Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 10, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 000-23877 | ||
Entity Registrant Name | HERITAGE COMMERCE CORP | ||
Entity Incorporation, State or Country Code | CA | ||
Entity Tax Identification Number | 77-0469558 | ||
Entity Address, Address Line One | 224 Airport Parkway | ||
Entity Address, City or Town | San Jose | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 95110 | ||
City Area Code | 408 | ||
Local Phone Number | 947-6900 | ||
Title of 12(b) Security | Common Stock, No Par Value | ||
Trading Symbol | HTBK | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 354.3 | ||
Entity Common Stock, Shares Outstanding | 59,919,957 | ||
Document Fiscal Year Focus | 2020 | ||
Entity Central Index Key | 0001053352 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --12-31 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and due from banks | $ 30,598,000 | $ 49,447,000 |
Other investments and interest-bearing deposits in other financial institutions | 1,100,475,000 | 407,923,000 |
Total cash and cash equivalents | 1,131,073,000 | 457,370,000 |
Securities available-for-sale, at fair value | 235,774,000 | 404,825,000 |
Securities held-to-maturity, at amortized cost, net of allowance for credit losses of $54 at December 31, 2020 (fair value of $304,927at December 31, 2020 and $368,107 at December 31, 2019) | 297,389,000 | 366,560,000 |
Loans held-for-sale - SBA, at lower of cost or fair value, including deferred costs | 1,699,000 | 1,052,000 |
Loans, net of deferred fees | 2,619,261,000 | 2,533,844,000 |
Allowance for credit losses on loans(1) | (44,400,000) | (23,285,000) |
Loans, net | 2,574,861,000 | 2,510,559,000 |
Federal Home Loan Bank, Federal Reserve Bank stock and other investments, at cost | 33,522,000 | 29,842,000 |
Company-owned life insurance | 77,523,000 | 76,027,000 |
Premises and equipment, net | 10,459,000 | 8,250,000 |
Goodwill | 167,631,000 | 167,420,000 |
Other intangible assets | 16,664,000 | 20,415,000 |
Accrued interest receivable and other assets | 87,519,000 | 67,143,000 |
Total assets | 4,634,114,000 | 4,109,463,000 |
Deposits: | ||
Demand, noninterest-bearing | 1,661,655,000 | 1,450,873,000 |
Demand, interest-bearing | 960,179,000 | 798,375,000 |
Savings and money market | 1,119,968,000 | 982,430,000 |
Time deposits - under $250 | 45,027,000 | 54,361,000 |
Time deposits - $250 and over | 103,746,000 | 99,882,000 |
CDARS - interest-bearing demand, money market and time deposits | 23,911,000 | 28,847,000 |
Total deposits | 3,914,486,000 | 3,414,768,000 |
Subordinated debt, net of issuance costs | 39,740,000 | 39,554,000 |
Other short-term borrowings | 328,000 | |
Accrued interest payable and other liabilities | 101,999,000 | 78,105,000 |
Total liabilities | 4,056,225,000 | 3,532,755,000 |
Shareholders' equity: | ||
Preferred stock, no par value; 10,000,000 shares authorized; none issued and outstanding at December 31, 2020 and December 31, 2019 | ||
Common stock, no par value; 100,000,000 shares authorized ;59,917,457 shares issued and outstanding at December 31, 2020 and 59,368,156 shares issued and outstanding at December 31, 2019 | 493,707,000 | 489,745,000 |
Retained earnings | 94,899,000 | 96,741,000 |
Accumulated other comprehensive loss | (10,717,000) | (9,778,000) |
Total shareholders' equity | 577,889,000 | 576,708,000 |
Total liabilities and shareholders' equity | $ 4,634,114,000 | $ 4,109,463,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Securities held-to-maturity | ||
Allowance for credit losses | $ (54) | |
Securities held-to-maturity, fair value (in dollars) | $ 304,927 | $ 368,107 |
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 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 59,917,457 | 59,368,156 |
Common stock, shares outstanding | 59,917,457 | 59,368,156 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Interest income: | |||
Loans, including fees | $ 133,169 | $ 116,808 | $ 105,635 |
Securities, taxable | 11,637 | 15,836 | 15,211 |
Securities, exempt from Federal tax | 1,908 | 2,148 | 2,225 |
Other investments, interest-bearing deposits in other financial institutions and Federal funds sold | 3,757 | 7,867 | 6,774 |
Total interest income | 150,471 | 142,659 | 129,845 |
Interest expense: | |||
Deposits | 6,260 | 8,159 | 5,506 |
Subordinated debt | 2,320 | 2,686 | 2,314 |
Short-term borrowings | 1 | 2 | 2 |
Total interest expense | 8,581 | 10,847 | 7,822 |
Net interest income before provision for credit losses on loans | 141,890 | 131,812 | 122,023 |
Provision for credit losses on loans | 13,233 | 846 | 7,421 |
Net interest income after provision for credit losses on loans | 128,657 | 130,966 | 114,602 |
Noninterest income: | |||
Increase in cash surrender value of life insurance | 1,845 | 1,404 | 1,045 |
Gain on sales of SBA loans | 839 | 689 | 698 |
Servicing income | 673 | 636 | 709 |
Gain on sales of securities | 277 | 661 | 266 |
Other | 2,638 | 2,344 | 2,743 |
Total noninterest income | 9,922 | 10,244 | 9,574 |
Noninterest expense: | |||
Salaries and employee benefits | 50,927 | 50,754 | 43,762 |
Occupancy and equipment | 8,018 | 6,647 | 5,411 |
Professional fees | 5,338 | 3,259 | 1,969 |
Other | 25,228 | 24,238 | 24,379 |
Total noninterest expense | 89,511 | 84,898 | 75,521 |
Income before income taxes | 49,068 | 56,312 | 48,655 |
Income tax expense | 13,769 | 15,851 | 13,324 |
Net income | $ 35,299 | $ 40,461 | $ 35,331 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 0.59 | $ 0.87 | $ 0.85 |
Diluted (in dollars per share) | $ 0.59 | $ 0.84 | $ 0.84 |
Service charges and fees on deposit accounts | |||
Noninterest income: | |||
Non-interest income | $ 2,859 | $ 4,510 | $ 4,113 |
Revenue, Product and Service [Extensible List] | Service charges and fees on deposit accounts | Service charges and fees on deposit accounts | Service charges and fees on deposit accounts |
Gain on the disposition of foreclosed assets | |||
Noninterest income: | |||
Non-interest income | $ 791 | ||
Revenue, Product and Service [Extensible List] | Gain on the disposition of foreclosed assets | Gain on the disposition of foreclosed assets | Gain on the disposition of foreclosed assets |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 35,299 | $ 40,461 | $ 35,331 |
Other comprehensive income (loss): | |||
Change in net unrealized holding (losses) gains on available-for-sale securities and I/O strips | 3,553 | 10,620 | (6,383) |
Deferred income taxes | (1,031) | (3,545) | 1,925 |
Change in net unamortized unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity | (52) | (65) | (44) |
Deferred income taxes | 15 | 19 | 13 |
Reclassification adjustment for gains realized in income | (277) | (661) | (266) |
Deferred income taxes | 82 | 195 | 79 |
Change in unrealized (losses) gains on securities and I/O strips, net of deferred income taxes | 2,290 | 6,563 | (4,676) |
Change in net pension and other benefit plan liability adjustment | (4,036) | (5,622) | 2,196 |
Deferred income taxes | 807 | 1,662 | (649) |
Change in pension and other benefit plan liability, net of deferred income taxes | (3,229) | (3,960) | 1,547 |
Other comprehensive (loss) income | (939) | 2,603 | (3,129) |
Total comprehensive income | $ 34,360 | $ 43,064 | $ 32,202 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Common StockTri Valley Bank | Common StockUnited American Bank | Common StockPresidio bank | Common Stock | Retained EarningsAdjustment | Retained Earnings | Accumulated Other Comprehensive Income / (Loss) | Tri Valley Bank | United American Bank | Presidio bank | Adjustment | Total |
Balance at Dec. 31, 2017 | $ 218,355,000 | $ 62,136,000 | $ (9,252,000) | $ 271,239,000 | ||||||||
Balance (in shares) at Dec. 31, 2017 | 38,200,883 | |||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||
Net income | 35,331,000 | 35,331,000 | ||||||||||
Other comprehensive income (loss) | (3,129,000) | (3,129,000) | ||||||||||
Issuance of common shares to acquire Business | $ 30,725,000 | $ 47,280,000 | $ 30,725,000 | $ 47,280,000 | ||||||||
Issuance of common shares to acquire Business (in shares) | 1,889,613 | 2,826,032 | ||||||||||
Issuance of restricted stock awards, net (in shares) | 95,378 | |||||||||||
Amortization of restricted stock awards, net of forfeitures and taxes | $ 1,109,000 | 1,109,000 | ||||||||||
Cash dividend declared | (18,464,000) | (18,464,000) | ||||||||||
Stock option expense, net of forfeitures | 708,000 | 708,000 | ||||||||||
Stock options exercised | $ 2,667,000 | 2,667,000 | ||||||||||
Stock options exercised (in shares) | 276,844 | |||||||||||
Balance at Dec. 31, 2018 | $ 300,844,000 | 79,003,000 | (12,381,000) | 367,466,000 | ||||||||
Balance (in shares) at Dec. 31, 2018 | 43,288,750 | |||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||
Net income | 40,461,000 | 40,461,000 | ||||||||||
Other comprehensive income (loss) | 2,603,000 | 2,603,000 | ||||||||||
Issuance of common shares to acquire Business | $ 177,926,000 | $ 177,926,000 | ||||||||||
Issuance of common shares to acquire Business (in shares) | 15,684,064 | |||||||||||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | 7,426,000 | ||||||||||
Issuance of restricted stock awards, net (in shares) | 128,653 | |||||||||||
Amortization of restricted stock awards, net of forfeitures and taxes | $ 1,283,000 | 1,283,000 | ||||||||||
Cash dividend declared | (22,723,000) | (22,723,000) | ||||||||||
Stock option expense, net of forfeitures | 640,000 | 640,000 | ||||||||||
Stock options exercised | $ 1,626,000 | 1,626,000 | ||||||||||
Stock options exercised (in shares) | 266,689 | |||||||||||
Balance at Dec. 31, 2019 | $ 489,745,000 | $ (6,062,000) | 96,741,000 | (9,778,000) | $ (6,062,000) | 576,708,000 | ||||||
Balance (in shares) at Dec. 31, 2019 | 59,368,156 | |||||||||||
Increase (Decrease) in Shareholders' Equity | ||||||||||||
Net income | 35,299,000 | 35,299,000 | ||||||||||
Other comprehensive income (loss) | (939,000) | (939,000) | ||||||||||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | |||||||||||
Issuance of restricted stock awards, net (in shares) | 168,117 | |||||||||||
Amortization of restricted stock awards, net of forfeitures and taxes | $ 1,689,000 | 1,689,000 | ||||||||||
Cash dividend declared | (31,079,000) | (31,079,000) | ||||||||||
Stock option expense, net of forfeitures and taxes | 559,000 | 559,000 | ||||||||||
Stock options exercised | $ 1,714,000 | 1,714,000 | ||||||||||
Stock options exercised (in shares) | 381,184 | |||||||||||
Balance at Dec. 31, 2020 | $ 493,707,000 | $ 94,899,000 | $ (10,717,000) | $ 577,889,000 | ||||||||
Balance (in shares) at Dec. 31, 2020 | 59,917,457 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |
Cash dividend declared per share (in dollars per share) | $ / shares | $ 0.48 |
Presidio bank | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |
Issuance of common shares to acquire Presidio Bank, offering costs | $ | $ 246 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income | $ 35,299,000 | $ 40,461,000 | $ 35,331,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Amortization of discounts and premiums on securities | 3,747,000 | 2,590,000 | 3,788,000 |
Gain on sale of securities available-for-sale | (277,000) | (661,000) | (266,000) |
Gain on sale of SBA loans | (839,000) | (689,000) | (698,000) |
Proceeds from sale of SBA loans originated for sale | 11,154,000 | 10,096,000 | 11,765,000 |
SBA loans originated for sale | (10,962,000) | (8,504,000) | (15,214,000) |
Provision for credit losses on loans | 13,233,000 | 846,000 | 7,421,000 |
Increase in cash surrender value of life insurance | (1,845,000) | (1,404,000) | (1,045,000) |
Depreciation and amortization | 951,000 | 846,000 | 753,000 |
Amortization of other intangible assets | 3,751,000 | 2,739,000 | 1,943,000 |
Stock option expense, net | 559,000 | 640,000 | 708,000 |
Amortization of restricted stock awards, net | 1,689,000 | 1,283,000 | 1,109,000 |
Amortization of subordinated debt issuance costs | 186,000 | 185,000 | 186,000 |
Gain on proceeds from company owned life insurance | (20,000) | ||
Effect of changes in: | |||
Accrued interest receivable and other assets | 8,101,000 | 8,407,000 | 1,572,000 |
Accrued interest payable and other liabilities | (6,641,000) | (6,492,000) | 1,219,000 |
Net cash provided by operating activities | 58,086,000 | 50,343,000 | 48,572,000 |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchase of securities available-for-sale | (111,954,000) | (162,806,000) | |
Purchase of securities held-to-maturity | (30,916,000) | (50,041,000) | (31,496,000) |
Maturities/paydowns/calls of securities available-for-sale | 114,662,000 | 53,566,000 | 57,142,000 |
Maturities/paydowns/calls of securities held-to-maturity | 97,365,000 | 59,361,000 | 50,773,000 |
Proceeds from sales of securities available-for-sale | 56,598,000 | 167,551,000 | 94,291,000 |
Net change in loans | (85,646,000) | 33,810,000 | 38,394,000 |
Changes in Federal Home Loan Bank stock and other investments | (3,680,000) | 1,161,000 | (4,483,000) |
Purchase of premises and equipment | (3,160,000) | (203,000) | (187,000) |
Cash received in bank acquisition, net of cash paid | 117,988,000 | 36,028,000 | |
Proceeds from redemption of company-owned life insurance | 369,000 | ||
Net cash provided by investing activities | 145,592,000 | 271,239,000 | 77,656,000 |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Net change in deposits | 499,718,000 | 2,977,000 | (262,085,000) |
Redemption of subordinated debt | (10,000,000) | ||
Payment for early debt extinguishment penalty | (300,000) | ||
Net change in short-term borrowings | (328,000) | (114,000) | |
Exercise of stock options | 1,714,000 | 1,626,000 | 2,667,000 |
Common stock offering costs | (246,000) | ||
Payment of cash dividends | (31,079,000) | (22,723,000) | (18,464,000) |
Net cash provided by (used in) financing activities | 470,025,000 | (28,780,000) | (277,882,000) |
Net increase in cash and cash equivalents | 673,703,000 | 292,802,000 | (151,654,000) |
Cash and cash equivalents, beginning of period | 457,370,000 | 164,568,000 | 316,222,000 |
Cash and cash equivalents, end of period | 1,131,073,000 | 457,370,000 | 164,568,000 |
Supplemental disclosures of cash flow information: | |||
Interest paid | 8,558,000 | 9,935,000 | 7,528,000 |
Income taxes paid, net | 10,640,000 | 17,730,000 | 12,838,000 |
Supplemental schedule of non-cash activity: | |||
Recording of right to use assets in exchange for lease obligations | $ 26,654,000 | 9,566,000 | |
Transfer of loans held-for-sale to loan portfolio | $ 694,000 | $ 4,917,000 |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS - Summary of Assets Acquired and Liabilities Assumed Through Acquisition (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of assets acquired and liabilities assumed through acquisitions: | ||
Cash and cash equivalents, net of cash paid | $ 117,988,000 | $ 36,028,000 |
Securities available-for-sale | 45,069,000 | 63,723,000 |
Securities held-to-maturity | 463,000 | |
Net loans | 685,964,000 | 336,446,000 |
Premises and equipment | 1,756,000 | 350,000 |
Goodwill | 83,878,000 | 38,039,000 |
Other intangible assets | 11,147,000 | 8,361,000 |
Company owned life insurance | 12,764,000 | |
Other assets, net | 29,397,000 | 14,736,000 |
Deposits | (774,259,000) | (416,628,000) |
Subordinated debt | (10,000,000) | |
Other borrowings | (442,000) | (62,000) |
Other liabilities | (18,127,000) | (3,038,000) |
Presidio bank | ||
Summary of assets acquired and liabilities assumed through acquisitions: | ||
Common stock issued in acquisitions | $ 185,598,000 | |
Tri Valley Bank and United American Bank | ||
Summary of assets acquired and liabilities assumed through acquisitions: | ||
Common stock issued in acquisitions | $ 78,005,000 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | HERITAGE COMMERCE CORP NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1) Summary of Significant Accounting Policies Description of Business and Basis of Presentation Heritage Commerce Corp (“HCC”) operates as a registered bank holding company for its wholly-owned subsidiary Heritage Bank of Commerce (“HBC” or the “Bank”), collectively referred to as the “Company”. HBC was incorporated on November 23, 1993 and commenced operations on June 8, 1994. HBC is a California state chartered bank which offers a full range of commercial and personal banking services to residents and the business/professional community in Alameda, Contra Costa, Marin, San Benito, San Francisco, San Mateo, and Santa Clara 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. Bay View Funding’s primary business operation is purchasing and collecting factored receivables. Factored receivables are receivables that have been transferred by the originating organization and typically have not been subject to previous collection efforts. In a factoring transaction Bay View Funding directly purchases the receivables generated by its clients at a discount to their face value. The transactions are structured to provide the clients with immediate working capital when there is a mismatch between payments to the client for a good and service and the payment of operating costs incurred to provide such good or service. The Company acquired Tri-Valley Bank (“Tri-Valley”) on April 6, 2018. Tri-Valley was merged with HBC, with HBC as the surviving bank. Tri-Valley’s results of operations have been included in the Company’s results of operations beginning April 7, 2018. The Company acquired United American Bank (“United American”) on May 4, 2018. United American was merged with HBC, with HBC as the surviving bank. United American’s results of operations have been included in the Company’s results of operations beginning May 5, 2018. The Company acquired Presidio Bank (“Presidio”) on October 11, 2019. Presidio was merged with HBC, with HBC as the surviving bank. Presidio’s results of operations have been included in the Company’s results of operations beginning October 12, 2019. The consolidated financial statements are prepared in accordance with accounting policies generally accepted in the United States of America and general practices in the banking industry. The financial statements include the accounts of the Company. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, amounts held at the Federal Reserve Bank, and Federal funds sold. The Company is required to maintain reserves against certain of the deposit accounts with the Federal Reserve Bank. Federal funds are generally sold and purchased for one Cash Flows Net cash flows are reported for customer loan and deposit transactions, notes payable, repurchase agreements and other short-term borrowings. Securities The Company classifies its securities as either available-for-sale or held-to-maturity at the time of purchase. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of taxes. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts are amortized, or accreted, over the life of the related security, or the earliest call date for callable securities, as an adjustment to income using a method that approximates the interest method. Realized gains and losses are recorded on the trade date and determined using the specific identification method for the cost of securities sold. Allowance for Credit Losses – Available-for-sale Securities Allowance for Credit Losses – Held-to-Maturity Securities Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type and bond rating. The estimate of expected credit losses considers historical loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management classifies the held-to-maturity portfolio in the following major security types: Agency mortgage-backed and Municipals. All the mortgage backed securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. Other securities are comprised primarily of tax exempt municipal securities. At December 31, 2020, these securities are primarily rated A-Aaa (defined as investment grade), with a small portion of the portfolio rated Baa2 (defined as medium grade). The issuers in these securities are primarily municipal entities and school districts. Changes in the allowance for credit losses are recorded as a provision (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Loan Sales and Servicing The Company holds for sale the conditionally guaranteed portion of certain loans guaranteed by the Small Business Administration or the U.S. Department of Agriculture (collectively referred to as “SBA loans”). These loans are carried at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Gains or losses on SBA loans held-for-sale are recognized upon completion of the sale, based on the difference between the selling price and the carrying value of the related loan sold. SBA loans are sold with servicing retained. Servicing assets recognized separately upon the sale of SBA loans consist of servicing rights and, for loans sold prior to 2009, interest-only strip receivables (“I/O strips”). The Company accounts for the sale and servicing of SBA loans based on the financial and servicing assets it controls and liabilities it has incurred, reversing recognition of financial assets when control has been surrendered, and reversing recognition of liabilities when extinguished. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans. Servicing rights are amortized in proportion to and over the period of net servicing income and are assessed for impairment on an ongoing basis. Impairment is determined by stratifying the servicing rights based on interest rates and terms. Any servicing assets in excess of the contractually specified servicing fees are reclassified at fair value as an I/O strip receivable and treated like an available for sale security. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance. The servicing rights, net of any required valuation allowance, and I/O strip receivable are included in other assets on the consolidated balance sheets. Servicing income, net of amortization of servicing rights, is recognized as noninterest income. The initial fair value of I/O strip receivables is amortized against interest income on loans. Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan origination fees and costs on originated loans, or unamortized premiums or discounts on purchased or acquired loans, and an allowance for credit losses on loans. Accrued interest receivable is excluded from the estimate of credit losses. Interest on loans is accrued on the unpaid principal balance and is credited to income using the effective yield interest method. Interest on purchased or acquired loans and the accretion (amortization) of the related purchase discount (premium) is also credited to income using the effective yield interest method. A loan portfolio segment is defined as the level at which the Company uses a systematic methodology to determine the allowance for credit losses on loans. A loan portfolio class is defined as a group of loans having similar risk characteristics and methods for monitoring and assessing risk. For all loan classes, when a loan is classified as nonaccrual, the accrual of interest is discontinued, any accrued and unpaid interest is reversed, and the amortization of deferred loan fees and costs is discontinued. For all loan classes, loans are classified as nonaccrual when the payment of principal or interest is 90 days past due, unless the loan is well secured and in the process of collection. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for credit loss and individually evaluated loans. In certain circumstances, loans that are under 90 days past due may also be classified as nonaccrual. Any interest or principal payments received on nonaccrual loans are applied toward reduction of principal. Nonaccrual loans generally are not returned to performing status until the obligation is brought current, the loan has performed in accordance with the contract terms for a reasonable period of time, and the ultimate collectability of the contractual principal and interest is no longer in doubt. Non-refundable loan fees and direct origination costs are deferred and recognized over the expected lives of the related loans using the effective yield interest method. Allowance for Credit Losses on Loans The allowance for credit losses on loans is an estimate of the current expected credit losses in the loan portfolio. Loans are charged-off against the allowance when management determines that a loan balance has become uncollectible. Subsequent recoveries, if any, are credited to the allowance for credit losses on loans. Management’s methodology for estimating the allowance balance consists of several key elements, which include pooling loans with similar characteristics into segments and using a discounted cash flow calculation to estimate losses. The discounted cash flow model inputs include loan level cash flow estimates for each loan segment based on peer and bank historic loss correlations with certain economic factors. Management uses a four quarter forecast of each economic factor that is used for each loan segment and the economic factors are assumed to revert to the historic mean over an eight quarter period after the four quarter forecast period. The economic factors management has selected include the California unemployment rate, California gross state product, California home price index, and a national CRE value index. These factors are evaluated and updated occasionally and as economic conditions change. Additionally, management uses qualitative adjustments to the discounted cash flow quantitative loss estimates in certain cases when management has assessed an adjustment is necessary. These qualitative adjustments are applied by pooled loan segment and have been made for increased risk due to loan quality trends, collateral risk, or other risks management determines are not adequately captured in the discounted cash flow loss estimation. Specific allowances on individually analyzed loans are added to the allowance on pools of collectively evaluated loans to derive the total allowance for credit losses on loans. Loans that do not share risk characteristics with pooled segments are evaluated on an individual basis. Loans for which the terms have been modified with a concession granted, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. When foreclosure is probable or when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of collateral expected credit losses are based on the fair value of the collateral adjusted for selling costs as appropriate. When the discounted cash flow method is utilized the amount of credit loss is measured using the net present value of expected future cash flows adjusted for the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The amount of any impairment will be charged off against the allowance for credit losses on loans if the amount is a confirmed loss or, alternatively, a specific allocation within the allowance will be established. Loans evaluated individually are specifically excluded from the collective evaluation in the allowance for credit losses. The allowance for credit losses on loans was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The loan portfolio is classified into eight segments of loans - commercial, commercial real estate – owner occupied, commercial real estate – non-owner occupied, land and construction, home equity, multifamily, residential mortgage and consumer and other. The risk characteristics of each loan portfolio segment are as follows: Commercial Commercial loans primarily rely on the identified cash flows of the borrower for repayment and secondarily on the underlying collateral provided by the borrower. However, the cash flows of the borrowers may not be as expected and the collateral securing these loans may vary in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory or equipment and may incorporate a personal guarantee; however, some loans may be unsecured. Included in commercial loans are $290,679,000 of PPP loans at December 31, 2020. Commercial Real Estate Commercial real estate loans rely primarily on the cash flows of the properties securing the loan and secondarily on the value of the property that is securing the loan. Commercial real estate loans comprise two segments differentiated by owner occupied commercial real estate and non-owner commercial real estate. Owner occupied commercial real estate loans are secured by commercial properties that are at least 50% occupied by the borrower or borrower affiliate. Non-owner occupied commercial real estate loans are secured by commercial properties that are less than 50% occupied by the borrower or borrower affiliate. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. Land and Construction Land and construction loans are generally based on estimates of costs and value associated with the complete project. Construction loans usually involve the disbursement of funds with repayment substantially dependent on the success of the completion of the project. Sources of repayment for these loans may be permanent loans from HBC or other lenders, or proceeds from the sales of the completed project. These loans are monitored by on-site inspections and are considered to have higher risk than other real estate loans due to the final repayment dependent on numerous factors including general economic conditions. Home Equity Home equity loans are secured by 1-4 family residences that are generally owner occupied. Repayment of these loans depends primarily on the personal income of the borrower and secondarily by the value of the property securing the loan which can be impacted by changes in economic conditions such as the unemployment rate and property values. Multifamily Multifamily loans are loans on 5+ residential properties. These loans rely primarily on the cash flows of the properties securing the loan for repayment and secondarily on the value of the properties securing the loan. The cash flows of these borrowers can fluctuate along with the values of the underlying property depending on general economic conditions. Residential Mortgages Residential mortgage loans are secured by 1-4 family residences which are generally owner-occupied. Repayment of these loans depends primarily on the personal income of the borrower and secondarily by the value of the property securing the loan which can be impacted by changes in economic conditions such as the unemployment rate and property values. Consumer and Other Consumer and other loans are secured by personal property or are unsecured and rely primarily on the income of the borrower for repayment and secondarily on the collateral value for secured loans. Borrower income and collateral value can vary dependent on economic conditions. Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The notional amount of these commitments is not reflected in the consolidated financial statement until they are funded. The Company maintains an allowance for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet and is adjusted as a provision for credit loss expense included in other noninterest expense. Federal Home Loan Bank and Federal Reserve Bank Stock As a member of the Federal Home Loan Bank (“FHLB”) system, the Bank is required to own common stock in the FHLB based on the Bank’s level of borrowings and outstanding FHLB advances. FHLB stock is carried at cost and classified as a restricted security. Both cash and stock dividends from the FHLB are reported as income. As a member of the Federal Reserve Bank (“FRB”) of San Francisco, the Bank is required to own stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends received from the FRB are reported as income. Company-Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan The Company has purchased life insurance policies on certain directors and officers. Company-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for charges or other amounts due that are probable at settlement. The purchased insurance is subject to split-dollar insurance agreements with the insured participants, which continues after the participant’s employment and retirement. Accounting guidance requires that a liability be recorded primarily over the participant’s service period when a split-dollar life insurance agreement continues after a participant’s employment or retirement. The required accrued liability is based on either the post-employment benefit cost for the continuing life insurance or the future death benefit depending on the contractual terms of the underlying agreement. Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation and amortization are computed on the straight-line basis over the lesser of the respective lease terms or estimated useful lives. The Company owns one building which is being depreciated over 40 years. Furniture, equipment and improvements depreciated five 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 resulting from business combinations represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. Other intangible assets consist of a core deposit intangible, a below market lease, an above market lease liability, a customer relationship and brokered relationship intangible assets. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposits intangible assets from the acquisitions 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. The above market lease adjustment is being amortized on the straight line method over 60 months. The customer relationship and brokered relationship intangible assets are being amortized over ten years. Foreclosed Assets Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through operations. Operating costs after acquisition are expensed. Gains and losses on disposition are included in noninterest expense. There were no foreclosed assets at December 31, 2020 and 2019. Retirement Plans Expenses for the Company’s non-qualified, unfunded defined benefits plan consists of service and interest cost and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service. Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company’s accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated. The Company’s accounting policy for uncertain recoveries is to recognize the anticipated recovery when realization is deemed probable. Income Taxes The Company files consolidated Federal and combined and separate state income tax returns. Income tax expense is the total of the current year income tax payable or refunded, the change in deferred tax assets and liabilities, and low income housing investment losses, net of tax benefits received. Some items of income and expense are recognized in different years for tax purposes when applying generally accepted accounting principles, leading to timing differences between the Company’s actual 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. Realization of the Company’s deferred tax assets is primarily dependent upon the Company generating sufficient taxable income to obtain benefit from the reversal of net deductible temporary differences and utilization of tax credit carryforwards for Federal and California state income tax purposes. The amount of deferred tax assets considered realizable is subject to adjustment in future periods based on estimates of future taxable income. Under generally accepted accounting principles, a valuation allowance is required to be recognized 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. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost recognized reflects estimated forfeitures, adjusted as necessary for actual forfeitures. Comprehensive Income (Loss) Total comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss) because they have been recorded directly in equity, net of tax, under the provisions of certain accounting guidance. The Company’s sources of other comprehensive income (loss) are unrealized gains and losses on securities available-for-sale, and I/O strips, which are treated like available-for-sale securities, and the liabilities related to the Company’s defined benefit pension plan and the split-dollar life insurance benefit plan. Reclassification adjustments result from gains or losses that were realized and included in net income (loss) of the current period that also had been included in other comprehensive income as unrealized holding gains and losses. Segment Reporting HBC is a commercial bank serving customers located in Alameda, Contra Costa, Marin, San Benito, San Francisco, San Mateo, and Santa Clara counties of California. Bay View Funding provides business essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10 percent of revenue for HBC or the Company. With the previous acquisition of Bay View Funding, the Company has two reportable segments consisting of Banking and Factoring. Reclassifications Certain items in the consolidated financial statements for the years ended December 31, 2019 and 2018 were reclassified to conform to the 2020 presentation. These reclassifications did not affect previously reported net income or shareholders’ equity. London Inter-Bank Offered Rate (“LIBOR”) Transition and Phase-Out We have loans and borrowings that are tied to LIBOR benchmark interest rates. It is anticipated that the LIBOR index will be phased-out by the end of 2021 and the Federal Reserve Bank of New York has established the Secured Overnight Financing Rate (“SOFR”) as its recommended alternative to LIBOR. We have created a sub-committee of our Asset Liability Management Committee to address LIBOR transition and phase-out issues. We are currently reviewing loan documentation, technology systems and procedures we will need to implement for the transition. COVID-19 Capital and Liquidity While the Company believes that it has sufficient capital to withstand an extended economic recession brought about by COVID-19, its reported and regulatory capital ratios could be adversely impacted by credit losses. The Company relies on cash on hand as well as dividends from its subsidiary bank to service its debt. If the Company’s capital deteriorates such that its subsidiary bank is unable to pay dividends to it for an extended period of time, the Company may not be able to service its debt. The Company maintains access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on the Company’s net interest margin. If an extended recession caused large numbers of the Company’s deposit customers to withdraw their funds, the Company might become more reliant on volatile or more expensive sources of funding. Asset Valuation The extent to which the COVID-19 pandemic will impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. Those developments and factors include the duration and spread of the pandemic, its severity, the actions to contain the pandemic or address its impact, and how quickly and to what extent normal economic and operating conditions can resume. We do not yet know the full extent of the impact. However, the effects could have a material adverse impact on our business, asset valuations, financial condition and results of operations. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, investments, loans, or deferred tax assets. Adoption of New Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update replace the incurred loss impairment methodology in prior GAAP with a methodology that reflects expected life-of-instrument 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 Company adopted CECL on January 1, 2020, using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for the reporting periods after January 1, 2020, are presented under Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. The following table shows the impact of adopting CECL on January 1, 2020: As Reported Pre- Impact of Under Topic 326 Topic 326 Topic 326 Adoption Adoption (Dollars in thousands) Assets: Allowance for credit losses on debt securities Held-to-maturity municipal securities $ 58 $ - $ 58 Loans Commercial 6,790 10,453 (3,663) CRE - owner occupied 6,994 3,825 3,169 CRE - non-owner occupied 11,672 3,760 7,912 Land and construction 1,458 2,621 (1,163) Home equity 1,321 2,244 (923) Multifamily 1,253 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) ("AOCI") | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income ("AOCI") | |
Accumulated Other Comprehensive Income ("AOCI") | 2) Accumulated Other Comprehensive Income (“AOCI”) The following table reflects the changes in AOCI by component for the periods indicated: Year Ended December 31, 2020 and 2019 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 Maturity Items(1) Total (Dollars in thousands) Beginning balance January 1, 2020, net of taxes $ 1,602 $ 298 $ (11,678) $ (9,778) Other comprehensive income (loss) before reclassification, net of taxes 2,522 — (3,459) (937) Amounts reclassified from other comprehensive income (loss), net of taxes (195) (37) 230 (2) Net current period other comprehensive income (loss), net of taxes 2,327 (37) (3,229) (939) Ending balance December 31, 2020, net of taxes $ 3,929 $ 261 $ (14,907) $ (10,717) Beginning balance January 1, 2019, net of taxes $ (5,007) $ 344 $ (7,718) $ (12,381) Other comprehensive income (loss) before reclassification, net of taxes 7,075 — (4,022) 3,053 Amounts reclassified from other comprehensive income (loss), net of taxes (466) (46) 62 (450) Net current period other comprehensive income (loss), net of taxes 6,609 (46) (3,960) 2,603 Ending balance December 31, 2019, net of taxes $ 1,602 $ 298 $ (11,678) $ (9,778) (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 14—Benefit Plans) and includes split-dollar life insurance benefit plan. Amounts Reclassified from AOCI(1) Year Ended December 31, Affected Line Item Where Details About AOCI Components 2020 2019 2018 Net Income is Presented (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ 277 $ 661 $ 266 Gain on sales of securities (82) (195) (79) Income tax expense 195 466 187 Net of tax Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity 52 65 44 Interest income on taxable securities (15) (19) (13) Income tax expense 37 46 31 Net of tax Amortization of defined benefit pension plan items (1) Prior transition obligation and actuarial losses (2) 60 96 65 Actuarial losses (3) (387) (184) (292) (327) (88) (227) Other noninterest expense 97 26 67 Income tax benefit (230) (62) (160) Net of tax Total reclassification from AOCI for the period $ 2 $ 450 $ 58 (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 14 — Benefit Plans (2) This is related to the split dollar life insurance benefit plan. (3) This is related to the supplemental executive retirement plan. |
Securities
Securities | 12 Months Ended |
Dec. 31, 2020 | |
Securities | |
Securities | 3) Securities The amortized cost and estimated fair value of securities at year-end were as follows: Gross Gross Allowance Estimated Amortized Unrealized Unrealized for Credit Fair December 31, 2020 Cost Gains (Losses) Losses Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 170,215 $ 5,111 $ — $ — $ 175,326 U.S. Treasury 59,797 651 — — 60,448 Total $ 230,012 $ 5,762 $ — $ — $ 235,774 Gross Gross Estimated Allowance Amortized Unrecognized Unrecognized Fair for Credit December 31, 2020 Cost Gains (Losses) Value Losses (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 228,652 $ 6,075 $ (230) $ 234,497 $ — Municipals - exempt from Federal tax 68,791 1,639 — 70,430 (54) Total $ 297,443 $ 7,714 $ (230) $ 304,927 $ (54) Gross Gross Estimated Amortized Unrealized Unrealized Fair December 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 283,598 $ 934 $ (171) $ 284,361 U.S. Treasury 118,939 1,525 — 120,464 Total $ 402,537 $ 2,459 $ (171) $ 404,825 Gross Gross Estimated Amortized Unrecognized Unrecognized Fair December 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 285,344 $ 1,206 $ (968) $ 285,582 Municipals - exempt from Federal tax 81,216 1,313 (4) 82,525 Total $ 366,560 $ 2,519 $ (972) $ 368,107 Securities with unrealized losses at year end, aggregated by investment category and length of time that individual securities have been in an unrealized loss position are as follows: Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2020 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 30,930 (230) $ — $ — $ 30,930 $ (230) Total $ 30,930 $ (230) $ — $ — $ 30,930 $ (230) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 100,816 $ (105) $ 27,534 $ (66) $ 128,350 $ (171) Total $ 100,816 $ (105) $ 27,534 $ (66) $ 128,350 $ (171) Securities held-to-maturity: Agency mortgage-backed securities $ 50,060 $ (178) $ 88,128 $ (790) $ 138,188 $ (968) Municipals - exempt from Federal tax 1,556 (4) — — 1,556 (4) Total $ 51,616 $ (182) $ 88,128 $ (790) $ 139,744 $ (972) 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 December 31, 2020, the Company held 407 securities (116 available-for-sale and 291 held-to-maturity), of which five had fair values below amortized cost. At December 31, 2020, there were $30,930,000 of agency mortgage-backed securities held-to-maturity, carried with an unrealized loss for less than 12 months. The total unrealized loss for securities less than 12 months was ($230,000) at December 31, 2020. The unrealized losses were due to higher interest rates at period end compared to when the securities were purchased. 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 have credit-related losses at December 31, 2020. The proceeds from sales of securities and the resulting gains and losses are listed below: 2020 2019 2018 (Dollars in thousands) Proceeds $ 56,598 $ 167,551 $ 94,291 Gross gains 277 1,094 1,243 Gross losses — (433) (977) The amortized cost and fair value of debt securities as of December 31, 2020, by contractual maturity, are shown below. The expected maturities will differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single maturity date are shown separately. Available-for-sale Amortized Estimated Cost Fair Value (Dollars in thousands) Due 3 months or less $ 14,988 $ 15,039 Due after 3 months through one year 44,809 45,409 Agency mortgage-backed securities 170,215 175,326 Total $ 230,012 $ 235,774 Held-to-maturity Amortized Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 493 $ 499 Due after one through five years 10,390 10,757 Due after five through ten years 31,509 32,149 Due after ten years 26,399 27,025 Agency mortgage-backed securities 228,652 234,497 Total $ 297,443 $ 304,927 Securities with amortized cost of $40,238,000 and $32,773,000 as of December 31, 2020 and 2019 were pledged to secure public deposits and for other purposes as required or permitted by law or contract. The table below presents a roll-forward by major security type for the year ended December 31, 2020 of the allowance for credit losses on debt securities held-to-maturity held at period end: Municipals (Dollars in thousands) Beginning balance January 1, 2020 $ - Impact of adopting Topic 326 58 Provision (credit) for credit loss (4) Ending balance December 31, 2020 $ 54 For the year ended December 31, 2020, there was a reduction of $4,000 to the allowance for credit losses on the Company’s held-to-maturity municipal investment securities portfolio. This reduction was the result of a reduction in municipal securities amortized balances resulting from regular payments. The bond ratings for the Company’s municipal investment securities at December 31, 2020 were consistent with the ratings at January 1, 2020. |
Loans and Allowance for Credit
Loans and Allowance for Credit Losses on Loans | 12 Months Ended |
Dec. 31, 2020 | |
Allowance for Credit Losses on Loans | |
Allowance for Credit Losses on Loans | 4) Loans and Allowance for Credit Losses on Loans The allowance for credit losses on loans was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The loan portfolio is classified into eight segments of loans - commercial, commercial real estate – owner occupied, commercial real estate – non-owner occupied, land and construction, home equity, multifamily, residential mortgage and consumer and other. See Note 1 – Summary of Significant Accounting Polices - Allowance for Credit Losses on Loans Loans by portfolio segment and the allowance for credit losses on loans were as follows for the periods indicated: December 31, December 31, 2020 2019 (Dollars in thousands) Loans held-for-investment: Commercial $ 846,386 $ 603,345 Real estate: CRE - owner occupied 560,362 548,907 CRE - non-owner occupied 693,103 767,821 Land and construction 144,594 147,189 Home equity 111,885 151,775 Multifamily 166,425 180,623 Residential mortgages 85,116 100,759 Consumer and other 18,116 33,744 Loans 2,625,987 2,534,163 Deferred loan fees, net (6,726) (319) Loans, net of deferred fees 2,619,261 2,533,844 Allowance for credit losses on loans (1) (44,400) (23,285) Loans, net $ 2,574,861 $ 2,510,559 (1) Changes in the allowance for credit losses on loans were as follows: Year Ended December 31, 2020 Owner Non-owner Land & Home Multi- Residential Consumer Commercial Occupied Occupied Construction Equity Family Mortgage and Other Total (Dollars in thousands) Beginning of period balance $ 10,453 $ 3,825 $ 3,760 $ 2,621 $ 2,244 $ 57 $ 243 $ 82 $ 23,285 Adoption of Topic 326 (3,663) 3,169 7,912 (1,163) (923) 1,196 435 1,607 8,570 Balance at adoption on January 1, 2020 6,790 6,994 11,672 1,458 1,321 1,253 678 1,689 31,855 Charge-offs (1,776) — — — — — — (104) (1,880) Recoveries 998 1 — 70 93 — — 30 1,192 Net (charge-offs) recoveries (778) 1 — 70 93 — — (74) (688) Provision (credit) for credit losses on loans 5,575 1,565 4,744 981 (117) 1,551 265 (1,331) 13,233 End of period balance $ 11,587 $ 8,560 $ 16,416 $ 2,509 $ 1,297 $ 2,804 $ 943 $ 284 $ 44,400 evaluated loans are combined to the allowance on pools of loans with similar risk characteristics to derive to total allowance for credit losses on loans. The increase in the allowance for credit loss and related provision during the year ended December 31, 2020 is primarily attributable to the change in projected economic conditions resulting from the COVID-19 pandemic, with elevated levels of unemployment being the most significant factor. Management has also considered other qualitative risks such as collateral values, concentrations of credit risk (geographic, large borrower, and industry), economic conditions, changes in underwriting standards, experience and depth of lending staff, trends in delinquencies, and the level of criticized loans to address asset-specific risks and current conditions that were not fully considered by the macroeconomic variables driving the quantitative estimate. Changes in the allowance for loan losses were as follows: Year Ended December 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 Charge-offs (6,609) — (14) (6,623) Recoveries 1,045 169 — 1,214 Net recoveries (5,564) 169 (14) (5,409) Provision (credit) for loan losses (1,044) 1,910 (20) 846 End of period balance $ 10,453 $ 12,750 $ 82 $ 23,285 Year Ended December 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 10,608 $ 8,950 $ 100 $ 19,658 Charge-offs (2,002) — (24) (2,026) Recoveries 2,645 150 — 2,795 Net recoveries 643 150 (24) 769 Provision for loan losses 5,810 1,571 40 7,421 End of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 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 as follows at year-end: December 31, 2019 Consumer Commercial Real Estate and other Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 1,835 $ — $ — $ 1,835 Collectively evaluated for impairment 8,618 12,750 82 21,450 Total allowance balance $ 10,453 $ 12,750 $ 82 $ 23,285 Loans: Individually evaluated for impairment $ 4,810 $ 5,454 $ — $ 10,264 Collectively evaluated for impairment 598,535 1,891,620 33,744 2,523,899 Total loan balance $ 603,345 $ 1,897,074 $ 33,744 $ 2,534,163 The following table presents the amortized cost basis of nonaccrual loans and loans past due over 90 days and still accruing at December 31, 2020: Restructured Nonaccrual Nonaccrual and Loans with no Specific with Specific over 90 Days Allowance for Allowance for Past Due Credit Credit and Still Losses Losses Accruing Total (Dollars in thousands) Commercial $ 752 $ 1,974 $ 81 $ 2,807 Real estate: CRE - Owner Occupied 3,706 — — 3,706 Home equity 949 — — 949 Consumer and other 407 — 407 Total $ 5,814 $ 1,974 $ 81 $ 7,869 The following table presents nonperforming loans by class at December 31, 2019: Restructured and Loans over 90 Days Past Due and Still Nonaccrual Accruing Total (Dollars in thousands) Commercial $ 3,444 $ 1,153 $ 4,597 Real estate: CRE 5,094 — 5,094 Home equity 137 — 137 Total $ 8,675 $ 1,153 $ 9,828 The following tables presents the aging of past due loans by class for the periods indicated: December 31, 2020 30 - 59 60 - 89 90 Days or Days Days Greater Total Past Due Past Due Past Due Past Due Current Total (Dollars in thousands) Commercial $ 3,524 $ 259 $ 392 $ 4,175 $ 842,211 $ 846,386 Real estate: CRE - Owner Occupied 1,133 — 29 1,162 559,200 560,362 CRE - Non-Owner Occupied — 485 — 485 692,618 693,103 Land and construction — — — — 144,594 144,594 Home equity — — — 111,885 111,885 Multifamily — — — — 166,425 166,425 Residential mortgages — — — — 85,116 85,116 Consumer and other — — 407 407 17,709 18,116 Total $ 4,657 $ 744 $ 828 $ 6,229 $ 2,619,758 $ 2,625,987 December 31, 2019 30 - 59 60 - 89 90 Days or Days Days Greater Total Past Due Past Due Past Due Past Due Current Total (Dollars in thousands) Commercial $ 4,770 $ 2,097 $ 3,217 $ 10,084 $ 593,261 $ 603,345 Real estate: CRE - Owner Occupied — — 5,094 5,094 543,813 548,907 CRE - Non-Owner Occupied — — — — 767,821 767,821 Land and construction — — — — 147,189 147,189 Home equity — 137 — 137 151,638 151,775 Multifamily — — — — 180,623 180,623 Residential mortgages — — — — 100,759 100,759 Consumer and other — — — — 33,744 33,744 Total $ 4,770 $ 2,234 $ 8,311 $ 15,315 $ 2,518,848 $ 2,534,163 Past due loans 30 days or greater totaled $6,229,000 and $15,315,000 at December 31, 2020 and December 31, 2019, respectively, of which $1,918,000 and $7,413,000 were on nonaccrual. At December 31, 2020, there were also $5,870,000 loans less than 30 days past due included in nonaccrual loans held-for-investment. At December 31, 2019, there were also $1,262,000 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. 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, and other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis. Pass loans generally include those loans that are expected to be repaid in accordance with contractual loans terms. Loans not categorized as pass are assigned a rating using the following definitions: Special Mention. Substandard. Substandard-Nonaccrual. because of the underlying weaknesses. Doubtful. Loss. Loans may be reviewed at any time throughout a loan’s duration. If new information is provided, a new risk assessment may be performed if warranted. The following table presents term loans amortized cost by vintage and loan grade classification, and revolving loans amortized cost by loan grade classification. The loan grade classifications are based on the Bank’s internal loan grading methodology. Loan grade categories for doubtful and loss rated loans are not included on the table below as there are no loans with those grades at December 31, 2020. The vintage year represents the period the loan was originated or in the case of renewed loans, the period last renewed. The amortized balance is the loan balance less any purchase discounts, and plus any loan purchase premiums. The loan categories are based on the loan segmentation in the Company's CECL reserve methodology based on loan purpose and type. Revolving Loans Term Loans Amortized Cost Basis by Originated Period Amortized 2015 and Cost 2020 2019 2018 2017 2016 Prior Basis Total (Dollars in thousands) Commercial: Pass $ 431,369 $ 33,350 $ 21,154 $ 13,840 $ 7,341 $ 8,292 $ 296,286 $ 811,632 Special Mention 15,720 716 1,301 953 713 170 1,937 21,510 Substandard 4,036 - 19 758 2,396 73 3,236 10,518 Substandard-Nonaccrual 2,106 56 36 - 115 26 387 2,726 Total 453,231 34,122 22,510 15,551 10,565 8,561 301,846 846,386 CRE - Owner Occupied: Pass 168,224 73,064 68,068 51,705 50,716 109,350 15,964 537,091 Special Mention 3,151 2,568 4,128 783 - 2,569 - 13,199 Substandard 2,561 - 400 2,954 - 451 - 6,366 Substandard-Nonaccrual 3,678 - - - - 28 - 3,706 Total 177,614 75,632 72,596 55,442 50,716 112,398 15,964 560,362 CRE - Non-Owner Occupied: Pass 166,550 128,361 68,796 99,816 57,422 150,683 1,926 673,554 Special Mention 11,930 - 2,557 - - - - 14,487 Substandard 3,166 - 1,411 - 485 - - 5,062 Substandard-Nonaccrual - - - - - - - - Total 181,646 128,361 72,764 99,816 57,907 150,683 1,926 693,103 Land and construction: Pass 114,932 22,054 - - - 1,343 4,906 143,235 Special Mention - - - - - - - - Substandard 1,359 - - - - - - 1,359 Substandard-Nonaccrual - - - - - - - - Total 116,291 22,054 - - - 1,343 4,906 144,594 Home equity: Pass 266 - 74 - - - 109,848 110,188 Special Mention - - - - - - - - Substandard - - - - - 143 605 748 Substandard-Nonaccrual 117 - - - - - 832 949 Total 383 - 74 - - 143 111,285 111,885 Multifamily: Pass 31,481 39,183 17,248 24,572 16,235 30,751 880 160,350 Special Mention - - - - - 5,186 - 5,186 Substandard 889 - - - - - - 889 Substandard-Nonaccrual - - - - - - - - Total 32,370 39,183 17,248 24,572 16,235 35,937 880 166,425 Residential mortgage: Pass 12,798 10,048 3,246 7,324 28,115 15,568 - 77,099 Special Mention 5,089 - 1,630 - - - 6,719 Substandard - - - - - 1,298 - 1,298 Substandard-Nonaccrual - - - - - - - - Total 17,887 10,048 4,876 7,324 28,115 16,866 - 85,116 Consumer and other: Pass 10 522 1,486 20 116 987 14,568 17,709 Special Mention - - - - - - - - Substandard - - - - - - - - Substandard-Nonaccrual - - 407 - - - - 407 Total 10 522 1,893 20 116 987 14,568 18,116 Total loans $ 979,432 $ 309,922 $ 191,961 $ 202,725 $ 163,654 $ 326,918 $ 451,375 $ 2,625,987 Risk Grades:. Pass $ 925,630 $ 306,582 $ 180,072 $ 197,277 $ 159,945 $ 316,974 $ 444,378 $ 2,530,858 Special Mention 35,890 3,284 9,616 1,736 713 7,925 1,937 61,101 Substandard 12,011 - 1,830 3,712 2,881 1,965 3,841 26,240 Substandard-Nonaccrual 5,901 56 443 - 115 54 1,219 7,788 Grand Total $ 979,432 $ 309,922 $ 191,961 $ 202,725 $ 163,654 $ 326,918 $ 451,375 $ 2,625,987 The following table provides a summary of the loan portfolio by loan type and credit quality classification at December 31, 2019: December 31, 2019 Nonclassified Classified Total Commercial $ 599,143 4,202 $ 603,345 Real estate: CRE - Owner Occupied 538,229 10,678 548,907 CRE - Non-Owner Occupied 761,801 6,020 767,821 Land and construction 144,108 3,081 147,189 Home equity 149,131 2,644 151,775 Multifamily 180,623 — 180,623 Residential mortgages 100,262 497 100,759 Consumer and other 28,287 5,457 33,744 Total $ 2,501,584 $ 32,579 $ 2,534,163 Nonclassified loans include those rated as Pass or Special Mention using the definitions listed above. Classified loans are those rated Substandard, Substandard-Nonaccrual, Doubtful and Loss, using those definitions. The following table presents the amortized cost basis of collateral-dependent loans by loan classification at December 31, 2020: Collateral Type Real Estate Business Property Assets Unsecured Total (Dollars in thousands) Commercial $ 29 $ 1,815 $ 130 $ 1,974 Total $ 29 $ 1,815 $ 130 $ 1,974 When management determines that foreclosures are probable, expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. For loans which foreclosure is not probable, but for which repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty, management has elected the practical expedient under ASC 326 to estimate expected credit losses based on the fair value of collateral, adjusted for selling costs as appropriate. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table details the allowance for loan losses and recorded investment in loans individually evaluated for impairment by loan classification as of December 31, 2019, as determined in accordance with ASC 310 prior to adoption of Topic 326: Allowance Unpaid for Loan Principal Recorded Losses Balance Investment Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ 2,113 $ 2,113 $ — Real estate: CRE 5,094 5,094 — Home Equity 360 360 — Total with no related allowance recorded 7,567 7,567 — With an allowance recorded: Commercial 2,697 2,697 1,835 Total with an allowance recorded 2,697 2,697 1,835 Total $ 10,264 $ 10,264 $ 1,835 The book balance of troubled debt restructurings at December 31, 2020 was $674,000, which included $468,000 of nonaccrual loans and $206,000 of accruing loans. The book balance of troubled debt restructurings at December 31, 2019 was $1,039,000, which included $590,000 of nonaccrual loans and $449,000 of accruing loans. Approximately $352,000 and $20,000 in specific reserves were established with respect to these loans as of December 31, 2020 and December 31, 2019. As of December 31, 2020 and December 31, 2019, the Company had no additional amounts committed on any loan classified as a troubled debt restructuring. The following table presents loans by class modified as troubled debt restructurings for the periods indicated: During the Year Ended December 31, 2020 Pre-modification Post-modification Number Outstanding Outstanding of Recorded Recorded Troubled Debt Restructurings: Contracts Investment Investment (Dollars in thousands) Commercial 15 $ 630 $ 630 Total 15 $ 630 $ 630 During the Year Ended December 31, 2019 Pre-modification Post-modification Number Outstanding Outstanding of Recorded Recorded Troubled Debt Restructurings: Contracts Investment Investment (Dollars in thousands) Commercial 3 $ 591 $ 591 Total 3 $ 591 $ 591 There were 15 new loans with total recorded investment of $630,000 that were modified as troubled debt restructurings during the year ended December 31, 2020. During the twelve months ended December 31, 2020, there were 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 credit losses on loans. 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 years ended December 31, 2020 and 2019. 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. On March 22, 2020, the Interagency Statement was issued by our banking regulators that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act further provides that a qualified loan modification is exempt by law from classification as a TDR as defined by GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 outbreak declared by the President of the United States under the National Emergencies Act terminates. The Interagency Statement was subsequently revised in April 2020 to clarify the interaction of the original guidance with Section 4013 of the CARES Act, as well as setting forth the banking regulators’ views on consumer protection considerations. Section 541 of the Consolidated Appropriations Act extends this relief to the earlier of January 1, 2022 or 60 days after the national emergency termination date. In accordance with such guidance, we are offering short-term modifications made in response to COVID-19 to borrowers who are current and otherwise not past due. These include short-term (180 days or less) modifications in the form of payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. The table below presents these loan deferrals by loan category: Underlying Collateral Business Real Assets Estate Total (in $000's, unaudited) Initial Deferments (1) $ - $ 1,573 $ 1,573 2nd Deferments (2) 295 684 979 Total $ 295 $ 2,257 $ 2,552 (1) (2) |
Loan Servicing
Loan Servicing | 12 Months Ended |
Dec. 31, 2020 | |
Loan Servicing | |
Loan Servicing | 5) Loan Servicing At December 31, 2020, 2019, and 2018, the Company serviced SBA loans sold to the secondary market of approximately $77,973,000, $87,835,000, and $104,016,000, respectively. Servicing assets represent the servicing spread generated from the sold guaranteed portions of SBA loans. The weighted average servicing rate for all loans serviced was 1.12%, 1.16%, and 1.12% at December 31, 2020, 2019, and 2018, respectively. Servicing rights are included in “accrued interest receivable and other assets” on the consolidated balance sheets. Activity for loan servicing rights follows: 2020 2019 2018 (Dollars in thousands) Beginning of year balance $ 583 $ 871 $ 1,373 Additions 213 157 200 Amortization (265) (445) (702) End of year balance $ 531 $ 583 $ 871 There was no valuation allowance for servicing rights at December 31, 2020, 2019, and 2018, because the estimated fair value of the servicing rights was greater than the carrying value. The estimated fair value of loan servicing rights was $1,172,000, $1,295,000, and $1,651,000, at December 31, 2020, 2019, and 2018, respectively. The fair value of servicing rights at December 31, 2020, was estimated using a weighted average constant prepayment rate (“CPR”) assumption of 14.65%, and a weighted average discount rate assumption of 12.91%. The fair value of servicing rights at December 31, 2019, was estimated using a weighted average CPR assumption of 13.50%, and a weighted average discount rate assumption of 15.90%. The fair value of servicing rights at December 31, 2018, was estimated using a weighted average CPR assumption of 10.89%, and a weighted average discount rate assumption of 16.40%. The weighted average discount rate and CPR assumptions used to estimate the fair value of the I/O strip receivables are the same as for the servicing rights. Management reviews the key economic assumptions used to estimate the fair value of I/O strip receivables on a quarterly basis. The fair value of the I/O strip can be adversely impacted by a significant increase in either the prepayment speed of the portfolio or the discount rate. I/O strip receivables are included in “accrued interest receivable and other assets” on the consolidated balance sheets. Activity for I/O strip receivables follows: 2020 2019 2018 (Dollars in thousands) Beginning of year balance $ 503 $ 568 $ 968 Unrealized loss (198) (65) (400) End of year balance $ 305 $ 503 $ 568 |
Premises and Equipment
Premises and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Premises and Equipment | 6) Premises and Equipment Premises and equipment at year-end were as follows: 2020 2019 (Dollars in thousands) Building $ 3,508 $ 3,508 Land 2,900 2,900 Furniture and equipment 12,721 10,067 Leasehold improvements 6,726 7,372 25,855 23,847 Accumulated depreciation and amortization (15,396) (15,597) Premises and equipment, net $ 10,459 $ 8,250 Depreciation and amortization expense was $951,000, $846,000, and $753,000 in 2020, 2019, and 2018, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Leases | 7) 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. The Company is impacted as a lessee of the offices and real estate used for operations. Some of the Company's lease agreements include options to renew liabilities The following table presents the quantitative information for the Company’s leases: December 31, 2020 2019 (Dollars in thousands) Operating Lease Cost (Cost resulting from lease payments) $ 6,837 $ 1,490 Operating Lease - Operating Cash Flows (Fixed Payments) $ 5,572 $ 1,519 Operating Lease - ROU assets $ 35,873 $ 12,173 Operating Lease – Liabilities $ 35,873 $ 13,032 Weighted Average Lease Term - Operating Leases 8.30 yrs 4.79 yrs Weighted Average Discount Rate - Operating Leases 4.55% 3.86% The following maturity analysis shows the undiscounted cash flows due on the Company’s operating lease liabilities: (Dollars in thousands) 2021 $ 5,242 2022 5,668 2023 5,039 2024 4,692 2025 4,262 Thereafter 18,798 Total undiscounted cash flows 43,701 Discount on cash flows (7,828) Total lease liability $ 35,873 The merger with Presidio resulted in the Company operating overlapping branch locations in the cities of Walnut Creek and San Mateo, California. These branches were consolidated in 2020 by vacating the HBC leased locations prior to the lease termination date, and moving the operations to the Presidio branch locations. The consolidation of these two branches into the Presidio locations resulted in the impairment of both Heritage leases at December 31, 2019. The lease impairment and write-off of fixed assets and tenant improvements totaled $434,000 for the Walnut Creek location, and $625,000 for the San Mateo location during the fourth quarter of 2019. In June of 2019, the Company entered into a lease agreement for 54,910 square feet of office space in San Jose, California, commencing on February 1, 2020. The Company completed the relocation of its corporate headquarters, San Jose Branch and factoring subsidiary, Bay View Funding to 224 Airport Parkway, San Jose, California in the third quarter of 2020. |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations | |
Business Combinations | 8) 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. Tri-Valley’s results of operations were 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. United American’s results of operations were included in the Company’s results of operations beginning May 5, 2018. (Dollars in thousands) Issuance of to Presidio shareholders and holders of restricted stock (stock price = $ 178,171 Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options 7,426 Cash paid for fractional shares 1 Total consideration $ 185,598 The following table summarizes the estimated fair values of the Presidio assets acquired and liabilities assumed at the date of the merger. As As Recorded Fair Recorded by Value at Presidio Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 117,989 $ (1) (a) $ 117,988 Securities available-for-sale 44,647 422 (b) 45,069 Securities held-to-maturity 463 — 463 Loans 698,493 (12,529) (c) 685,964 Allowance for loan losses (7,463) 7,463 (d) — Premises and equipment, net 1,756 — 1,756 Other intangible assets — 11,147 (e) 11,147 Other assets, net 43,539 (1,378) (f) 42,161 Total assets acquired $ 899,424 $ 5,124 904,548 Liabilities assumed: Deposits $ 774,260 $ (1) (g) 774,259 Subordinated Debt 10,000 — (h) 10,000 Other borrowings 442 — 442 Other liabilities 17,916 211 (i) 18,127 Total liabilities assumed $ 802,618 $ 210 802,828 Net assets acquired 101,720 Purchase price 185,598 Goodwill recorded in the merger $ 83,878 Explanation of certain fair value related adjustments for the Presidio merger: (a) Represents cash paid for fractional shares in the transaction. (b) Represents the fair value adjustment on investment securities available-for-sale. (c) Represents the fair value adjustment to the net book value of loans includes an interest rate mark and credit mark adjustment. (d) Represents the elimination of Presidio’s allowance for loan losses. (e) Represents intangible assets recorded to reflect the fair value of core deposits and an above market lease. The core deposit 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 above market lease liability will be accreted on the straight line method over 60 months . (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 amortized as interest expense. (h) The Company acquired $10,000,000 of subordinated debt from the Presidio transaction. The Presidio subordinated debt was redeemed on December 19, 2019. (i) Represents adjustments to accrued accounts payable. Presidio’s results of operations were included in the Company’s results of operations beginning October 12, 2019. The following table presents pro forma financial information as if the merger had occurred on January 1, 2018, which includes the pre-acquisition period for Presidio. The historical unaudited pro forma financial information has been adjusted to reflect supportable items that are directly attributable to the acquisition and expected to have a continuing impact on consolidated results of operations, as such, one-time acquisition costs are not included. The unaudited pro forma financial information is provided for informational purposes only. The unaudited pro forma financial information is not necessarily, and should not be assumed to be, an indication of the results that would have been achieved had the acquisition been completed as of the dates indicated or that may be achieved in the future. The preparation of the unaudited pro forma combined consolidated financial statements and related adjustments required management to make certain assumptions and estimates. For the Year Ended December 31, 2019 December 31, 2018 (Unaudited) (Dollars in thousands, except per share amounts) Net interest income $ 163,555 $ 160,044 Provision for loan losses 870 7,694 Noninterest income 11,291 10,795 Noninterest expense 92,708 97,563 Income before income taxes 81,268 65,582 Income tax expense 23,730 17,549 Net income $ 57,538 $ 48,033 Net income per share - basic $ 0.98 $ 0.84 Net income per share - diluted $ 0.96 $ 0.83 For the Year Ended December 31, December 31, December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 356 $ 6,580 $ 3,569 Other 2,245 4,500 5,598 Total merger-related costs $ 2,601 $ 11,080 $ 9,167 Goodwill of $13,819,000 arising from the Tri-Valley acquisition, $24,271,000 from the United American acquisition and $83,878,000 from the Presidio merger is largely attributable to synergies and cost savings resulting from combining the operations of the companies. As these transactions were structured as tax-free exchanges, the goodwill will not be deductible for tax purposes. As of April 6, 2019, May 4, 2019, and October 11, 2020, the Company finalized its valuation of all assets acquired and liabilities assumed in its acquisition of Tri-Valley, United American, and Presidio respectively, resulting in no material changes to acquisition accounting adjustments. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Goodwill and Other Intangible Assets | 9) Goodwill and Other Intangible Assets Goodwill At December 31, 2020, the carrying value of goodwill was $167,631,000, which included $13,044,000 of goodwill related to its acquisition of Bay View Funding, $32,619,000 from its acquisition of Focus Business Bank (“Bank”), $13,819,000 from its acquisition of Tri-Valley, $24,271,000 from its acquisition of United American and $83,878,000 from Presidio. 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 reporting units, including the existing goodwill and intangible assets, and estimating the fair value of each reporting unit. The Company completed its annual goodwill impairment analysis as of November 30, 2020 with the assistance of an independent valuation firm. The goodwill related to the acquisition of Bay View Funding was tested separately for impairment under this analysis. No events or circumstances since the November 30, 2020 annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists, for either the Company’s banking or factoring reporting units. The following table summarizes the carrying amount of goodwill by segment at December 31, 2020 and 2019: December 31, 2020 2019 (Dollars in thousands) Banking $ 154,587 $ 154,376 Factoring 13,044 13,044 Total Goodwill $ 167,631 $ 167,420 Other Intangible Assets The Company’s intangible assets are summarized as follows for the periods indicated: December 31, 2020 Gross Carrying Accumulated Amount Amortization Total (Dollars in thousands) Core deposit intangibles $ 25,023 $ (9,153) $ 15,870 Customer relationship and brokered relationship intangibles 1,900 (1,171) 729 Below market leases 770 (705) 65 Total $ 27,693 $ (11,029) $ 16,664 December 31, 2019 Gross Carrying Accumulated Amount Amortization Total (Dollars in thousands) Core deposit intangibles $ 25,023 $ (5,846) $ 19,177 Customer relationship and brokered relationship intangibles 1,900 (981) 919 Below market leases 770 (451) 319 Total $ 27,693 $ (7,278) $ 20,415 Estimated amortization expense for each of the next five years and thereafter is as follows: United United Bay View Funding Presidio Presidio American American Tri-Valley Tri-Valley Focus Customer & Core Above Core Below Core Below Core Brokered Total Deposit Market Deposit Market Deposit Market Deposit Relationship Amortization Year Intangible Lease Intangible Lease Intangible Lease Intangible Intangible Expense (Dollars in thousands) 2021 $ 1,447 $ (20) $ 602 $ (21) $ 184 $ 18 $ 596 $ 190 $ 2,996 2022 1,225 (20) 553 — 167 18 502 190 2,635 2023 1,118 (20) 521 — 158 18 420 190 2,405 2024 1,026 (13) 499 — 152 18 346 159 2,187 2025 970 — 478 — 145 18 202 — 1,813 Thereafter 3,211 — 1,042 — 306 69 — — 4,628 $ 8,997 $ (73) $ 3,695 $ (21) $ 1,112 $ 159 $ 2,066 $ 729 $ 16,664 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 December 31, 2020 and December 31, 2019. |
Deposits
Deposits | 12 Months Ended |
Dec. 31, 2020 | |
Deposits. | |
Deposits | 10) Deposits The following table presents the scheduled maturities of all time deposits for the next five years: (Dollars in thousands) 2021 $ 138,100 2022 10,255 2023 4,126 2024 435 2025 491 Total $ 153,407 Time deposits of $250,000 and over were $103,746,000 and $99,882,000 at December 31, 2020 and 2019, respectively. At December 31, 2020, Certificate of Deposit Account Registry Service (“CDARS”) deposits totaled $23,911,000 which were comprised of money market deposits of $663,000, and interest-bearing demand deposits of $18,614,000, (which have no scheduled maturity date, and therefore, are excluded from the table above), and time deposits of $4,634,000, (which are included in the table above). At December 31, 2019, CDARS deposits totaled $28,847,000, which were comprised of money market deposits of $2,171,000, and interest-bearing demand deposits of $12,885,000, (which have no scheduled maturity date, and therefore, are excluded from the table above), and time deposits of $13,791,000, (which are included in the table above). The CDARS program allows customers with deposits in excess of FDIC-insured limits to obtain full coverage on time deposits through a network of banks within the CDARS program. Deposits gathered through these programs are not considered brokered deposits under current regulatory reporting guidelines. Deposits from executive officers, directors, and their affiliates were $4,491,000 and $12,636,000 at December 31, 2020 and 2019, respectively. |
Borrowing Arrangements
Borrowing Arrangements | 12 Months Ended |
Dec. 31, 2020 | |
Borrowing Arrangements | |
Borrowing Arrangements | 11) Borrowing Arrangements Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit HBC maintains a collateralized line of credit with the FHLB of San Francisco. Under this line, the Company can borrow from the FHLB on a short-term (typically overnight) or long-term (over one year) basis. As of December 31, 2020, and December 31, 2019, HBC had no overnight borrowings from the FHLB. HBC had $232,632,000 of loans and pledged to the FHLB as collateral on a line of credit of $160,523,000 at December 31, 2020. HBC also had $3,202,000 of securities pledged to the FHLB as collateral on an available line of credit of $3,041,000 at December 31, 2020, none of which was outstanding. HBC had $272,879,000 of loans and no securities pledged to the FHLB as collateral on a line of credit of $228,103,000 at December 31, 2019. HBC can also borrow from the FRB’s discount window. HBC had approximately $921,373,000 of loans pledged to the FRB as collateral on an available line of credit of approximately $528,064,000 at December 31, 2020, none At December 31, 2020, HBC had Federal funds purchase arrangements available of $80,000,000. There were no Federal funds purchased outstanding at December 31, 2020 and 2019. HCC has a $10,000,000 line of credit with a correspondent bank, of which none HBC may also utilize securities sold under repurchase agreements to manage our liquidity position. There were no securities sold under agreements to repurchase at December 31, 2020, and 2019. 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 1st and December 1st of each year through June 1, 2022 and quarterly thereafter on March 1st, June 1st, September 1st and December 1st 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. Unamortized debt issuance cost totaled $260,000 at December 31, 2020. See “ LIBOR Transition and Phase–Out The Company acquired $10,000,000 of subordinated debt from the Presidio transaction with an interest rate of 8%, which was redeemed on December 19, 2019. As a result of the redemption of the Presidio subordinated debt, the Company paid a pre-payment penalty of $300,000 during the fourth quarter of 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Income Taxes | 12) Income Taxes Income tax expense (benefit) consisted of the following for the year ended December 31, as follows: 2020 2019 2018 (Dollars in thousands) Currently payable tax: Federal $ 9,630 $ 7,631 $ 9,187 State 5,828 4,689 5,416 Total currently payable 15,458 12,320 14,603 Deferred tax expense (benefit): Federal (932) 2,200 (1,133) State (757) 1,331 (146) Total deferred tax (1,689) 3,531 (1,279) Income tax expense $ 13,769 $ 15,851 $ 13,324 The effective tax rate differs from the Federal statutory rate for the years ended December 31, as follows: 2020 2019 2018 Statutory Federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 8.2 % 8.5 % 8.5 % Low income housing credits, net of investment losses (0.5) % (0.5) % (0.8) % Increase in cash surrender value of life insurance (0.8) % (0.5) % (0.5) % Stock option/restricted stock windfall tax benefit 0.6 % (0.3) % (0.9) % Non-taxable interest income (0.8) % (0.8) % (0.9) % Split-dollar term insurance 0.1 % 0.1 % 0.1 % Merger cost 0.0 % 0.5 % 0.5 % Other, net 0.3 % 0.1 % 0.4 % Effective tax rate 28.1 % 28.1 % 27.4 % Deferred tax assets and liabilities that result from the tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes at December 31, are as follows: 2020 2019 (Dollars in thousands) Deferred tax assets: Allowance for credit losses on loans $ 12,827 $ 7,231 Lease accounting 10,537 1,647 Defined postretirement benefit obligation 10,419 9,901 Accrued expenses 2,896 2,562 Federal net operating loss carryforwards 2,846 3,662 Stock compensation 1,894 1,636 State income taxes 1,142 954 California net operating loss carryforwards 1,106 1,489 Premises and equipment 459 695 Nonaccrual interest 101 61 Split-dollar life insurance benefit plan 80 75 Tax credit carryforwards 57 57 Other 469 654 Total deferred tax assets 44,833 30,624 Deferred tax liabilities: Lease accounting (10,537) (1,647) Loan fees (1,820) (1,842) Securities available-for-sale (1,764) (772) Intangible liabilities (1,388) (1,321) Prepaid expenses (689) (289) FHLB stock (166) (177) I/O strips (87) (144) Other (161) (130) Total deferred tax liabilities (16,612) (6,322) Net deferred tax assets $ 28,221 $ 24,302 At December 31, 2020, the Company's federal net operating loss (“NOL”) carryforwards were $13,553,000 and the Company's California net operating loss carryforwards were $12,903,000. These amounts are attributable to the merger transactions. The realization of these NOL carryforwards for Federal and State tax purposes are limited on the amount of net operating losses that can be utilized annually under the current tax law. The Company does not believe that its annual limitation on each acquisition will impact the ultimate deductibility of the NOL carryforwards. The State tax credit carryforwards, net of Federal tax effects, were $72,567 as of December 31, 2020 which will begin to expire in 2022. Since the Company will be able to fully utilize the net operating loss carryforwards before they begin to expire in 2029, no valuation allowance is required against the deferred tax assets. 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. As of December 31, 2020 and 2019 the Company’s recorded amount of uncertain tax positions was not considered significant for financial reporting and the Company does not expect this amount to significantly increase or decrease in the next twelve months. At December 31, 2020, and December 31, 2019, the Company had net deferred tax assets of $28,221,000 and $24,302,000, respectively. At December 31, 2020, the Company determined that a valuation allowance for deferred tax assets was not necessary. The Company and its subsidiaries are subject to U.S. Federal income tax as well as income tax of the State of California. The Company is no longer subject to examination by Federal and state taxing authorities for years before 2017, and by the State of California taxing authority for years before 2016. The following table reflects the carrying 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: December 31, December 31, 2020 2019 (Dollars in thousands) Low income housing investments $ 5,246 $ 6,126 Future commitments $ 596 $ 625 The Company expects $46,000 of the future commitments to be paid in 2021, and $550,000 in 2022 through 2025. For tax purposes, the Company recognized low income housing tax credits of $839,000 and $511,000 for the years ended December 31, 2020 and December 2019, respectively, and low income housing investment expense of $850,000 and $520,000, respectively. The Company recognizes low income housing investment expenses as a component of income tax expense. |
Equity Plan
Equity Plan | 12 Months Ended |
Dec. 31, 2020 | |
Equity Plan | |
Equity Plan | 13) 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. The Company’s shareholders approved the 2013 Equity Incentive Plan (the “2013 Plan”). The equity plans provide for the grant of incentive and nonqualified stock options and restricted stock. The equity plans provide that the option price for both incentive and nonqualified stock options will be determined by the Board of Directors at no less than the fair value at the date of grant. Options granted vest on a schedule determined by the Board of Directors at the time of grant. Generally options vest over four years. All options expire no later than ten years from the date of grant. Restricted stock is subject to time vesting. In 2020, the Company granted 329,500 shares of nonqualified stock options and 168,117 shares of restricted stock subject to time vesting requirements. There were 2,409,062 shares available for the issuance of equity awards under the 2013 Plan as of December 31, 2020. The Presidio equity plans were assumed by the Company and the outstanding options issued under the Presidio equity plans were converted into the right to receive the Company’s shares at the exercise price pursuant to the formula defined in the merger agreement. Consideration for the assumed Presidio stock options exchanged for 1,176,757 shares of the Company’s stock options totaled $7,426,000. 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, 2020 2,712,846 $ 8.80 Granted 329,500 $ 9.11 Exercised (381,184) $ 4.50 Forfeited or expired (114,341) $ 12.93 Outstanding at December 31, 2020 2,546,821 $ 9.30 5.43 $ 3,473,312 Vested or expected to vest 2,394,012 5.43 $ 3,264,913 Exercisable at December 31, 2020 2,017,899 4.60 $ 3,473,312 Information related to the equity plans for each of the last three years: December 31, 2020 2019 2018 Intrinsic value of options exercised $ 2,258,245 $ 1,618,615 $ 1,844,909 Cash received from option exercise $ 1,713,737 $ 1,626,113 $ 2,667,305 Tax benefit realized from option exercises $ 63,124 $ 258,037 $ 534,638 Weighted average fair value of options granted $ 1.15 $ 1.91 $ 3.03 As of December 31, 2020, there was $894,000 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 2.63 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 in each year. December 31, 2020 2019 2018 Expected life in months(1) 72 72 72 Volatility(1) 29 % 24 % 21 % Weighted average risk-free interest rate(2) 0.53 % 2.23 % 2.88 % Expected dividends(3) 5.71 % 3.95 % 2.64 % (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 The Company estimates the impact of forfeitures based on historical experience. Should the Company’s current estimate change, additional expense could be recognized or reversed in future periods. The Company issues authorized shares of common stock to satisfy stock option exercises. 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, 2020 239,453 $ 11.23 Granted 168,117 $ 9.20 Vested (108,870) $ 13.19 Forfeited or expired — $ — Nonvested shares at December 31, 2020 298,700 $ 10.83 As of December 31, 2020, there was $2,198,000 of total unrecognized compensation cost related to nonvested restricted stock awards granted under the 2013 Plan. The cost is expected to be recognized over a weighted-average period of approximately 1.76 years. The Company has two share based compensation plans. Total compensation cost has been charged against income for those plans was $2,248,000, $1,924,000, $1,817,000, for 2020, 2019, and 2018, respectively. The total income tax expense was $301,000 for the year ended December 31, 2020. The total income tax benefit was ($146,000), and ($424,000) for the years ended December 31, 2019, and 2018, respectively. |
Benefit Plans
Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Benefit Plans | |
Benefit Plans | 14) Benefit Plans 401(k) Savings Plan The Company offers a 401(k) savings plan that allows employees to contribute up to a maximum percentage of their compensation, as established by the Internal Revenue Code. The Company made a discretionary matching contribution of up to $3,000 for each employee’s contributions in 2020 and 2019. Contribution expense was $942,000, $934,000, and $749,000 in 2020, 2019 and 2018, respectively. Employee Stock Ownership Plan The Company sponsors a non-contributory employee stock ownership plan (“ESOP”). To participate in this plan, an employee must have worked at least 1,000 hours during the year and must be employed by the Company at year-end. Employer contributions to the ESOP are discretionary. The Company has suspended contributions to the ESOP since 2010. The Plan was “frozen” as of January 1, 2019. At December 31, 2020, the ESOP owned 101,231 shares of the Company’s common stock. Deferred Compensation Plan The Company has a nonqualified deferred compensation plan for some of its employees. Under the deferred compensation plan, an employee may defer up to 100% of their bonus and 50% of their regular salary into a deferred account. Amounts deferred are invested in a portfolio of approved investment choices as directed by the employee. Amounts deferred by employees to the deferred compensation plan will be distributed at a future date they have selected or upon termination of employment. There were eight and five employees who elected to participate in the deferred compensation plan during 2020 and 2019, respectively. Nonqualified Defined Benefit Pension Plan The Company has a supplemental retirement plan (“SERP”) covering some current and some former key executives and directors. The SERP is an unfunded, nonqualified defined benefit plan. The combined number of active and retired/terminated participants in the SERP was 53 at December 31, 2020. The defined benefit represents a stated amount for key executives and directors that generally vests over nine years and is reduced for early retirement. The projected benefit obligation is included in “Accrued interest payable and other liabilities” on the consolidated balance sheets. The SERP has no assets and the projected benefit obligation is unfunded. The measurement date of the SERP is December 31. The following table sets forth the SERP’s status at December 31: 2020 2019 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 33,689 $ 26,781 Projected benefit obligation of SERP agreements acquired from Presidio — 2,541 Service cost 492 263 Actuarial loss (gain) 3,008 4,182 Interest cost 935 1,059 Benefits paid (3,118) (1,137) Plan amendment 398 — Projected benefit obligation at end of year $ 35,404 $ 33,689 Amounts recognized in accumulated other comprehensive loss: Net actuarial loss $ 12,445 $ 9,714 Weighted-average assumptions used to determine the benefit obligation at year-end: 2020 2019 Discount rate 2.26 % 3.01 % Rate of compensation increase N/A N/A Estimated benefit payments over the next ten years, which reflect anticipated future events, service and other assumptions, are as follows: Estimated Benefit Year Payments (Dollars in thousands) 2021 $ 2,123 2022 1,814 2023 1,918 2024 1,954 2025 2,026 2026 to 2030 11,465 The components of pension cost for the SERP follow: 2020 2019 (Dollars in thousands) Components of net periodic benefit cost: Service cost $ 492 $ 263 Interest cost 935 1,059 Amortization of prior transition obligation 299 — Amortization of net actuarial loss 387 184 Accelerated benefits for Presidio SERP agreements due to change in control — 1,465 Net periodic benefit cost $ 2,113 $ 2,971 Amount recognized in other comprehensive income $ 1,924 $ 2,847 The components of net periodic benefit cost other than the service cost component are included in the line item “other noninterest expense” in the Consolidated Statements of Income. The estimated net actuarial loss and prior service cost for the SERP that will be amortized from Accumulated Other Comprehensive Loss into net periodic benefit cost over the next fiscal year are $643,000 as of December 31, 2020. Net periodic benefit cost for the years ended December 31, 2020 and 2019 were determined using the following assumption: 2020 2019 Discount rate 3.01 % 4.03 % Rate of compensation increase N/A N/A 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, some of which continues after the participant’s employment and retirement. The policies acquired from Focus and Presidio do not include a post retirement benefit. All participants are fully vested in their split-dollar life insurance benefits. The accrued benefit liability for the split-dollar insurance agreements represents either the present value of the future death benefits payable to the participants’ beneficiaries or the present value of the estimated cost to maintain life insurance, depending on the contractual terms of the participant’s underlying agreement. The split-dollar life insurance projected benefit obligation is included in “Accrued interest payable and other liabilities” on the consolidated balance sheets. The measurement date of the split-dollar life insurance benefit plan is December 31. The following sets forth the funded status of the split dollar life insurance benefits: December 31, December 31, 2020 2019 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 8,198 $ 6,903 Interest cost 246 278 Actuarial loss (gain) 1,245 1,017 Projected benefit obligation at end of period $ 9,689 $ 8,198 Amounts recognized in accumulated other comprehensive loss at December 31 consist of: December 31, December 31, 2020 2019 (Dollars in thousands) Net actuarial loss $ 5,170 $ 3,776 Prior transition obligation 970 1,059 Accumulated other comprehensive loss $ 6,140 $ 4,835 Weighted-average assumption used to determine the benefit obligation at year-end follow: 2020 2019 Discount rate 2.26 % 3.01 % Components of net periodic benefit cost during the year are: 2020 2019 (Dollars in thousands) Amortization of prior transition obligation and actuarial losses $ (60) $ (96) Interest cost 246 278 Net periodic benefit cost $ 186 $ 182 Amount recognized in other comprehensive income $ 1,305 $ 1,113 The estimated net actuarial loss and prior transition obligation for the split-dollar life insurance benefit plan that will be amortized from accumulated other comprehensive loss into net periodic benefit cost over the next fiscal year are $90,000 as of December 31, 2020 and 2019. Weighted-average assumption used to determine the net periodic benefit cost: 2020 2019 Discount rate 3.01 % 4.03 % |
Fair Value
Fair Value | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value | |
Fair Value | 15) 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 Company uses matrix pricing (Level 2 inputs) to establish the fair value of its securities available-for-sale. 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 December 31, 2020 Available-for-sale securities: Agency mortgage-backed securities $ 175,326 — $ 175,326 — U.S. Treasury 60,448 60,448 — — I/O strip receivables 305 — 305 — Assets at December 31, 2019 Available-for-sale securities: Agency mortgage-backed securities $ 284,361 — $ 284,361 — U.S. Treasury 120,464 120,464 — — I/O strip receivables 503 — 503 — Assets and Liabilities Measured on a Non-Recurring Basis The fair value of collateral dependent loans individually evaluated with specific allocations of the allowance for credit losses on loans 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. Assets carried at fair value on a non-recurring basis are immaterial. 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. At December 31, 2020 and December 31, 2019, there were no foreclosed assets on the balance sheet. The carrying amounts and estimated fair values of financial instruments at December 31, 2020 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 $ 1,131,073 $ 1,131,073 $ — $ — $ 1,131,073 Securities available-for-sale 235,774 60,448 175,326 — 235,774 Securities held-to-maturity 297,389 — 304,927 — 304,927 Loans (including loans held-for-sale), net 2,576,560 — 1,699 2,572,993 2,574,692 FHLB stock, FRB stock, and other investments 33,522 — — — N/A Accrued interest receivable 10,546 309 1,512 8,725 10,546 I/O strips receivables 305 — 305 — 305 Liabilities: Time deposits $ 153,407 $ — $ 153,740 $ — $ 153,740 Other deposits 3,761,079 — 3,761,079 — 3,761,079 Subordinated debt 39,740 — 40,340 — 40,340 Accrued interest payable 545 — 545 — 545 The carrying amounts and estimated fair values of financial instruments at December 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 $ 457,370 $ 457,370 $ — $ — $ 457,370 Securities available-for-sale 404,825 120,464 284,361 — 404,825 Securities held-to-maturity 366,560 — 368,107 — 368,107 Loans (including loans held-for-sale), net 2,511,611 — 1,052 2,512,277 2,513,329 FHLB stock, FRB stock, and other investments 29,842 — — — N/A Accrued interest receivable 10,915 446 2,218 8,251 10,915 I/O strips receivables 503 — 503 — 503 Liabilities: Time deposits $ 168,034 $ — $ 158,704 $ — $ 158,704 Other deposits 3,246,734 — 3,246,734 — 3,246,734 Subordinated debt 39,554 — 40,404 — 40,404 Accrued interest payable 707 — 707 — 707 |
Commitments and Loss Contingenc
Commitments and Loss Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Loss Contingencies | |
Commitments and Loss Contingencies | 16) Commitments and Contingencies Loss Contingencies Within the ordinary course of our business, we are subject to private lawsuits, government audits, administrative proceedings and other claims. A number of these claims may exist at any given time, and some of the claims may be pled as class actions. We could be affected by adverse publicity and litigation costs resulting from such allegations, regardless of whether they are valid or whether we are legally determined to be liable. The Company had the following outstanding matters as of February 25, 2021. ● In December 2020, Solar Eclipse Investment Fund III, et al v. Heritage Bank of Commerce, et al., was filed against Heritage, and others, in the Solano County Superior Court for the State of California (“Solar Eclipse”). Also in December 2020, Solarmore Management Services, Inc. v. Jeff Carpoff et al., (“Solarmore”) filed an amended complaint in the United States District Court for the Eastern District of California against Heritage and others. Both of these cases relate to our former deposit relationships with D.C. Solar and their affiliates (collectively “D.C. Solar”) and its sponsored investment funds. D.C. Solar is a former customer that allegedly perpetrated a Ponzi scheme and declared bankruptcy. These actions seek unspecified damages and are in an early phase. We intend to vigorously defend these actions. ● In re Double Jump, Inc. is pending in the United States Bankruptcy Court of Nevada and was filed by D.C. Solar and some of its affiliated entities. One of the chapter 7 trustees has indicated that it may bring an adversary action against Heritage related to our former deposit relationships with D.C. Solar and its sponsored investment funds. The parties have agreed to attend a pre-filing mediation. ● In November 2020, a present and a former bank employee purporting to represent a class of Bank employees, have alleged in a lawsuit that the Bank violated the California Labor Code and California Business and Professions Code, by failing to permit required meal and rest breaks, and failing to provide accurate wage statements, among other claims. The lawsuit seeks unspecified penalties under the California Private Attorneys General Act (“PAGA”) in addition to other monetary payments. The case is in the early phase. In February 2021, the Bank was notified of another set of PAGA and potential class claims alleged by letter to the California Labor and Workforce Development Agency transmitted on behalf of another former Bank employee. The notice to the California Labor and Workforce Development Agency, which is a prerequisite to a PAGA filing, alleged the same claims, class, and relief requested that are the subject of the lawsuit filed in November 2020, and disclosed no new claims. We intend to vigorously defend the filed class and PAGA complaint and any subsequent related class action and PAGA filing. The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and adjusted to reflect the impacts of negotiations, estimated settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. The outcomes of legal proceedings and other contingencies are, however, inherently unpredictable and subject to significant uncertainties. As a result, the Company is not able to reasonably estimate the amount or range of possible losses, including losses that could arise as a result of application of non-monetary remedies, with respect to the contingencies it faces, and the Company’s estimates may not prove to be accurate. At this time, we believe that the amount of reasonably possible losses resulting from final disposition of any pending lawsuits, audits, proceedings and claims will not have a material adverse effect individually or in the aggregate on our financial position, results of operations or liquidity. It is possible, however, that our future results of operations for a particular quarter or fiscal year could be impacted by changes in circumstances relating to lawsuits, audits, proceedings or claims. Legal costs related to such claims are expensed as incurred. Off-Balance Sheet Arrangements In the normal course of business the Company makes commitments to extend credit to its customers as long as there are no violations of any conditions established in the contractual arrangements. These commitments are obligations that represent a potential credit risk to the Company, but are not reflected on the Company’s consolidated balance sheets. Total unused commitments to extend credit were $1,114,193,000 at December 31, 2020, compared to $1,120,638,000 at December 31, 2019. Unused commitments represented 42% outstanding gross loans at December 31, 2020, and 44% at December 31, 2019. The effect on the Company’s revenues, expenses, cash flows and liquidity from the unused portion of the commitments to provide credit cannot be reasonably predicted because there is no certainty that lines of credit and letters of credit will ever be fully utilized. The following table presents the Company’s commitments to extend credit for the periods indicated: December 31, 2020 2019 Fixed Variable Fixed Variable Rate Rate Total Rate Rate Total (Dollars in thousands) Unused lines of credit and commitments to make loans $ 121,560 $ 970,614 $ 1,092,174 $ 147,372 $ 951,206 $ 1,098,578 Standby letters of credit 3,049 18,970 22,019 11,445 10,615 22,060 $ 124,609 $ 989,584 $ 1,114,193 $ 158,817 $ 961,821 $ 1,120,638 For the year ended December 31, 2020, there was an increase of $192,000 to the allowance for credit losses on loans for the Company’s off-balance sheet credit exposures, compared to the year ended December 31, 2019. The allowance for losses for the Company’s off-balance sheet credit exposures was $1,078,000 at December 31, 2020. As of the implementation date, there was a reduction of $207,000 to allowance for credit losses on loans recorded for the Company’s off-balance sheet credit exposures. The offsetting increase of $399,000 in 2020 in the allowance for credit losses on loans for off-balance sheet credit exposures was driven by increased loss factors in the CECL model for all loan segments with off-balance sheet exposures which resulted from deterioration in the economic forecast assumptions used in the CECL model. |
