 $ 850 $ 12,146 Total assets $ 3,053,116 $ 62,761 $ 3,115,877 Loans, net of deferred fees $ 1,800,064 $ 48,254 $ 1,848,318 Goodwill $ 70,709 $ 13,044 $ 83,753 (1) Includes the holding company’s results of operations Three Months Ended March 31, 2018 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ 24,731 $ 3,146 $ 27,877 Intersegment interest allocations 327 (327) — Total interest expense 1,529 — 1,529 Net interest income 23,529 2,819 26,348 Provision for loan losses 488 18 506 Net interest income after provision 23,041 2,801 25,842 Noninterest income 2,086 109 2,195 Noninterest expense 14,467 1,523 15,990 Intersegment expense allocations 175 (175) — Income before income taxes 10,835 1,212 12,047 Income tax expense 2,880 358 3,238 Net income $ 7,955 $ 854 $ 8,809 Total assets $ 2,722,472 $ 63,076 $ 2,785,548 Loans, net of deferred fees $ 1,541,466 $ 49,735 $ 1,591,201 Goodwill $ 32,620 $ 13,044 $ 45,664 (1) Includes the holding company’s results of operations

Subsequent Events

Subsequent Events	3 Months Ended
	Mar. 31, 2019
Subsequent Events
Subsequent Events	19) Subsequent Events On April 25, 2019, the Company announced that its Board of Directors declared a $0.12 per share quarterly cash dividend to holders of common stock. The dividend will be paid on May 23, 2019 to shareholders of record on May 9, 2019.

Basis of Presentation (Policies

Basis of Presentation (Policies)	3 Months Ended
	Mar. 31, 2019
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, 2018. HBC is a commercial bank serving customers primarily located in Santa Clara, Alameda, Contra Costa, San Benito, and San Mateo counties of California. CSNK Working Capital Finance Corp. a California corporation, dba Bay View Funding (“Bay View Funding”) is a wholly owned subsidiary of HBC, and provides business-essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10% of revenue for HBC or the Company. The Company reports its results for two segments: 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 months ended March 31, 2019 are not necessarily indicative of the results expected for any subsequent period or for the entire year ending December 31, 2019.
Business Combinations	Business Combinations The Company accounts for acquisitions of businesses using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their estimated fair values at the date of acquisition. Management utilizes various valuation techniques including discounted cash flow analyses to determine these fair values. Any excess of the purchase price over amounts allocated to the acquired assets, including identifiable intangible assets, and liabilities assumed is recorded as goodwill.
Goodwill and Other Intangible Assets	Goodwill and Other Intangible Assets Goodwill resulted from the acquisition of Tri-Valley Bank (“Tri-Valley”) on April 6, 2018 and United American Bank (“United American”) on May 4, 2018, and from acquisitions in prior years. Goodwill represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. Other intangible assets consist of core deposit intangible assets and a below market value lease intangible asset, arising from the United American and Tri-Valley acquisitions. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposit intangible assets from the acquisitions of United American and Tri-Valley are being amortized on an accelerated method over ten years. The below market value lease intangible assets are being amortized on the straight line method over three years for United American and eleven years for Tri-Valley.
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 February 2016, the FASB issued ASU No. 2016-02, “Leases (Topic 842).” This update revises the model to assess how a lease should be classified and provides guidance for lessees and lessors, when presenting right-of-use assets and lease liabilities on the balance sheet. Under the new guidance, lessees will be required to recognize the following for all leases, with the exception of short-term leases, at the commencement date: (1) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (2) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged. This update became effective for the Company on January 1, 2019. In July 2018, the FASB issued supplementary ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, which provides for an additional transition method allowing for a modified retrospective adoption approach where the guidance would only be applied to existing leases in effect at the adoption date and new leases going forward, with a cumulative effect adjustment to retained earnings as of the adoption date and additional required disclosures regarding leasing arrangements only for those periods after adoption. This update also allows lessors to not separate non-lease components from the associated lease component if certain conditions are met. The Company has elected the practical expedients permitted by ASU 2018-11. The Company adopted the new guidance on January 1, 2019. At the adoption date, the Company reported increase assets and liabilities of approximately $9.6 million on its consolidated balance sheet as a result of recognizing right-of-use assets and lease liabilities related to non-cancellable operating lease agreements for office space. The adoption of this guidance did not have a material impact to its Consolidated Statetements of Income or Cash Flows. See Note 17 – Leases for more information. In March 2017, the FASB issued ASU 2017-08, Premium Amortization on Purchased Callable Debt Securities. This update shortens the amortization period of certain callable debt securities held at a premium to the earliest call date. The amendments in this update were effective for the Company on January 1, 2019. The amendments are applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the period of adoption and the Company is required to provide change in accounting principle disclosures. The Company adopted the new guidance on January 1, 2019, and there was no material impact to the financial statements and no cumulative adjustments were made. Newly Issued, but not yet Effective Accounting Standards 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 debt securities. 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. While early application is permitted for fiscal years beginning after December 15, 2018, the Company plans to adopt this standard on January 1, 2020. The Company has established a company-wide, cross-functional governance structure, which oversees overall strategy for implementation of CECL. We are currently evaluating various loss methodologies to determine their correlation to our various loan categories historical performance. The project plan is targeting the data and model validation completion during the second quarter of 2019, with parallel processing of our existing allowance for loan loss model with CECL prior to implementation. The Company is focused on completing data and model validation, refining assumptions and continued review of the models. The Company also continues to focus on researching and resolving interpretive accounting issues in the ASU, contemplating various related accounting policies, developing processes and related controls and considering various reporting disclosures. The Company also continues to believe that the adoption of the standard will result in an overall increase in the allowance for loan losses to cover credit losses over the estimated life of the financial assets. However, the magnitude of the increase in its allowance for loan losses at the adoption date will depend upon the nature and characteristics of the portfolio at the adoption date, as well as macroeconomic conditions and forecasts at that time. In January 2017, the FASB issued accounting standards ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The provisions of the update eliminate the existing second step of the goodwill impairment test which provides for the allocation of reporting unit fair value among existing assets and liabilities, with the net remaining amount representing the implied fair value of goodwill. In replacement of the existing goodwill impairment rule, the update will provide that impairment should be recognized as the excess of any of the reporting unit’s goodwill over the fair value of the reporting unit. Under the provisions of this update, the amount of the impairment is limited to the carrying value of the reporting unit’s goodwill. For public business entities that are SEC filers, the amendments of the update will become effective in fiscal years beginning after December 15, 2019. Management does not expect the requirements of this update to have a material impact on the Company’s financial position, results of operations or cash flows.

Shareholders' Equity and Earn_2

Shareholders' Equity and Earnings Per Share (Tables)	3 Months Ended
	Mar. 31, 2019
Shareholders' Equity and Earnings Per Share.
Schedule of reconciliation of factors used in computing basic and diluted earnings per common share	Three Months Ended March 31, 2019 2018 (Dollars in thousands, except per share amounts) Net income $ 12,146 $ 8,809 Weighted average common shares outstanding for basic earnings per common share 43,108,208 38,240,495 Dilutive potential common shares 562,133 574,227 Shares used in computing diluted earnings per common share 43,670,341 38,814,722 Basic earnings per share $ 0.28 $ 0.23 Diluted earnings per share $ 0.28 $ 0.23

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Loss) (“AOCI”) (Tables)	3 Months Ended
	Mar. 31, 2019
Accumulated Other Comprehensive Income (Loss) (“AOCI”)
Schedule of changes in AOCI by component	Three Months Ended March 31, 2019 and 2018 Unamortized Unrealized Unrealized Gain on Gains (Losses) on Available- Available- for-Sale Defined for-Sale Securities Benefit Securities Reclassified Pension and I/O to Held-to- Plan Strips(1) Maturity Items Total (Dollars in thousands) Beginning balance January 1, 2019, net of taxes $ (5,007) $ 344 $ (7,718) $ (12,381) Other comprehensive income (loss) before reclassification, net of taxes 3,404 — (7) 3,397 Amounts reclassified from other comprehensive income (loss), net of taxes — (18) 15 (3) Net current period other comprehensive income (loss), net of taxes 3,404 (18) 8 3,394 Ending balance March 31, 2019, net of taxes $ (1,603) $ 326 $ (7,710) $ (8,987) Beginning balance January 1, 2018, net of taxes $ (362) $ 375 $ (9,265) $ (9,252) Other comprehensive income (loss) before reclassification, net of taxes (5,670) — (5) (5,675) Amounts reclassified from other comprehensive income (loss), net of taxes (61) (8) 40 (29) Net current period other comprehensive income (loss), net of taxes (5,731) (8) 35 (5,704) Ending balance March 31, 2018, net of taxes $ (6,093) $ 367 $ (9,230) $ (14,956)
Schedule of reclassifications out of AOCI into net income	Amounts Reclassified from AOCI(1) Three Months Ended March 31, Affected Line Item Where Details About AOCI Components 2019 2018 Net Income is Presented (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ — $ 87 Gain on sales of securities — (26) Income tax expense — 61 Net of tax Amortization of unrealized gain on securities available- for-sale that were reclassified to securities held-to-maturity 26 11 Interest income on taxable securities (8) (3) Income tax expense 18 8 Net of tax Amortization of defined benefit pension plan items (1) Prior transition obligation 25 16 Actuarial losses (46) (73) (21) (57) Salaries and employee benefits 6 17 Income tax benefit (15) (40) Net of tax Total reclassification for the year $ 3 $ 29 (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)	3 Months Ended
	Mar. 31, 2019
Securities
Schedule of amortized cost and estimated fair value of securities	Gross Gross Estimated Amortized Unrealized Unrealized Fair March 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 299,847 $ 343 $ (4,612) $ 295,578 U.S. Treasury 148,095 1,387 — 149,482 U.S. Government sponsored entities 7,447 14 — 7,461 Total $ 455,389 $ 1,744 $ (4,612) $ 452,521 Securities held-to-maturity: Agency mortgage-backed securities $ 281,102 $ 281 $ (4,758) $ 276,625 Municipals - exempt from Federal tax 85,921 683 (648) 85,956 Total $ 367,023 $ 964 $ (5,406) $ 362,581 Gross Gross Estimated Amortized Unrealized Unrealized Fair December 31, 2018 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 311,523 $ 98 $ (8,767) $ 302,854 U.S. Treasury 147,823 930 — 148,753 U.S. Government sponsored entities 7,433 4 (1) 7,436 Total $ 466,779 $ 1,032 $ (8,768) $ 459,043 Securities held-to-maturity: Agency mortgage-backed securities $ 291,241 $ 59 $ (9,153) $ 282,147 Municipals - exempt from Federal tax 85,957 312 (2,241) 84,028 Total $ 377,198 $ 371 $ (11,394) $ 366,175
Schedule of securities with unrealized losses	Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized March 31, 2019 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ — $ — $ 269,629 $ (4,612) $ 269,629 $ (4,612) Total $ — $ — $ 269,629 $ (4,612) $ 269,629 $ (4,612) Securities held-to-maturity: Agency mortgage-backed securities $ — $ — $ 250,516 $ (4,758) $ 250,516 $ (4,758) Municipals - exempt from Federal tax — — 32,440 (648) 32,440 (648) Total $ — $ — $ 282,956 $ (5,406) $ 282,956 $ (5,406) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2018 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 3,868 $ (21) $ 281,082 $ (8,746) $ 284,950 $ (8,767) U.S. Government sponsored entities 3,974 (1) — — 3,974 (1) Total $ 7,842 $ (22) $ 281,082 $ (8,746) $ 288,924 $ (8,768) Securities held-to-maturity: Agency mortgage-backed securities $ 16,088 $ (103) $ 255,917 $ (9,050) $ 272,005 $ (9,153) Municipals - exempt from Federal tax 5,019 (27) 57,301 (2,214) 62,320 (2,241) Total $ 21,107 $ (130) $ 313,218 $ (11,264) $ 334,325 $ (11,394)
Schedule of proceeds from sales of securities and the resulting gains and losses	Three Months Ended March 31, 2019 2018 (Dollars in thousands) Proceeds $ — $ 38,754 Gross gains — 1,050 Gross losses — (963)
Schedule of amortized cost and estimated fair values of securities, by contractual maturity	Available-for-sale Amortized Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 5,468 $ 5,475 Due after one through five years 150,074 151,468 Agency mortgage-backed securities 299,847 295,578 Total $ 455,389 $ 452,521 Held-to-maturity Amortized Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 770 $ 771 Due after one through five years 4,941 5,038 Due after five through ten years 27,670 27,988 Due after ten years 52,540 52,159 Agency mortgage-backed securities 281,102 276,625 Total $ 367,023 $ 362,581