Shareholders' Equity and Earnin
Shareholders' Equity and Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Equity | |
Shareholders' Equity and Earnings Per Share | 17) Shareholders’ Equity and Earnings Per Share Authorized Shares of Common Stock Earnings Per Share Year Ended December 31, 2020 2019 2018 (Dollars in thousands, except per share amounts) Net income $ 35,299 $ 40,461 $ $ 35,331 Weighted average common shares outstanding for basic earnings per common share 59,478,343 46,684,384 41,469,211 Dilutive potential common shares 690,796 1,221,845 713,728 Shares used in computing diluted earnings per common share 60,169,139 47,906,229 42,182,939 Basic earnings per share $ 0.59 $ 0.87 $ 0.85 Diluted earnings per share $ 0.59 $ 0.84 $ 0.84 |
Capital Requirements
Capital Requirements | 12 Months Ended |
Dec. 31, 2020 | |
Capital Requirements | |
Capital Requirements | 18) 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 December 31, 2020, that management believes have changed the categorization of the Company or HBC as “well-capitalized.” The Company’s consolidated capital ratios and the HBC’s capital ratios exceeded the regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at December 31, 2020. As permitted by the interim final rule issued on March 27, 2020 by our federal regulatory agency, we elected the option to delay the estimated impact of the adoption of the CECL Standard in our regulatory capital for two years. This two-year delay is in addition to the three-year transition period the agency had already made available. The adoption will delay the effects of CECL on our regulatory capital for the next two years, after which the effects will be phased-in over a three-year period from January 1, 2022 through December 31, 2024. Under the interim final rule, the amount of adjustments to regulatory capital deferred until the phase-in period include both the initial impact of adoption of the CECL Standard at January 1, 2020 and 25% of subsequent changes in our allowance for credit losses during each quarter of the two-year period ending December 31, 2021. 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 December 31, 2020 and December 31, 2019, 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 December 31, 2020, and December 31, 2019. Required For Capital Adequacy Purposes Actual Under Basel III Amount Ratio Amount Ratio (1) (Dollars in thousands) As of December 31, 2020 Total Capital $ 483,870 16.5 % $ 307,067 10.5 % (to risk-weighted assets) Tier 1 Capital $ 410,307 14.0 % $ 248,578 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 410,307 14.0 % $ 204,711 7.0 % (to risk-weighted assets) Tier 1 Capital $ 410,307 9.1 % $ 180,281 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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, 2019 Total Capital $ 457,158 14.6 % $ 329,306 10.5 % (to risk-weighted assets) Tier 1 Capital $ 393,432 12.5 % $ 266,581 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 393,432 12.5 % $ 219,538 7.0 % (to risk-weighted assets) Tier 1 Capital $ 393,432 9.7 % $ 161,677 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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, 2020 Total Capital $ 461,933 15.8 % $ 292,258 10.0 % $ 306,871 10.5 % (to risk-weighted assets) Tier 1 Capital $ 428,109 14.6 % $ 233,806 8.0 % $ 248,419 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 428,109 14.6 % $ 189,968 6.5 % $ 204,580 7.0 % (to risk-weighted assets) Tier 1 Capital $ 428,109 9.5 % $ 225,263 5.0 % $ 180,211 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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, 2019 Total Capital $ 435,757 13.9 % $ 313,485 10.0 % $ 329,159 10.5 % (to risk-weighted assets) Tier 1 Capital $ 411,585 13.1 % $ 250,788 8.0 % $ 266,462 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 411,585 13.1 % $ 203,765 6.5 % $ 219,439 7.0 % (to risk-weighted assets) Tier 1 Capital $ 411,585 10.2 % $ 202,013 5.0 % $ 161,611 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, except the Tier 1 Capital to average assets. The Subordinated Debt, net of unamortized issuance costs, totaled $39,740,000 at December 31, 2020, 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 December 31, 2020, HBC would not be required to obtain regulatory approval, and the amount available for cash dividends is $21,996,000. Similar restrictions applied to the amount and sum of loan advances and other transfers of funds from HBC to the parent company. HBC distributed to HCC dividends of $32,000,000 and $22,500,000 for the years ended December 31, 2020 and 2019, respectively. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition | |
Revenue Recognition | 19) Revenue Recognition On January 1, 2018, the Company adopted ASU No. 2014-09 (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 Company currently accounts for sales of foreclosed assets in accordance with Topic 360-20. In most cases the Company will seek to engage a real estate agent for the sale of foreclosed assets immediately upon foreclosure. However, in some cases, where there is clear demand for the property in question, the Company may elect to allow for a marketing period on no more than six months to attempt a direct sale of the property. We generally recognize the sale, and any associated gain or loss, of a real estate property when control of the property transfers. Any gains or losses from the sale are recorded to noninterest income/expense. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the periods indicated: Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Noninterest Income In-scope of Topic 606: Service charges and fees on deposit accounts $ 2,859 $ 4,510 $ 4,113 Gain on the disposition of foreclosed assets 791 — — Total noninterest income in-scope of Topic 606 3,650 4,510 4,113 Noninterest Income Out-of-scope of Topic 606 6,272 5,734 5,461 Total noninterest income $ 9,922 $ 10,244 $ 9,574 |
Noninterest Expense
Noninterest Expense | 12 Months Ended |
Dec. 31, 2020 | |
Noninterest Expense | |
Noninterest Expense | 20) Noninterest Expense The following table indicates the various components of the Company’s noninterest expense in each category for the periods indicated: Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 50,927 $ 50,754 $ 43,762 Occupancy and equipment 8,018 6,647 5,411 Professional fees 5,338 3,259 1,969 Amortization of intangible assets 3,751 2,739 1,943 Software subscriptions 3,102 2,397 2,343 Data processing 2,770 2,890 1,978 Insurance expense 2,286 1,864 1,685 Supplemental retirement plan cost 1,724 1,240 202 Other 11,595 13,108 16,228 Total noninterest expense $ 89,511 $ 84,898 $ 75,521 The following table presents the merger-related costs by category for the periods indicated: For the Year Ended December 31, December 31, December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 356 $ 6,580 $ 3,569 Other 2,245 4,500 5,598 Total merger-related costs $ 2,601 $ 11,080 $ 9,167 |
Business Segment Information
Business Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Business Segment Information | |
Business Segment Information | 21) 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. Year Ended December 31, 2020 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 139,744 $ 10,727 $ 150,471 Intersegment interest allocations 923 (923) — Total interest expense 8,581 — 8,581 Net interest income 132,086 9,804 141,890 Provision for credit losses on loans 12,928 305 13,233 Net interest income after provision 119,158 9,499 128,657 Noninterest income 9,277 645 9,922 Noninterest expense (2) 83,149 6,362 89,511 Intersegment expense allocations 404 (404) — Income before income taxes 45,690 3,378 49,068 Income tax expense 12,770 999 13,769 Net income $ 32,920 $ 2,379 $ 35,299 Total assets $ 4,567,239 $ 66,875 $ 4,634,114 Loans, net of deferred fees $ 2,572,060 $ 47,201 $ 2,619,261 Goodwill $ 154,587 $ 13,044 $ 167,631 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $2,601,000. Year Ended December 31, 2019 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 130,971 $ 11,688 $ 142,659 Intersegment interest allocations 1,182 (1,182) — Total interest expense 10,847 — 10,847 Net interest income 121,306 10,506 131,812 Provision for loan losses 517 329 846 Net interest income after provision 120,789 10,177 130,966 Noninterest income 9,643 601 10,244 Noninterest expense (2) 78,159 6,739 84,898 Intersegment expense allocations 547 (547) — Income before income taxes 52,820 3,492 56,312 Income tax expense 14,819 1,032 15,851 Net income $ 38,001 $ 2,460 $ 40,461 Total assets $ 4,045,801 $ 63,662 $ 4,109,463 Loans, net of deferred fees $ 2,487,864 $ 45,980 $ 2,533,844 Goodwill $ 154,376 $ 13,044 $ 167,420 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $11,080,000. Year Ended December 31, 2018 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 115,147 $ 14,698 $ 129,845 Intersegment interest allocations 1,856 (1,856) — Total interest expense 7,822 — 7,822 Net interest income 109,181 12,842 122,023 Provision for loan losses 7,224 197 7,421 Net interest income after provision 101,957 12,645 114,602 Noninterest income 8,662 912 9,574 Noninterest expense (2) 69,164 6,357 75,521 Intersegment expense allocations 753 (753) — Income before income taxes 42,208 6,447 48,655 Income tax expense 11,418 1,906 13,324 Net income $ 30,790 $ 4,541 $ 35,331 Total assets $ 3,028,721 $ 67,841 $ 3,096,562 Loans, net of deferred fees $ 1,832,815 $ 53,590 $ 1,886,405 Goodwill $ 70,709 $ 13,044 $ 83,753 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $9,167,000. |
Parent Company only Condensed F
Parent Company only Condensed Financial Information | 12 Months Ended |
Dec. 31, 2020 | |
Parent Company only Condensed Financial Information | |
Parent Company only Condensed Financial Information | 22) Parent Company only Condensed Financial Information The condensed financial statements of Heritage Commerce Corp (parent company only) are as follows: Condensed Balance Sheets December 31, 2020 2019 (Dollars in thousands) Assets Cash and cash equivalents $ 20,378 $ 20,260 Investment in subsidiary bank 595,681 594,868 Other assets 1,881 1,761 Total assets $ 617,940 $ 616,889 Liabilities and Shareholders' Equity Subordinated debt, net of issuance costs $ 39,740 $ 39,554 Other liabilities 311 627 Shareholders' equity 577,889 576,708 Total liabilities and shareholders' equity $ 617,940 $ 616,889 Condensed Statements of Operations Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Dividend from subsidiary bank $ 32,000 $ 22,500 $ 17,000 Other income — 121 — Interest expense (2,321) (2,314) (2,315) Other expenses (3,263) (3,084) (3,030) Income before income taxes and equity in net income of subsidiary bank 26,416 17,223 11,655 Equity in undistributed net income of subsidiary bank 7,255 21,757 22,161 Income tax benefit 1,628 1,481 1,515 Net income $ 35,299 $ 40,461 $ 35,331 Condensed Statements of Cash Flows Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Cash flows from operating activities: Net Income $ 35,299 $ 40,461 $ 35,331 Adjustments to reconcile net income to net cash provided by operations: Amortization of restricted stock awards, net 1,689 1,283 1,109 Equity in undistributed net income of subsidiary bank (7,255) (21,757) (22,161) Net change in other assets and liabilities (250) 12 (64) Net cash provided by operating activities 29,483 19,999 14,215 Cash flows from financing activities: Payment of cash dividends (31,079) (22,723) (18,464) Proceeds from exercise of stock options 1,714 1,626 2,667 Net cash provided by (used in) financing activities (29,365) (21,097) (15,797) Net increase (decrease) in cash and cash equivalents 118 (1,098) (1,582) Cash and cash equivalents, beginning of year 20,260 21,358 22,940 Cash and cash equivalents, end of year $ 20,378 $ 20,260 $ 21,358 |
Quarterly Financial Data (Unaud
Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (Unaudited) | |
Quarterly Financial Data (Unaudited) | 23) Quarterly Financial Data (Unaudited) The following table discloses the Company’s selected unaudited quarterly financial data: Quarter Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 (Dollars in thousands, except per share amounts) Interest income $ 36,145 $ 36,252 $ 37,132 $ 40,942 Interest expense 1,940 2,087 2,192 2,362 Net interest income 34,205 34,165 34,940 38,580 Provision (recapture) for credit losses on loans (1,348) 197 1,114 13,270 Net interest income after provision for credit losses on loans 35,553 33,968 33,826 25,310 Noninterest income 2,056 2,595 2,078 3,193 Noninterest expense (1) 21,557 21,168 21,012 25,774 Income before income taxes 16,052 15,395 14,892 2,729 Income tax expense 4,429 4,198 4,274 868 Net income $ 11,623 $ 11,197 $ 10,618 $ 1,861 Earnings per common share Basic $ 0.19 $ 0.19 $ 0.18 $ 0.03 Diluted $ 0.19 $ 0.19 $ 0.18 $ 0.03 (1) Includes $101,000, $17,000, $59,000, and $2,424,000 pre-tax acquisition costs in the fourth, third, second and first quarters of 2020, respectively, related to the Presidio merger. Quarter Ended 12/31/2019 9/30/2019 6/30/2019 3/31/2019 (Dollars in thousands, except per share amounts) Interest income $ 42,471 $ 33,250 $ 33,489 $ 33,449 Interest expense 3,242 2,625 2,573 2,407 Net interest income 39,229 30,625 30,916 31,042 Provision (credit) for loan losses 3,223 (576) (740) (1,061) Net interest income after provision for loan losses 36,006 31,201 31,656 32,103 Noninterest income 2,393 2,618 2,765 2,468 Noninterest expense (1) 30,626 17,909 18,445 17,918 Income before income taxes 7,773 15,910 15,976 16,653 Income tax expense 2,088 4,633 4,623 4,507 Net income $ 5,685 $ 11,277 $ 11,353 $ 12,146 Earnings per common share Basic $ 0.10 $ 0.26 $ 0.26 $ 0.28 Diluted $ 0.10 $ 0.26 $ 0.26 $ 0.28 (1) Includes $9,879,000, $661,000, and $540,000 pre-tax acquisition costs in the fourth, third, and second quarters of 2019, respectively, related to the Presidio merger. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events | |
Subsequent Events | 24) Subsequent Events On January 28, 2021, the Company announced that its Board of Directors declared a $0.13 per share quarterly cash dividend to holders of common stock. The dividend will be paid on February 26, 2021 to shareholders of record on February 12, 2021. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Heritage Commerce Corp (“HCC”) operates as a registered bank holding company for its wholly-owned subsidiary Heritage Bank of Commerce (“HBC” or the “Bank”), collectively referred to as the “Company”. HBC was incorporated on November 23, 1993 and commenced operations on June 8, 1994. HBC is a California state chartered bank which offers a full range of commercial and personal banking services to residents and the business/professional community in Alameda, Contra Costa, Marin, San Benito, San Francisco, San Mateo, and Santa Clara 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. Bay View Funding’s primary business operation is purchasing and collecting factored receivables. Factored receivables are receivables that have been transferred by the originating organization and typically have not been subject to previous collection efforts. In a factoring transaction Bay View Funding directly purchases the receivables generated by its clients at a discount to their face value. The transactions are structured to provide the clients with immediate working capital when there is a mismatch between payments to the client for a good and service and the payment of operating costs incurred to provide such good or service. The Company acquired Tri-Valley Bank (“Tri-Valley”) on April 6, 2018. Tri-Valley was merged with HBC, with HBC as the surviving bank. Tri-Valley’s results of operations have been included in the Company’s results of operations beginning April 7, 2018. The Company acquired United American Bank (“United American”) on May 4, 2018. United American was merged with HBC, with HBC as the surviving bank. United American’s results of operations have been included in the Company’s results of operations beginning May 5, 2018. The Company acquired Presidio Bank (“Presidio”) on October 11, 2019. Presidio was merged with HBC, with HBC as the surviving bank. Presidio’s results of operations have been included in the Company’s results of operations beginning October 12, 2019. The consolidated financial statements are prepared in accordance with accounting policies generally accepted in the United States of America and general practices in the banking industry. The financial statements include the accounts of the Company. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand, amounts due from banks, amounts held at the Federal Reserve Bank, and Federal funds sold. The Company is required to maintain reserves against certain of the deposit accounts with the Federal Reserve Bank. Federal funds are generally sold and purchased for one |
Cash Flows | Cash Flows Net cash flows are reported for customer loan and deposit transactions, notes payable, repurchase agreements and other short-term borrowings. |
Securities | Securities The Company classifies its securities as either available-for-sale or held-to-maturity at the time of purchase. Debt securities are classified as held-to-maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities not classified as held-to-maturity are classified as available-for-sale. Securities available-for-sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of taxes. Interest income includes amortization of purchase premiums or discounts. Premiums and discounts are amortized, or accreted, over the life of the related security, or the earliest call date for callable securities, as an adjustment to income using a method that approximates the interest method. Realized gains and losses are recorded on the trade date and determined using the specific identification method for the cost of securities sold. |
Allowance for Credit Losses - Available-for-sale Securities | Allowance for Credit Losses – Available-for-sale Securities Allowance for Credit Losses – Held-to-Maturity Securities Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type and bond rating. The estimate of expected credit losses considers historical loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management classifies the held-to-maturity portfolio in the following major security types: Agency mortgage-backed and Municipals. All the mortgage backed securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses. Other securities are comprised primarily of tax exempt municipal securities. At December 31, 2020, these securities are primarily rated A-Aaa (defined as investment grade), with a small portion of the portfolio rated Baa2 (defined as medium grade). The issuers in these securities are primarily municipal entities and school districts. Changes in the allowance for credit losses are recorded as a provision (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. |
Loan Sales and Servicing | Loan Sales and Servicing The Company holds for sale the conditionally guaranteed portion of certain loans guaranteed by the Small Business Administration or the U.S. Department of Agriculture (collectively referred to as “SBA loans”). These loans are carried at the lower of aggregate cost or fair value. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Gains or losses on SBA loans held-for-sale are recognized upon completion of the sale, based on the difference between the selling price and the carrying value of the related loan sold. SBA loans are sold with servicing retained. Servicing assets recognized separately upon the sale of SBA loans consist of servicing rights and, for loans sold prior to 2009, interest-only strip receivables (“I/O strips”). The Company accounts for the sale and servicing of SBA loans based on the financial and servicing assets it controls and liabilities it has incurred, reversing recognition of financial assets when control has been surrendered, and reversing recognition of liabilities when extinguished. Servicing rights are initially recorded at fair value with the income statement effect recorded in gains on sale of loans. Servicing rights are amortized in proportion to and over the period of net servicing income and are assessed for impairment on an ongoing basis. Impairment is determined by stratifying the servicing rights based on interest rates and terms. Any servicing assets in excess of the contractually specified servicing fees are reclassified at fair value as an I/O strip receivable and treated like an available for sale security. Fair value is determined using prices for similar assets with similar characteristics, when available, or based upon discounted cash flows using market-based assumptions. Impairment is recognized through a valuation allowance. The servicing rights, net of any required valuation allowance, and I/O strip receivable are included in other assets on the consolidated balance sheets. Servicing income, net of amortization of servicing rights, is recognized as noninterest income. The initial fair value of I/O strip receivables is amortized against interest income on loans. |
Loans | Loans Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the principal amount outstanding, net of deferred loan origination fees and costs on originated loans, or unamortized premiums or discounts on purchased or acquired loans, and an allowance for credit losses on loans. Accrued interest receivable is excluded from the estimate of credit losses. Interest on loans is accrued on the unpaid principal balance and is credited to income using the effective yield interest method. Interest on purchased or acquired loans and the accretion (amortization) of the related purchase discount (premium) is also credited to income using the effective yield interest method. A loan portfolio segment is defined as the level at which the Company uses a systematic methodology to determine the allowance for credit losses on loans. A loan portfolio class is defined as a group of loans having similar risk characteristics and methods for monitoring and assessing risk. For all loan classes, when a loan is classified as nonaccrual, the accrual of interest is discontinued, any accrued and unpaid interest is reversed, and the amortization of deferred loan fees and costs is discontinued. For all loan classes, loans are classified as nonaccrual when the payment of principal or interest is 90 days past due, unless the loan is well secured and in the process of collection. Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for credit loss and individually evaluated loans. In certain circumstances, loans that are under 90 days past due may also be classified as nonaccrual. Any interest or principal payments received on nonaccrual loans are applied toward reduction of principal. Nonaccrual loans generally are not returned to performing status until the obligation is brought current, the loan has performed in accordance with the contract terms for a reasonable period of time, and the ultimate collectability of the contractual principal and interest is no longer in doubt. Non-refundable loan fees and direct origination costs are deferred and recognized over the expected lives of the related loans using the effective yield interest method. |
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans The allowance for credit losses on loans is an estimate of the current expected credit losses in the loan portfolio. Loans are charged-off against the allowance when management determines that a loan balance has become uncollectible. Subsequent recoveries, if any, are credited to the allowance for credit losses on loans. Management’s methodology for estimating the allowance balance consists of several key elements, which include pooling loans with similar characteristics into segments and using a discounted cash flow calculation to estimate losses. The discounted cash flow model inputs include loan level cash flow estimates for each loan segment based on peer and bank historic loss correlations with certain economic factors. Management uses a four quarter forecast of each economic factor that is used for each loan segment and the economic factors are assumed to revert to the historic mean over an eight quarter period after the four quarter forecast period. The economic factors management has selected include the California unemployment rate, California gross state product, California home price index, and a national CRE value index. These factors are evaluated and updated occasionally and as economic conditions change. Additionally, management uses qualitative adjustments to the discounted cash flow quantitative loss estimates in certain cases when management has assessed an adjustment is necessary. These qualitative adjustments are applied by pooled loan segment and have been made for increased risk due to loan quality trends, collateral risk, or other risks management determines are not adequately captured in the discounted cash flow loss estimation. Specific allowances on individually analyzed loans are added to the allowance on pools of collectively evaluated loans to derive the total allowance for credit losses on loans. Loans that do not share risk characteristics with pooled segments are evaluated on an individual basis. Loans for which the terms have been modified with a concession granted, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings. When foreclosure is probable or when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of collateral expected credit losses are based on the fair value of the collateral adjusted for selling costs as appropriate. When the discounted cash flow method is utilized the amount of credit loss is measured using the net present value of expected future cash flows adjusted for the effective interest rate used to discount expected cash flows to incorporate expected prepayments. The amount of any impairment will be charged off against the allowance for credit losses on loans if the amount is a confirmed loss or, alternatively, a specific allocation within the allowance will be established. Loans evaluated individually are specifically excluded from the collective evaluation in the allowance for credit losses. The allowance for credit losses on loans was calculated by pooling loans of similar credit risk characteristics and credit monitoring procedures. The loan portfolio is classified into eight segments of loans - commercial, commercial real estate – owner occupied, commercial real estate – non-owner occupied, land and construction, home equity, multifamily, residential mortgage and consumer and other. The risk characteristics of each loan portfolio segment are as follows: Commercial Commercial loans primarily rely on the identified cash flows of the borrower for repayment and secondarily on the underlying collateral provided by the borrower. However, the cash flows of the borrowers may not be as expected and the collateral securing these loans may vary in value. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable, inventory or equipment and may incorporate a personal guarantee; however, some loans may be unsecured. Included in commercial loans are $290,679,000 of PPP loans at December 31, 2020. Commercial Real Estate Commercial real estate loans rely primarily on the cash flows of the properties securing the loan and secondarily on the value of the property that is securing the loan. Commercial real estate loans comprise two segments differentiated by owner occupied commercial real estate and non-owner commercial real estate. Owner occupied commercial real estate loans are secured by commercial properties that are at least 50% occupied by the borrower or borrower affiliate. Non-owner occupied commercial real estate loans are secured by commercial properties that are less than 50% occupied by the borrower or borrower affiliate. Commercial real estate loans may be adversely affected by conditions in the real estate markets or in the general economy. Land and Construction Land and construction loans are generally based on estimates of costs and value associated with the complete project. Construction loans usually involve the disbursement of funds with repayment substantially dependent on the success of the completion of the project. Sources of repayment for these loans may be permanent loans from HBC or other lenders, or proceeds from the sales of the completed project. These loans are monitored by on-site inspections and are considered to have higher risk than other real estate loans due to the final repayment dependent on numerous factors including general economic conditions. Home Equity Home equity loans are secured by 1-4 family residences that are generally owner occupied. Repayment of these loans depends primarily on the personal income of the borrower and secondarily by the value of the property securing the loan which can be impacted by changes in economic conditions such as the unemployment rate and property values. Multifamily Multifamily loans are loans on 5+ residential properties. These loans rely primarily on the cash flows of the properties securing the loan for repayment and secondarily on the value of the properties securing the loan. The cash flows of these borrowers can fluctuate along with the values of the underlying property depending on general economic conditions. Residential Mortgages Residential mortgage loans are secured by 1-4 family residences which are generally owner-occupied. Repayment of these loans depends primarily on the personal income of the borrower and secondarily by the value of the property securing the loan which can be impacted by changes in economic conditions such as the unemployment rate and property values. Consumer and Other Consumer and other loans are secured by personal property or are unsecured and rely primarily on the income of the borrower for repayment and secondarily on the collateral value for secured loans. Borrower income and collateral value can vary dependent on economic conditions. |
Loan Commitments and Related Financial Instruments | Loan Commitments and Related Financial Instruments Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded. The notional amount of these commitments is not reflected in the consolidated financial statement until they are funded. The Company maintains an allowance for credit losses on unfunded commercial lending commitments and letters of credit to provide for the risk of loss inherent in these arrangements. The allowance is computed using a methodology similar to that used to determine the allowance for credit losses for loans, modified to take into account the probability of a drawdown on the commitment. The allowance for credit losses on unfunded loan commitments is classified as a liability account on the balance sheet and is adjusted as a provision for credit loss expense included in other noninterest expense. |
Federal Home Loan Bank and Federal Reserve Bank Stock | Federal Home Loan Bank and Federal Reserve Bank Stock As a member of the Federal Home Loan Bank (“FHLB”) system, the Bank is required to own common stock in the FHLB based on the Bank’s level of borrowings and outstanding FHLB advances. FHLB stock is carried at cost and classified as a restricted security. Both cash and stock dividends from the FHLB are reported as income. As a member of the Federal Reserve Bank (“FRB”) of San Francisco, the Bank is required to own stock in the FRB of San Francisco based on a specified ratio relative to our capital. FRB stock is carried at cost and may be sold back to the FRB at its carrying value. Cash dividends received from the FRB are reported as income. |