Loans (Tables)

Loans (Tables)	3 Months Ended
	Mar. 31, 2019
Loans
Schedule of loans	March 31, December 31, 2019 2018 (Dollars in thousands) Loans held-for-investment: Commercial $ 559,718 $ 597,763 Real estate: CRE 1,012,641 994,067 Land and construction 98,222 122,358 Home equity 118,448 109,112 Residential mortgages 49,786 50,979 Consumer 9,690 12,453 Loans 1,848,505 1,886,732 Deferred loan fees, net (187) (327) Loans, net of deferred fees 1,848,318 1,886,405 Allowance for loan losses (27,318) (27,848) Loans, net $ 1,821,000 $ 1,858,557
Schedule of changes in allowance for loan losses	Three Months Ended March 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 Charge-offs (226) — — (226) Recoveries 715 42 — 757 Net recoveries 489 42 — 531 Provision (credit) for loan losses (1,993) 958 (26) (1,061) End of year balance $ 15,557 $ 11,671 $ 90 $ 27,318 Three Months Ended March 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 10,608 $ 8,950 $ 100 $ 19,658 Charge-offs (245) — — (245) Recoveries 157 63 — 220 Net (charge-offs) recoveries (88) 63 — (25) Provision (credit) for loan losses 645 (155) 16 506 End of period balance $ 11,165 $ 8,858 $ 116 $ 20,139
Schedule of balance in allowance for loan losses and recorded investment in loans by portfolio segment, based on impairment method	March 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 6,467 $ 897 $ — $ 7,364 Collectively evaluated for impairment 9,090 10,774 90 19,954 Total allowance balance $ 15,557 $ 11,671 $ 90 $ 27,318 Loans: Individually evaluated for impairment $ 8,536 $ 8,980 $ — $ 17,516 Collectively evaluated for impairment 551,182 1,270,117 9,690 1,830,989 Total loan balance $ 559,718 $ 1,279,097 $ 9,690 $ 1,848,505 December 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 6,944 $ — $ — $ 6,944 Collectively evaluated for impairment 10,117 10,671 116 20,904 Total allowance balance $ 17,061 $ 10,671 $ 116 $ 27,848 Loans: Individually evaluated for impairment $ 9,495 $ 5,645 $ — $ 15,140 Collectively evaluated for impairment 588,268 1,270,871 12,453 1,871,592 Total loan balance $ 597,763 $ 1,276,516 $ 12,453 $ 1,886,732
Schedule of loans held-for-investment individually evaluated for impairment by class of loans	March 31, 2019 December 31, 2018 Allowance Allowance Unpaid for Loan Unpaid for Loan Principal Recorded Losses Principal Recorded Losses Balance Investment Allocated Balance Investment Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ 1,615 $ 1,615 $ — $ 1,849 $ 1,849 $ — Real estate: CRE — — — 5,094 5,094 — Land and construction — — — — — — Home Equity 538 538 — 551 551 — Total with no related allowance recorded 2,153 2,153 — 7,494 7,494 — With an allowance recorded: Commercial 6,921 6,921 6,467 7,646 7,646 6,944 Real estate: Commercial 8,442 8,442 897 — — — Total with an allowance recorded 15,363 15,363 7,364 7,646 7,646 6,944 Total $ 17,516 $ 17,516 $ 7,364 $ 15,140 $ 15,140 $ 6,944
Schedule of average impaired loans with interest recognized and cash-basis interest earned on impaired loans	Three Months Ended March 31, 2019 Real Estate Land and Home Commercial CRE Construction Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ 9,016 $ 6,768 $ — $ 544 $ — $ 16,328 Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest recognized $ — $ — $ — $ — $ — $ — Three Months Ended March 31, 2018 Real Estate Land and Home Commercial CRE Construction Equity Consumer Total (Dollars in thousands) Average of impaired loans during the period $ 2,474 $ 501 $ 59 $ 371 $ 1 $ 3,406 Interest income during impairment $ — $ — $ — $ — $ — $ — Cash-basis interest recognized $ — $ — $ — $ — $ — $ —
Schedule of nonperforming loans	March 31, December 31, 2019 2018 2018 (Dollars in thousands) Nonaccrual loans - held-for-investment $ 15,958 $ 3,637 $ 13,699 Restructured and loans over 90 days past due and still accruing 1,357 158 1,188 Total nonperforming loans 17,315 3,795 14,887 Other restructured loans 201 241 253 Total impaired loans $ 17,516 $ 4,036 $ 15,140
Schedule of nonperforming loans by class	March 31, 2019 December 31, 2018 Restructured Restructured and Loans and Loans over 90 Days over 90 Days Past Due Past Due and Still and Still Nonaccrual Accruing Total Nonaccrual Accruing Total (Dollars in thousands) Commercial $ 7,203 $ 1,132 $ 8,335 $ 8,279 $ 963 $ 9,242 Real estate: CRE 8,442 — 8,442 5,094 — 5,094 Home equity 313 225 538 326 225 551 Total $ 15,958 $ 1,357 $ 17,315 $ 13,699 $ 1,188 $ 14,887
Schedule of aging of past due loans by class of loans	March 31, 2019 30 - 59 60 - 89 90 Days or Days Days Greater Total Loans Not Past Due Past Due Past Due Past Due Past Due Total (Dollars in thousands) Commercial $ 4,207 $ 6,948 $ 2,014 $ 13,169 $ 546,549 $ 559,718 Real estate: CRE — 6,192 2,251 8,443 1,004,198 1,012,641 Land and construction — — — — 98,222 98,222 Home equity 168 — — 168 118,280 118,448 Residential mortgages — — — — 49,786 49,786 Consumer — — — — 9,690 9,690 Total $ 4,375 $ 13,140 $ 4,265 $ 21,780 $ 1,826,725 $ 1,848,505 December 31, 2018 30 - 59 60 - 89 90 Days or Days Days Greater Total Loans Not Past Due Past Due Past Due Past Due Past Due Total (Dollars in thousands) Commercial $ 5,698 $ 1,916 $ 1,258 $ 8,872 $ 588,891 $ 597,763 Real estate: CRE — — — — 994,067 994,067 Land and construction — — — — 122,358 122,358 Home equity — — — 109,112 109,112 Residential mortgages — — — — 50,979 50,979 Consumer 1 — — 1 12,452 12,453 Total $ 5,699 $ 1,916 $ 1,258 $ 8,873 $ 1,877,859 $ 1,886,732
Summary of loan portfolio by loan type and credit quality classification	March 31, 2019 December 31, 2018 Nonclassified Classified Total Nonclassified Classified Total (Dollars in thousands) Commercial $ 545,151 14,567 $ 559,718 $ 584,845 $ 12,918 $ 597,763 Real estate: CRE 1,003,770 8,871 1,012,641 985,193 8,874 994,067 Land and construction 98,222 — 98,222 122,358 — 122,358 Home equity 116,710 1,738 118,448 107,495 1,617 109,112 Residential mortgages 49,786 — 49,786 50,979 — 50,979 Consumer 9,690 — 9,690 12,453 — 12,453 Total $ 1,823,329 $ 25,176 $ 1,848,505 $ 1,863,323 $ 23,409 $ 1,886,732

Business Combinations (Tables)

Business Combinations (Tables)	3 Months Ended
	Mar. 31, 2019
Tri Valley Bank
Business Acquisition [Line Items]
Summary of consideration paid	(Dollars in thousands) Cash paid for: Warrant $ 889 Options 615 Other 91 Total cash paid 1,595 Issuance of 1,889,613 shares of common stock to Tri- Valley shareholders at $16.26 per share at Closing 30,725 Total consideration $ 32,320
Schedule of recognized identified assets acquired and liabilities assumed	As As Recorded Fair Recorded by Value at Tri-Valley Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 21,757 $ 1,153 (a) $ 22,910 Loans 123,532 (2,563) (b) 120,969 Allowance for loan losses (1,969) 1,969 (c) — Other intangible assets — 1,978 (d) 1,978 Other assets, net 9,939 (2,894) (e) 7,045 Total assets acquired $ 153,259 $ (357) 152,902 Liabilities assumed: Deposits $ 135,351 $ 37 (f) 135,388 Other liabilities 608 — 608 Total liabilities assumed $ 135,959 $ 37 135,996 Net assets acquired 16,906 Purchase price 30,725 Goodwill recorded in the merger $ 13,819 Explanation of certain fair value related adjustments for the Tri-Valley acquisition: (a) Represents the cash acquired in the merger, the disposition of other real estate owned of $1,132,000, a gain on the sale of securities of $53,000, partially offset by invoices paid after closing for services prior to closing of $29,000, and cash paid for fractional shares in the transaction of $3,000. The remaining $1,592,000 of cash paid for the transaction is an adjustment to prepaid assets included in other assets, net. (b) (c) (d) (e) (f) Represents the fair value adjustment on time deposits, which was be accreted as a reduction of interest expense.
United American Bank
Business Acquisition [Line Items]
Summary of consideration paid	(Dollars in thousands) Consideration paid: Cash paid for: Series A Preferred Stock $ 8,700 Series B Preferred Stock 435 Other 2 Total cash paid 9,137 Issuance of 2,826,032 shares of common stock to United American shareholders at $16.73 per share at Closing 47,280 Total consideration $ 56,417
Schedule of recognized identified assets acquired and liabilities assumed	As As Recorded Fair Recorded by Value at United American Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 45,638 $ (32,520) (a) $ 13,118 Securities available-for-sale 64,144 (421) (b) 63,723 Loans 196,694 18,783 (c) 215,477 Allowance for loan losses (2,952) 2,952 (d) — Other intangible assets — 6,383 (e) 6,383 Other assets, net 9,119 (1,078) (f) 8,041 Total assets acquired $ 312,643 $ (5,901) 306,742 Liabilities assumed: Deposits $ 281,189 $ 51 (g) 281,240 Other borrowings 62 — 62 Other liabilities 2,617 (187) (h) 2,430 Total liabilities $ 283,868 $ (136) 283,732 Net assets acquired 23,010 Purchase price 47,280 Goodwill recorded in the merger $ 24,270 Explanation of certain fair value related adjustments for the United American acquisition: (a) Represents the cash acquired in the merger, net of cash paid for the transaction of $9,137,000, the repurchase of $23,732,000 loan participations from ATBancorp, and $51,000 for invoices paid after closing for services prior to closing, partially offset by a tax refund of $400,000. (b) Represents the fair value adjustment on investment securities available-for-sale. (c) Represents the repurchase of $23,732,000 loan participations from ATBancorp, partially offset by the fair value adjustment to the net book value of loans of $4,680,000, which includes an interest rate mark and credit mark adjustment, and net charge-offs of $269,000 subsequent to closing. (d) Represents the elimination of United American’s allowance for loan losses. (e) Represents intangible assets recorded to reflect the fair value of core deposits and a below market lease. The core deposit intangible asset was recorded as an identifiable intangible asset and is amortized on an accelerated basis over the estimated average life of the deposit base. The below market lease intangible assets are amortized on the straight line method over three years. (f) Represents an adjustment to net deferred tax assets resulting from the fair value adjustments related to the acquired assets, liabilities assumed and identifiable intangible assets recorded. (g) Represents the fair value adjustment on time deposits, which was be accreted as a reduction of interest expense. (h) Represents the reversal of accrued accounts payable.