Company Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan | Company-Owned Life Insurance and Split-Dollar Life Insurance Benefit Plan The Company has purchased life insurance policies on certain directors and officers. Company-owned life insurance is recorded at the amount that can be realized under the insurance contract at the balance sheet date, which is the cash surrender value adjusted for charges or other amounts due that are probable at settlement. The purchased insurance is subject to split-dollar insurance agreements with the insured participants, which continues after the participant’s employment and retirement. Accounting guidance requires that a liability be recorded primarily over the participant’s service period when a split-dollar life insurance agreement continues after a participant’s employment or retirement. The required accrued liability is based on either the post-employment benefit cost for the continuing life insurance or the future death benefit depending on the contractual terms of the underlying agreement. |
Premises and Equipment | Premises and Equipment Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation and amortization are computed on the straight-line basis over the lesser of the respective lease terms or estimated useful lives. The Company owns one building which is being depreciated over 40 years. Furniture, equipment and improvements depreciated five |
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 resulting from business combinations represents the excess of the purchase price over the fair value of the net assets of businesses acquired. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified. Other intangible assets consist of a core deposit intangible, a below market lease, an above market lease liability, a customer relationship and brokered relationship intangible assets. They are initially measured at fair value and then are amortized over their estimated useful lives. The core deposits intangible assets from the acquisitions 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. The above market lease adjustment is being amortized on the straight line method over 60 months. The customer relationship and brokered relationship intangible assets are being amortized over ten years. |
Foreclosed Assets | Foreclosed Assets Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through operations. Operating costs after acquisition are expensed. Gains and losses on disposition are included in noninterest expense. There were no foreclosed assets at December 31, 2020 and 2019. |
Retirement Plans | Retirement Plans Expenses for the Company’s non-qualified, unfunded defined benefits plan consists of service and interest cost and amortization of gains and losses not immediately recognized. Employee 401(k) and profit sharing plan expense is the amount of matching contributions. Deferred compensation and supplemental retirement plan expense allocates the benefits over years of service. |
Loss Contingencies | Loss Contingencies Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. The Company’s accounting policy for legal costs related to loss contingencies is to accrue for the probable fees that can be reasonably estimated. The Company’s accounting policy for uncertain recoveries is to recognize the anticipated recovery when realization is deemed probable. |
Income Taxes | Income Taxes The Company files consolidated Federal and combined and separate state income tax returns. Income tax expense is the total of the current year income tax payable or refunded, the change in deferred tax assets and liabilities, and low income housing investment losses, net of tax benefits received. Some items of income and expense are recognized in different years for tax purposes when applying generally accepted accounting principles, leading to timing differences between the Company’s actual 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. Realization of the Company’s deferred tax assets is primarily dependent upon the Company generating sufficient taxable income to obtain benefit from the reversal of net deductible temporary differences and utilization of tax credit carryforwards for Federal and California state income tax purposes. The amount of deferred tax assets considered realizable is subject to adjustment in future periods based on estimates of future taxable income. Under generally accepted accounting principles, a valuation allowance is required to be recognized 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. A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. The Company recognizes interest and penalties related to uncertain tax positions as income tax expense. |
Stock-Based Compensation | Stock-Based Compensation Compensation cost is recognized for stock options and restricted stock awards issued to employees and directors, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award. Compensation cost recognized reflects estimated forfeitures, adjusted as necessary for actual forfeitures. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Total comprehensive income (loss) consists of net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to gains and losses that are included in comprehensive income (loss) but are excluded from net income (loss) because they have been recorded directly in equity, net of tax, under the provisions of certain accounting guidance. The Company’s sources of other comprehensive income (loss) are unrealized gains and losses on securities available-for-sale, and I/O strips, which are treated like available-for-sale securities, and the liabilities related to the Company’s defined benefit pension plan and the split-dollar life insurance benefit plan. Reclassification adjustments result from gains or losses that were realized and included in net income (loss) of the current period that also had been included in other comprehensive income as unrealized holding gains and losses. |
Segment Reporting | Segment Reporting HBC is a commercial bank serving customers located in Alameda, Contra Costa, Marin, San Benito, San Francisco, San Mateo, and Santa Clara counties of California. Bay View Funding provides business essential working capital factoring financing to various industries throughout the United States. No customer accounts for more than 10 percent of revenue for HBC or the Company. With the previous acquisition of Bay View Funding, the Company has two reportable segments consisting of Banking and Factoring. |
Reclassifications | Reclassifications Certain items in the consolidated financial statements for the years ended December 31, 2019 and 2018 were reclassified to conform to the 2020 presentation. These reclassifications did not affect previously reported net income or shareholders’ equity. |
London Inter-Bank Offered Rate ("LIBOR") Transition and Phase-Out | London Inter-Bank Offered Rate (“LIBOR”) Transition and Phase-Out We have loans and borrowings that are tied to LIBOR benchmark interest rates. It is anticipated that the LIBOR index will be phased-out by the end of 2021 and the Federal Reserve Bank of New York has established the Secured Overnight Financing Rate (“SOFR”) as its recommended alternative to LIBOR. We have created a sub-committee of our Asset Liability Management Committee to address LIBOR transition and phase-out issues. We are currently reviewing loan documentation, technology systems and procedures we will need to implement for the transition. |
Capital and Liquidity | Capital and Liquidity While the Company believes that it has sufficient capital to withstand an extended economic recession brought about by COVID-19, its reported and regulatory capital ratios could be adversely impacted by credit losses. The Company relies on cash on hand as well as dividends from its subsidiary bank to service its debt. If the Company’s capital deteriorates such that its subsidiary bank is unable to pay dividends to it for an extended period of time, the Company may not be able to service its debt. The Company maintains access to multiple sources of liquidity. Wholesale funding markets have remained open to us, but rates for short term funding have recently been volatile. If funding costs are elevated for an extended period of time, it could have an adverse effect on the Company’s net interest margin. If an extended recession caused large numbers of the Company’s deposit customers to withdraw their funds, the Company might become more reliant on volatile or more expensive sources of funding. |
Asset Valuation | Asset Valuation The extent to which the COVID-19 pandemic will impact our business, results of operations and financial condition will depend on future developments, which are highly uncertain and difficult to predict. Those developments and factors include the duration and spread of the pandemic, its severity, the actions to contain the pandemic or address its impact, and how quickly and to what extent normal economic and operating conditions can resume. We do not yet know the full extent of the impact. However, the effects could have a material adverse impact on our business, asset valuations, financial condition and results of operations. Material adverse impacts may include all or a combination of valuation impairments on our intangible assets, investments, loans, or deferred tax assets. |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The amendments in this update replace the incurred loss impairment methodology in prior GAAP with a methodology that reflects expected life-of-instrument 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 Company adopted CECL on January 1, 2020, using the modified retrospective method for all financial assets measured at amortized cost and off-balance sheet credit exposures. Results for the reporting periods after January 1, 2020, are presented under Topic 326, while prior period amounts continue to be reported in accordance with previously applicable GAAP. The following table shows the impact of adopting CECL on January 1, 2020: As Reported Pre- Impact of Under Topic 326 Topic 326 Topic 326 Adoption Adoption (Dollars in thousands) Assets: Allowance for credit losses on debt securities Held-to-maturity municipal securities $ 58 $ - $ 58 Loans Commercial 6,790 10,453 (3,663) CRE - owner occupied 6,994 3,825 3,169 CRE - non-owner occupied 11,672 3,760 7,912 Land and construction 1,458 2,621 (1,163) Home equity 1,321 2,244 (923) Multifamily 1,253 57 1,196 Residential mortgage 678 243 435 Consumer and other 1,689 82 1,607 Allowance for credit losses on loans $ 31,855 $ 23,285 $ 8,570 Liabilities: Allowance for credit losses on off-balance sheet credit exposures $ 679 $ 886 $ (207) As of the implementation date of January 1, 2020, the Company recognized an increase of $8,570,000 to its allowance for credit losses for loans. The majority of this increase is related to loan portfolios acquired in our recent acquisitions that under the previous methodology had no recognized allowance for loan losses until the estimated allowance exceeded the unaccreted discount. In the normal course of business, the Company makes commitments to extend credit to its customers as long as there are no violations of any conditions established in contractual arrangements. These commitments are obligations that represent a potential credit risk to the Company, yet are not reflected in any form within the Company’s consolidated balance sheets. As of the implementation date, there was a reduction of $207,000 to the allowance for losses recorded for the Company’s off-balance sheet credit exposures. The reduction in reserves for off-balance sheet credit exposures at implementation was primarily driven by applying a lower estimated CECL loss factor for unfunded commercial loan and construction loan commitments. The cumulative-effect adjustment as a result of the adoption of this guidance was recorded, net of tax of $2,359,000, as a $6,062,000 reduction to retained earnings effective January 1, 2020. In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Test for Goodwill Impairment. The provisions of the update eliminated 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 provided 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. The Company adopted the new guidance on January 1, 2020 and there was no material impact to the financial statements and no cumulative adjustments were made. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides temporary, optional guidance to ease the potential burden in accounting for, or recognizing the effects of, the transition away from the LIBOR or other interbank offered rate on financial reporting. To help with the transition to new reference rates, the ASU provides optional expedients and exceptions for applying GAAP to affected contract modifications and hedge accounting relationships. The main provisions include: ● A change in a contract’s reference interest rate would be accounted for as a continuation of that contract rather than as the creation of a new one for contracts, including loans, debt, leases, and other arrangements, that meet specific criteria. ● When updating its hedging strategies in response to reference rate reform, an entity would be allowed to preserve its hedge accounting. The guidance is applicable only to contracts or hedge accounting relationships that reference LIBOR or another reference rate expected to be discontinued. Because the guidance is meant to help entities through the transition period, it will be in effect for a limited time and will not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients that are retained through the end of the hedging relationship. The amendments in this ASU are effective March 12, 2020 through December 31, 2022. ASU 2020-04 permits relief solely for reference rate reform actions and permits different elections over the effective date for legacy and new activity. Accordingly, the Company is evaluating and reassessing the elections on a quarterly basis. For current elections in effect regarding the assertion of the probability of forecasted transactions, the Company elects the expedient to assert the probability of the hedged interest payments and receipts regardless of any expected modification in terms related to reference rate reform. The Company believes the adoption of this guidance on activities subsequent to December 31, 2020 through December 31, 2022 will not have a material impact on the consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |
Schedule of impact of adopting CECL | The following table shows the impact of adopting CECL on January 1, 2020: As Reported Pre- Impact of Under Topic 326 Topic 326 Topic 326 Adoption Adoption (Dollars in thousands) Assets: Allowance for credit losses on debt securities Held-to-maturity municipal securities $ 58 $ - $ 58 Loans Commercial 6,790 10,453 (3,663) CRE - owner occupied 6,994 3,825 3,169 CRE - non-owner occupied 11,672 3,760 7,912 Land and construction 1,458 2,621 (1,163) Home equity 1,321 2,244 (923) Multifamily 1,253 57 1,196 Residential mortgage 678 243 435 Consumer and other 1,689 82 1,607 Allowance for credit losses on loans $ 31,855 $ 23,285 $ 8,570 Liabilities: Allowance for credit losses on off-balance sheet credit exposures $ 679 $ 886 $ (207) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income ("AOCI") (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accumulated Other Comprehensive Income ("AOCI") | |
Schedule of changes in AOCI by component | Year Ended December 31, 2020 and 2019 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 Maturity Items(1) Total (Dollars in thousands) Beginning balance January 1, 2020, net of taxes $ 1,602 $ 298 $ (11,678) $ (9,778) Other comprehensive income (loss) before reclassification, net of taxes 2,522 — (3,459) (937) Amounts reclassified from other comprehensive income (loss), net of taxes (195) (37) 230 (2) Net current period other comprehensive income (loss), net of taxes 2,327 (37) (3,229) (939) Ending balance December 31, 2020, net of taxes $ 3,929 $ 261 $ (14,907) $ (10,717) Beginning balance January 1, 2019, net of taxes $ (5,007) $ 344 $ (7,718) $ (12,381) Other comprehensive income (loss) before reclassification, net of taxes 7,075 — (4,022) 3,053 Amounts reclassified from other comprehensive income (loss), net of taxes (466) (46) 62 (450) Net current period other comprehensive income (loss), net of taxes 6,609 (46) (3,960) 2,603 Ending balance December 31, 2019, net of taxes $ 1,602 $ 298 $ (11,678) $ (9,778) (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 14—Benefit Plans) and includes split-dollar life insurance benefit plan. |
Schedule of reclassifications out of AOCI into net income | Amounts Reclassified from AOCI(1) Year Ended December 31, Affected Line Item Where Details About AOCI Components 2020 2019 2018 Net Income is Presented (Dollars in thousands) Unrealized gains on available-for-sale securities and I/O strips $ 277 $ 661 $ 266 Gain on sales of securities (82) (195) (79) Income tax expense 195 466 187 Net of tax Amortization of unrealized gain on securities available-for-sale that were reclassified to securities held-to-maturity 52 65 44 Interest income on taxable securities (15) (19) (13) Income tax expense 37 46 31 Net of tax Amortization of defined benefit pension plan items (1) Prior transition obligation and actuarial losses (2) 60 96 65 Actuarial losses (3) (387) (184) (292) (327) (88) (227) Other noninterest expense 97 26 67 Income tax benefit (230) (62) (160) Net of tax Total reclassification from AOCI for the period $ 2 $ 450 $ 58 (1) This AOCI component is included in the computation of net periodic benefit cost (see Note 14 — Benefit Plans (2) This is related to the split dollar life insurance benefit plan. (3) This is related to the supplemental executive retirement plan. |
Securities (Tables)
Securities (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Securities | |
Schedule of amortized cost and estimated fair value of securities | Gross Gross Allowance Estimated Amortized Unrealized Unrealized for Credit Fair December 31, 2020 Cost Gains (Losses) Losses Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 170,215 $ 5,111 $ — $ — $ 175,326 U.S. Treasury 59,797 651 — — 60,448 Total $ 230,012 $ 5,762 $ — $ — $ 235,774 Gross Gross Estimated Allowance Amortized Unrecognized Unrecognized Fair for Credit December 31, 2020 Cost Gains (Losses) Value Losses (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 228,652 $ 6,075 $ (230) $ 234,497 $ — Municipals - exempt from Federal tax 68,791 1,639 — 70,430 (54) Total $ 297,443 $ 7,714 $ (230) $ 304,927 $ (54) Gross Gross Estimated Amortized Unrealized Unrealized Fair December 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 283,598 $ 934 $ (171) $ 284,361 U.S. Treasury 118,939 1,525 — 120,464 Total $ 402,537 $ 2,459 $ (171) $ 404,825 Gross Gross Estimated Amortized Unrecognized Unrecognized Fair December 31, 2019 Cost Gains (Losses) Value (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 285,344 $ 1,206 $ (968) $ 285,582 Municipals - exempt from Federal tax 81,216 1,313 (4) 82,525 Total $ 366,560 $ 2,519 $ (972) $ 368,107 |
Schedule of securities with unrealized losses | Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2020 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities held-to-maturity: Agency mortgage-backed securities $ 30,930 (230) $ — $ — $ 30,930 $ (230) Total $ 30,930 $ (230) $ — $ — $ 30,930 $ (230) Less Than 12 Months 12 Months or More Total Fair Unrealized Fair Unrealized Fair Unrealized December 31, 2019 Value (Losses) Value (Losses) Value (Losses) (Dollars in thousands) Securities available-for-sale: Agency mortgage-backed securities $ 100,816 $ (105) $ 27,534 $ (66) $ 128,350 $ (171) Total $ 100,816 $ (105) $ 27,534 $ (66) $ 128,350 $ (171) Securities held-to-maturity: Agency mortgage-backed securities $ 50,060 $ (178) $ 88,128 $ (790) $ 138,188 $ (968) Municipals - exempt from Federal tax 1,556 (4) — — 1,556 (4) Total $ 51,616 $ (182) $ 88,128 $ (790) $ 139,744 $ (972) |
Schedule of proceeds from sales of securities and the resulting gains and losses | 2020 2019 2018 (Dollars in thousands) Proceeds $ 56,598 $ 167,551 $ 94,291 Gross gains 277 1,094 1,243 Gross losses — (433) (977) |
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 3 months or less $ 14,988 $ 15,039 Due after 3 months through one year 44,809 45,409 Agency mortgage-backed securities 170,215 175,326 Total $ 230,012 $ 235,774 Held-to-maturity Amortized Estimated Cost Fair Value (Dollars in thousands) Due after 3 months through one year $ 493 $ 499 Due after one through five years 10,390 10,757 Due after five through ten years 31,509 32,149 Due after ten years 26,399 27,025 Agency mortgage-backed securities 228,652 234,497 Total $ 297,443 $ 304,927 |
Schedule of roll-forward by major security type of the allowance for credit losses on debt securities held-to-maturity | Municipals (Dollars in thousands) Beginning balance January 1, 2020 $ - Impact of adopting Topic 326 58 Provision (credit) for credit loss (4) Ending balance December 31, 2020 $ 54 |
Loans and Allowance for Credi_2
Loans and Allowance for Credit Losses on Loans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Allowance for Credit Losses on Loans | |
Schedule of loans | December 31, December 31, 2020 2019 (Dollars in thousands) Loans held-for-investment: Commercial $ 846,386 $ 603,345 Real estate: CRE - owner occupied 560,362 548,907 CRE - non-owner occupied 693,103 767,821 Land and construction 144,594 147,189 Home equity 111,885 151,775 Multifamily 166,425 180,623 Residential mortgages 85,116 100,759 Consumer and other 18,116 33,744 Loans 2,625,987 2,534,163 Deferred loan fees, net (6,726) (319) Loans, net of deferred fees 2,619,261 2,533,844 Allowance for credit losses on loans (1) (44,400) (23,285) Loans, net $ 2,574,861 $ 2,510,559 (1) |
Schedule of changes in allowance for loan (credit) losses | Year Ended December 31, 2020 Owner Non-owner Land & Home Multi- Residential Consumer Commercial Occupied Occupied Construction Equity Family Mortgage and Other Total (Dollars in thousands) Beginning of period balance $ 10,453 $ 3,825 $ 3,760 $ 2,621 $ 2,244 $ 57 $ 243 $ 82 $ 23,285 Adoption of Topic 326 (3,663) 3,169 7,912 (1,163) (923) 1,196 435 1,607 8,570 Balance at adoption on January 1, 2020 6,790 6,994 11,672 1,458 1,321 1,253 678 1,689 31,855 Charge-offs (1,776) — — — — — — (104) (1,880) Recoveries 998 1 — 70 93 — — 30 1,192 Net (charge-offs) recoveries (778) 1 — 70 93 — — (74) (688) Provision (credit) for credit losses on loans 5,575 1,565 4,744 981 (117) 1,551 265 (1,331) 13,233 End of period balance $ 11,587 $ 8,560 $ 16,416 $ 2,509 $ 1,297 $ 2,804 $ 943 $ 284 $ 44,400 Year Ended December 31, 2019 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 Charge-offs (6,609) — (14) (6,623) Recoveries 1,045 169 — 1,214 Net recoveries (5,564) 169 (14) (5,409) Provision (credit) for loan losses (1,044) 1,910 (20) 846 End of period balance $ 10,453 $ 12,750 $ 82 $ 23,285 Year Ended December 31, 2018 Commercial Real Estate Consumer Total (Dollars in thousands) Beginning of period balance $ 10,608 $ 8,950 $ 100 $ 19,658 Charge-offs (2,002) — (24) (2,026) Recoveries 2,645 150 — 2,795 Net recoveries 643 150 (24) 769 Provision for loan losses 5,810 1,571 40 7,421 End of period balance $ 17,061 $ 10,671 $ 116 $ 27,848 |
Schedule of loans held-for-investment individually evaluated for impairment by class of loans | December 31, 2019 Consumer Commercial Real Estate and other Total (Dollars in thousands) Allowance for loan losses: Ending allowance balance attributable to loans: Individually evaluated for impairment $ 1,835 $ — $ — $ 1,835 Collectively evaluated for impairment 8,618 12,750 82 21,450 Total allowance balance $ 10,453 $ 12,750 $ 82 $ 23,285 Loans: Individually evaluated for impairment $ 4,810 $ 5,454 $ — $ 10,264 Collectively evaluated for impairment 598,535 1,891,620 33,744 2,523,899 Total loan balance $ 603,345 $ 1,897,074 $ 33,744 $ 2,534,163 |
Schedule of nonperforming loans | Restructured Nonaccrual Nonaccrual and Loans with no Specific with Specific over 90 Days Allowance for Allowance for Past Due Credit Credit and Still Losses Losses Accruing Total (Dollars in thousands) Commercial $ 752 $ 1,974 $ 81 $ 2,807 Real estate: CRE - Owner Occupied 3,706 — — 3,706 Home equity 949 — — 949 Consumer and other 407 — 407 Total $ 5,814 $ 1,974 $ 81 $ 7,869 Restructured and Loans over 90 Days Past Due and Still Nonaccrual Accruing Total (Dollars in thousands) Commercial $ 3,444 $ 1,153 $ 4,597 Real estate: CRE 5,094 — 5,094 Home equity 137 — 137 Total $ 8,675 $ 1,153 $ 9,828 |
Schedule of aging of past due loans by class of loans | December 31, 2020 30 - 59 60 - 89 90 Days or Days Days Greater Total Past Due Past Due Past Due Past Due Current Total (Dollars in thousands) Commercial $ 3,524 $ 259 $ 392 $ 4,175 $ 842,211 $ 846,386 Real estate: CRE - Owner Occupied 1,133 — 29 1,162 559,200 560,362 CRE - Non-Owner Occupied — 485 — 485 692,618 693,103 Land and construction — — — — 144,594 144,594 Home equity — — — 111,885 111,885 Multifamily — — — — 166,425 166,425 Residential mortgages — — — — 85,116 85,116 Consumer and other — — 407 407 17,709 18,116 Total $ 4,657 $ 744 $ 828 $ 6,229 $ 2,619,758 $ 2,625,987 December 31, 2019 30 - 59 60 - 89 90 Days or Days Days Greater Total Past Due Past Due Past Due Past Due Current Total (Dollars in thousands) Commercial $ 4,770 $ 2,097 $ 3,217 $ 10,084 $ 593,261 $ 603,345 Real estate: CRE - Owner Occupied — — 5,094 5,094 543,813 548,907 CRE - Non-Owner Occupied — — — — 767,821 767,821 Land and construction — — — — 147,189 147,189 Home equity — 137 — 137 151,638 151,775 Multifamily — — — — 180,623 180,623 Residential mortgages — — — — 100,759 100,759 Consumer and other — — — — 33,744 33,744 Total $ 4,770 $ 2,234 $ 8,311 $ 15,315 $ 2,518,848 $ 2,534,163 |
Summary of loan portfolio by loan type and credit quality classification | Revolving Loans Term Loans Amortized Cost Basis by Originated Period Amortized 2015 and Cost 2020 2019 2018 2017 2016 Prior Basis Total (Dollars in thousands) Commercial: Pass $ 431,369 $ 33,350 $ 21,154 $ 13,840 $ 7,341 $ 8,292 $ 296,286 $ 811,632 Special Mention 15,720 716 1,301 953 713 170 1,937 21,510 Substandard 4,036 - 19 758 2,396 73 3,236 10,518 Substandard-Nonaccrual 2,106 56 36 - 115 26 387 2,726 Total 453,231 34,122 22,510 15,551 10,565 8,561 301,846 846,386 CRE - Owner Occupied: Pass 168,224 73,064 68,068 51,705 50,716 109,350 15,964 537,091 Special Mention 3,151 2,568 4,128 783 - 2,569 - 13,199 Substandard 2,561 - 400 2,954 - 451 - 6,366 Substandard-Nonaccrual 3,678 - - - - 28 - 3,706 Total 177,614 75,632 72,596 55,442 50,716 112,398 15,964 560,362 CRE - Non-Owner Occupied: Pass 166,550 128,361 68,796 99,816 57,422 150,683 1,926 673,554 Special Mention 11,930 - 2,557 - - - - 14,487 Substandard 3,166 - 1,411 - 485 - - 5,062 Substandard-Nonaccrual - - - - - - - - Total 181,646 128,361 72,764 99,816 57,907 150,683 1,926 693,103 Land and construction: Pass 114,932 22,054 - - - 1,343 4,906 143,235 Special Mention - - - - - - - - Substandard 1,359 - - - - - - 1,359 Substandard-Nonaccrual - - - - - - - - Total 116,291 22,054 - - - 1,343 4,906 144,594 Home equity: Pass 266 - 74 - - - 109,848 110,188 Special Mention - - - - - - - - Substandard - - - - - 143 605 748 Substandard-Nonaccrual 117 - - - - - 832 949 Total 383 - 74 - - 143 111,285 111,885 Multifamily: Pass 31,481 39,183 17,248 24,572 16,235 30,751 880 160,350 Special Mention - - - - - 5,186 - 5,186 Substandard 889 - - - - - - 889 Substandard-Nonaccrual - - - - - - - - Total 32,370 39,183 17,248 24,572 16,235 35,937 880 166,425 Residential mortgage: Pass 12,798 10,048 3,246 7,324 28,115 15,568 - 77,099 Special Mention 5,089 - 1,630 - - - 6,719 Substandard - - - - - 1,298 - 1,298 Substandard-Nonaccrual - - - - - - - - Total 17,887 10,048 4,876 7,324 28,115 16,866 - 85,116 Consumer and other: Pass 10 522 1,486 20 116 987 14,568 17,709 Special Mention - - - - - - - - Substandard - - - - - - - - Substandard-Nonaccrual - - 407 - - - - 407 Total 10 522 1,893 20 116 987 14,568 18,116 Total loans $ 979,432 $ 309,922 $ 191,961 $ 202,725 $ 163,654 $ 326,918 $ 451,375 $ 2,625,987 Risk Grades:. Pass $ 925,630 $ 306,582 $ 180,072 $ 197,277 $ 159,945 $ 316,974 $ 444,378 $ 2,530,858 Special Mention 35,890 3,284 9,616 1,736 713 7,925 1,937 61,101 Substandard 12,011 - 1,830 3,712 2,881 1,965 3,841 26,240 Substandard-Nonaccrual 5,901 56 443 - 115 54 1,219 7,788 Grand Total $ 979,432 $ 309,922 $ 191,961 $ 202,725 $ 163,654 $ 326,918 $ 451,375 $ 2,625,987 December 31, 2019 Nonclassified Classified Total Commercial $ 599,143 4,202 $ 603,345 Real estate: CRE - Owner Occupied 538,229 10,678 548,907 CRE - Non-Owner Occupied 761,801 6,020 767,821 Land and construction 144,108 3,081 147,189 Home equity 149,131 2,644 151,775 Multifamily 180,623 — 180,623 Residential mortgages 100,262 497 100,759 Consumer and other 28,287 5,457 33,744 Total $ 2,501,584 $ 32,579 $ 2,534,163 |
Schedule of amortized cost basis of collateral-dependent loans | Collateral Type Real Estate Business Property Assets Unsecured Total (Dollars in thousands) Commercial $ 29 $ 1,815 $ 130 $ 1,974 Total $ 29 $ 1,815 $ 130 $ 1,974 |
Schedule of balance in allowance for loan losses and recorded investment in loans individually evaluated, based on impairment method | Allowance Unpaid for Loan Principal Recorded Losses Balance Investment Allocated (Dollars in thousands) With no related allowance recorded: Commercial $ 2,113 $ 2,113 $ — Real estate: CRE 5,094 5,094 — Home Equity 360 360 — Total with no related allowance recorded 7,567 7,567 — With an allowance recorded: Commercial 2,697 2,697 1,835 Total with an allowance recorded 2,697 2,697 1,835 Total $ 10,264 $ 10,264 $ 1,835 |
Schedule of loans by class modified as troubled debt restructurings | During the Year Ended December 31, 2020 Pre-modification Post-modification Number Outstanding Outstanding of Recorded Recorded Troubled Debt Restructurings: Contracts Investment Investment (Dollars in thousands) Commercial 15 $ 630 $ 630 Total 15 $ 630 $ 630 During the Year Ended December 31, 2019 Pre-modification Post-modification Number Outstanding Outstanding of Recorded Recorded Troubled Debt Restructurings: Contracts Investment Investment (Dollars in thousands) Commercial 3 $ 591 $ 591 Total 3 $ 591 $ 591 |
Schedule of loan deferrals by loan category | Underlying Collateral Business Real Assets Estate Total (in $000's, unaudited) Initial Deferments (1) $ - $ 1,573 $ 1,573 2nd Deferments (2) 295 684 979 Total $ 295 $ 2,257 $ 2,552 (1) (2) |
Loan Servicing (Tables)
Loan Servicing (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Loan Servicing | |
Schedule of activity for loan servicing rights | 2020 2019 2018 (Dollars in thousands) Beginning of year balance $ 583 $ 871 $ 1,373 Additions 213 157 200 Amortization (265) (445) (702) End of year balance $ 531 $ 583 $ 871 |
Schedule of activity for IO strip receivables | 2020 2019 2018 (Dollars in thousands) Beginning of year balance $ 503 $ 568 $ 968 Unrealized loss (198) (65) (400) End of year balance $ 305 $ 503 $ 568 |
Premises and Equipment (Tables)
Premises and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Premises and Equipment | |
Schedule of premises and equipment | 2020 2019 (Dollars in thousands) Building $ 3,508 $ 3,508 Land 2,900 2,900 Furniture and equipment 12,721 10,067 Leasehold improvements 6,726 7,372 25,855 23,847 Accumulated depreciation and amortization (15,396) (15,597) Premises and equipment, net $ 10,459 $ 8,250 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases | |
Schedule of leases | December 31, 2020 2019 (Dollars in thousands) Operating Lease Cost (Cost resulting from lease payments) $ 6,837 $ 1,490 Operating Lease - Operating Cash Flows (Fixed Payments) $ 5,572 $ 1,519 Operating Lease - ROU assets $ 35,873 $ 12,173 Operating Lease – Liabilities $ 35,873 $ 13,032 Weighted Average Lease Term - Operating Leases 8.30 yrs 4.79 yrs Weighted Average Discount Rate - Operating Leases 4.55% 3.86% |
Schedule of maturity analysis shows the undiscounted cash flows due on the Company's operating lease liabilities | (Dollars in thousands) 2021 $ 5,242 2022 5,668 2023 5,039 2024 4,692 2025 4,262 Thereafter 18,798 Total undiscounted cash flows 43,701 Discount on cash flows (7,828) Total lease liability $ 35,873 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Acquisition [Line Items] | |
Summary of consideration paid | (Dollars in thousands) Issuance of to Presidio shareholders and holders of restricted stock (stock price = $ 178,171 Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options 7,426 Cash paid for fractional shares 1 Total consideration $ 185,598 |
Schedule of unaudited pro forma combined consolidated financial statements and related adjustments | For the Year Ended December 31, 2019 December 31, 2018 (Unaudited) (Dollars in thousands, except per share amounts) Net interest income $ 163,555 $ 160,044 Provision for loan losses 870 7,694 Noninterest income 11,291 10,795 Noninterest expense 92,708 97,563 Income before income taxes 81,268 65,582 Income tax expense 23,730 17,549 Net income $ 57,538 $ 48,033 Net income per share - basic $ 0.98 $ 0.84 Net income per share - diluted $ 0.96 $ 0.83 |
Summary of pre-tax merger-related costs | For the Year Ended December 31, December 31, December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 356 $ 6,580 $ 3,569 Other 2,245 4,500 5,598 Total merger-related costs $ 2,601 $ 11,080 $ 9,167 |
Presidio bank | |
Business Acquisition [Line Items] | |
Schedule of recognized identified assets acquired and liabilities assumed | As As Recorded Fair Recorded by Value at Presidio Adjustments Acquisition (Dollars in thousands) Assets acquired: Cash and cash equivalents $ 117,989 $ (1) (a) $ 117,988 Securities available-for-sale 44,647 422 (b) 45,069 Securities held-to-maturity 463 — 463 Loans 698,493 (12,529) (c) 685,964 Allowance for loan losses (7,463) 7,463 (d) — Premises and equipment, net 1,756 — 1,756 Other intangible assets — 11,147 (e) 11,147 Other assets, net 43,539 (1,378) (f) 42,161 Total assets acquired $ 899,424 $ 5,124 904,548 Liabilities assumed: Deposits $ 774,260 $ (1) (g) 774,259 Subordinated Debt 10,000 — (h) 10,000 Other borrowings 442 — 442 Other liabilities 17,916 211 (i) 18,127 Total liabilities assumed $ 802,618 $ 210 802,828 Net assets acquired 101,720 Purchase price 185,598 Goodwill recorded in the merger $ 83,878 Explanation of certain fair value related adjustments for the Presidio merger: (a) Represents cash paid for fractional shares in the transaction. (b) Represents the fair value adjustment on investment securities available-for-sale. (c) Represents the fair value adjustment to the net book value of loans includes an interest rate mark and credit mark adjustment. (d) Represents the elimination of Presidio’s allowance for loan losses. (e) Represents intangible assets recorded to reflect the fair value of core deposits and an above market lease. The core deposit 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 above market lease liability will be accreted on the straight line method over 60 months . (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 amortized as interest expense. (h) The Company acquired $10,000,000 of subordinated debt from the Presidio transaction. The Presidio subordinated debt was redeemed on December 19, 2019. (i) Represents adjustments to accrued accounts payable. |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Other Intangible Assets | |
Schedule of carrying amount of goodwill by segment | December 31, 2020 2019 (Dollars in thousands) Banking $ 154,587 $ 154,376 Factoring 13,044 13,044 Total Goodwill $ 167,631 $ 167,420 |
Summary of Company's intangible assets | December 31, 2020 Gross Carrying Accumulated Amount Amortization Total (Dollars in thousands) Core deposit intangibles $ 25,023 $ (9,153) $ 15,870 Customer relationship and brokered relationship intangibles 1,900 (1,171) 729 Below market leases 770 (705) 65 Total $ 27,693 $ (11,029) $ 16,664 December 31, 2019 Gross Carrying Accumulated Amount Amortization Total (Dollars in thousands) Core deposit intangibles $ 25,023 $ (5,846) $ 19,177 Customer relationship and brokered relationship intangibles 1,900 (981) 919 Below market leases 770 (451) 319 Total $ 27,693 $ (7,278) $ 20,415 |
Schedule of estimated amortization expense | United United Bay View Funding Presidio Presidio American American Tri-Valley Tri-Valley Focus Customer & Core Above Core Below Core Below Core Brokered Total Deposit Market Deposit Market Deposit Market Deposit Relationship Amortization Year Intangible Lease Intangible Lease Intangible Lease Intangible Intangible Expense (Dollars in thousands) 2021 $ 1,447 $ (20) $ 602 $ (21) $ 184 $ 18 $ 596 $ 190 $ 2,996 2022 1,225 (20) 553 — 167 18 502 190 2,635 2023 1,118 (20) 521 — 158 18 420 190 2,405 2024 1,026 (13) 499 — 152 18 346 159 2,187 2025 970 — 478 — 145 18 202 — 1,813 Thereafter 3,211 — 1,042 — 306 69 — — 4,628 $ 8,997 $ (73) $ 3,695 $ (21) $ 1,112 $ 159 $ 2,066 $ 729 $ 16,664 |
Deposits (Tables)
Deposits (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Deposits. | |
Schedule of maturities of time deposits including brokered deposits | (Dollars in thousands) 2021 $ 138,100 2022 10,255 2023 4,126 2024 435 2025 491 Total $ 153,407 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Taxes | |
Schedule of income tax (benefit) | 2020 2019 2018 (Dollars in thousands) Currently payable tax: Federal $ 9,630 $ 7,631 $ 9,187 State 5,828 4,689 5,416 Total currently payable 15,458 12,320 14,603 Deferred tax expense (benefit): Federal (932) 2,200 (1,133) State (757) 1,331 (146) Total deferred tax (1,689) 3,531 (1,279) Income tax expense $ 13,769 $ 15,851 $ 13,324 |
Schedule of effective tax rate differs from the federal statutory rate | 2020 2019 2018 Statutory Federal income tax rate 21.0 % 21.0 % 21.0 % State income taxes, net of federal tax benefit 8.2 % 8.5 % 8.5 % Low income housing credits, net of investment losses (0.5) % (0.5) % (0.8) % Increase in cash surrender value of life insurance (0.8) % (0.5) % (0.5) % Stock option/restricted stock windfall tax benefit 0.6 % (0.3) % (0.9) % Non-taxable interest income (0.8) % (0.8) % (0.9) % Split-dollar term insurance 0.1 % 0.1 % 0.1 % Merger cost 0.0 % 0.5 % 0.5 % Other, net 0.3 % 0.1 % 0.4 % Effective tax rate 28.1 % 28.1 % 27.4 % |
Schedule of deferred tax assets and liabilities | 2020 2019 (Dollars in thousands) Deferred tax assets: Allowance for credit losses on loans $ 12,827 $ 7,231 Lease accounting 10,537 1,647 Defined postretirement benefit obligation 10,419 9,901 Accrued expenses 2,896 2,562 Federal net operating loss carryforwards 2,846 3,662 Stock compensation 1,894 1,636 State income taxes 1,142 954 California net operating loss carryforwards 1,106 1,489 Premises and equipment 459 695 Nonaccrual interest 101 61 Split-dollar life insurance benefit plan 80 75 Tax credit carryforwards 57 57 Other 469 654 Total deferred tax assets 44,833 30,624 Deferred tax liabilities: Lease accounting (10,537) (1,647) Loan fees (1,820) (1,842) Securities available-for-sale (1,764) (772) Intangible liabilities (1,388) (1,321) Prepaid expenses (689) (289) FHLB stock (166) (177) I/O strips (87) (144) Other (161) (130) Total deferred tax liabilities (16,612) (6,322) Net deferred tax assets $ 28,221 $ 24,302 |
Summary of carrying amount of low income tax housing investment | December 31, December 31, 2020 2019 (Dollars in thousands) Low income housing investments $ 5,246 $ 6,126 Future commitments $ 596 $ 625 |
Equity Plan (Tables)
Equity Plan (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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, 2020 2,712,846 $ 8.80 Granted 329,500 $ 9.11 Exercised (381,184) $ 4.50 Forfeited or expired (114,341) $ 12.93 Outstanding at December 31, 2020 2,546,821 $ 9.30 5.43 $ 3,473,312 Vested or expected to vest 2,394,012 5.43 $ 3,264,913 Exercisable at December 31, 2020 2,017,899 4.60 $ 3,473,312 |
Schedule of information related to the equity Plan | December 31, 2020 2019 2018 Intrinsic value of options exercised $ 2,258,245 $ 1,618,615 $ 1,844,909 Cash received from option exercise $ 1,713,737 $ 1,626,113 $ 2,667,305 Tax benefit realized from option exercises $ 63,124 $ 258,037 $ 534,638 Weighted average fair value of options granted $ 1.15 $ 1.91 $ 3.03 |
Schedule of assumptions used to estimate the fair value of each option grant on the date of grant | December 31, 2020 2019 2018 Expected life in months(1) 72 72 72 Volatility(1) 29 % 24 % 21 % Weighted average risk-free interest rate(2) 0.53 % 2.23 % 2.88 % Expected dividends(3) 5.71 % 3.95 % 2.64 % (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, 2020 239,453 $ 11.23 Granted 168,117 $ 9.20 Vested (108,870) $ 13.19 Forfeited or expired — $ — Nonvested shares at December 31, 2020 298,700 $ 10.83 |
Benefit Plans (Tables)
Benefit Plans (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Retirement Plan | |
Benefit plans | |
Schedule of change in projected benefit obligation | 2020 2019 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 33,689 $ 26,781 Projected benefit obligation of SERP agreements acquired from Presidio — 2,541 Service cost 492 263 Actuarial loss (gain) 3,008 4,182 Interest cost 935 1,059 Benefits paid (3,118) (1,137) Plan amendment 398 — Projected benefit obligation at end of year $ 35,404 $ 33,689 Amounts recognized in accumulated other comprehensive loss: Net actuarial loss $ 12,445 $ 9,714 |
Schedule of weighted-average assumptions used to determine the benefit obligation | 2020 2019 Discount rate 2.26 % 3.01 % Rate of compensation increase N/A N/A |
Schedule of estimated benefit payments over the next ten years, which reflect anticipated future events, service and other assumptions | Estimated Benefit Year Payments (Dollars in thousands) 2021 $ 2,123 2022 1,814 2023 1,918 2024 1,954 2025 2,026 2026 to 2030 11,465 |
Schedule of components of net periodic benefit cost | 2020 2019 (Dollars in thousands) Components of net periodic benefit cost: Service cost $ 492 $ 263 Interest cost 935 1,059 Amortization of prior transition obligation 299 — Amortization of net actuarial loss 387 184 Accelerated benefits for Presidio SERP agreements due to change in control — 1,465 Net periodic benefit cost $ 2,113 $ 2,971 Amount recognized in other comprehensive income $ 1,924 $ 2,847 |
Schedule of assumption used to determine the net periodic benefit cost | 2020 2019 Discount rate 3.01 % 4.03 % Rate of compensation increase N/A N/A |
Split-Dollar Life Insurance Benefit Plan | |
Benefit plans | |
Schedule of change in projected benefit obligation | December 31, December 31, 2020 2019 (Dollars in thousands) Change in projected benefit obligation: Projected benefit obligation at beginning of year $ 8,198 $ 6,903 Interest cost 246 278 Actuarial loss (gain) 1,245 1,017 Projected benefit obligation at end of period $ 9,689 $ 8,198 |
Schedule of weighted-average assumptions used to determine the benefit obligation | 2020 2019 Discount rate 2.26 % 3.01 % |
Schedule of amounts recognized in accumulated other comprehensive loss | December 31, December 31, 2020 2019 (Dollars in thousands) Net actuarial loss $ 5,170 $ 3,776 Prior transition obligation 970 1,059 Accumulated other comprehensive loss $ 6,140 $ 4,835 |
Schedule of components of net periodic benefit cost | 2020 2019 (Dollars in thousands) Amortization of prior transition obligation and actuarial losses $ (60) $ (96) Interest cost 246 278 Net periodic benefit cost $ 186 $ 182 Amount recognized in other comprehensive income $ 1,305 $ 1,113 |
Schedule of assumption used to determine the net periodic benefit cost | 2020 2019 Discount rate 3.01 % 4.03 % |
Fair Value (Tables)
Fair Value (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 Available-for-sale securities: Agency mortgage-backed securities $ 175,326 — $ 175,326 — U.S. Treasury 60,448 60,448 — — I/O strip receivables 305 — 305 — Assets at December 31, 2019 Available-for-sale securities: Agency mortgage-backed securities $ 284,361 — $ 284,361 — U.S. Treasury 120,464 120,464 — — I/O strip receivables 503 — 503 — |
Schedule of carrying amounts and estimated fair values of financial instruments | 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 $ 1,131,073 $ 1,131,073 $ — $ — $ 1,131,073 Securities available-for-sale 235,774 60,448 175,326 — 235,774 Securities held-to-maturity 297,389 — 304,927 — 304,927 Loans (including loans held-for-sale), net 2,576,560 — 1,699 2,572,993 2,574,692 FHLB stock, FRB stock, and other investments 33,522 — — — N/A Accrued interest receivable 10,546 309 1,512 8,725 10,546 I/O strips receivables 305 — 305 — 305 Liabilities: Time deposits $ 153,407 $ — $ 153,740 $ — $ 153,740 Other deposits 3,761,079 — 3,761,079 — 3,761,079 Subordinated debt 39,740 — 40,340 — 40,340 Accrued interest payable 545 — 545 — 545 ` 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 $ 457,370 $ 457,370 $ — $ — $ 457,370 Securities available-for-sale 404,825 120,464 284,361 — 404,825 Securities held-to-maturity 366,560 — 368,107 — 368,107 Loans (including loans held-for-sale), net 2,511,611 — 1,052 2,512,277 2,513,329 FHLB stock, FRB stock, and other investments 29,842 — — — N/A Accrued interest receivable 10,915 446 2,218 8,251 10,915 I/O strips receivables 503 — 503 — 503 Liabilities: Time deposits $ 168,034 $ — $ 158,704 $ — $ 158,704 Other deposits 3,246,734 — 3,246,734 — 3,246,734 Subordinated debt 39,554 — 40,404 — 40,404 Accrued interest payable 707 — 707 — 707 |
Commitments and Loss Continge_2
Commitments and Loss Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Loss Contingencies | |
Schedule of commitments to extend credit | December 31, 2020 2019 Fixed Variable Fixed Variable Rate Rate Total Rate Rate Total (Dollars in thousands) Unused lines of credit and commitments to make loans $ 121,560 $ 970,614 $ 1,092,174 $ 147,372 $ 951,206 $ 1,098,578 Standby letters of credit 3,049 18,970 22,019 11,445 10,615 22,060 $ 124,609 $ 989,584 $ 1,114,193 $ 158,817 $ 961,821 $ 1,120,638 |
Shareholders' Equity and Earn_2
Shareholders' Equity and Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Shareholders' Equity and Earnings Per Share | |
Schedule of reconciliation of factors used in computing basic and diluted earnings per common share | Year Ended December 31, 2020 2019 2018 (Dollars in thousands, except per share amounts) Net income $ 35,299 $ 40,461 $ $ 35,331 Weighted average common shares outstanding for basic earnings per common share 59,478,343 46,684,384 41,469,211 Dilutive potential common shares 690,796 1,221,845 713,728 Shares used in computing diluted earnings per common share 60,169,139 47,906,229 42,182,939 Basic earnings per share $ 0.59 $ 0.87 $ 0.85 Diluted earnings per share $ 0.59 $ 0.84 $ 0.84 |
Capital Requirements (Tables)
Capital Requirements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
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 December 31, 2020 Total Capital $ 483,870 16.5 % $ 307,067 10.5 % (to risk-weighted assets) Tier 1 Capital $ 410,307 14.0 % $ 248,578 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 410,307 14.0 % $ 204,711 7.0 % (to risk-weighted assets) Tier 1 Capital $ 410,307 9.1 % $ 180,281 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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, 2019 Total Capital $ 457,158 14.6 % $ 329,306 10.5 % (to risk-weighted assets) Tier 1 Capital $ 393,432 12.5 % $ 266,581 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 393,432 12.5 % $ 219,538 7.0 % (to risk-weighted assets) Tier 1 Capital $ 393,432 9.7 % $ 161,677 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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 December 31, 2020 Total Capital $ 461,933 15.8 % $ 292,258 10.0 % $ 306,871 10.5 % (to risk-weighted assets) Tier 1 Capital $ 428,109 14.6 % $ 233,806 8.0 % $ 248,419 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 428,109 14.6 % $ 189,968 6.5 % $ 204,580 7.0 % (to risk-weighted assets) Tier 1 Capital $ 428,109 9.5 % $ 225,263 5.0 % $ 180,211 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, 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, 2019 Total Capital $ 435,757 13.9 % $ 313,485 10.0 % $ 329,159 10.5 % (to risk-weighted assets) Tier 1 Capital $ 411,585 13.1 % $ 250,788 8.0 % $ 266,462 8.5 % (to risk-weighted assets) Common Equity Tier 1 Capital $ 411,585 13.1 % $ 203,765 6.5 % $ 219,439 7.0 % (to risk-weighted assets) Tier 1 Capital $ 411,585 10.2 % $ 202,013 5.0 % $ 161,611 4.0 % (to average assets) (1) Includes 2.5% capital conservation buffer, except the Tier 1 Capital to average assets. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue Recognition | |
Schedule of noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606 | Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Noninterest Income In-scope of Topic 606: Service charges and fees on deposit accounts $ 2,859 $ 4,510 $ 4,113 Gain on the disposition of foreclosed assets 791 — — Total noninterest income in-scope of Topic 606 3,650 4,510 4,113 Noninterest Income Out-of-scope of Topic 606 6,272 5,734 5,461 Total noninterest income $ 9,922 $ 10,244 $ 9,574 |
Noninterest Expense (Tables)
Noninterest Expense (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Noninterest Expense | |
Schedule of noninterest expense | Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 50,927 $ 50,754 $ 43,762 Occupancy and equipment 8,018 6,647 5,411 Professional fees 5,338 3,259 1,969 Amortization of intangible assets 3,751 2,739 1,943 Software subscriptions 3,102 2,397 2,343 Data processing 2,770 2,890 1,978 Insurance expense 2,286 1,864 1,685 Supplemental retirement plan cost 1,724 1,240 202 Other 11,595 13,108 16,228 Total noninterest expense $ 89,511 $ 84,898 $ 75,521 The following table presents the merger-related costs by category for the periods indicated: For the Year Ended December 31, December 31, December 31, 2020 2019 2018 (Dollars in thousands) Salaries and employee benefits $ 356 $ 6,580 $ 3,569 Other 2,245 4,500 5,598 Total merger-related costs $ 2,601 $ 11,080 $ 9,167 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Segment Information | |
Schedule of information by operating segment | Year Ended December 31, 2020 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 139,744 $ 10,727 $ 150,471 Intersegment interest allocations 923 (923) — Total interest expense 8,581 — 8,581 Net interest income 132,086 9,804 141,890 Provision for credit losses on loans 12,928 305 13,233 Net interest income after provision 119,158 9,499 128,657 Noninterest income 9,277 645 9,922 Noninterest expense (2) 83,149 6,362 89,511 Intersegment expense allocations 404 (404) — Income before income taxes 45,690 3,378 49,068 Income tax expense 12,770 999 13,769 Net income $ 32,920 $ 2,379 $ 35,299 Total assets $ 4,567,239 $ 66,875 $ 4,634,114 Loans, net of deferred fees $ 2,572,060 $ 47,201 $ 2,619,261 Goodwill $ 154,587 $ 13,044 $ 167,631 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $2,601,000. Year Ended December 31, 2019 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 130,971 $ 11,688 $ 142,659 Intersegment interest allocations 1,182 (1,182) — Total interest expense 10,847 — 10,847 Net interest income 121,306 10,506 131,812 Provision for loan losses 517 329 846 Net interest income after provision 120,789 10,177 130,966 Noninterest income 9,643 601 10,244 Noninterest expense (2) 78,159 6,739 84,898 Intersegment expense allocations 547 (547) — Income before income taxes 52,820 3,492 56,312 Income tax expense 14,819 1,032 15,851 Net income $ 38,001 $ 2,460 $ 40,461 Total assets $ 4,045,801 $ 63,662 $ 4,109,463 Loans, net of deferred fees $ 2,487,864 $ 45,980 $ 2,533,844 Goodwill $ 154,376 $ 13,044 $ 167,420 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $11,080,000. Year Ended December 31, 2018 Banking (1) Factoring Consolidated (Dollars in thousands) Interest income $ 115,147 $ 14,698 $ 129,845 Intersegment interest allocations 1,856 (1,856) — Total interest expense 7,822 — 7,822 Net interest income 109,181 12,842 122,023 Provision for loan losses 7,224 197 7,421 Net interest income after provision 101,957 12,645 114,602 Noninterest income 8,662 912 9,574 Noninterest expense (2) 69,164 6,357 75,521 Intersegment expense allocations 753 (753) — Income before income taxes 42,208 6,447 48,655 Income tax expense 11,418 1,906 13,324 Net income $ 30,790 $ 4,541 $ 35,331 Total assets $ 3,028,721 $ 67,841 $ 3,096,562 Loans, net of deferred fees $ 1,832,815 $ 53,590 $ 1,886,405 Goodwill $ 70,709 $ 13,044 $ 83,753 (1) Includes the holding company’s results of operations. (2) The banking segment’s noninterest expense includes merger-related costs of $9,167,000. |
Parent Company only Condensed_2
Parent Company only Condensed Financial Information (Tables) - HCC (Parent) | 12 Months Ended |
Dec. 31, 2020 | |
Condensed financial statements | |
Schedule of condensed balance sheets | Condensed Balance Sheets December 31, 2020 2019 (Dollars in thousands) Assets Cash and cash equivalents $ 20,378 $ 20,260 Investment in subsidiary bank 595,681 594,868 Other assets 1,881 1,761 Total assets $ 617,940 $ 616,889 Liabilities and Shareholders' Equity Subordinated debt, net of issuance costs $ 39,740 $ 39,554 Other liabilities 311 627 Shareholders' equity 577,889 576,708 Total liabilities and shareholders' equity $ 617,940 $ 616,889 |
Schedule of condensed statements of income | Condensed Statements of Operations Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Dividend from subsidiary bank $ 32,000 $ 22,500 $ 17,000 Other income — 121 — Interest expense (2,321) (2,314) (2,315) Other expenses (3,263) (3,084) (3,030) Income before income taxes and equity in net income of subsidiary bank 26,416 17,223 11,655 Equity in undistributed net income of subsidiary bank 7,255 21,757 22,161 Income tax benefit 1,628 1,481 1,515 Net income $ 35,299 $ 40,461 $ 35,331 |
Schedule of condensed statements of cash flows | Condensed Statements of Cash Flows Year Ended December 31, 2020 2019 2018 (Dollars in thousands) Cash flows from operating activities: Net Income $ 35,299 $ 40,461 $ 35,331 Adjustments to reconcile net income to net cash provided by operations: Amortization of restricted stock awards, net 1,689 1,283 1,109 Equity in undistributed net income of subsidiary bank (7,255) (21,757) (22,161) Net change in other assets and liabilities (250) 12 (64) Net cash provided by operating activities 29,483 19,999 14,215 Cash flows from financing activities: Payment of cash dividends (31,079) (22,723) (18,464) Proceeds from exercise of stock options 1,714 1,626 2,667 Net cash provided by (used in) financing activities (29,365) (21,097) (15,797) Net increase (decrease) in cash and cash equivalents 118 (1,098) (1,582) Cash and cash equivalents, beginning of year 20,260 21,358 22,940 Cash and cash equivalents, end of year $ 20,378 $ 20,260 $ 21,358 |
Quarterly Financial Data (Una_2
Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Quarterly Financial Data (Unaudited) | |
Schedule of the Company's selected unaudited quarterly financial data | Quarter Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 (Dollars in thousands, except per share amounts) Interest income $ 36,145 $ 36,252 $ 37,132 $ 40,942 Interest expense 1,940 2,087 2,192 2,362 Net interest income 34,205 34,165 34,940 38,580 Provision (recapture) for credit losses on loans (1,348) 197 1,114 13,270 Net interest income after provision for credit losses on loans 35,553 33,968 33,826 25,310 Noninterest income 2,056 2,595 2,078 3,193 Noninterest expense (1) 21,557 21,168 21,012 25,774 Income before income taxes 16,052 15,395 14,892 2,729 Income tax expense 4,429 4,198 4,274 868 Net income $ 11,623 $ 11,197 $ 10,618 $ 1,861 Earnings per common share Basic $ 0.19 $ 0.19 $ 0.18 $ 0.03 Diluted $ 0.19 $ 0.19 $ 0.18 $ 0.03 (1) Includes $101,000, $17,000, $59,000, and $2,424,000 pre-tax acquisition costs in the fourth, third, second and first quarters of 2020, respectively, related to the Presidio merger. Quarter Ended 12/31/2019 9/30/2019 6/30/2019 3/31/2019 (Dollars in thousands, except per share amounts) Interest income $ 42,471 $ 33,250 $ 33,489 $ 33,449 Interest expense 3,242 2,625 2,573 2,407 Net interest income 39,229 30,625 30,916 31,042 Provision (credit) for loan losses 3,223 (576) (740) (1,061) Net interest income after provision for loan losses 36,006 31,201 31,656 32,103 Noninterest income 2,393 2,618 2,765 2,468 Noninterest expense (1) 30,626 17,909 18,445 17,918 Income before income taxes 7,773 15,910 15,976 16,653 Income tax expense 2,088 4,633 4,623 4,507 Net income $ 5,685 $ 11,277 $ 11,353 $ 12,146 Earnings per common share Basic $ 0.10 $ 0.26 $ 0.26 $ 0.28 Diluted $ 0.10 $ 0.26 $ 0.26 $ 0.28 (1) Includes $9,879,000, $661,000, and $540,000 pre-tax acquisition costs in the fourth, third, and second quarters of 2019, respectively, related to the Presidio merger. |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and Cash Equivalents (Details) | 12 Months Ended |
Dec. 31, 2020 | |
Cash and Cash Equivalents | |
Period for which federal funds are sold and purchased | 1 day |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Premises and Equipment (Details) | 12 Months Ended |
Dec. 31, 2020building | |
Premises and Equipment | |
Number of buildings owned | 1 |
Building | |
Premises and Equipment | |
Estimated useful life | 40 years |
Furniture | Minimum | |
Premises and Equipment | |
Estimated useful life | 5 days |
Furniture | Maximum | |
Premises and Equipment | |
Estimated useful life | 15 years |
Equipment | Minimum | |
Premises and Equipment | |
Estimated useful life | 5 years |
Equipment | Maximum | |
Premises and Equipment | |
Estimated useful life | 15 years |
Leasehold improvements | Minimum | |
Premises and Equipment | |
Estimated useful life | 5 years |
Leasehold improvements | Maximum | |
Premises and Equipment | |
Estimated useful life | 15 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details) | Oct. 11, 2019 | May 04, 2018 | Aug. 01, 2015 | Oct. 31, 2019 | Nov. 30, 2014 |
United American Bank | |||||
Goodwill and Other Intangible Assets | |||||
Useful life, amortization period | 3 years | ||||
Presidio bank | |||||
Goodwill and Other Intangible Assets | |||||
Useful life, amortization period | 60 months | ||||
Core deposit | Focus | |||||
Goodwill and Other Intangible Assets | |||||
Useful life, amortization period | 10 years | ||||
Below or Above market-value lease | Presidio bank | |||||
Goodwill and Other Intangible Assets | |||||
Useful life, amortization period | 60 months | ||||
Customer relationship and brokered relationship | BVF/CSNK | |||||
Goodwill and Other Intangible Assets | |||||
Useful life, amortization period | 10 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Foreclosed Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Foreclosed Assets | ||
Foreclosed assets | $ 0 | $ 0 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Segment Reporting (Details) | 12 Months Ended |
Dec. 31, 2020segmentcustomer | |
Segment Reporting | |
Number of customers accounting for more than 10 percent of revenue for HBC or the Company | customer | 0 |
Number of Reportable Segments | segment | 2 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Adoption of New Accounting Standards (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Summary of Significant Accounting Policies | |||
Assets | $ 4,634,114 | $ 4,109,463 | $ 3,096,562 |
Liabilities | $ 4,056,225 | $ 3,532,755 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Impact of Adoption (Details) - USD ($) | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Allowance for credit losses on debt securities | $ 54,000 | $ 58,000 | |||
Loans, net of deferred fees | 2,625,987,000 | 31,855,000 | $ 2,534,163,000 | ||
Allowance for credit losses on off-balance sheet credit exposures | 1,078,000 | 679,000 | |||
Allowance for credit losses on loans | 44,400,000 | 31,855,000 | 23,285,000 | $ 27,848,000 | $ 19,658,000 |
Cumulative-effect adjustment as a result of the adoption of ASU 2016-03 | 577,889,000 | 576,708,000 | 367,466,000 | 271,239,000 | |
Retained earnings | 94,899,000 | 96,741,000 | |||
ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (8,570,000) | ||||
Cumulative-effect adjustment as a result of the adoption of ASU 2016-03 | 58,000 | ||||
ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Allowance for credit losses on debt securities | 58,000 | ||||
Loans, net of deferred fees | 8,570,000 | ||||
Allowance for credit losses on off-balance sheet credit exposures | (207,000) | (207,000) | |||
Allowance for credit losses on loans | 8,570,000 | ||||
Cumulative-effect adjustment as a result of the adoption of ASU 2016-03 | 2,359,000 | ||||
Retained earnings | 6,062,000 | ||||
ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 23,285,000 | ||||
Allowance for credit losses on off-balance sheet credit exposures | 886,000 | ||||
HCC (Parent) | |||||
Cumulative-effect adjustment as a result of the adoption of ASU 2016-03 | 577,889,000 | 576,708,000 | |||
Commercial | |||||
Loans, net of deferred fees | 603,345,000 | ||||
Allowance for credit losses on loans | 10,453,000 | $ 17,061,000 | $ 10,608,000 | ||
Commercial | |||||
Loans, net of deferred fees | 846,386,000 | 6,790,000 | 603,345,000 | ||
Allowance for credit losses on loans | 11,587,000 | 6,790,000 | 10,453,000 | ||
Commercial | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | 3,663,000 | ||||
Commercial | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | (3,663,000) | ||||
Commercial | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 10,453,000 | ||||
Commercial | Commercial | |||||
Loans, net of deferred fees | 846,386,000 | 603,345,000 | |||
CRE - owner occupied | |||||
Loans, net of deferred fees | 560,362,000 | 6,994,000 | 548,907,000 | ||
Allowance for credit losses on loans | 8,560,000 | 6,994,000 | 3,825,000 | ||
CRE - owner occupied | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (3,169,000) | ||||
CRE - owner occupied | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | 3,169,000 | ||||
CRE - owner occupied | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 3,825,000 | ||||
CRE - non-owner occupied | |||||
Loans, net of deferred fees | 693,103,000 | 11,672,000 | 767,821,000 | ||
Allowance for credit losses on loans | 16,416,000 | 11,672,000 | 3,760,000 | ||
CRE - non-owner occupied | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (7,912,000) | ||||
CRE - non-owner occupied | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | 7,912,000 | ||||
CRE - non-owner occupied | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 3,760,000 | ||||
Land and construction | |||||
Loans, net of deferred fees | 144,594,000 | 1,458,000 | 147,189,000 | ||
Allowance for credit losses on loans | 2,509,000 | 1,458,000 | 2,621,000 | ||
Land and construction | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | 1,163,000 | ||||
Land and construction | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | (1,163,000) | ||||
Land and construction | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 2,621,000 | ||||
Home equity | |||||
Loans, net of deferred fees | 111,885,000 | 1,321,000 | 151,775,000 | ||
Allowance for credit losses on loans | 1,297,000 | 1,321,000 | 2,244,000 | ||
Home equity | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | 923,000 | ||||
Home equity | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | (923,000) | ||||
Home equity | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 2,244,000 | ||||
Multi-family | |||||
Loans, net of deferred fees | 166,425,000 | 1,253,000 | 180,623,000 | ||
Allowance for credit losses on loans | 2,804,000 | 1,253,000 | 57,000 | ||
Multi-family | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (1,196,000) | ||||
Multi-family | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | 1,196,000 | ||||
Multi-family | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 57,000 | ||||
Residential mortgages | |||||
Loans, net of deferred fees | 85,116,000 | 678,000 | 100,759,000 | ||
Allowance for credit losses on loans | 943,000 | 678,000 | 243,000 | ||
Residential mortgages | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (435,000) | ||||
Residential mortgages | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | 435,000 | ||||
Residential mortgages | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | 243,000 | ||||
Consumer and other | |||||
Loans, net of deferred fees | 18,116,000 | 1,689,000 | 33,744,000 | ||
Allowance for credit losses on loans | 284,000 | $ 1,689,000 | 82,000 | ||
Consumer and other | ASU 2016-03 - Topic 326 | |||||
Allowance for credit losses on loans | (1,607,000) | ||||
Consumer and other | ASU 2016-03 - Topic 326 | Restatement Adjustment | |||||
Loans, net of deferred fees | 1,607,000 | ||||
Consumer and other | ASU 2016-03 - Topic 326 | Previously Reported | |||||
Loans, net of deferred fees | $ 82,000 | ||||
SBA Paycheck Protection Program ("PPP") loans | Commercial | |||||
Loans, net of deferred fees | $ 290,679,000 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (''AOCI'') - Changes in AOCI by Component (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in AOCI by Component | |||
Balance at the beginning of the period, net of taxes | $ (9,778) | ||
Net current period other comprehensive income (loss), net of taxes | (939) | $ 2,603 | $ (3,129) |
Balance at the end of the period, net of taxes | (10,717) | (9,778) | |
Accumulated Other Comprehensive Income / (Loss) | |||
Changes in AOCI by Component | |||
Balance at the beginning of the period, net of taxes | (9,778) | (12,381) | |
Other comprehensive loss before reclassification, net of taxes | (937) | 3,053 | |
Amounts reclassified from other comprehensive income (loss), net of taxes | (2) | (450) | |
Net current period other comprehensive income (loss), net of taxes | (939) | 2,603 | (3,129) |
Balance at the end of the period, net of taxes | (10,717) | (9,778) | (12,381) |
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 | 1,602 | (5,007) | |
Other comprehensive loss before reclassification, net of taxes | 2,522 | 7,075 | |
Amounts reclassified from other comprehensive income (loss), net of taxes | (195) | (466) | |
Net current period other comprehensive income (loss), net of taxes | 2,327 | 6,609 | |
Balance at the end of the period, net of taxes | 3,929 | 1,602 | (5,007) |
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 | 298 | 344 | |
Amounts reclassified from other comprehensive income (loss), net of taxes | (37) | (46) | |
Net current period other comprehensive income (loss), net of taxes | (37) | (46) | |
Balance at the end of the period, net of taxes | 261 | 298 | 344 |
Defined Benefit Pension Plan Items | |||
Changes in AOCI by Component | |||
Balance at the beginning of the period, net of taxes | (11,678) | (7,718) | |
Other comprehensive loss before reclassification, net of taxes | (3,459) | (4,022) | |
Amounts reclassified from other comprehensive income (loss), net of taxes | 230 | 62 | |
Net current period other comprehensive income (loss), net of taxes | (3,229) | (3,960) | |
Balance at the end of the period, net of taxes | $ (14,907) | $ (11,678) | $ (7,718) |
Accumulated Other Comprehensi_4
Accumulated Other Comprehensive Income (''AOCI'') - Amount Reclassified from AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Amount Reclassified from AOCI | |||||||||||