Goodwill and Other Intangible_2

Goodwill and Other Intangible Assets (Tables)	3 Months Ended
	Mar. 31, 2019
Goodwill and Other Intangible Assets
Schedule of estimated amortization expense	United United Bay View Funding American American Tri-Valley Tri-Valley Focus Customer & Core Below Core Below Core Brokered Total Deposit Market Deposit Market Deposit Relationship Amortization Year Intangible Lease Intangible Lease Intangible Intangible Expense (Dollars in thousands) 2019 $ 777 $ 255 $ 240 $ 18 $ 734 $ 190 $ 2,214 2020 665 235 208 18 716 190 2,032 2021 602 — 184 18 596 190 1,590 2022 553 — 167 18 502 190 1,430 2023 521 — 158 18 420 190 1,307 2024 499 — 152 18 346 159 1,174 Thereafter 1,520 — 451 88 201 — 2,260 $ 5,137 $ 490 $ 1,560 $ 196 $ 3,515 $ 1,109 $ 12,007

Income Taxes (Tables)

Income Taxes (Tables)	3 Months Ended
	Mar. 31, 2019
Income Taxes
Summary of carrying amount of low income tax housing investment	March 31, December 31, 2019 2018 (Dollars in thousands) Low income housing investments $ 3,253 $ 3,172 Future commitments $ 273 $ 273

Benefit Plans (Tables)

Benefit Plans (Tables)	3 Months Ended
	Mar. 31, 2019
Supplemental Retirement Plan
Benefit plans
Schedule of components of net periodic benefit cost	Three Months Ended March 31, 2019 2018 Components of net periodic benefit cost: Service cost $ 55 $ 62 Interest cost 264 237 Amortization of net actuarial loss 46 73 Net periodic benefit cost $ 365 $ 372
Split-Dollar Life Insurance Benefit Plan
Benefit plans
Schedule of change in projected benefit obligation	March 31, December 31, 2019 2018 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 6,903 $ 6,711 Interest cost 70 227 Actuarial loss (gain) — (35) Projected benefit obligation at end of period $ 6,973 $ 6,903
Schedule of amounts recognized in accumulated other comprehensive loss	March 31, December 31, 2019 2018 (Dollars in thousands) Net actuarial loss $ 2,620 $ 2,573 Prior transition obligation 1,126 1,149 Accumulated other comprehensive loss $ 3,746 $ 3,722
Schedule of components of net periodic benefit cost	Three Months Ended March 31, 2019 2018 Amortization of prior transition obligation $ (25) $ (16) Interest cost 70 57 Net periodic benefit cost $ 45 $ 41

Fair Value (Tables)

Fair Value (Tables)	3 Months Ended
	Mar. 31, 2019
Fair Value
Schedule of financial assets and liabilities measured on a recurring basis	Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance (Level 1) (Level 2) (Level 3) (Dollars in thousands) Assets at March 31, 2019 Available-for-sale securities: Agency mortgage-backed securities $ 295,578 — $ 295,578 — U.S. Treasury 149,482 149,482 — — U.S. Government sponsored entities 7,461 — 7,461 — I/O strip receivables 571 — 571 — Assets at December 31, 2018 Available-for-sale securities: Agency mortgage-backed securities $ 302,854 — $ 302,854 — U.S. Treasury 148,753 148,753 — — U.S. Government sponsored entities 7,436 — 7,436 — I/O strip receivables 568 — 568 —
Schedule of assets and liabilities measured on a non-recurring basis	Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Balance (Level 1) (Level 2) (Level 3) (Dollars in thousands) Assets at March 31, 2019 Impaired loans - held-for-investment: Commercial $ 454 — — $ 454 Real estate: CRE 7,546 — — 7,546 $ 8,000 — — $ 8,000 Assets at December 31, 2018 Impaired loans - held-for-investment: Commercial $ 702 — — $ 702 $ 702 — — $ 702
Schedule of impaired loans held-for-investment and impaired loans held-for-investment carried at fair value	March 31, 2019 December 31, 2018 (Dollars in thousands) Impaired loans held-for-investment: Book value of impaired loans held-for-investment carried at fair value $ 15,364 $ 7,646 Book value of impaired loans held-for-investment carried at cost 2,152 7,494 Total impaired loans held-for-investment $ 17,516 $ 15,140 Impaired loans held-for-investment carried at fair value: Book value of impaired loans held-for-investment carried at fair value $ 15,364 $ 7,646 Specific valuation allowance (7,364) (6,944) Impaired loans held-for-investment carried at fair value, net $ 8,000 $ 702
Schedule of quantitative information about level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis	March 31, 2019 Valuation Unobservable Range Fair Value Techniques Inputs (Weighted Average) (Dollars in thousands) Impaired loans - held-for-investment: Commercial $ 454 Market Approach Discount adjustment for differences between comparable sales 0% to 1% (1%) Real estate: CRE 7,546 Market Approach Discount adjustment for differences between comparable sales 0% to 13% (5%) December 31, 2018 Valuation Unobservable Range Fair Value Techniques Inputs (Weighted Average) (Dollars in thousands) Impaired loans - held-for-investment: Commercial $ 702 Market Approach Discount adjustment for differences between comparable sales 0% to 1%
Schedule of carrying amounts and estimated fair values of financial instruments	The carrying amounts and estimated fair values of financial instruments at March 31, 2019 are as follows: Estimated Fair Value Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amounts (Level 1) (Level 2) (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ 234,977 $ 234,977 $ — $ — $ 234,977 Securities available-for-sale 452,521 149,482 303,039 — 452,521 Securities held-to-maturity 367,023 — 362,581 — 362,581 Loans (including loans held-for-sale), net 1,824,216 — 3,216 1,799,945 1,803,161 FHLB stock, FRB stock, and other investments 25,221 — — — N/A Accrued interest receivable 9,014 876 2,229 6,785 9,890 I/O strips receivables 571 — 571 — 571 Liabilities: Time deposits $ 148,969 $ — $ 149,347 $ — $ 149,347 Other deposits 2,491,275 — 2,491,275 — 2,491,275 Subordinated debt 39,414 — 39,064 — 39,064 Accrued interest payable 1,135 — 1,135 — 1,135 The carrying amounts and estimated fair values of the Company’s financial instruments at December 31, 2018: Estimated Fair Value Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Carrying Identical Assets Inputs Inputs Amounts (Level 1) (Level 2) (Level 3) Total (Dollars in thousands) Assets: Cash and cash equivalents $ 164,568 $ 164,568 $ — $ — $ 164,568 Securities available-for-sale 459,043 148,753 310,290 — 459,043 Securities held-to-maturity 377,198 — 366,175 — 366,175 Loans (including loans held-for-sale), net 1,861,206 — 2,649 1,826,654 1,829,303 FHLB stock, FRB stock, and other investments 25,216 — — — N/A Accrued interest receivable 9,577 597 2,274 6,706 9,577 I/O strips receivables 568 — 568 — 568 Liabilities: Time deposits $ 147,560 $ — $ 147,916 $ — $ 147,916 Other deposits 2,489,972 — 2,489,972 — 2,489,972 Subordinated debt 39,369 — 38,969 — 38,969 Accrued interest payable 497 — 497 — 497

Equity Plan (Tables)

Equity Plan (Tables)	3 Months Ended
	Mar. 31, 2019
Equity Plan
Schedule of stock option activity under the equity plans	Weighted Weighted Average Average Remaining Aggregate Number Exercise Contractual Intrinsic Total Stock Options of Shares Price Life (Years) Value Outstanding at January 1, 2019 1,570,603 $ 10.76 Exercised (35,003) $ 7.66 Forfeited or expired (9,086) $ 15.02 Outstanding at March 31, 2019 1,526,514 $ 10.81 6.29 $ 3,932,974 Vested or expected to vest 1,434,923 6.29 $ 3,696,996 Exercisable at March 31, 2019 1,083,415 5.37 $ 3,806,137
Schedule of information related to the equity Plan	Three Months Ended March 31, 2019 2018 Intrinsic value of options exercised $ 197,994 $ 560,332 Cash received from option exercise $ 268,691 $ 449,294 Tax benefit realized from option exercises $ 26,578 $ 164,978 Weighted average fair value of options granted $ 3.24 $ 3.00
Schedule of assumptions used to estimate the fair value of each option grant on the date of grant	Three Months Ended March 31, 2019 2018 Expected life in months(1) N/A 72 Volatility(1) N/A 22 % Weighted average risk-free interest rate(2) N/A 2.58 % Expected dividends(3) N/A 2.51 % (1) The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding based on historical experience. Volatility is based on the historical volatility of the stock price over the same period of the expected life of the option. (2) Based on the U.S. Treasury constant maturity interest rate with a term consistent with the expected life of the option granted. (3) Each grant’s dividend yield is calculated by annualizing the most recent quarterly cash dividend and dividing that amount by the market price of the Company’s common stock as of the grant date
Schedule of restricted stock activity under the equity plans	Weighted Average Grant Number Date Fair Total Restricted Stock Award of Shares Value Nonvested shares at January 1, 2019 193,298 $ 11.04 Vested (1,250) $ 14.01 Nonvested shares at March 31, 2019 192,048 $ 11.04

Capital Requirements (Tables)

Capital Requirements (Tables)	3 Months Ended
	Mar. 31, 2019
Capital Requirements
Schedule of actual capital and required amounts and ratios	Required For Capital Adequacy Purposes Actual Under Basel III Amount Ratio Amount Ratio (1) (Dollars in thousands) As of March 31, 2019 Total Capital $ 352,830 15.6 % $ 237,991 10.5 % (to risk-weighted assets) Tier 1 Capital $ 285,417 12.6 % $ 192,660 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 285,417 12.6 % $ 158,661 7.0 % (to risk-weighted assets) Tier 1 Capital $ 285,417 9.5 % $ 120,576 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, effective January 1, 2019, except the Tier 1 Capital to average assets ratio. Required For Capital Adequacy Purposes Actual Under Basel III Amount Ratio Amount Ratio (1) (Dollars in thousands) As of December 31, 2018 Total Capital $ 344,597 15.0 % $ 227,514 9.875 % (to risk-weighted assets) Tier 1 Capital $ 276,675 12.0 % $ 181,435 7.875 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 276,675 12.0 % $ 146,876 6.375 % (to risk-weighted assets) Tier 1 Capital $ 276,675 8.9 % $ 124,726 4.000 % (to average assets) (1) Includes 1.875% capital conservation buffer, effective January 1, 2018 except the Tier 1 Capital to average assets ratio.
HBC (Wholly-owned Subsidiary)
Capital Requirements
Schedule of actual capital and required amounts and ratios	Required For Capital To Be Well-Capitalized Adequacy Under Basel III PCA Regulatory Purposes Actual Requirements Under Basel III Amount Ratio Amount Ratio Amount Ratio (1) (Dollars in thousands) As of March 31, 2019 Total Capital $ 330,915 14.6 % $ 226,530 10.0 % $ 237,856 10.5 % (to risk-weighted assets) Tier 1 Capital $ 302,917 13.4 % $ 181,224 8.0 % $ 192,550 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 302,917 13.4 % $ 147,244 6.5 % $ 158,571 7.0 % (to risk-weighted assets) Tier 1 Capital $ 302,917 10.1 % $ 150,656 5.0 % $ 120,525 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, effective January 1, 2018, except the Tier 1 Capital to average assets ratio. Required For Capital To Be Well-Capitalized Adequacy Under Basel III PCA Regulatory Purposes Actual Requirements Under Basel III Amount Ratio Amount Ratio Amount Ratio (1) (Dollars in thousands) As of December 31, 2018 Total Capital $ 322,283 14.0 % $ 230,275 10.0 % $ 227,397 9.875 % (to risk-weighted assets) Tier 1 Capital $ 293,730 12.8 % $ 184,220 8.0 % $ 181,342 7.875 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 293,730 12.8 % $ 149,679 6.5 % $ 146,800 6.375 % (to risk-weighted assets) Tier 1 Capital $ 293,730 9.4 % $ 155,832 5.0 % $ 124,666 4.000 % (to average assets) (1) Includes 1.875% capital conservation buffer, effective January 1, 2018, except the Tier 1 Capital to average assets ratio.

Revenue Recognition (Tables)

Revenue Recognition (Tables)	3 Months Ended
	Mar. 31, 2019
Revenue Recognition
Schedule of noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606	Three Months Ended March 31, 2019 2018 (Dollars in thousands) Noninterest Income In-scope of Topic 606: Service charges and fees on deposit accounts $ 1,161 $ 902 Noninterest Income Out-of-scope of Topic 606 1,307 1,293 Total noninterest income $ 2,468 $ 2,195

Noninterest Expense (Tables)

Noninterest Expense (Tables)	3 Months Ended
	Mar. 31, 2019
Noninterest Expense
Schedule of noninterest expense	Three Months Ended March 31, 2019 2018 Salaries and employee benefits $ 10,770 $ 9,777 Occupancy and equipment 1,506 1,106 Professional fees 818 684 Data processing 679 353 Software subscriptions 589 593 Amortization of intangible assets 553 241 Insurance expense 436 407 Other acquisition and integration related costs — 615 Other 2,567 2,214 Total $ 17,918 $ 15,990

Lease (Tables)

Lease (Tables)	3 Months Ended
	Mar. 31, 2019
Leases
Schedule of leases	March 31, 2019 (Dollars in thousands) Operating Lease Cost (Cost resulting from lease payments) $ 1,050 Operating Lease - Operating Cash Flows (Fixed Payments) $ 1,013 Operating Lease - ROU assets $ 8,630 Operating Lease - Liabilities $ 8,630 Weighted Average Lease Term - Operating Leases 3.50 years Weighted Average Discount Rate - Operating Leases
Schedule of maturity analysis shows the undiscounted cash flows due on the Company’s operating lease liabilities	(Dollars in thousands) 2019 $ 3,040 2020 2,666 2021 1,351 2022 1,144 2023 605 Thereafter 691 Total undiscounted cash flows 9,497 Discount on cash flows (867) Total lease liability $ 8,630

Business Segment Information (T

Business Segment Information (Tables)	3 Months Ended
	Mar. 31, 2019
Business Segment Information
Schedule of information by operating segment	Three Months Ended March 31, 2019 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ 30,496 2,953 $ 33,449 Intersegment interest allocations 314 (314) — Total interest expense 2,407 — 2,407 Net interest income 28,403 2,639 31,042 Provision (credit) for loan losses (892) (169) (1,061) Net interest income after provision 29,295 2,808 32,103 Noninterest income 2,232 236 2,468 Noninterest expense 16,201 1,717 17,918 Intersegment expense allocations 121 (121) — Income before income taxes 15,447 1,206 16,653 Income tax (benefit) expense 4,151 356 4,507 Net income $ 11,296 $ 850 $ 12,146 Total assets $ 3,053,116 $ 62,761 $ 3,115,877 Loans, net of deferred fees $ 1,800,064 $ 48,254 $ 1,848,318 Goodwill $ 70,709 $ 13,044 $ 83,753 (1) Includes the holding company’s results of operations Three Months Ended March 31, 2018 Banking(1) Factoring Consolidated (Dollars in thousands) Interest income $ 24,731 $ 3,146 $ 27,877 Intersegment interest allocations 327 (327) — Total interest expense 1,529 — 1,529 Net interest income 23,529 2,819 26,348 Provision for loan losses 488 18 506 Net interest income after provision 23,041 2,801 25,842 Noninterest income 2,086 109 2,195 Noninterest expense 14,467 1,523 15,990 Intersegment expense allocations 175 (175) — Income before income taxes 10,835 1,212 12,047 Income tax expense 2,880 358 3,238 Net income $ 7,955 $ 854 $ 8,809 Total assets $ 2,722,472 $ 63,076 $ 2,785,548 Loans, net of deferred fees $ 1,541,466 $ 49,735 $ 1,591,201 Goodwill $ 32,620 $ 13,044 $ 45,664 (1) Includes the holding company’s results of operations

Basis of Presentation (Details)

Basis of Presentation (Details) $ in Thousands	May 04, 2018	Apr. 06, 2018	May 31, 2018	Apr. 30, 2018	Mar. 31, 2019USD ($)segmentcustomer	Jan. 01, 2019USD ($)
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
Operating lease, right-of-use asset					$ 8,630
Operating lease liability					$ 8,630
Tri Valley Bank and United American Bank | Core deposit
Segment Reporting
Finite-Lived Intangible Asset, Useful Life					10 years
Tri Valley Bank
Segment Reporting
Finite-Lived Intangible Asset, Useful Life		11 years
Tri Valley Bank | Core deposit
Segment Reporting
Finite-Lived Intangible Asset, Useful Life				10 years
Tri Valley Bank | Below market-value lease
Segment Reporting
Finite-Lived Intangible Asset, Useful Life				11 years	11 years
United American Bank
Segment Reporting
Finite-Lived Intangible Asset, Useful Life	3 years
United American Bank | Core deposit
Segment Reporting
Finite-Lived Intangible Asset, Useful Life			10 years
United American Bank | Below market-value lease
Segment Reporting
Finite-Lived Intangible Asset, Useful Life			3 years		3 years
ASU 2016-02
Segment Reporting
Operating lease, right-of-use asset						$ 9,600
Operating lease liability						$ 9,600

Shareholders' Equity and Earn_3

Shareholders' Equity and Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Reconciliation of factors used in computing basic and diluted earnings per common share
Net income	$ 12,146	$ 8,809
Weighted average common shares outstanding for basic earnings per common share (in shares)	43,108,208	38,240,495
Dilutive potential common shares	562,133	574,227
Shares used in computing diluted earnings per common share (in shares)	43,670,341	38,814,722
Basic earnings per share (in dollars per share)	$ 0.28	$ 0.23
Diluted earnings per share (in dollars per share)	$ 0.28	$ 0.23
Number of shares not in computing diluted earnings per common share	539,000	275,000

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Loss) (''AOCI'') - Changes in AOCI by Component (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Changes in AOCI by Component
Balance at the beginning of the period, net of taxes	$ (12,381)
Net current period other comprehensive income (loss), net of taxes	3,394	$ (5,704)
Balance at the end of the period, net of taxes	(8,987)
Accumulated Other Comprehensive Income / (Loss)
Changes in AOCI by Component
Balance at the beginning of the period, net of taxes	(12,381)	(9,252)
Other comprehensive income (loss) before reclassification, net of taxes	3,397	(5,675)
Amounts reclassified from other comprehensive income (loss), net of taxes	(3)	(29)
Net current period other comprehensive income (loss), net of taxes	3,394	(5,704)
Balance at the end of the period, net of taxes	(8,987)	(14,956)
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips
Changes in AOCI by Component
Balance at the beginning of the period, net of taxes	(5,007)	(362)
Other comprehensive income (loss) before reclassification, net of taxes	3,404	(5,670)
Amounts reclassified from other comprehensive income (loss), net of taxes		(61)
Net current period other comprehensive income (loss), net of taxes	3,404	(5,731)
Balance at the end of the period, net of taxes	(1,603)	(6,093)
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	344	375
Amounts reclassified from other comprehensive income (loss), net of taxes	(18)	(8)
Net current period other comprehensive income (loss), net of taxes	(18)	(8)
Balance at the end of the period, net of taxes	326	367
Defined Benefit Pension Plan Items
Changes in AOCI by Component
Balance at the beginning of the period, net of taxes	(7,718)	(9,265)
Other comprehensive income (loss) before reclassification, net of taxes	(7)	(5)
Amounts reclassified from other comprehensive income (loss), net of taxes	15	40
Net current period other comprehensive income (loss), net of taxes	8	35
Balance at the end of the period, net of taxes	$ (7,710)	$ (9,230)

Accumulated Other Comprehensi_4

Accumulated Other Comprehensive Income (Loss) (''AOCI'') - Amount Reclassified from AOCI (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Amount Reclassified from AOCI
Gain on sales of securities		$ 87
Interest income on taxable securities	$ 4,509	3,862
Income tax expense	(4,507)	(3,238)
Net income	12,146	8,809
Income before income tax	16,653	12,047
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips
Amount Reclassified from AOCI
Net of tax		61
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips | Amount Reclassified from AOCI
Amount Reclassified from AOCI
Gain on sales of securities		87
Income tax expense		(26)
Net of tax		61
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity
Amount Reclassified from AOCI
Net of tax	18	8
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	26	11
Income tax expense	(8)	(3)
Net of tax	18	8
Defined Benefit Pension Plan Items
Amount Reclassified from AOCI
Net of tax	(15)	(40)
Defined Benefit Pension Plan Items | Amount Reclassified from AOCI
Amount Reclassified from AOCI
Salaries and employee benefits	(21)	(57)
Income tax benefit	6	17
Net of tax	(15)	(40)
Prior transition obligation | Amount Reclassified from AOCI
Amount Reclassified from AOCI
Salaries and employee benefits	25	16
Actuarial losses | Amount Reclassified from AOCI
Amount Reclassified from AOCI
Salaries and employee benefits	(46)	(73)
Accumulated Other Comprehensive Income / (Loss)
Amount Reclassified from AOCI
Net of tax	3	29
Accumulated Other Comprehensive Income / (Loss) | Amount Reclassified from AOCI
Amount Reclassified from AOCI
Net of tax	$ 3	$ 29

Securities - Amortized Cost and

Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Available-for-sale (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Securities available-for-sale:
Amortized Cost	$ 455,389	$ 466,779
Gross Unrealized Gains	1,744	1,032
Gross Unrealized (Losses)	(4,612)	(8,768)
Total	452,521	459,043
Agency mortgage-backed securities
Securities available-for-sale:
Amortized Cost	299,847	311,523
Gross Unrealized Gains	343	98
Gross Unrealized (Losses)	(4,612)	(8,767)
Total	295,578	302,854
U.S. Treasury
Securities available-for-sale:
Amortized Cost	148,095	147,823
Gross Unrealized Gains	1,387	930
Total	149,482	148,753
U.S. Government sponsored entities
Securities available-for-sale:
Amortized Cost	7,447	7,433
Gross Unrealized Gains	14	4
Gross Unrealized (Losses)		(1)
Total	$ 7,461	$ 7,436

Securities - Amortized Cost a_2

Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Held-to-maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Securities held-to-maturity:
Amortized Cost	$ 367,023	$ 377,198
Gross Unrealized Gains	964	371
Gross Unrealized (Losses)	(5,406)	(11,394)
Estimated Fair Value	362,581	366,175
Agency mortgage-backed securities
Securities held-to-maturity:
Amortized Cost	281,102	291,241
Gross Unrealized Gains	281	59
Gross Unrealized (Losses)	(4,758)	(9,153)
Estimated Fair Value	276,625	282,147
Municipals - exempt from Federal tax
Securities held-to-maturity:
Amortized Cost	85,921	85,957
Gross Unrealized Gains	683	312
Gross Unrealized (Losses)	(648)	(2,241)
Estimated Fair Value	$ 85,956	$ 84,028

Securities - Securities with Un

Securities - Securities with Unrealized Losses - Securities Available-for-sale (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available-for-sale, Fair Value
Less Than 12 Months		$ 7,842
12 Months or More	$ 269,629	281,082
Total	269,629	288,924
Available-for-sale, Unrealized (Losses)
Less Than 12 Months		(22)
12 Months or More	(4,612)	(8,746)
Total	(4,612)	(8,768)
Agency mortgage-backed securities
Available-for-sale, Fair Value
Less Than 12 Months		3,868
12 Months or More	269,629	281,082
Total	269,629	284,950
Available-for-sale, Unrealized (Losses)
Less Than 12 Months		(21)
12 Months or More	(4,612)	(8,746)
Total	$ (4,612)	(8,767)
U.S. Government sponsored entities
Available-for-sale, Fair Value
Less Than 12 Months		3,974
Total		3,974
Available-for-sale, Unrealized (Losses)
Less Than 12 Months		(1)
Total		$ (1)