Gain on sales of securities | $ 277 | $ 661 | $ 266 | ||||||||
Interest income on taxable securities | 11,637 | 15,836 | 15,211 | ||||||||
Income tax expense | $ (4,429) | $ (4,198) | $ (4,274) | $ (868) | $ (2,088) | $ (4,633) | $ (4,623) | $ (4,507) | (13,769) | (15,851) | (13,324) |
Net income | $ 11,623 | $ 11,197 | $ 10,618 | $ 1,861 | $ 5,685 | $ 11,277 | $ 11,353 | $ 12,146 | 35,299 | 40,461 | 35,331 |
Unrealized Gains (Losses) on Available-for-Sale Securities and I/O Strips | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net of tax | 195 | 466 | |||||||||
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 | 277 | 661 | 266 | ||||||||
Income tax expense | (82) | (195) | (79) | ||||||||
Net income | 195 | 466 | 187 | ||||||||
Unamortized Unrealized Gain on Available-for-Sale Securities Reclassified to Held-to-Maturity | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net of tax | 37 | 46 | |||||||||
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 | 52 | 65 | 44 | ||||||||
Income tax expense | (15) | (19) | (13) | ||||||||
Net income | 37 | 46 | 31 | ||||||||
Defined Benefit Pension Plan Items | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net of tax | (230) | (62) | |||||||||
Defined Benefit Pension Plan Items | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Other noninterest expense | (327) | (88) | (227) | ||||||||
Income tax benefit | 97 | 26 | 67 | ||||||||
Net of tax | (230) | (62) | (160) | ||||||||
Prior transition obligation | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Other noninterest expense | 60 | 96 | 65 | ||||||||
Actuarial losses | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Other noninterest expense | (387) | (184) | (292) | ||||||||
Accumulated Other Comprehensive Income / (Loss) | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net of tax | 2 | 450 | |||||||||
Accumulated Other Comprehensive Income / (Loss) | Amount Reclassified from AOCI | |||||||||||
Amount Reclassified from AOCI | |||||||||||
Net of tax | $ 2 | $ 450 | $ 58 |
Securities - Amortized Cost and
Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Available-for-sale (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Securities available-for-sale: | ||
Amortized Cost | $ 230,012 | $ 402,537 |
Gross Unrealized Gains | 5,762 | 2,459 |
Gross Unrealized (Losses) | (171) | |
Estimated Fair Value | 235,774 | 404,825 |
Agency mortgage-backed securities | ||
Securities available-for-sale: | ||
Amortized Cost | 170,215 | 283,598 |
Gross Unrealized Gains | 5,111 | 934 |
Gross Unrealized (Losses) | (171) | |
Estimated Fair Value | 175,326 | 284,361 |
U.S. Treasury | ||
Securities available-for-sale: | ||
Amortized Cost | 59,797 | 118,939 |
Gross Unrealized Gains | 651 | 1,525 |
Estimated Fair Value | $ 60,448 | $ 120,464 |
Securities - Amortized Cost a_2
Securities - Amortized Cost and Estimated Fair Value of Securities - Securities Held-to-maturity (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Securities held-to-maturity: | |||
Amortized Cost | $ 297,443 | $ 366,560 | |
Gross Unrealized Gains | 7,714 | 2,519 | |
Gross Unrealized (Losses) | (230) | (972) | |
Allowance for credit losses | (54) | $ (58) | |
Estimated Fair Value | 304,927 | 368,107 | |
Agency mortgage-backed securities | |||
Securities held-to-maturity: | |||
Amortized Cost | 228,652 | 285,344 | |
Gross Unrealized Gains | 6,075 | 1,206 | |
Gross Unrealized (Losses) | (230) | (968) | |
Estimated Fair Value | 234,497 | 285,582 | |
Municipals - exempt from Federal tax | |||
Securities held-to-maturity: | |||
Amortized Cost | 68,791 | 81,216 | |
Gross Unrealized Gains | 1,639 | 1,313 | |
Gross Unrealized (Losses) | (4) | ||
Allowance for credit losses | (54) | ||
Estimated Fair Value | $ 70,430 | $ 82,525 |
Securities - Securities with Un
Securities - Securities with Unrealized Losses - Securities Available-for-sale (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Available-for-sale, Fair Value | |
Less Than 12 Months | $ 100,816 |
12 Months or More | 27,534 |
Total | 128,350 |
Available-for-sale, Unrealized (Losses) | |
Less Than 12 Months | (105) |
12 Months or More | (66) |
Total | (171) |
Agency mortgage-backed securities | |
Available-for-sale, Fair Value | |
Less Than 12 Months | 100,816 |
12 Months or More | 27,534 |
Total | 128,350 |
Available-for-sale, Unrealized (Losses) | |
Less Than 12 Months | (105) |
12 Months or More | (66) |
Total | $ (171) |
Securities - Securities with _2
Securities - Securities with Unrealized Losses - Securities Held-to-maturity (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Held-to-maturity, Fair Value | ||
Less Than 12 Months | $ 30,930,000 | $ 51,616,000 |
12 Months or More | 88,128,000 | |
Total | 30,930,000 | 139,744,000 |
Held-to-maturity, Unrealized (Losses) | ||
Less Than 12 Months | (230,000) | (182,000) |
12 Months or More | (790,000) | |
Total | (230,000) | (972,000) |
Agency mortgage-backed securities | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 30,930,000 | 50,060,000 |
12 Months or More | 88,128,000 | |
Total | 30,930,000 | 138,188,000 |
Held-to-maturity, Unrealized (Losses) | ||
Less Than 12 Months | (230,000) | (178,000) |
12 Months or More | (790,000) | |
Total | $ (230,000) | (968,000) |
Municipals - exempt from Federal tax | ||
Held-to-maturity, Fair Value | ||
Less Than 12 Months | 1,556,000 | |
Total | 1,556,000 | |
Held-to-maturity, Unrealized (Losses) | ||
Less Than 12 Months | (4,000) | |
Total | $ (4,000) |
Securities - Additional Informa
Securities - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2020USD ($)securityitem | Dec. 31, 2019USD ($) | |
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 | item | 407 | |
Number of available for sale securities held | item | 116 | |
Number of held to maturity securities held | item | 291 | |
Number of securities with fair values below amortized cost | item | 5 | |
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | $ | $ 30,930,000 | $ 139,744,000 |
Total unrealized loss for securities less than 12 months | $ | (230,000) | |
Agency mortgage-backed securities | ||
Additional Information | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | $ | $ 30,930,000 | 138,188,000 |
Municipals - exempt from Federal tax | ||
Additional Information | ||
Held-to-maturity Securities, Continuous Unrealized Loss Position, Fair Value | $ | $ 1,556,000 |
Securities - Proceeds from Sale
Securities - Proceeds from Sales of Securities and the Resulting Gains and Losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Proceeds from Sales of Securities and the Resulting Gains and Losses | |||
Proceeds | $ 56,598 | $ 167,551 | $ 94,291 |
Gross gains | $ 277 | 1,094 | 1,243 |
Gross losses | $ (433) | $ (977) |
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 | Dec. 31, 2020 | Dec. 31, 2019 |
Available-for-sale, Amortized Cost | ||
Due 3 months or less | $ 14,988 | |
Due after 3 months through one year | 44,809 | |
Agency mortgage-backed securities | 170,215 | |
Total | 230,012 | $ 402,537 |
Available-for-sale, Estimated Fair Value | ||
Due 3 months or less | 15,039 | |
Due after 3 months through one year | 45,409 | |
Agency mortgage-backed securities | 175,326 | |
Total | $ 235,774 | $ 404,825 |
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 | Dec. 31, 2020 | Dec. 31, 2019 |
Held-to-maturity, Amortized Cost | ||
Due after 3 months through one year | $ 493 | |
Due after one year through five years | 10,390 | |
Due after five years through ten years | 31,509 | |
Due after ten years | 26,399 | |
Agency mortgage-backed securities | 228,652 | |
Total | 297,443 | |
Held-to-maturity, Estimated Fair Value | ||
Due after 3 months through one year | 499 | |
Due after one year through five years | 10,757 | |
Due after five years through ten years | 32,149 | |
Due after ten years | 27,025 | |
Agency mortgage-backed securities | 234,497 | |
Total | $ 304,927 | $ 368,107 |
Securities - Securities Pledged
Securities - Securities Pledged to Secure Public Deposits and for Other Purposes (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
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 | $ 40,238,000 | $ 32,773,000 |
Securities - Roll-forward by ma
Securities - Roll-forward by major security type (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Schedule of Held-to-maturity Securities [Line Items] | ||||
Shareholder's equity | $ 577,889,000 | $ 576,708,000 | $ 367,466,000 | $ 271,239,000 |
Provision (credit) for credit loss | (4,000) | |||
Debt Securities, Held-to-maturity, Allowance for Credit Loss, Ending Balance | 54,000 | |||
ASU 2016-03 - Topic 326 | ||||
Schedule of Held-to-maturity Securities [Line Items] | ||||
Shareholder's equity | 58,000 | |||
Adjustment | ||||
Schedule of Held-to-maturity Securities [Line Items] | ||||
Shareholder's equity | (6,062,000) | |||
Restatement Adjustment | ASU 2016-03 - Topic 326 | ||||
Schedule of Held-to-maturity Securities [Line Items] | ||||
Debt Securities, Held-to-maturity, Allowance for Credit Loss, Beginning Balance | $ 58,000 | |||
Shareholder's equity | $ 2,359,000 |
Loans and Allowance for Credi_3
Loans and Allowance for Credit Losses on Loans - Loans Balance (Details) - USD ($) | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Loans held-for-investment: | |||||
Total loan balance | $ 2,625,987,000 | $ 31,855,000 | $ 2,534,163,000 | ||
Deferred loan fees, net | (6,726,000) | (319,000) | |||
Loans, net of deferred fees | 2,619,261,000 | 2,533,844,000 | $ 1,886,405,000 | ||
Allowance for credit losses on loans(1) | (44,400,000) | (31,855,000) | (23,285,000) | (27,848,000) | $ (19,658,000) |
Loans, net | 2,574,861,000 | 2,510,559,000 | |||
Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | 603,345,000 | ||||
Allowance for credit losses on loans(1) | (10,453,000) | (17,061,000) | (10,608,000) | ||
Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 1,897,074,000 | ||||
Allowance for credit losses on loans(1) | (12,750,000) | (10,671,000) | (8,950,000) | ||
Consumer | |||||
Loans held-for-investment: | |||||
Total loan balance | 33,744,000 | ||||
Allowance for credit losses on loans(1) | (82,000) | $ (116,000) | $ (100,000) | ||
Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | 846,386,000 | 6,790,000 | 603,345,000 | ||
Allowance for credit losses on loans(1) | (11,587,000) | (6,790,000) | (10,453,000) | ||
Commercial | Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | 846,386,000 | 603,345,000 | |||
SBA Paycheck Protection Program ("PPP") loans | Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | 290,679,000 | ||||
CRE - owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 560,362,000 | 6,994,000 | 548,907,000 | ||
Allowance for credit losses on loans(1) | (8,560,000) | (6,994,000) | (3,825,000) | ||
CRE - owner occupied | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 560,362,000 | 548,907,000 | |||
CRE - non-owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 693,103,000 | 11,672,000 | 767,821,000 | ||
Allowance for credit losses on loans(1) | (16,416,000) | (11,672,000) | (3,760,000) | ||
CRE - non-owner occupied | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 693,103,000 | 767,821,000 | |||
Land and construction | |||||
Loans held-for-investment: | |||||
Total loan balance | 144,594,000 | 1,458,000 | 147,189,000 | ||
Allowance for credit losses on loans(1) | (2,509,000) | (1,458,000) | (2,621,000) | ||
Land and construction | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 144,594,000 | 147,189,000 | |||
Home equity | |||||
Loans held-for-investment: | |||||
Total loan balance | 111,885,000 | 1,321,000 | 151,775,000 | ||
Allowance for credit losses on loans(1) | (1,297,000) | (1,321,000) | (2,244,000) | ||
Home equity | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 111,885,000 | 151,775,000 | |||
Multi-family | |||||
Loans held-for-investment: | |||||
Total loan balance | 166,425,000 | 1,253,000 | 180,623,000 | ||
Allowance for credit losses on loans(1) | (2,804,000) | (1,253,000) | (57,000) | ||
Multi-family | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 166,425,000 | 180,623,000 | |||
Residential mortgages | |||||
Loans held-for-investment: | |||||
Total loan balance | 85,116,000 | 678,000 | 100,759,000 | ||
Allowance for credit losses on loans(1) | (943,000) | (678,000) | (243,000) | ||
Residential mortgages | Real estate | |||||
Loans held-for-investment: | |||||
Total loan balance | 85,116,000 | 100,759,000 | |||
Consumer and other | |||||
Loans held-for-investment: | |||||
Total loan balance | 18,116,000 | 1,689,000 | 33,744,000 | ||
Allowance for credit losses on loans(1) | (284,000) | $ (1,689,000) | (82,000) | ||
Consumer and other | Consumer | |||||
Loans held-for-investment: | |||||
Total loan balance | $ 18,116,000 | 33,744,000 | |||
ASU 2016-03 - Topic 326 | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 8,570,000 | ||||
ASU 2016-03 - Topic 326 | Commercial | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | (3,663,000) | ||||
ASU 2016-03 - Topic 326 | CRE - owner occupied | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 3,169,000 | ||||
ASU 2016-03 - Topic 326 | CRE - non-owner occupied | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 7,912,000 | ||||
ASU 2016-03 - Topic 326 | Land and construction | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | (1,163,000) | ||||
ASU 2016-03 - Topic 326 | Home equity | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | (923,000) | ||||
ASU 2016-03 - Topic 326 | Multi-family | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 1,196,000 | ||||
ASU 2016-03 - Topic 326 | Residential mortgages | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 435,000 | ||||
ASU 2016-03 - Topic 326 | Consumer and other | |||||
Loans held-for-investment: | |||||
Allowance for credit losses on loans(1) | 1,607,000 | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | |||||
Loans held-for-investment: | |||||
Total loan balance | 8,570,000 | ||||
Allowance for credit losses on loans(1) | (8,570,000) | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | (3,663,000) | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | CRE - owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 3,169,000 | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | CRE - non-owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 7,912,000 | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Land and construction | |||||
Loans held-for-investment: | |||||
Total loan balance | (1,163,000) | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Home equity | |||||
Loans held-for-investment: | |||||
Total loan balance | (923,000) | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Multi-family | |||||
Loans held-for-investment: | |||||
Total loan balance | 1,196,000 | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Residential mortgages | |||||
Loans held-for-investment: | |||||
Total loan balance | 435,000 | ||||
Restatement Adjustment | ASU 2016-03 - Topic 326 | Consumer and other | |||||
Loans held-for-investment: | |||||
Total loan balance | 1,607,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | |||||
Loans held-for-investment: | |||||
Total loan balance | 23,285,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Commercial | |||||
Loans held-for-investment: | |||||
Total loan balance | 10,453,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | CRE - owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 3,825,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | CRE - non-owner occupied | |||||
Loans held-for-investment: | |||||
Total loan balance | 3,760,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Land and construction | |||||
Loans held-for-investment: | |||||
Total loan balance | 2,621,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Home equity | |||||
Loans held-for-investment: | |||||
Total loan balance | 2,244,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Multi-family | |||||
Loans held-for-investment: | |||||
Total loan balance | 57,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Residential mortgages | |||||
Loans held-for-investment: | |||||
Total loan balance | 243,000 | ||||
Previously Reported | ASU 2016-03 - Topic 326 | Consumer and other | |||||
Loans held-for-investment: | |||||
Total loan balance | $ 82,000 |
Loans and Allowance for Credi_4
Loans and Allowance for Credit Losses on Loans - Changes in the Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | $ 23,285 | $ 27,848 | $ 23,285 | $ 27,848 | $ 19,658 | ||||||
Charge-offs | (1,880) | (6,623) | (2,026) | ||||||||
Recoveries | 1,192 | 1,214 | 2,795 | ||||||||
Net (charge-offs) recoveries | (688) | (5,409) | 769 | ||||||||
Provision (recapture) for credit losses on loans | $ (1,348) | $ 197 | $ 1,114 | 13,270 | $ 3,223 | $ (576) | $ (740) | (1,061) | 13,233 | 846 | 7,421 |
End of period balance | 44,400 | 23,285 | 44,400 | 23,285 | 27,848 | ||||||
ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | (8,570) | (8,570) | |||||||||
End of period balance | (8,570) | (8,570) | |||||||||
Commercial | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 10,453 | 17,061 | 10,453 | 17,061 | 10,608 | ||||||
Charge-offs | (6,609) | (2,002) | |||||||||
Recoveries | 1,045 | 2,645 | |||||||||
Net (charge-offs) recoveries | (5,564) | 643 | |||||||||
Provision (recapture) for credit losses on loans | (1,044) | 5,810 | |||||||||
End of period balance | 10,453 | 10,453 | 17,061 | ||||||||
Real estate | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 12,750 | 10,671 | 12,750 | 10,671 | 8,950 | ||||||
Recoveries | 169 | 150 | |||||||||
Net (charge-offs) recoveries | 169 | 150 | |||||||||
Provision (recapture) for credit losses on loans | 1,910 | 1,571 | |||||||||
End of period balance | 12,750 | 12,750 | 10,671 | ||||||||
Consumer | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 82 | $ 116 | 82 | 116 | 100 | ||||||
Charge-offs | (14) | (24) | |||||||||
Net (charge-offs) recoveries | (14) | (24) | |||||||||
Provision (recapture) for credit losses on loans | (20) | 40 | |||||||||
End of period balance | 82 | 82 | $ 116 | ||||||||
Commercial | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 10,453 | 10,453 | |||||||||
Charge-offs | (1,776) | ||||||||||
Recoveries | 998 | ||||||||||
Net (charge-offs) recoveries | (778) | ||||||||||
Provision (recapture) for credit losses on loans | 5,575 | ||||||||||
End of period balance | 11,587 | 10,453 | 11,587 | 10,453 | |||||||
Commercial | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 3,663 | 3,663 | |||||||||
End of period balance | 3,663 | 3,663 | |||||||||
CRE - owner occupied | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 3,825 | 3,825 | |||||||||
Recoveries | 1 | ||||||||||
Net (charge-offs) recoveries | 1 | ||||||||||
Provision (recapture) for credit losses on loans | 1,565 | ||||||||||
End of period balance | 8,560 | 3,825 | 8,560 | 3,825 | |||||||
CRE - owner occupied | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | (3,169) | (3,169) | |||||||||
End of period balance | (3,169) | (3,169) | |||||||||
CRE - non-owner occupied | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 3,760 | 3,760 | |||||||||
Provision (recapture) for credit losses on loans | 4,744 | ||||||||||
End of period balance | 16,416 | 3,760 | 16,416 | 3,760 | |||||||
CRE - non-owner occupied | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | (7,912) | (7,912) | |||||||||
End of period balance | (7,912) | (7,912) | |||||||||
Land and construction | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 2,621 | 2,621 | |||||||||
Recoveries | 70 | ||||||||||
Net (charge-offs) recoveries | 70 | ||||||||||
Provision (recapture) for credit losses on loans | 981 | ||||||||||
End of period balance | 2,509 | 2,621 | 2,509 | 2,621 | |||||||
Land and construction | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 1,163 | 1,163 | |||||||||
End of period balance | 1,163 | 1,163 | |||||||||
Home equity | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 2,244 | 2,244 | |||||||||
Recoveries | 93 | ||||||||||
Net (charge-offs) recoveries | 93 | ||||||||||
Provision (recapture) for credit losses on loans | (117) | ||||||||||
End of period balance | 1,297 | 2,244 | 1,297 | 2,244 | |||||||
Home equity | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 923 | 923 | |||||||||
End of period balance | 923 | 923 | |||||||||
Multi-family | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 57 | 57 | |||||||||
Provision (recapture) for credit losses on loans | 1,551 | ||||||||||
End of period balance | 2,804 | 57 | 2,804 | 57 | |||||||
Multi-family | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | (1,196) | (1,196) | |||||||||
End of period balance | (1,196) | (1,196) | |||||||||
Residential mortgages | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 243 | 243 | |||||||||
Provision (recapture) for credit losses on loans | 265 | ||||||||||
End of period balance | 943 | 243 | 943 | 243 | |||||||
Residential mortgages | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | (435) | (435) | |||||||||
End of period balance | (435) | (435) | |||||||||
Consumer and other | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | 82 | 82 | |||||||||
Charge-offs | (104) | ||||||||||
Recoveries | 30 | ||||||||||
Net (charge-offs) recoveries | (74) | ||||||||||
Provision (recapture) for credit losses on loans | (1,331) | ||||||||||
End of period balance | $ 284 | 82 | 284 | 82 | |||||||
Consumer and other | ASU 2016-03 - Topic 326 | |||||||||||
Changes in the Allowance for Loan Losses | |||||||||||
Beginning of period balance | $ (1,607) | $ (1,607) | |||||||||
End of period balance | $ (1,607) | $ (1,607) |
Loans and Allowance for Credi_5
Loans and Allowance for Credit Losses on 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 | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 | Dec. 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 | $ 1,835 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 21,450 | ||||
Total allowance balance | $ 44,400 | $ 31,855 | 23,285 | $ 27,848 | $ 19,658 |
Loans, Individually evaluated for impairment | 10,264 | ||||
Loans, Collectively evaluated for impairment | 2,523,899 | ||||
Total loan balance | $ 2,625,987 | $ 31,855 | 2,534,163 | ||
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 | 1,835 | ||||
Allowance for loan losses, Collectively evaluated for impairment | 8,618 | ||||
Total allowance balance | 10,453 | 17,061 | 10,608 | ||
Loans, Individually evaluated for impairment | 4,810 | ||||
Loans, Collectively evaluated for impairment | 598,535 | ||||
Total loan balance | 603,345 | ||||
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, Collectively evaluated for impairment | 12,750 | ||||
Total allowance balance | 12,750 | 10,671 | 8,950 | ||
Loans, Individually evaluated for impairment | 5,454 | ||||
Loans, Collectively evaluated for impairment | 1,891,620 | ||||
Total loan balance | 1,897,074 | ||||
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 | 82 | ||||
Total allowance balance | 82 | $ 116 | $ 100 | ||
Loans, Collectively evaluated for impairment | 33,744 | ||||
Total loan balance | $ 33,744 |
Loans and Allowance for Credi_6
Loans and Allowance for Credit Losses on Loans - Nonaccrual Status and Loans Past Due Over 90 Days (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Nonperforming Loans by Class | ||
Nonaccrual Financing Receivable, no special allowance | $ 5,814 | |
Nonaccrual Financing Receivable, with special allowance | 1,974 | |
Nonaccrual loans | $ 8,675 | |
Loans Over 90 Days Past Due and Still Accruing | 81 | 1,153 |
Total | 7,869 | 9,828 |
Commercial | ||
Nonperforming Loans by Class | ||
Nonaccrual Financing Receivable, no special allowance | 752 | |
Nonaccrual Financing Receivable, with special allowance | 1,974 | |
Nonaccrual loans | 3,444 | |
Loans Over 90 Days Past Due and Still Accruing | 81 | 1,153 |
Total | 2,807 | 4,597 |
CRE | ||
Nonperforming Loans by Class | ||
Nonaccrual loans | 5,094 | |
Total | 5,094 | |
CRE - owner occupied | ||
Nonperforming Loans by Class | ||
Nonaccrual Financing Receivable, no special allowance | 3,706 | |
Total | 3,706 | |
Home equity | ||
Nonperforming Loans by Class | ||
Nonaccrual Financing Receivable, no special allowance | 949 | |
Nonaccrual loans | 137 | |
Total | 949 | $ 137 |
Consumer and other | ||
Nonperforming Loans by Class | ||
Nonaccrual Financing Receivable, no special allowance | 407 | |
Total | $ 407 |
Loans and Allowance for Credi_7
Loans and Allowance for Credit Losses on Loans - Aging of Past Due Loans by Class of Loans (Details) - USD ($) | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | $ 6,229,000 | $ 15,315,000 | |
Current | 2,619,758,000 | 2,518,848,000 | |
Total loan balance | 2,625,987,000 | $ 31,855,000 | 2,534,163,000 |
30-59 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 4,657,000 | 4,770,000 | |
60-89 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 744,000 | 2,234,000 | |
90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 828,000 | 8,311,000 | |
Commercial | |||
Aging of Past Due Loans by Class of Loans | |||
Total loan balance | 603,345,000 | ||
Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Total loan balance | 1,897,074,000 | ||
Consumer | |||
Aging of Past Due Loans by Class of Loans | |||
Total loan balance | 33,744,000 | ||
Commercial | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 10,084,000 | ||
Current | 593,261,000 | ||
Total loan balance | 846,386,000 | 6,790,000 | 603,345,000 |
Commercial | 30-59 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 4,770,000 | ||
Commercial | 60-89 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 2,097,000 | ||
Commercial | 90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 3,217,000 | ||
Commercial | Commercial | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 4,175,000 | ||
Current | 842,211,000 | ||
Total loan balance | 846,386,000 | 603,345,000 | |
Commercial | Commercial | 30-59 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 3,524,000 | ||
Commercial | Commercial | 60-89 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 259,000 | ||
Commercial | Commercial | 90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 392,000 | ||
CRE - owner occupied | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 5,094,000 | ||
Current | 543,813,000 | ||
Total loan balance | 560,362,000 | 6,994,000 | 548,907,000 |
CRE - owner occupied | 90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 5,094,000 | ||
CRE - owner occupied | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 1,162,000 | ||
Current | 559,200,000 | ||
Total loan balance | 560,362,000 | 548,907,000 | |
CRE - owner occupied | Real estate | 30-59 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 1,133,000 | ||
CRE - owner occupied | Real estate | 90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 29,000 | ||
CRE - non-owner occupied | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 767,821,000 | ||
Total loan balance | 693,103,000 | 11,672,000 | 767,821,000 |
CRE - non-owner occupied | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 485,000 | ||
Current | 692,618,000 | ||
Total loan balance | 693,103,000 | 767,821,000 | |
CRE - non-owner occupied | Real estate | 60-89 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 485,000 | ||
Land and construction | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 147,189,000 | ||
Total loan balance | 144,594,000 | 1,458,000 | 147,189,000 |
Land and construction | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 144,594,000 | ||
Total loan balance | 144,594,000 | 147,189,000 | |
Home equity | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 137,000 | ||
Current | 151,638,000 | ||
Total loan balance | 111,885,000 | 1,321,000 | 151,775,000 |
Home equity | 60-89 Days Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 137,000 | ||
Home equity | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 111,885,000 | ||
Total loan balance | 111,885,000 | 151,775,000 | |
Multi-family | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 180,623,000 | ||
Total loan balance | 166,425,000 | 1,253,000 | 180,623,000 |
Multi-family | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 166,425,000 | ||
Total loan balance | 166,425,000 | 180,623,000 | |
Residential mortgages | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 100,759,000 | ||
Total loan balance | 85,116,000 | 678,000 | 100,759,000 |
Residential mortgages | Real estate | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 85,116,000 | ||
Total loan balance | 85,116,000 | 100,759,000 | |
Consumer and other | |||
Aging of Past Due Loans by Class of Loans | |||
Current | 33,744,000 | ||
Total loan balance | 18,116,000 | $ 1,689,000 | 33,744,000 |
Consumer and other | Consumer | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | 407,000 | ||
Current | 17,709,000 | ||
Total loan balance | 18,116,000 | $ 33,744,000 | |
Consumer and other | Consumer | 90 Days or Greater Past Due | |||
Aging of Past Due Loans by Class of Loans | |||
Total Past Due | $ 407,000 |
Loans and Allowance for Credi_8
Loans and Allowance for Credit Losses on Loans - Aging of Past Due Loans by Class of Loans - Additional Information (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Aging of Past Due Loans by Class of Loans | ||
Past due loans 30 day or greater | $ 6,229,000 | $ 15,315,000 |
Nonaccrual loans | 8,675,000 | |
30 days or greater past due | ||
Aging of Past Due Loans by Class of Loans | ||
Nonaccrual loans | 1,918,000 | 7,413,000 |
Less than 30 days past due | ||
Aging of Past Due Loans by Class of Loans | ||
Nonaccrual loans | $ 5,870,000 | 1,262,000 |
Commercial | ||
Aging of Past Due Loans by Class of Loans | ||
Past due loans 30 day or greater | 10,084,000 | |
Nonaccrual loans | 3,444,000 | |
CRE | ||
Aging of Past Due Loans by Class of Loans | ||
Nonaccrual loans | 5,094,000 | |
CRE - owner occupied | ||
Aging of Past Due Loans by Class of Loans | ||
Past due loans 30 day or greater | 5,094,000 | |
Home equity | ||
Aging of Past Due Loans by Class of Loans | ||
Past due loans 30 day or greater | 137,000 | |
Nonaccrual loans | $ 137,000 |
Loans and Allowance for Credi_9
Loans and Allowance for Credit Losses on Loans - Credit Quality Indicators (Details) - USD ($) | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Loans | |||
2020 | $ 979,432,000 | ||
2019 | 309,922,000 | ||
2018 | 191,961,000 | ||
2017 | 202,725,000 | ||
2016 | 163,654,000 | ||
2015 and Prior | 326,918,000 | ||
Revolving | 451,375,000 | ||
Total loan balance | 2,625,987,000 | $ 31,855,000 | $ 2,534,163,000 |
Balance to report | 2,574,861,000 | 2,510,559,000 | |
Loan classified as loss | |||
Loans | |||
Balance to report | 0 | 0 | |
Commercial | |||
Loans | |||
2020 | 453,231,000 | ||
2019 | 34,122,000 | ||
2018 | 22,510,000 | ||
2017 | 15,551,000 | ||
2016 | 10,565,000 | ||
2015 and Prior | 8,561,000 | ||
Revolving | 301,846,000 | ||
Total loan balance | 846,386,000 | 6,790,000 | 603,345,000 |
Commercial | Pass [Member] | |||
Loans | |||
2020 | 431,369,000 | ||
2019 | 33,350,000 | ||
2018 | 21,154,000 | ||
2017 | 13,840,000 | ||
2016 | 7,341,000 | ||
2015 and Prior | 8,292,000 | ||
Revolving | 296,286,000 | ||
Total loan balance | 811,632,000 | ||
Commercial | Special Mention [Member] | |||
Loans | |||
2020 | 15,720,000 | ||
2019 | 716,000 | ||
2018 | 1,301,000 | ||
2017 | 953,000 | ||
2016 | 713,000 | ||
2015 and Prior | 170,000 | ||
Revolving | 1,937,000 | ||
Total loan balance | 21,510,000 | ||
Commercial | Substandard [Member] | |||
Loans | |||
2020 | 4,036,000 | ||
2018 | 19,000 | ||
2017 | 758,000 | ||
2016 | 2,396,000 | ||
2015 and Prior | 73,000 | ||
Revolving | 3,236,000 | ||
Total loan balance | 10,518,000 | ||
Commercial | Substandard-Nonaccrual [Member] | |||
Loans | |||
2020 | 2,106,000 | ||
2019 | 56,000 | ||
2018 | 36,000 | ||
2016 | 115,000 | ||
2015 and Prior | 26,000 | ||
Revolving | 387,000 | ||
Total loan balance | 2,726,000 | ||
CRE - owner occupied | |||
Loans | |||
2020 | 177,614,000 | ||
2019 | 75,632,000 | ||
2018 | 72,596,000 | ||
2017 | 55,442,000 | ||
2016 | 50,716,000 | ||
2015 and Prior | 112,398,000 | ||
Revolving | 15,964,000 | ||
Total loan balance | 560,362,000 | 6,994,000 | 548,907,000 |
CRE - owner occupied | Pass [Member] | |||
Loans | |||
2020 | 168,224,000 | ||
2019 | 73,064,000 | ||
2018 | 68,068,000 | ||
2017 | 51,705,000 | ||
2016 | 50,716,000 | ||
2015 and Prior | 109,350,000 | ||
Revolving | 15,964,000 | ||
Total loan balance | 537,091,000 | ||
CRE - owner occupied | Special Mention [Member] | |||
Loans | |||
2020 | 3,151,000 | ||
2019 | 2,568,000 | ||
2018 | 4,128,000 | ||
2017 | 783,000 | ||
2015 and Prior | 2,569,000 | ||
Total loan balance | 13,199,000 | ||
CRE - owner occupied | Substandard [Member] | |||
Loans | |||
2020 | 2,561,000 | ||
2018 | 400,000 | ||
2017 | 2,954,000 | ||
2015 and Prior | 451,000 | ||
Total loan balance | 6,366,000 | ||
CRE - owner occupied | Substandard-Nonaccrual [Member] | |||
Loans | |||
2020 | 3,678,000 | ||
2015 and Prior | 28,000 | ||
Total loan balance | 3,706,000 | ||
CRE - non-owner occupied | |||
Loans | |||
2020 | 181,646,000 | ||
2019 | 128,361,000 | ||
2018 | 72,764,000 | ||
2017 | 99,816,000 | ||
2016 | 57,907,000 | ||
2015 and Prior | 150,683,000 | ||
Revolving | 1,926,000 | ||
Total loan balance | 693,103,000 | 11,672,000 | 767,821,000 |
CRE - non-owner occupied | Pass [Member] | |||
Loans | |||
2020 | 166,550,000 | ||
2019 | 128,361,000 | ||
2018 | 68,796,000 | ||
2017 | 99,816,000 | ||
2016 | 57,422,000 | ||
2015 and Prior | 150,683,000 | ||
Revolving | 1,926,000 | ||
Total loan balance | 673,554,000 | ||
CRE - non-owner occupied | Special Mention [Member] | |||
Loans | |||
2020 | 11,930,000 | ||
2018 | 2,557,000 | ||
Total loan balance | 14,487,000 | ||
CRE - non-owner occupied | Substandard [Member] | |||
Loans | |||
2020 | 3,166,000 | ||