Securities - Securities with _2

Securities - Securities with Unrealized Losses - Securities Held-to-maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Held-to-maturity, Fair Value
Less Than 12 Months		$ 21,107
12 Months or More	$ 282,956	313,218
Total	282,956	334,325
Held-to-maturity, Unrealized (Losses)
Less Than 12 Months		(130)
12 Months or More	(5,406)	(11,264)
Total	(5,406)	(11,394)
Agency mortgage-backed securities
Held-to-maturity, Fair Value
Less Than 12 Months		16,088
12 Months or More	250,516	255,917
Total	250,516	272,005
Held-to-maturity, Unrealized (Losses)
Less Than 12 Months		(103)
12 Months or More	(4,758)	(9,050)
Total	(4,758)	(9,153)
Municipals - exempt from Federal tax
Held-to-maturity, Fair Value
Less Than 12 Months		5,019
12 Months or More	32,440	57,301
Total	32,440	62,320
Held-to-maturity, Unrealized (Losses)
Less Than 12 Months		(27)
12 Months or More	(648)	(2,214)
Total	$ (648)	$ (2,241)

Securities - Additional Informa

Securities - Additional Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)securityitem	Dec. 31, 2018USD ($)
Additional Information
The number of holdings of securities of any one issuer other than the U.S. Government and its sponsored entities | security	0
Holdings of securities as percentage of shareholders' equity, considered as threshold for disclosure purpose	10.00%
Number of securities held	525
Number of available for sale securities held	202
Number of held to maturity securities held	323
Number of securities with fair values below amortized cost	288
Total unrealized loss for securities 12 months or more | $	$ 10,018
12 Months or More | $	282,956	$ 313,218
Municipals - exempt from Federal tax
Additional Information
12 Months or More | $	$ 32,440	$ 57,301

Securities - Proceeds from Sale

Securities - Proceeds from Sales of Securities and the Resulting Gains and Losses (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)
Proceeds from Sales of Securities and the Resulting Gains and Losses
Proceeds	$ 38,754
Gross gains	1,050
Gross losses	$ (963)

Securities - Amortized Cost a_3

Securities - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity – Securities Available-for-sale (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Available-for-sale, Amortized Cost
Due after 3 months through one year	$ 5,468
Due after one year through five years	150,074
Agency mortgage-backed securities	299,847
Total	455,389	$ 466,779
Available-for-sale, Estimated Fair Value
Due after 3 months through one year	5,475
Due after one year through five years	151,468
Agency mortgage-backed securities	295,578
Total	$ 452,521	$ 459,043

Securities - Amortized Cost a_4

Securities - Amortized Cost and Fair Value of Debt Securities by Contractual Maturity – Securities Held-to-maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Held-to-maturity, Amortized Cost
Due after 3 months through one year	$ 770
Due after one year through five years	4,941
Due after five years through ten years	27,670
Due after ten years	52,540
Agency mortgage-backed securities	281,102
Total	367,023	$ 377,198
Held-to-maturity, Estimated Fair Value
Due after 3 months through one year	771
Due after one year through five years	5,038
Due after five years through ten years	27,988
Due after ten years	52,159
Agency mortgage-backed securities	276,625
Total	$ 362,581	$ 366,175

Securities - Securities Pledged

Securities - Securities Pledged to Secure Public Deposits and for Other Purposes (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Securities Pledged to Secure Public Deposits and for Other Purposes
Amortized cost of securities pledged to secure public deposits and for other purposes as required or permitted by law or contract	$ 34,806	$ 36,229

Loans -Loans Balance (Details)

Loans -Loans Balance (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Loans held-for-investment:
Total loan balance	$ 1,848,505	$ 1,886,732
Deferred loan fees, net	(187)	(327)
Loans, net of deferred fees	1,848,318	1,886,405	$ 1,591,201
Allowance for loan losses	(27,318)	(27,848)	(20,139)	$ (19,658)
Loans, net	1,821,000	1,858,557
Commercial
Loans held-for-investment:
Total loan balance	559,718	597,763
Allowance for loan losses	(15,557)	(17,061)	(11,165)	(10,608)
Real estate
Loans held-for-investment:
Total loan balance	1,279,097	1,276,516
Allowance for loan losses	(11,671)	(10,671)	(8,858)	(8,950)
Real estate | CRE
Loans held-for-investment:
Total loan balance	1,012,641	994,067
Real estate | Land and construction
Loans held-for-investment:
Total loan balance	98,222	122,358
Real estate | Home equity
Loans held-for-investment:
Total loan balance	118,448	109,112
Real estate | Residential mortgages
Loans held-for-investment:
Total loan balance	49,786	50,979
Consumer
Loans held-for-investment:
Total loan balance	9,690	12,453
Allowance for loan losses	(90)	(116)	$ (116)	$ (100)
Focus
Loans held-for-investment:
Non-PCI loans acquired	34,433	36,958
Tri Valley Bank
Loans held-for-investment:
Non-PCI loans acquired	103,540	111,952
United American Bank
Loans held-for-investment:
Non-PCI loans acquired	$ 174,328	$ 181,453

Loans - Additional Information

Loans - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Loans
Nonaccrual loans - held-for-investment	$ 15,958	$ 3,637	$ 13,699
Provision (credit) for loan losses	(1,061)	506
Net (charge-offs) recoveries	$ 531	$ (25)

Loans - Changes in the Allowanc

Loans - Changes in the Allowance for Loan Losses (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Changes in the Allowance for Loan Losses
Beginning of period balance	$ 27,848	$ 19,658
Charge-offs	(226)	(245)
Recoveries	757	220
Net (charge-offs) recoveries	531	(25)
Provision (credit) for loan losses	(1,061)	506
End of year balance	27,318	20,139
Commercial
Changes in the Allowance for Loan Losses
Beginning of period balance	17,061	10,608
Charge-offs	(226)	(245)
Recoveries	715	157
Net (charge-offs) recoveries	489	(88)
Provision (credit) for loan losses	(1,993)	645
End of year balance	15,557	11,165
Real estate
Changes in the Allowance for Loan Losses
Beginning of period balance	10,671	8,950
Recoveries	42	63
Net (charge-offs) recoveries	42	63
Provision (credit) for loan losses	958	(155)
End of year balance	11,671	8,858
Consumer
Changes in the Allowance for Loan Losses
Beginning of period balance	116	100
Provision (credit) for loan losses	(26)	16
End of year balance	$ 90	$ 116

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	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
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	$ 7,364	$ 6,944
Allowance for loan losses, Collectively evaluated for impairment	19,954	20,904
Total allowance balance	27,318	27,848	$ 20,139	$ 19,658
Loans, Individually evaluated for impairment	17,516	15,140
Loans, Collectively evaluated for impairment	1,830,989	1,871,592
Total loan balance	1,848,505	1,886,732
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	6,467	6,944
Allowance for loan losses, Collectively evaluated for impairment	9,090	10,117
Total allowance balance	15,557	17,061	11,165	10,608
Loans, Individually evaluated for impairment	8,536	9,495
Loans, Collectively evaluated for impairment	551,182	588,268
Total loan balance	559,718	597,763
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	897
Allowance for loan losses, Collectively evaluated for impairment	10,774	10,671
Total allowance balance	11,671	10,671	8,858	8,950
Loans, Individually evaluated for impairment	8,980	5,645
Loans, Collectively evaluated for impairment	1,270,117	1,270,871
Total loan balance	1,279,097	1,276,516
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	90	116
Total allowance balance	90	116	$ 116	$ 100
Loans, Collectively evaluated for impairment	9,690	12,453
Total loan balance	$ 9,690	$ 12,453

Loans - Loans Held for Investme

Loans - Loans Held for Investment Individually Evaluated for Impairment by Class of Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Unpaid Principal Balance
Total with no related allowance recorded	$ 2,153	$ 7,494
Total with an allowance recorded	15,363	7,646
Total	17,516	15,140
Recorded Investment
Total with no related allowance recorded	2,153	7,494
Total with an allowance recorded	15,363	7,646
Total	17,516	15,140	$ 4,036
Total with an allowance recorded, Allowance for Loan Losses Allocated	7,364	6,944
Commercial
Unpaid Principal Balance
Total with no related allowance recorded	1,615	1,849
Total with an allowance recorded	6,921	7,646
Recorded Investment
Total with no related allowance recorded	1,615	1,849
Total with an allowance recorded	6,921	7,646
Total with an allowance recorded, Allowance for Loan Losses Allocated	6,467	6,944
Commercial | Real estate
Unpaid Principal Balance
Total with an allowance recorded	8,442
Recorded Investment
Total with an allowance recorded	8,442
Total with an allowance recorded, Allowance for Loan Losses Allocated	897
Home equity | Real estate
Unpaid Principal Balance
Total with no related allowance recorded	538	551
Recorded Investment
Total with no related allowance recorded	$ 538	551
CRE | Real estate
Unpaid Principal Balance
Total with no related allowance recorded		5,094
Recorded Investment
Total with no related allowance recorded		$ 5,094

Loans - Interest Recognized and

Loans - Interest Recognized and Cash Basis Interest Earned on Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period	$ 16,328	$ 3,406
Commercial
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period	9,016	2,474
Consumer
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period		1
CRE | Real estate
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period	6,768	501
Land and construction | Real estate
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period		59
Home equity | Real estate
Interest Recognized and Cash Basis Interest Earned on Impaired Loans
Average of impaired loans during the period	$ 544	$ 371

Loans - Nonperforming Loans (De

Loans - Nonperforming Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Nonaccrual loans - held-for-investment	$ 15,958	$ 13,699	$ 3,637
Restructured and loans over 90 days past due and still accruing	1,357	1,188	158
Total nonperforming loans	17,315	14,887	3,795
Other restructured loans	201	253	241
Total	$ 17,516	$ 15,140	$ 4,036

Loans - Nonperforming Loans by

Loans - Nonperforming Loans by Class (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Nonperforming Loans by Class
Nonaccrual loans - held-for-investment	$ 15,958	$ 13,699	$ 3,637
Restructured and Loans Over 90 Days Past Due and Still Accruing	1,357	1,188	158
Total	17,315	14,887	$ 3,795
Commercial
Nonperforming Loans by Class
Nonaccrual loans - held-for-investment	7,203	8,279
Restructured and Loans Over 90 Days Past Due and Still Accruing	1,132	963
Total	8,335	9,242
CRE | Real estate
Nonperforming Loans by Class
Nonaccrual loans - held-for-investment	8,442	5,094
Total	8,442	5,094
Home equity | Real estate
Nonperforming Loans by Class
Nonaccrual loans - held-for-investment	313	326
Restructured and Loans Over 90 Days Past Due and Still Accruing	225	225
Total	$ 538	$ 551

Loans - Aging of Past Due Loans

Loans - Aging of Past Due Loans by Class of Loans - Tabular Disclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Aging of Past Due Loans by Class of Loans
Total Past Due	$ 21,780	$ 8,873
Loans Not Past Due	1,826,725	1,877,859
Total loan balance	1,848,505	1,886,732
30-59 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	4,375	5,699
60-89 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	13,140	1,916
90 Days or Greater Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	4,265	1,258
Commercial
Aging of Past Due Loans by Class of Loans
Total Past Due	13,169	8,872
Loans Not Past Due	546,549	588,891
Total loan balance	559,718	597,763
Commercial | 30-59 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	4,207	5,698
Commercial | 60-89 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	6,948	1,916
Commercial | 90 Days or Greater Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	2,014	1,258
Real estate
Aging of Past Due Loans by Class of Loans
Total loan balance	1,279,097	1,276,516
Consumer
Aging of Past Due Loans by Class of Loans
Total Past Due		1
Loans Not Past Due	9,690	12,452
Total loan balance	9,690	12,453
Consumer | 30-59 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due		1
CRE | Real estate
Aging of Past Due Loans by Class of Loans
Total Past Due	8,443
Loans Not Past Due	1,004,198	994,067
Total loan balance	1,012,641	994,067
CRE | Real estate | 60-89 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	6,192
CRE | Real estate | 90 Days or Greater Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	2,251
Land and construction | Real estate
Aging of Past Due Loans by Class of Loans
Loans Not Past Due	98,222	122,358
Total loan balance	98,222	122,358
Home equity | Real estate
Aging of Past Due Loans by Class of Loans
Total Past Due	168
Loans Not Past Due	118,280	109,112
Total loan balance	118,448	109,112
Home equity | Real estate | 30-59 Days Past Due
Aging of Past Due Loans by Class of Loans
Total Past Due	168
Residential mortgages | Real estate
Aging of Past Due Loans by Class of Loans
Loans Not Past Due	49,786	50,979
Total loan balance	$ 49,786	$ 50,979

Loans - Aging of Past Due Loa_2

Loans - Aging of Past Due Loans by Class of Loans - Additional Information (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2018
Aging of Past Due Loans by Class of Loans
Past due loans 30 day or greater	$ 21,780	$ 8,873
Nonaccrual loans - held-for-investment	15,958	13,699	$ 3,637
30 days or greater past due
Aging of Past Due Loans by Class of Loans
Nonaccrual loans - held-for-investment	15,089	430
Less than 30 days past due
Aging of Past Due Loans by Class of Loans
Nonaccrual loans - held-for-investment	$ 869
Less than 30 days past due nonaccrual loans held-for-investment		$ 13,269

Loans - Credit Quality Indicato

Loans - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Loans
Balance to report	$ 1,821,000	$ 1,858,557
Loan classified as loss
Loans
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	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Loans
Total	$ 1,848,505		$ 1,886,732
Nonclassified
Loans
Total	1,823,329		1,863,323
Classified
Loans
Total	$ 25,176	$ 30,800	$ 23,409
Percentage of financing receivable balance over total assets	0.81%	1.07%	0.76%
Commercial
Loans
Total	$ 559,718		$ 597,763
Commercial | Nonclassified
Loans
Total	545,151		584,845
Commercial | Classified
Loans
Total	14,567		12,918
Real estate
Loans
Total	1,279,097		1,276,516
Real estate | CRE
Loans
Total	1,012,641		994,067
Real estate | CRE | Nonclassified
Loans
Total	1,003,770		985,193
Real estate | CRE | Classified
Loans
Total	8,871		8,874
Real estate | Land and construction
Loans
Total	98,222		122,358
Real estate | Land and construction | Nonclassified
Loans
Total	98,222		122,358
Real estate | Home equity
Loans
Total	118,448		109,112
Real estate | Home equity | Nonclassified
Loans
Total	116,710		107,495
Real estate | Home equity | Classified
Loans
Total	1,738		1,617
Real estate | Residential mortgages
Loans
Total	49,786		50,979
Real estate | Residential mortgages | Nonclassified
Loans
Total	49,786		50,979
Consumer
Loans
Total	9,690		12,453
Consumer | Nonclassified
Loans
Total	$ 9,690		$ 12,453

Loans - Troubled Debt Restructu

Loans - Troubled Debt Restructurings (Details) - USD ($)	Mar. 31, 2019	Dec. 31, 2018
Loans
Recorded investment of troubled debt restructurings	$ 580,000	$ 649,000
Allowance for Credit Losses, Change in Method of Calculating Impairment	1,000
Troubled debt restructurings, nonaccrual loans		36,000
Troubled debt restructurings, accruing loans		613,000
Specific reserves	$ 1,000	$ 38,000

Loans - Troubled Debt Restruc_2

Loans - Troubled Debt Restructurings by Class (Details) - loan	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Loans
Number of loans modified as troubled debt restructurings during the period	0	0

Loans - Defaults on Troubled De

Loans - Defaults on Troubled Debt Restructurings (Details)	3 Months Ended
	Mar. 31, 2019loanitem	Mar. 31, 2018loanitem
Loans
Number of troubled debt restructurings in which the amount of principal or accrued interest owed from the borrower was forgiven	0
Number of loans modified as troubled debt restructurings during the period	0	0
Default period contractually past due under modified terms (in days)	30 days
Number of defaults on troubled debt restructurings | item	0	0
Period of consecutive payments (in months)	6 months

Business Combinations - Tri-Val

Business Combinations - Tri-Valley (Details)	Apr. 06, 2018USD ($)$ / sharesshares	Mar. 31, 2018USD ($)	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)	May 04, 2018$ / shares
Business Combinations
Gain on sales of securities		$ 87,000
Stock price at Closing (in dollars per share) | $ / shares					$ 16.73
Liabilities assumed:
Goodwill recorded in the merger		$ 45,664,000	$ 83,753,000	$ 83,753,000
Tri Valley Bank
Business Combinations
Disposition of other real estate owned	$ 1,132,000
Gain on sales of securities	53,000
Cash paid for invoices after closing for services prior to closing	29,000
Cash paid for fractional shares	3,000
Cash paid for transaction adjustment to prepaid assets included in other assets	1,592,000
Aggregate transaction value	$ 32,320,000
Shares issued in acquisition | shares	1,889,613
Fixed exchange ratio of company's common stock	0.0489
Stock price at Closing (in dollars per share) | $ / shares	$ 16.26
Total cash paid	$ 1,595,000
Issuance of 1,889,613 shares of common stock to Tri-Valley shareholders at $16.26 per share at Closing	30,725,000
Total Consideration Paid	$ 32,320,000
Amortized intangible assets	11 years
Assets acquired:
Cash and cash equivalents	$ 22,910,000
Loans	120,969,000
Other intangible assets	1,978,000
Other assets, net	7,045,000
Total assets acquired	152,902,000
Liabilities assumed:
Deposits	135,388,000
Other liabilities	608,000
Total liabilities assumed	135,996,000
Net assets acquired	16,906,000
Purchase price	30,725,000
Goodwill recorded in the merger	13,819,000
Tri Valley Bank | As Recorded
Assets acquired:
Cash and cash equivalents	21,757,000
Loans	123,532,000
Allowance for loan losses	(1,969,000)
Other assets, net	9,939,000
Total assets acquired	153,259,000
Liabilities assumed:
Deposits	135,351,000
Other liabilities	608,000
Total liabilities assumed	135,959,000
Tri Valley Bank | Fair Value Adjustments
Assets acquired:
Cash and cash equivalents	1,153,000
Loans	(2,563,000)
Allowance for loan losses	1,969,000
Other intangible assets	1,978,000
Other assets, net	(2,894,000)
Total assets acquired	(357,000)
Liabilities assumed:
Deposits	37,000
Total liabilities assumed	37,000
Warrant | Tri Valley Bank
Business Combinations
Total cash paid	889,000
Options | Tri Valley Bank
Business Combinations
Total cash paid	615,000
Other | Tri Valley Bank
Business Combinations
Total cash paid	$ 91,000

Business Combinations - United

Business Combinations - United American (Details)	May 04, 2018USD ($)$ / sharesshares	Mar. 31, 2019USD ($)	Dec. 31, 2018USD ($)	Mar. 31, 2018USD ($)
Business Combinations
Stock price at Closing (in dollars per share) | $ / shares	$ 16.73
Liabilities assumed:
Goodwill recorded in the merger		$ 83,753,000	$ 83,753,000	$ 45,664,000
United American Bank
Business Combinations
Aggregate transaction value	$ 56,417,000
Fixed exchange ratio of company's common stock	2.1644
Shares issued in acquisition | shares	2,826,032
Total cash paid	$ 9,137,000
Issuance of 2,826,032 shares of common stock to United American shareholders at $16.73 per share at Closing	47,280,000
Total Consideration Paid	56,417,000
Loan participations repurchase	23,732,000
Cash paid for invoices after closing for services prior to closing	51,000
Tax refund	$ 400,000
Amortized intangible assets	3 years
Assets acquired:
Cash and cash equivalents	$ 13,118,000
Securities available-for-sale	63,723,000
Net loans	215,477,000
Other intangible assets	6,383,000
Other assets, net	8,041,000
Total assets acquired	306,742,000
Liabilities assumed:
Deposits	281,240,000
Other borrowings	62,000
Other liabilities	2,430,000
Total liabilities assumed	283,732,000
Net assets acquired	23,010,000
Purchase price	47,280,000
Goodwill recorded in the merger	24,270,000
Fair value adjustments:
Loans receivable fair value adjustment	4,680,000
Charge-off	269,000
United American Bank | As Recorded
Assets acquired:
Cash and cash equivalents	45,638,000
Securities available-for-sale	64,144,000
Net loans	196,694,000
Allowance for loan losses	(2,952,000)
Other assets, net	9,119,000
Total assets acquired	312,643,000
Liabilities assumed:
Deposits	281,189,000
Other borrowings	62,000
Other liabilities	2,617,000
Total liabilities assumed	283,868,000
Series A Preferred Stock | United American Bank
Business Combinations
Total cash paid	8,700,000
Series B Preferred Stock | United American Bank
Business Combinations
Total cash paid	$ 435,000
Series A and Series B Preferred Stock | United American Bank
Business Combinations
Cash issued per share | $ / shares	$ 1,000
Other | United American Bank
Business Combinations
Total cash paid	$ 2,000
Fair Value Adjustments | United American Bank
Assets acquired:
Cash and cash equivalents	(32,520,000)
Securities available-for-sale	(421,000)
Net loans	18,783,000
Allowance for loan losses	2,952,000
Other intangible assets	6,383,000
Other assets, net	(1,078,000)
Total assets acquired	(5,901,000)
Liabilities assumed:
Deposits	51,000
Other liabilities	(187,000)
Total liabilities assumed	$ (136,000)

Business Combinations (Details)

Business Combinations (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2018USD ($)	Mar. 31, 2019USD ($)companyloan	Dec. 31, 2018companyloan
Business Combinations
Number of business banking franchises acquired | company		3	3
Combined business value after business combination		$ 3,100,000
Other acquisition and integration related costs	$ 615
Number of loan classified as PCI loan | loan		0	0

Goodwill and Other Intangible_3

Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018	May 04, 2018	Apr. 06, 2018	Mar. 31, 2018
Goodwill
Goodwill	$ 83,753	$ 83,753			$ 45,664
BVF/CSNK
Goodwill
Goodwill acquired	13,044
Focus
Goodwill
Goodwill acquired	32,620
Tri Valley Bank
Goodwill
Goodwill				$ 13,819
Goodwill acquired	13,819
United American Bank
Goodwill
Goodwill			$ 24,270
Goodwill acquired	$ 24,270

Goodwill and Other Intangible_4

Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands	May 04, 2018	Apr. 06, 2018	May 31, 2018	Apr. 30, 2018	Aug. 31, 2015	Nov. 30, 2014	Mar. 31, 2019	Dec. 31, 2018
Other Intangible Assets
Accumulated amortization							$ 2,953	$ 2,770
United American Bank
Other Intangible Assets
Accumulated amortization							$ 1,014	756
Useful life, amortization period	3 years
United American Bank | Core deposit
Other Intangible Assets
Intangible assets acquired			$ 5,723
Useful life, amortization period			10 years
United American Bank | Below market-value lease
Other Intangible Assets
Intangible assets acquired			$ 660
Useful life, amortization period			3 years				3 years
Tri Valley Bank
Other Intangible Assets
Accumulated amortization							$ 287	222
Useful life, amortization period		11 years
Tri Valley Bank | Core deposit
Other Intangible Assets
Intangible assets acquired				$ 1,768
Useful life, amortization period				10 years
Tri Valley Bank | Below market-value lease
Other Intangible Assets
Intangible assets acquired				$ 210
Useful life, amortization period				11 years			11 years
Focus | Core deposit
Other Intangible Assets
Intangible assets acquired					$ 6,285
Useful life, amortization period					10 years
BVF/CSNK
Other Intangible Assets
Accumulated amortization							$ 838	$ 791
BVF/CSNK | Below market-value lease
Other Intangible Assets
Intangible assets acquired						$ 109
BVF/CSNK | Non-compete agreement
Other Intangible Assets
Intangible assets acquired						250
BVF/CSNK | Customer relationship and brokered relationship
Other Intangible Assets
Intangible assets acquired						$ 1,900
Useful life, amortization period						10 years

Goodwill and Other Intangible_5

Goodwill and Other Intangible Assets - Estimated Amortization Expense (Details) $ in Thousands	Mar. 31, 2019USD ($)
Estimated Amortization Expense
2019	$ 2,214
2020	2,032
2021	1,590
2022	1,430
2023	1,307
2024	1,174
Thereafter	2,260
Total	12,007
United American Bank | Core deposit
Estimated Amortization Expense
2019	777
2020	665
2021	602
2022	553
2023	521
2024	499
Thereafter	1,520
Total	5,137
United American Bank | Below market-value lease
Estimated Amortization Expense
2019	255
2020	235
Total	490
Tri Valley Bank | Core deposit
Estimated Amortization Expense
2019	240
2020	208
2021	184
2022	167
2023	158
2024	152
Thereafter	451
Total	1,560
Tri Valley Bank | Below market-value lease
Estimated Amortization Expense
2019	18
2020	18
2021	18
2022	18
2023	18
2024	18
Thereafter	88
Total	196
Focus | Core deposit
Estimated Amortization Expense
2019	734
2020	716
2021	596
2022	502
2023	420
2024	346
Thereafter	201
Total	3,515
BVF/CSNK | Customer relationship and brokered relationship
Estimated Amortization Expense
2019	190
2020	190
2021	190
2022	190
2023	190
2024	159
Total	$ 1,109

Goodwill and Other Intangible_6

Goodwill and Other Intangible Assets - Impairment of Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Impairment of Intangible Assets
Impairment of intangible assets	$ 0	$ 0

Income Taxes - Net Deferred Tax

Income Taxes - Net Deferred Tax Assets (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Net deferred tax assets
Net deferred tax assets	$ 24,263	$ 27,089
Valuation allowance for deferred tax assets	$ 0	$ 0

Income Taxes - Carry Amounts of

Income Taxes - Carry Amounts of the Low Income Housing Investments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Income Taxes
Low income housing investments	$ 3,253	$ 3,172
Future commitments	$ 273	$ 273

Income Taxes - Future Commitmen

Income Taxes - Future Commitments of the Low Income Housing Investments (Details) - Low income housing investments $ in Thousands	Mar. 31, 2019USD ($)
Future Commitments
2019	$ 14
2020	14
2021 through 2023	$ 245

Income Taxes - Components of Lo

Income Taxes - Components of Low Income Housing Investment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Income Taxes
Low income housing tax credits		$ 106
Low income housing investment expense	$ 109	$ 119

Benefit Plans - Defined Benefit

Benefit Plans - Defined Benefit Plans - Nonqualified Defined Benefit Pension Plan (Details) $ in Thousands	Mar. 31, 2019USD ($)
Supplemental Retirement Plan
Supplemental Retirement Plan
Plan assets associated with the plan	$ 0

Benefit Plans - Defined Benef_2

Benefit Plans - Defined Benefit Plans - Components of Pension Cost (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Supplemental Retirement Plan
Components of net periodic benefit cost:
Service cost	$ 55	$ 62
Interest cost	264	237
Amortization of net actuarial loss	46	73
Net periodic benefit cost	365	372
Split-Dollar Life Insurance Benefit Plan
Components of net periodic benefit cost:
Interest cost	70	57	$ 227
Amortization of prior transition obligation	(25)	(16)
Net periodic benefit cost	$ 45	$ 41

Benefit Plans - Defined Benef_3

Benefit Plans - Defined Benefit Plans - Change in Projected Benefit Obligation (Details) - Split-Dollar Life Insurance Benefit Plan - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$ 6,903	$ 6,711	$ 6,711
Interest cost	70	$ 57	227
Actuarial loss (gain)			(35)
Projected benefit obligation at end of period	$ 6,973		$ 6,903

Benefit Plans - Defined Benef_4

Benefit Plans - Defined Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - Split-Dollar Life Insurance Benefit Plan - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Amounts Recognized in Accumulated Other Comprehensive Loss
Net actuarial loss	$ 2,620	$ 2,573
Prior transition obligation	1,126	1,149
Accumulated other comprehensive loss	$ 3,746	$ 3,722

Fair Value - Financial Assets a

Fair Value - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	$ 452,521	$ 459,043
I/O strip receivables	571	568
Agency mortgage-backed securities
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	295,578	302,854
U.S. Treasury
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	149,482	148,753
U.S. Government sponsored entities
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	7,461	7,436
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	149,482	148,753
Significant Other Observable Inputs (Level 2)
Financial Assets and Liabilities Measured on a Recurring Basis
I/O strip receivables	571	568
Significant Other Observable Inputs (Level 2) | Agency mortgage-backed securities
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	295,578	302,854
Significant Other Observable Inputs (Level 2) | U.S. Government sponsored entities
Financial Assets and Liabilities Measured on a Recurring Basis
Securities available-for-sale	7,461	7,436
Recurring basis
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

Fair Value - Financial Assets_2

Fair Value - Financial Assets and Liabilities Measured on a Non-Recurring Basis (Details) - Non-recurring basis - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	$ 8,000	$ 702
Significant Unobservable Inputs (Level 3)
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	8,000	702
Commercial | Commercial
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	454	702
Commercial | Commercial | Significant Unobservable Inputs (Level 3)
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	454	$ 702
CRE | Real estate
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	7,546
CRE | Real estate | Significant Unobservable Inputs (Level 3)
Financial Assets and Liabilities Measured on a Non-Recurring Basis
Impaired loans - held-for-investment:	$ 7,546

Fair Value - Impaired Loans Hel

Fair Value - Impaired Loans Held-for-investment - Tabular Disclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Impaired Loans Held-for-investment
Impaired loans held-for-investment	$ 17,516	$ 15,140
Carried at fair value
Impaired Loans Held-for-investment
Impaired loans held-for-investment	15,364	7,646
Specific valuation allowance	(7,364)	(6,944)
Impaired loans held-for-investment carried at fair value, net	8,000	702
Portion carried at cost
Impaired Loans Held-for-investment
Impaired loans held-for-investment	$ 2,152	$ 7,494

Fair Value - Impaired Loans H_2

Fair Value - Impaired Loans Held-for-investment - Additional Disclosures (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Impaired Loans Held-for-investment
Impaired loans held-for-investment	$ 17,516	$ 15,140
Additional provision (credit) for loan losses	288	7,042
Carrying amount
Impaired Loans Held-for-investment
Foreclosed assets	0
Carried at fair value
Impaired Loans Held-for-investment
Impaired loans held-for-investment	15,364	7,646
Specific valuation allowance	7,364	6,944
Portion carried at cost
Impaired Loans Held-for-investment
Impaired loans held-for-investment	$ 2,152	$ 7,494

Fair Value - Quantitative Infor

Fair Value - Quantitative Information about Level 3 Fair Value Measurements (Details) - Non-recurring basis $ in Thousands	Mar. 31, 2019USD ($)item	Dec. 31, 2018USD ($)item
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 | $	$ 8,000	$ 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 | $	8,000	702
Commercial | 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 | $	454	702
Commercial | 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 | $	$ 454	$ 702
Commercial | Commercial | Significant Unobservable Inputs (Level 3) | 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 - Impaired loan held for investment (as a percent) | item	0	0
Commercial | Commercial | Significant Unobservable Inputs (Level 3) | 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 - Impaired loan held for investment (as a percent) | item	0.01	0.01
Commercial | Commercial | Significant Unobservable Inputs (Level 3) | 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 - Impaired loan held for investment (as a percent) | item	0.01
CRE | 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 | $	$ 7,546
CRE | 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 | $	$ 7,546
CRE | Real estate | Significant Unobservable Inputs (Level 3) | 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 - Real Estate (as a percent) | item	0
CRE | Real estate | Significant Unobservable Inputs (Level 3) | 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 - Real Estate (as a percent) | item	0.13
CRE | Real estate | Significant Unobservable Inputs (Level 3) | 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 - Real Estate (as a percent) | item	0.05

Fair Value - Carrying Amounts a

Fair Value - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Assets
Securities available-for-sale	$ 452,521	$ 459,043
Securities held-to-maturity	362,581	366,175
Federal Home Loan Bank and Federal Reserve Bank stock and other investments, at cost	25,221	25,216
I/O strips receivables	571	568
Liabilities
Subordinated Debt.	39,414	39,369
Significant Other Observable Inputs (Level 2)
Assets
I/O strips receivables	571	568
Carrying amount
Assets
Cash and cash equivalents	234,977	164,568
Securities available-for-sale	452,521	459,043
Securities held-to-maturity	367,023	377,198
Loans (including loans held-for-sale), net	1,824,216	1,861,206
Federal Home Loan Bank and Federal Reserve Bank stock and other investments, at cost	25,221	25,216
Accrued interest receivable	9,014	9,577
I/O strips receivables	571	568
Liabilities
Time deposits	148,969	147,560
Other deposits	2,491,275	2,489,972
Subordinated Debt.	39,414	39,369
Accrued interest payable	1,135	497
Carried at fair value
Assets
Cash and cash equivalents	234,977	164,568
Securities available-for-sale	452,521	459,043
Securities held-to-maturity	362,581	366,175
Loans (including loans held-for-sale), net	1,803,161	1,829,303
Accrued interest receivable	9,890	9,577
I/O strips receivables	571	568
Liabilities
Time deposits	149,347	147,916
Other deposits	2,491,275	2,489,972
Subordinated Debt.	39,064	38,969
Accrued interest payable	1,135	497
Carried at fair value | Quoted Prices in Active Markets for Identical Assets (Level 1)
Assets
Cash and cash equivalents	234,977	164,568
Securities available-for-sale	149,482	148,753
Accrued interest receivable	876	597
Carried at fair value | Significant Other Observable Inputs (Level 2)
Assets
Securities available-for-sale	303,039	310,290
Securities held-to-maturity	362,581	366,175
Loans (including loans held-for-sale), net	3,216	2,649
Accrued interest receivable	2,229	2,274
I/O strips receivables	571	568
Liabilities
Time deposits	149,347	147,916
Other deposits	2,491,275	2,489,972
Subordinated Debt.	39,064	38,969
Accrued interest payable	1,135	497
Carried at fair value | Significant Unobservable Inputs (Level 3)
Assets
Loans (including loans held-for-sale), net	1,799,945	1,826,654
Accrued interest receivable	$ 6,785	$ 6,706

Equity Plan - General Disclosur

Equity Plan - General Disclosures (Details) - shares	3 Months Ended
	Mar. 31, 2019	May 25, 2017	May 24, 2017
2013 Plan
Equity Plan
Number of shares authorized for equity plan		3,000,000	1,750,000
Number of shares available for future grants	1,172,592
Options
Equity Plan
Vesting period	4 years
Options | Maximum
Equity Plan
Expiration term	10 years

Equity Plan - Stock Option Acti

Equity Plan - Stock Option Activity (Details) - Options	3 Months Ended
	Mar. 31, 2019USD ($)$ / sharesshares
Number of Shares
Outstanding at the beginning of the period (in shares)	1,570,603
Exercised (in shares)	(35,003)
Forfeited or expired (in shares)	(9,086)
Outstanding at the end of the period (in shares)	1,526,514
Vested or expected to vest (in shares)	1,434,923
Exercisable at the end of the period (in shares)	1,083,415
Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share) | $ / shares	$ 10.76
Exercised (in dollars per share) | $ / shares	7.66
Forfeited or expired (in dollars per share) | $ / shares	15.02
Outstanding at the end of the period (in dollars per share) | $ / shares	$ 10.81
Additional Information
Weighted Average Remaining Contractual Life - Outstanding at the end of the period (in years)	6 years 3 months 15 days
Weighted Average Remaining Contractual Life - Vested or expected to vest (in years)	6 years 3 months 15 days
Weighted Average Remaining Contractual Life - Exercisable at the end of the period (in years)	5 years 4 months 13 days
Aggregate Intrinsic Value - Outstanding at the end of the period (in dollars) | $	$ 3,932,974
Aggregate Intrinsic Value - Vested or expected to vest (in dollars) | $	3,696,996
Aggregate Intrinsic Value - Exercisable at the end of the period (in dollars) | $	$ 3,806,137

Equity Plan - Information Relat

Equity Plan - Information Related to the Equity Plans for each of the Last Three Years (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Information Related to the Equity Plans
Cash received from option exercise	$ 269	$ 449
Options
Information Related to the Equity Plans
Intrinsic value of options exercised	197,994	560,332
Cash received from option exercise	268,691	449,294
Tax benefit realized from option exercises	$ 26,578	$ 164,978
Weighted average fair value of options granted (in dollars per share)	$ 3.24	$ 3

Equity Plan - Unrecognized Comp

Equity Plan - Unrecognized Compensation Cost - Nonvested Stock Options (Details) - Options $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Unrecognized Compensation Cost
Total unrecognized compensation cost related to nonvested stock options granted	$ 1,199
Expected weighted-average period for recognition of compensation costs related to nonvested stock options	2 years 6 months 11 days

Equity Plan - Assumptions Used

Equity Plan - Assumptions Used to Estimate Fair Value (Details)	3 Months Ended
	Mar. 31, 2018
Assumptions Used to Estimate Fair Value
Expected life in months	72 months
Options
Assumptions Used to Estimate Fair Value
Volatility (as a percent)	22.00%
Weighted average risk-free interest rate (as a percent)	2.58%
Expected dividends (as a percent)	2.51%

Equity Plan - Restricted Stock

Equity Plan - Restricted Stock Activity (Details) - Restricted stock	3 Months Ended
	Mar. 31, 2019$ / sharesshares
Number of Shares
Nonvested shares at the beginning of the period (in shares) | shares	193,298
Vested (in shares) | shares	(1,250)
Nonvested shares at the end of the period (in shares) | shares	192,048
Weighted Average Grant Date Fair Value
Nonvested shares at the beginning of the period (in dollars per share) | $ / shares	$ 11.04
Vested (in dollars per share) | $ / shares	14.01
Nonvested shares at the end of the period (in dollars per share) | $ / shares	$ 11.04

Equity Plan - Unrecognized Co_2

Equity Plan - Unrecognized Compensation Cost - Nonvested Restricted Stock Awards (Details) - Restricted stock $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Unrecognized Compensation Cost
Total unrecognized compensation cost related to nonvested restricted stock awards	$ 1,817
Expected weighted-average period for recognition of compensation costs related to nonvested restricted stock awards	2 years 5 months 16 days

Subordinate Debt (Details)

Subordinate Debt (Details) - USD ($)	Jun. 01, 2022	Mar. 31, 2019	May 26, 2017
Debt Instrument [Line Items]
Principal amount			$ 40,000,000
Fixed interest rate (as a percent)		5.25%
LIBOR
Debt Instrument [Line Items]
Base rate	three-month LIBOR
Rate of interest added to base rate	3.365%

Capital Requirements - General

Capital Requirements - General Information (Details)	Jan. 01, 2016	Mar. 31, 2019	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Capital Requirements
Phase-in period (in years)	4 years
Capital conservation buffer (as a percent)		2.50%		1.875%		0.625%
Forecast
Capital Requirements
Capital conservation buffer (as a percent)			2.50%
HBC (Wholly-owned Subsidiary)
Capital Requirements
Capital conservation buffer (as a percent)		2.50%		1.875%	1.25%

Capital Requirements - Tabular

Capital Requirements - Tabular Disclosure (Details) - USD ($) $ in Thousands	Mar. 31, 2019	Dec. 31, 2018
Total Capital (to risk-weighted assets)
Actual, Amount	$ 352,830	$ 344,597
Required For Capital Adequacy Purposes, Amount	$ 237,991	$ 227,514
Actual, Ratio (as a percent)	15.60%	15.00%
Required For Capital Adequacy Purposes, Ratio (as a percent)	10.50%	9.875%
Tier 1 Capital (to risk-weighted assets)
Actual, Amount	$ 285,417	$ 276,675
Required For Capital Adequacy Purposes, Amount	$ 192,660	$ 181,435
Actual, Ratio (as a percent)	12.60%	12.00%
Required For Capital Adequacy Purposes, Ratio (as a percent)	8.50%	7.875%
Common Equity Tier 1 Capital (to risk-weighted assets)
Actual, Amount	$ 285,417	$ 276,675
Required For Capital Adequacy Purposes, Amount	$ 158,661	$ 146,876
Actual, Ratio (as a percent)	12.60%	12.00%
Required For Capital Adequacy Purposes, Ratio (as a percent)	7.00%	6.375%
Tier 1 Capital (to average assets)
Actual, Amount	$ 285,417	$ 276,675
Required For Capital Adequacy Purposes, Amount	$ 120,576	$ 124,726
Actual, Ratio (as a percent)	9.50%	8.90%
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	$ 330,915	$ 322,283
To Be Well Capitalized Under Regulatory Requirements, Amount	226,530	230,275
Required For Capital Adequacy Purposes, Amount	$ 237,856	$ 227,397
Actual, Ratio (as a percent)	14.60%	14.00%
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent)	10.00%	10.00%
Required For Capital Adequacy Purposes, Ratio (as a percent)	10.50%	9.875%
Tier 1 Capital (to risk-weighted assets)
Actual, Amount	$ 302,917	$ 293,730
To Be Well Capitalized Under Regulatory Requirements, Amount	181,224	184,220
Required For Capital Adequacy Purposes, Amount	$ 192,550	$ 181,342
Actual, Ratio (as a percent)	13.40%	12.80%
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent)	8.00%	8.00%
Required For Capital Adequacy Purposes, Ratio (as a percent)	8.50%	7.875%
Common Equity Tier 1 Capital (to risk-weighted assets)
Actual, Amount	$ 302,917	$ 293,730
To Be Well Capitalized Under Regulatory Requirements, Amount	147,244	149,679
Required For Capital Adequacy Purposes, Amount	$ 158,571	$ 146,800
Actual, Ratio (as a percent)	13.40%	12.80%
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent)	6.50%	6.50%
Required For Capital Adequacy Purposes, Ratio (as a percent)	7.00%	6.375%
Tier 1 Capital (to average assets)
Actual, Amount	$ 302,917	$ 293,730
To Be Well Capitalized Under Regulatory Requirements, Amount	150,656	155,832
Required For Capital Adequacy Purposes, Amount	$ 120,525	$ 124,666
Actual, Ratio (as a percent)	10.10%	9.40%
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) - USD ($)	3 Months Ended
	Mar. 31, 2019	Dec. 31, 2018
Cash dividend
Subordinated Debt.	$ 39,414,000	$ 39,369,000
HBC (Wholly-owned Subsidiary)
Cash dividend
Cash dividend available	38,136,000
Dividends paid to parent company	$ 5,000,000

Revenue Recognition (Details)

Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Revenue Recognition
Non-interest Income In-scope of Topic 606	$ 1,161	$ 902
Non-interest Income Out-of-scope of Topic 606	1,307	1,293
Total noninterest income	$ 2,468	$ 2,195

Noninterest Expense (Details)

Noninterest Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018
Noninterest Expense
Salaries and employee benefits	$ 10,770	$ 9,777
Occupancy and equipment	1,506	1,106
Professional fees	818	684
Data processing	679	353
Software subscriptions	589	593
Amortization of intangible assets	553	241
Insurance expense	436	407
Other acquisition and integration related costs		615
Other	2,567	2,214
Total noninterest expense	$ 17,918	$ 15,990

Lease (Details)

Lease (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2019USD ($)
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Option to renew	true
Operating Lease Cost (Cost resulting from lease payments)	$ 1,050
Operating Lease - Operating Cash Flows (Fixed Payments)	1,013
Operating Lease - Liabilities	8,630
Operating Lease - ROU assets	8,630
New ROU Assets - Finance Leases	$ 9,566
Weighted Average Lease Term - Operating Leases	3 years 6 months
Weighted Average Discount Rate - Operating Leases	5.25%
ASU 2018-11
Lessee, Lease, Description [Line Items]
Operating Lease - Liabilities	$ 8,600
Operating Lease - ROU assets	$ 8,600

Lease - Maturity Analysis (Deta

Lease - Maturity Analysis (Details) $ in Thousands	Mar. 31, 2019USD ($)
Operating Lease Payments Due
2019	$ 3,040
2020	2,666
2021	1,351
2022	1,144
2023	605
Thereafter	691
Total undiscounted cash flows	9,497
Discount on cash flows	(867)
Total lease liability	$ 8,630

Business Segment Information -

Business Segment Information - Business Segments (Details)	3 Months Ended
	Mar. 31, 2019segmentitem
Business Segment Information
Number of business segments | segment	2
Focus
Business Segment Information
Number of business segments | item	2

Business Segment Information _2

Business Segment Information - Operating Statements (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2019	Mar. 31, 2018	Dec. 31, 2018
Operating Income
Interest income	$ 33,449	$ 27,877
Total interest expense	2,407	1,529
Net interest income	31,042	26,348
Provision (credit) for loan losses	(1,061)	506
Net interest income after provision	32,103	25,842
Noninterest income	2,468	2,195
Noninterest expense	17,918	15,990
Income before income taxes	16,653	12,047
Income tax (benefit) expense	4,507	3,238
Net income	12,146	8,809
Total assets	3,115,877	2,785,548	$ 3,096,562
Loans, net of deferred fees	1,848,318	1,591,201	1,886,405
Goodwill	83,753	45,664	$ 83,753
Banking
Operating Income
Interest income	30,496	24,731
Intersegment interest allocations	314	327
Total interest expense	2,407	1,529
Net interest income	28,403	23,529
Provision (credit) for loan losses	(892)	488
Net interest income after provision	29,295	23,041
Noninterest income	2,232	2,086
Noninterest expense	16,201	14,467
Intersegment expense allocations	121	175
Income before income taxes	15,447	10,835
Income tax (benefit) expense	4,151	2,880
Net income	11,296	7,955
Total assets	3,053,116	2,722,472
Loans, net of deferred fees	1,800,064	1,541,466
Goodwill	70,709	32,620
Factoring
Operating Income
Interest income	2,953	3,146
Intersegment interest allocations	(314)	(327)
Net interest income	2,639	2,819
Provision (credit) for loan losses	(169)	18
Net interest income after provision	2,808	2,801
Noninterest income	236	109
Noninterest expense	1,717	1,523
Intersegment expense allocations	(121)	(175)
Income before income taxes	1,206	1,212
Income tax (benefit) expense	356	358
Net income	850	854
Total assets	62,761	63,076
Loans, net of deferred fees	48,254	49,735
Goodwill	$ 13,044	$ 13,044

Subsequent Events (Details)

Subsequent Events (Details) - $ / shares	Apr. 25, 2019	Mar. 31, 2019	Mar. 31, 2018
Subsequent Event [Line Items]
Quarterly cash dividends declared to holders of common stock		$ 0.12	$ 0.11
Subsequent Event
Subsequent Event [Line Items]
Quarterly cash dividends declared to holders of common stock	$ 0.12