2018 | 1,411,000 | ||
2016 | 485,000 | ||
Total loan balance | 5,062,000 | ||
Land and construction | |||
Loans | |||
2020 | 116,291,000 | ||
2019 | 22,054,000 | ||
2015 and Prior | 1,343,000 | ||
Revolving | 4,906,000 | ||
Total loan balance | 144,594,000 | 1,458,000 | 147,189,000 |
Land and construction | Pass [Member] | |||
Loans | |||
2020 | 114,932,000 | ||
2019 | 22,054,000 | ||
2015 and Prior | 1,343,000 | ||
Revolving | 4,906,000 | ||
Total loan balance | 143,235,000 | ||
Land and construction | Substandard [Member] | |||
Loans | |||
2020 | 1,359,000 | ||
Total loan balance | 1,359,000 | ||
Home equity | |||
Loans | |||
2020 | 383,000 | ||
2018 | 74,000 | ||
2015 and Prior | 143,000 | ||
Revolving | 111,285,000 | ||
Total loan balance | 111,885,000 | 1,321,000 | 151,775,000 |
Home equity | Pass [Member] | |||
Loans | |||
2020 | 266,000 | ||
2018 | 74,000 | ||
Revolving | 109,848,000 | ||
Total loan balance | 110,188,000 | ||
Home equity | Substandard [Member] | |||
Loans | |||
2015 and Prior | 143,000 | ||
Revolving | 605,000 | ||
Total loan balance | 748,000 | ||
Home equity | Substandard-Nonaccrual [Member] | |||
Loans | |||
2020 | 117,000 | ||
Revolving | 832,000 | ||
Total loan balance | 949,000 | ||
Multi-family | |||
Loans | |||
2020 | 32,370,000 | ||
2019 | 39,183,000 | ||
2018 | 17,248,000 | ||
2017 | 24,572,000 | ||
2016 | 16,235,000 | ||
2015 and Prior | 35,937,000 | ||
Revolving | 880,000 | ||
Total loan balance | 166,425,000 | 1,253,000 | 180,623,000 |
Multi-family | Pass [Member] | |||
Loans | |||
2020 | 31,481,000 | ||
2019 | 39,183,000 | ||
2018 | 17,248,000 | ||
2017 | 24,572,000 | ||
2016 | 16,235,000 | ||
2015 and Prior | 30,751,000 | ||
Revolving | 880,000 | ||
Total loan balance | 160,350,000 | ||
Multi-family | Special Mention [Member] | |||
Loans | |||
2015 and Prior | 5,186,000 | ||
Total loan balance | 5,186,000 | ||
Multi-family | Substandard [Member] | |||
Loans | |||
2020 | 889,000 | ||
Total loan balance | 889,000 | ||
Residential mortgages | |||
Loans | |||
2020 | 17,887,000 | ||
2019 | 10,048,000 | ||
2018 | 4,876,000 | ||
2017 | 7,324,000 | ||
2016 | 28,115,000 | ||
2015 and Prior | 16,866,000 | ||
Total loan balance | 85,116,000 | 678,000 | 100,759,000 |
Residential mortgages | Pass [Member] | |||
Loans | |||
2020 | 12,798,000 | ||
2019 | 10,048,000 | ||
2018 | 3,246,000 | ||
2017 | 7,324,000 | ||
2016 | 28,115,000 | ||
2015 and Prior | 15,568,000 | ||
Total loan balance | 77,099,000 | ||
Residential mortgages | Special Mention [Member] | |||
Loans | |||
2020 | 5,089,000 | ||
2018 | 1,630,000 | ||
Total loan balance | 6,719,000 | ||
Residential mortgages | Substandard [Member] | |||
Loans | |||
2015 and Prior | 1,298,000 | ||
Total loan balance | 1,298,000 | ||
Consumer and other | |||
Loans | |||
2020 | 10,000 | ||
2019 | 522,000 | ||
2018 | 1,893,000 | ||
2017 | 20,000 | ||
2016 | 116,000 | ||
2015 and Prior | 987,000 | ||
Revolving | 14,568,000 | ||
Total loan balance | 18,116,000 | $ 1,689,000 | $ 33,744,000 |
Consumer and other | Pass [Member] | |||
Loans | |||
2020 | 10,000 | ||
2019 | 522,000 | ||
2018 | 1,486,000 | ||
2017 | 20,000 | ||
2016 | 116,000 | ||
2015 and Prior | 987,000 | ||
Revolving | 14,568,000 | ||
Total loan balance | 17,709,000 | ||
Consumer and other | Substandard-Nonaccrual [Member] | |||
Loans | |||
2018 | 407,000 | ||
Total loan balance | 407,000 | ||
Risk Grades [Member] | |||
Loans | |||
2020 | 979,432,000 | ||
2019 | 309,922,000 | ||
2018 | 191,961,000 | ||
2017 | 202,725,000 | ||
2016 | 163,654,000 | ||
2015 and Prior | 326,918,000 | ||
Revolving | 451,375,000 | ||
Total loan balance | 2,625,987,000 | ||
Risk Grades [Member] | Pass [Member] | |||
Loans | |||
2020 | 925,630,000 | ||
2019 | 306,582,000 | ||
2018 | 180,072,000 | ||
2017 | 197,277,000 | ||
2016 | 159,945,000 | ||
2015 and Prior | 316,974,000 | ||
Revolving | 444,378,000 | ||
Total loan balance | 2,530,858,000 | ||
Risk Grades [Member] | Special Mention [Member] | |||
Loans | |||
2020 | 35,890,000 | ||
2019 | 3,284,000 | ||
2018 | 9,616,000 | ||
2017 | 1,736,000 | ||
2016 | 713,000 | ||
2015 and Prior | 7,925,000 | ||
Revolving | 1,937,000 | ||
Total loan balance | 61,101,000 | ||
Risk Grades [Member] | Substandard [Member] | |||
Loans | |||
2020 | 12,011,000 | ||
2018 | 1,830,000 | ||
2017 | 3,712,000 | ||
2016 | 2,881,000 | ||
2015 and Prior | 1,965,000 | ||
Revolving | 3,841,000 | ||
Total loan balance | 26,240,000 | ||
Risk Grades [Member] | Substandard-Nonaccrual [Member] | |||
Loans | |||
2020 | 5,901,000 | ||
2019 | 56,000 | ||
2018 | 443,000 | ||
2016 | 115,000 | ||
2015 and Prior | 54,000 | ||
Revolving | 1,219,000 | ||
Total loan balance | $ 7,788,000 |
Loans and Allowance for Cred_10
Loans and Allowance for Credit Losses on Loans - Credit Quality Classification (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2020 | Dec. 31, 2019 |
Loans | |||
Total | $ 2,625,987 | $ 31,855 | $ 2,534,163 |
Nonclassified | |||
Loans | |||
Total | 2,501,584 | ||
Classified | |||
Loans | |||
Total | 32,579 | ||
Commercial | |||
Loans | |||
Total | 603,345 | ||
Real estate | |||
Loans | |||
Total | 1,897,074 | ||
Consumer | |||
Loans | |||
Total | 33,744 | ||
Commercial | |||
Loans | |||
Total | 846,386 | 6,790 | 603,345 |
Commercial | Commercial | |||
Loans | |||
Total | 846,386 | 603,345 | |
Commercial | Commercial | Nonclassified | |||
Loans | |||
Total | 599,143 | ||
Commercial | Commercial | Classified | |||
Loans | |||
Total | 4,202 | ||
CRE - owner occupied | |||
Loans | |||
Total | 560,362 | 6,994 | 548,907 |
CRE - owner occupied | Real estate | |||
Loans | |||
Total | 560,362 | 548,907 | |
CRE - owner occupied | Real estate | Nonclassified | |||
Loans | |||
Total | 538,229 | ||
CRE - owner occupied | Real estate | Classified | |||
Loans | |||
Total | 10,678 | ||
CRE - non-owner occupied | |||
Loans | |||
Total | 693,103 | 11,672 | 767,821 |
CRE - non-owner occupied | Real estate | |||
Loans | |||
Total | 693,103 | 767,821 | |
CRE - non-owner occupied | Real estate | Nonclassified | |||
Loans | |||
Total | 761,801 | ||
CRE - non-owner occupied | Real estate | Classified | |||
Loans | |||
Total | 6,020 | ||
Land and construction | |||
Loans | |||
Total | 144,594 | 1,458 | 147,189 |
Land and construction | Real estate | |||
Loans | |||
Total | 144,594 | 147,189 | |
Land and construction | Real estate | Nonclassified | |||
Loans | |||
Total | 144,108 | ||
Land and construction | Real estate | Classified | |||
Loans | |||
Total | 3,081 | ||
Home equity | |||
Loans | |||
Total | 111,885 | 1,321 | 151,775 |
Home equity | Real estate | |||
Loans | |||
Total | 111,885 | 151,775 | |
Home equity | Real estate | Nonclassified | |||
Loans | |||
Total | 149,131 | ||
Home equity | Real estate | Classified | |||
Loans | |||
Total | 2,644 | ||
Multi-family | |||
Loans | |||
Total | 166,425 | 1,253 | 180,623 |
Multi-family | Real estate | |||
Loans | |||
Total | 166,425 | 180,623 | |
Multi-family | Real estate | Nonclassified | |||
Loans | |||
Total | 180,623 | ||
Residential mortgages | |||
Loans | |||
Total | 85,116 | 678 | 100,759 |
Residential mortgages | Real estate | |||
Loans | |||
Total | 85,116 | 100,759 | |
Residential mortgages | Real estate | Nonclassified | |||
Loans | |||
Total | 100,262 | ||
Residential mortgages | Real estate | Classified | |||
Loans | |||
Total | 497 | ||
Consumer and other | |||
Loans | |||
Total | 18,116 | $ 1,689 | 33,744 |
Consumer and other | Consumer | |||
Loans | |||
Total | $ 18,116 | 33,744 | |
Consumer and other | Consumer | Nonclassified | |||
Loans | |||
Total | 28,287 | ||
Consumer and other | Consumer | Classified | |||
Loans | |||
Total | $ 5,457 |
Loans and Allowance for Cred_11
Loans and Allowance for Credit Losses on Loans - Amortized Cost Basis of Collateral-dependent Loans (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | $ 1,974 |
Real Estate | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 29 |
Business Assets | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 1,815 |
Uncollateralized | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 130 |
Commercial | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 1,974 |
Commercial | Real Estate | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 29 |
Commercial | Business Assets | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | 1,815 |
Commercial | Uncollateralized | |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |
Collateral dependent loans | $ 130 |
Loans and Allowance for Cred_12
Loans and Allowance for Credit Losses on Loans - Allowance for loan losses and recorded investment in loans individually evaluated by loan classification and by impairment method (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Unpaid Principal Balance | |
Total with no related allowance recorded | $ 7,567 |
Total with an allowance recorded | 2,697 |
Total | 10,264 |
Recorded Investment | |
Total with no related allowance recorded | 7,567 |
Total with an allowance recorded | 2,697 |
Total | 10,264 |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 1,835 |
Commercial | |
Unpaid Principal Balance | |
Total with no related allowance recorded | 2,113 |
Total with an allowance recorded | 2,697 |
Recorded Investment | |
Total with no related allowance recorded | 2,113 |
Total with an allowance recorded | 2,697 |
Total with an allowance recorded, Allowance for Loan Losses Allocated | 1,835 |
Home equity | |
Unpaid Principal Balance | |
Total with no related allowance recorded | 360 |
Recorded Investment | |
Total with no related allowance recorded | 360 |
CRE | |
Unpaid Principal Balance | |
Total with no related allowance recorded | 5,094 |
Recorded Investment | |
Total with no related allowance recorded | $ 5,094 |
Loans and Allowance for Cred_13
Loans and Allowance for Credit Losses on Loans - Troubled Debt Restructurings (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Allowance for Credit Losses on Loans | ||
Recorded investment of troubled debt restructurings | $ 674,000 | $ 1,039,000 |
Troubled debt restructurings, nonaccrual loans | 468,000 | 590,000 |
Troubled debt restructurings, accruing loans | 206,000 | 449,000 |
Specific reserves | 352,000 | $ 20,000 |
Additional loan committed on any loans classified as troubled debt restructuring. | $ 0 |
Loans and Allowance for Cred_14
Loans and Allowance for Credit Losses on Loans - Troubled Debt Restructurings by Class (Details) | 12 Months Ended | |||
Dec. 31, 2020contract | Dec. 31, 2020USD ($) | Dec. 31, 2020loan | Dec. 31, 2019USD ($)contract | |
Troubled Debt Restructurings by Class | ||||
Number of loans modified as troubled debt restructurings during the period | 15 | 15 | 3 | |
Pre-modification Outstanding Recorded Investment | $ 630,000 | $ 591,000 | ||
Post-modification Outstanding Recorded Investment | 630,000 | $ 591,000 | ||
Commercial | ||||
Troubled Debt Restructurings by Class | ||||
Number of loans modified as troubled debt restructurings during the period | contract | 15 | 3 | ||
Pre-modification Outstanding Recorded Investment | 630,000 | $ 591,000 | ||
Post-modification Outstanding Recorded Investment | $ 630,000 | $ 591,000 |
Loans and Allowance for Cred_15
Loans and Allowance for Credit Losses on Loans - Defaults on Troubled Debt Restructurings (Details) | 12 Months Ended | 24 Months Ended | |||
Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($)contract | Dec. 31, 2020USD ($)loan | Dec. 31, 2019USD ($)contract | Dec. 31, 2020USD ($)item | |
Allowance for Credit Losses on Loans | |||||
Number of loans modified as troubled debt restructurings during the period | 15 | 15 | 3 | ||
Recorded investment of troubled debt restructurings | $ | $ 674,000 | $ 674,000 | $ 674,000 | $ 1,039,000 | $ 674,000 |
Default period contractually past due under modified terms (in days) | 30 days | ||||
Number of defaults on troubled debt restructurings | item | 0 | ||||
Period of consecutive payments (in months) | 6 months |
Loans and Allowance for Cred_16
Loans and Allowance for Credit Losses on Loans - Schedule of loan deferrals by loan category (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Loans, net | $ 2,574,861 | $ 2,510,559 |
Initial deferment period | 3 months | |
2nd deferment period | 3 months | |
Collateral Pledged | ||
Loans, net | $ 2,552 | |
Real Estate | ||
Loans, net | 2,257 | |
Business Assets | ||
Loans, net | 295 | |
Initial Deferments | Collateral Pledged | ||
Loans, net | 1,573 | |
Initial Deferments | Real Estate | ||
Loans, net | 1,573 | |
2nd Deferments | Collateral Pledged | ||
Loans, net | 979 | |
2nd Deferments | Real Estate | ||
Loans, net | 684 | |
2nd Deferments | Business Assets | ||
Loans, net | $ 295 |
Loan Servicing - SBA Loans (Det
Loan Servicing - SBA Loans (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for Credit Losses on Loans | |||
Serviced SBA loans sold to secondary market | $ 77,973,000 | $ 87,835,000 | $ 104,016,000 |
Weighted average servicing rate for loans serviced (as a percent) | 1.12% | 1.16% | 1.12% |
Loan Servicing - Activity for L
Loan Servicing - Activity for Loan Servicing Rights (Details) - Loan servicing rights - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Activity for Loan Servicing Rights | |||
Balance, beginning of year | $ 583 | $ 871 | $ 1,373 |
Additions | 213 | 157 | 200 |
Amortization | (265) | (445) | (702) |
Balance, end of year | $ 531 | $ 583 | $ 871 |
Loan Servicing - Loan Servicing
Loan Servicing - Loan Servicing Rights - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Loan Servicing | |||
Carrying amount/fair value | $ 1,172,000 | $ 1,295,000 | $ 1,651,000 |
Prepayment speed assumption (annual rate) (as a percent) | 14.65% | 13.50% | 10.89% |
Residual cash flow discount rate assumption (annual) (as a percent) | 12.91% | 15.90% | 16.40% |
Loan servicing rights | |||
Loan Servicing | |||
Valuation allowance | $ 0 | $ 0 | $ 0 |
Loan Servicing - Activity for I
Loan Servicing - Activity for I/O Strip Receivables (Details) - I/O strip receivables - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Activity for I/O Strip Receivables | |||
Balance, beginning of year | $ 503 | $ 568 | $ 968 |
Unrealized loss | (198) | (65) | (400) |
Balance, end of year | $ 305 | $ 503 | $ 568 |
Premises and Equipment - Premis
Premises and Equipment - Premises and Equipment, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Premises and Equipment | ||
Premises and equipment, gross | $ 25,855 | $ 23,847 |
Accumulated depreciation and amortization | (15,396) | (15,597) |
Premises and equipment, net | 10,459 | 8,250 |
Building | ||
Premises and Equipment | ||
Premises and equipment, gross | 3,508 | 3,508 |
Land | ||
Premises and Equipment | ||
Premises and equipment, gross | 2,900 | 2,900 |
Furniture and equipment | ||
Premises and Equipment | ||
Premises and equipment, gross | 12,721 | 10,067 |
Leasehold improvements | ||
Premises and Equipment | ||
Premises and equipment, gross | $ 6,726 | $ 7,372 |
Premises and Equipment - Deprec
Premises and Equipment - Depreciation and Amortization Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Premises and Equipment | |||
Depreciation and amortization | $ 951,000 | $ 846,000 | $ 753,000 |
Leases (Details)
Leases (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2019ft² | |
Lessee, Lease, Description [Line Items] | ||||
Lessee, Operating Lease, Option to renew | true | |||
Operating Lease Cost (Cost resulting from lease payments) | $ 6,837,000 | $ 1,490,000 | ||
Operating Lease - Operating Cash Flows (Fixed Payments) | 5,572,000 | 1,519,000 | ||
Operating Lease - ROU assets | $ 12,173,000 | 35,873,000 | 12,173,000 | |
Operating Lease - Liabilities | $ 13,032,000 | $ 35,873,000 | $ 13,032,000 | |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating Lease - Liabilities | Operating Lease - Liabilities | Operating Lease - Liabilities | |
Weighted Average Lease Term - Operating Leases | 8 years 3 months 18 days | 4 years 9 months 14 days | ||
Weighted Average Discount Rate - Operating Leases | 3.86% | 4.55% | 3.86% | |
Area of office space | ft² | 54,910 | |||
Wallnut creek | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease impairment and write-off of fixed assets and tenant improvements | $ 434,000 | |||
San Mateo | ||||
Lessee, Lease, Description [Line Items] | ||||
Lease impairment and write-off of fixed assets and tenant improvements | $ 625,000 |
Leases - Maturity Analysis (Det
Leases - Maturity Analysis (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Operating Lease Payments Due | ||
2021 | $ 5,242,000 | |
2022 | 5,668,000 | |
2023 | 5,039,000 | |
2024 | 4,692,000 | |
2025 | 4,262,000 | |
Thereafter | 18,798,000 | |
Total undiscounted cash flows | 43,701,000 | |
Discount on cash flows | (7,828,000) | |
Total lease liability | $ 35,873,000 | $ 13,032,000 |
Business Combinations - Tri-Val
Business Combinations - Tri-Valley (Details) - Tri Valley Bank | Apr. 06, 2018USD ($)shares |
Business Combinations | |
Aggregate transaction value | $ 32,320,000 |
Shares issued in acquisition | shares | 1,889,613 |
Issuance of shares of common stock to holders of restricted stock | $ 30,725,000 |
Fixed exchange ratio of company's common stock | 0.0489 |
Total cash paid | $ 1,595,000 |
Business Combinations - United
Business Combinations - United American (Details) - United American Bank | May 04, 2018USD ($)$ / sharesshares |
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 shares of common stock to holders of restricted stock | 47,280,000 |
Series A Preferred Stock | |
Business Combinations | |
Total cash paid | 8,700,000 |
Series B Preferred Stock | |
Business Combinations | |
Total cash paid | $ 435,000 |
Series A and Series B Preferred Stock | |
Business Combinations | |
Cash issued per share | $ / shares | $ 1,000 |
Other | |
Business Combinations | |
Total cash paid | $ 2,000 |
Business combinations - Presidi
Business combinations - Presidio (Details) | Oct. 11, 2019USD ($)$ / sharesshares | Oct. 31, 2019 | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 19, 2019USD ($) | Dec. 31, 2018USD ($) |
Assets acquired: | ||||||
Securities available-for-sale | $ 45,069,000 | $ 63,723,000 | ||||
Securities held-to-maturity | 463,000 | |||||
Loans | 685,964,000 | 336,446,000 | ||||
Premises and equipment | 1,756,000 | 350,000 | ||||
Other assets, net | 29,397,000 | 14,736,000 | ||||
Subordinate debt | $ 39,740,000 | 39,554,000 | ||||
Liabilities assumed: | ||||||
Deposits | 774,259,000 | 416,628,000 | ||||
Subordinate debt | 39,740,000 | 39,554,000 | ||||
Other borrowings | 442,000 | 62,000 | ||||
Other liabilities | 18,127,000 | 3,038,000 | ||||
Goodwill recorded in the merger | 167,631,000 | 167,420,000 | $ 83,753,000 | |||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | |||||
Presidio bank | ||||||
Assets acquired: | ||||||
Cash and cash equivalents | 117,988,000 | |||||
Securities available-for-sale | 45,069,000 | |||||
Securities held-to-maturity | 463,000 | |||||
Loans | 685,964,000 | |||||
Premises and equipment | 1,756,000 | |||||
Other intangible assets | 11,147,000 | |||||
Other assets, net | 42,161,000 | |||||
Total assets acquired | 904,548,000 | |||||
Amortized intangible assets | 60 months | |||||
Subordinate debt | 10,000,000 | $ 10,000,000 | ||||
Liabilities assumed: | ||||||
Deposits | 774,259,000 | |||||
Subordinate debt | 10,000,000 | $ 10,000,000 | ||||
Other borrowings | 442,000 | |||||
Other liabilities | 18,127,000 | |||||
Total liabilities assumed | 802,828,000 | |||||
Net assets acquired | 101,720,000 | |||||
Purchase price | 185,598,000 | |||||
Goodwill recorded in the merger | 83,878,000 | |||||
Aggregate transaction value | $ 185,598,000 | |||||
Fixed exchange ratio | 2.47 | |||||
Issuance of shares of common stock to Presidio shareholders | shares | 15,684,064 | |||||
Issuance of shares of common stock to holders of restricted stock | $ 178,171,000 | |||||
Stock price at Closing (in dollars per share) | $ / shares | $ 11.36 | |||||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | 7,426,000 | ||||
Cash paid for fractional shares | $ 1,000 | |||||
Presidio bank | Below or Above market-value lease | ||||||
Assets acquired: | ||||||
Amortized intangible assets | 60 months | |||||
Previously Reported | Presidio bank | ||||||
Assets acquired: | ||||||
Cash and cash equivalents | 117,989,000 | |||||
Securities available-for-sale | 44,647,000 | |||||
Securities held-to-maturity | 463,000 | |||||
Loans | 698,493,000 | |||||
Allowance for loan losses | (7,463,000) | |||||
Premises and equipment | 1,756,000 | |||||
Other assets, net | 43,539,000 | |||||
Total assets acquired | 899,424,000 | |||||
Subordinate debt | 10,000,000 | |||||
Liabilities assumed: | ||||||
Deposits | 774,260,000 | |||||
Subordinate debt | 10,000,000 | |||||
Other borrowings | 442,000 | |||||
Other liabilities | 17,916,000 | |||||
Total liabilities assumed | 802,618,000 | |||||
Fair Value Adjustments | Presidio bank | ||||||
Assets acquired: | ||||||
Cash and cash equivalents | (1,000) | |||||
Securities available-for-sale | 422,000 | |||||
Loans | (12,529,000) | |||||
Allowance for loan losses | 7,463,000 | |||||
Other intangible assets | 11,147,000 | |||||
Other assets, net | (1,378,000) | |||||
Total assets acquired | 5,124,000 | |||||
Liabilities assumed: | ||||||
Deposits | (1,000) | |||||
Other liabilities | 211,000 | |||||
Total liabilities assumed | $ 210,000 |
Business Combinations - Pro For
Business Combinations - Pro Forma Information (Details) - Presidio bank - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2018 | |
Pro Forma Information | ||
Net interest income | $ 163,555 | $ 160,044 |
Provision for loan losses | 870 | 7,694 |
Noninterest income | 11,291 | 10,795 |
Noninterest expense | 92,708 | 97,563 |
Income before income taxes | 81,268 | 65,582 |
Income tax expense | 23,730 | 17,549 |
Net income | $ 57,538 | $ 48,033 |
Net income per share - basic (in dollars per share) | $ 0.98 | $ 0.84 |
Net income per share - diluted (in dollars per share) | $ 0.96 | $ 0.83 |
Business combinations - Pre-tax
Business combinations - Pre-tax merger-related costs (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition [Line Items] | ||||||||||
Salaries and employee benefits | $ 356,000 | $ 6,580,000 | $ 3,569,000 | |||||||
Other | 2,245,000 | 4,500,000 | 5,598,000 | |||||||
Total merger-related costs | $ 101,000 | $ 17,000 | $ 59,000 | $ 2,424,000 | $ 9,879,000 | $ 661,000 | $ 540,000 | 2,601,000 | 11,080,000 | 9,167,000 |
Presidio bank | ||||||||||
Business Acquisition [Line Items] | ||||||||||
Salaries and employee benefits | 356,000 | 6,580,000 | 3,569,000 | |||||||
Other | 2,245,000 | 4,500,000 | 5,598,000 | |||||||
Total merger-related costs | $ 2,601,000 | $ 11,080,000 | $ 9,167,000 |
Business Combinations (Details)
Business Combinations (Details) | Dec. 31, 2020USD ($)company | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Number of business banking franchises acquired | company | 4 | ||
Combined business value after business combination | $ 4,000,000,000 | ||
Goodwill recorded in the merger | 167,631,000 | $ 167,420,000 | $ 83,753,000 |
Tri Valley Bank | |||
Goodwill recorded in the merger | 13,819,000 | ||
United American Bank | |||
Goodwill recorded in the merger | 24,271,000 | ||
Presidio bank | |||
Goodwill recorded in the merger | $ 83,878,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill | |||
Goodwill | $ 167,631,000 | $ 167,420,000 | $ 83,753,000 |
Goodwill acquired | 83,878,000 | 38,039,000 | |
BVF/CSNK | |||
Goodwill | |||
Goodwill acquired | 13,044,000 | ||
Focus | |||
Goodwill | |||
Goodwill acquired | 32,619,000 | ||
Tri Valley Bank | |||
Goodwill | |||
Goodwill | 13,819,000 | ||
Goodwill acquired | 13,819,000 | ||
United American Bank | |||
Goodwill | |||
Goodwill | 24,271,000 | ||
Goodwill acquired | 24,271,000 | ||
Presidio bank | |||
Goodwill | |||
Goodwill | 83,878,000 | ||
Goodwill acquired | 83,878,000 | ||
Banking | |||
Goodwill | |||
Goodwill | 154,587,000 | 154,376,000 | 70,709,000 |
Factoring | |||
Goodwill | |||
Goodwill | $ 13,044,000 | $ 13,044,000 | $ 13,044,000 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Other Intangible Assets | ||
Gross Carrying amount | $ 27,693 | $ 27,693 |
Accumulated Amortization | (11,029) | (7,278) |
Total | 16,664 | 20,415 |
Core deposit | ||
Other Intangible Assets | ||
Gross Carrying amount | 25,023 | 25,023 |
Accumulated Amortization | (9,153) | (5,846) |
Total | 15,870 | 19,177 |
Below market-value lease | ||
Other Intangible Assets | ||
Gross Carrying amount | 770 | 770 |
Accumulated Amortization | (705) | (451) |
Total | 65 | 319 |
Customer relationship and brokered relationship | ||
Other Intangible Assets | ||
Gross Carrying amount | 1,900 | 1,900 |
Accumulated Amortization | (1,171) | (981) |
Total | 729 | $ 919 |
United American Bank | Core deposit | ||
Other Intangible Assets | ||
Total | 3,695 | |
Tri Valley Bank | Core deposit | ||
Other Intangible Assets | ||
Total | 1,112 | |
Tri Valley Bank | Below or Above market-value lease | ||
Other Intangible Assets | ||
Total | 159 | |
Presidio bank | Core deposit | ||
Other Intangible Assets | ||
Total | 8,997 | |
Presidio bank | Below or Above market-value lease | ||
Other Intangible Assets | ||
Total | (73) | |
Focus | Core deposit | ||
Other Intangible Assets | ||
Total | 2,066 | |
BVF/CSNK | Customer relationship and brokered relationship | ||
Other Intangible Assets | ||
Total | $ 729 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Estimated Amortization Expense | ||
2021 | $ 2,996 | |
2022 | 2,635 | |
2023 | 2,405 | |
2024 | 2,187 | |
2025 | 1,813 | |
Thereafter | 4,628 | |
Total | 16,664 | $ 20,415 |
Core deposit | ||
Estimated Amortization Expense | ||
Total | 15,870 | 19,177 |
Below market-value lease | ||
Estimated Amortization Expense | ||
Total | 65 | 319 |
Customer relationship and brokered relationship | ||
Estimated Amortization Expense | ||
Total | 729 | $ 919 |
United American Bank | Core deposit | ||
Estimated Amortization Expense | ||
2021 | 602 | |
2022 | 553 | |
2023 | 521 | |
2024 | 499 | |
2025 | 478 | |
Thereafter | 1,042 | |
Total | 3,695 | |
Tri Valley Bank | Core deposit | ||
Estimated Amortization Expense | ||
2021 | 184 | |
2022 | 167 | |
2023 | 158 | |
2024 | 152 | |
2025 | 145 | |
Thereafter | 306 | |
Total | 1,112 | |
Tri Valley Bank | Below or Above market-value lease | ||
Estimated Amortization Expense | ||
2021 | 18 | |
2022 | 18 | |
2023 | 18 | |
2024 | 18 | |
2025 | 18 | |
Thereafter | 69 | |
Total | 159 | |
Presidio bank | Core deposit | ||
Estimated Amortization Expense | ||
2021 | 1,447 | |
2022 | 1,225 | |
2023 | 1,118 | |
2024 | 1,026 | |
2025 | 970 | |
Thereafter | 3,211 | |
Total | 8,997 | |
Presidio bank | Below or Above market-value lease | ||
Estimated Amortization Expense | ||
2021 | (20) | |
2022 | (20) | |
2023 | (20) | |
2024 | (13) | |
Total | (73) | |
Focus | Core deposit | ||
Estimated Amortization Expense | ||
2021 | 596 | |
2022 | 502 | |
2023 | 420 | |
2024 | 346 | |
2025 | 202 | |
Total | 2,066 | |
BVF/CSNK | Customer relationship and brokered relationship | ||
Estimated Amortization Expense | ||
2021 | 190 | |
2022 | 190 | |
2023 | 190 | |
2024 | 159 | |
Total | $ 729 |
Goodwill and Other Intangible_6
Goodwill and Other Intangible Assets - Impairment of Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Impairment of Intangible Assets | ||
Impairment of intangible assets | $ 0 | $ 0 |
Deposits - Scheduled Maturities
Deposits - Scheduled Maturities of all Time Deposits and Brokered Deposits for the Next Five Years (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Scheduled Maturities of Time Deposits Including Brokered Deposits for the Next Five Years | |
2021 | $ 138,100 |
2022 | 10,255 |
2023 | 4,126 |
2024 | 435 |
2025 | 491 |
Total | $ 153,407 |
Deposits - Time Deposits (Detai
Deposits - Time Deposits (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Deposits. | ||
Time deposits, including deposits within the CDARS and brokered deposits, $250,000 or more | $ 103,746,000 | $ 99,882,000 |
Deposits - Additional Informati
Deposits - Additional Information (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Additional Information | ||
CDARS deposits | $ 23,911,000 | $ 28,847,000 |
Interest-bearing demand deposits | 18,614,000 | 12,885,000 |
Money market accounts under CDARS program | 663,000 | 2,171,000 |
Time deposits under CDARS program | 4,634,000 | 13,791,000 |
Deposits from executive officers, directors, and their affiliates | $ 4,491,000 | $ 12,636,000 |
Borrowing Arrangements - Federa
Borrowing Arrangements - Federal Home Loan Bank Borrowings, Federal Reserve Bank Borrowings, and Available Lines of Credit (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
FHLB | ||
Borrowing Arrangements | ||
Securities pledged as collateral | $ 0 | |
FHLB | Line of credit | FHLB of San Francisco | ||
Borrowing Arrangements | ||
FHLB overnight borrowings | $ 0 | 0 |
FHLB | ||
Borrowing Arrangements | ||
Loans pledged as collateral | 272,879,000 | |
Securities pledged as collateral | 3,202,000 | |
Amount outstanding | 0 | |
Line of credit | 3,041,000 | $ 228,103,000 |
FHLB | Line of credit | FHLB of San Francisco | ||
Borrowing Arrangements | ||
Loans pledged as collateral | 232,632,000 | |
Line of credit | $ 160,523,000 |
Borrowing Arrangements - Fede_2
Borrowing Arrangements - Federal Reserve Bank Borrowings (Details) - Line of credit - FRB - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Borrowing Arrangements | ||
Loans pledged as collateral | $ 921,373,000 | $ 726,709,000 |
Line of credit | 528,064,000 | 408,401,000 |
Amount outstanding | $ 0 | $ 0 |
Borrowing Arrangements - Availa
Borrowing Arrangements - Available Lines of Credit (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Borrowing Arrangements | ||
Federal funds purchased | $ 0 | $ 0 |
Federal funds purchase arrangement | ||
Borrowing Arrangements | ||
Federal funds purchase arrangements available | $ 80,000,000 |
Borrowing Arrangements - Line o
Borrowing Arrangements - Line of Credit with a Corresponding Bank (Details) - Line of credit - HCC (Parent) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Borrowing Arrangements | ||
Line of credit | $ 10,000,000 | $ 5,000,000 |
Amount outstanding | $ 0 | |
Amount outstanding | $ 0 |
Borrowing Arrangements - Securi
Borrowing Arrangements - Securities Sold under Repurchase Agreements (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Borrowing Arrangements | ||
Amount of securities sold under agreements | $ 0 | $ 0 |
Borrowing Arrangements - Subord
Borrowing Arrangements - Subordinated Debt (Details) - USD ($) | May 26, 2017 | Dec. 31, 2019 | Dec. 31, 2020 | Dec. 19, 2019 |
Principal amount | $ 40,000,000 | |||
Fixed interest rate (as a percent) | 5.25% | |||
Subordinated Debt. | $ 39,554,000 | $ 39,740,000 | ||
Debt Issuance Costs | 260,000 | |||
Presidio bank | ||||
Fixed interest rate (as a percent) | 8.00% | |||
Subordinated Debt. | $ 10,000,000 | $ 10,000,000 | ||
Pre-payment penalty | $ 300,000 | |||
LIBOR | ||||
Rate of interest added to base rate | 336.50% |
Income Taxes - Income Tax (Bene
Income Taxes - Income Tax (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Currently payable tax: | |||||||||||
Federal | $ 9,630 | $ 7,631 | $ 9,187 | ||||||||
State | 5,828 | 4,689 | 5,416 | ||||||||
Total currently payable | 15,458 | 12,320 | 14,603 | ||||||||
Deferred tax (benefit): | |||||||||||
Federal | (932) | 2,200 | (1,133) | ||||||||
State | (757) | 1,331 | (146) | ||||||||
Total deferred tax | (1,689) | 3,531 | (1,279) | ||||||||
Income tax expense | $ 4,429 | $ 4,198 | $ 4,274 | $ 868 | $ 2,088 | $ 4,633 | $ 4,623 | $ 4,507 | $ 13,769 | $ 15,851 | $ 13,324 |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Effective tax rate differs from the federal statutory rate | |||
Statutory Federal income tax rate (as a percent) | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal tax benefit (as a percent) | 8.20% | 8.50% | 8.50% |
Low income housing credits, net of investment losses (as a percent) | (0.50%) | (0.50%) | (0.80%) |
Increase in cash surrender value of life insurance (as a percent) | (0.80%) | (0.50%) | (0.50%) |
Stock option/restricted stock windfall tax benefit | 0.60% | (0.30%) | (0.90%) |
Non-taxable interest income (as a percent) | (0.80%) | (0.80%) | (0.90%) |
Split dollar term insurance (as a percent) | 0.10% | 0.10% | 0.10% |
Merger cost | 0.00% | 0.50% | 0.50% |
Other, net (as a percent) | 0.30% | 0.10% | 0.40% |
Effective tax rate (as a percent) | 28.10% | 28.10% | 27.40% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Allowance for loan losses | $ 12,827 | $ 7,231 |
Lease accounting | 10,537 | 1,647 |
Defined postretirement benefit obligation | 10,419 | 9,901 |
Accrued expenses | 2,896 | 2,562 |
Federal net operating loss carryforwards | 2,846 | 3,662 |
Stock compensation | 1,894 | 1,636 |
State income taxes | 1,142 | 954 |
California net operating loss carryforwards | 1,106 | 1,489 |
Premises and equipment | 459 | 695 |
Nonaccrual interest | 101 | 61 |
Split-dollar life insurance benefit plan | 80 | 75 |
Tax credit carryforwards | 57 | 57 |
Other | 469 | 654 |
Total deferred tax assets | 44,833 | 30,624 |
Deferred tax liabilities: | ||
Lease accounting | (10,537) | (1,647) |
Loan fees | (1,820) | (1,842) |
Securities available-for-sale | (1,764) | (772) |
Intangible liabilities | (1,388) | (1,321) |
Prepaid expenses | (689) | (289) |
FHLB stock | (166) | (177) |
I/O strips | (87) | (144) |
Other | (161) | (130) |
Total deferred tax liabilities | (16,612) | (6,322) |
Net deferred tax assets | $ 28,221 | $ 24,302 |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforward (Details) | Dec. 31, 2020USD ($) |
Federal | IRS | |
Operating Loss Carryforward | |
Net operating loss carryforward | $ 13,553,000 |
State | California | |
Operating Loss Carryforward | |
Net operating loss carryforward | $ 12,903,000 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) | Dec. 31, 2020USD ($) |
Tax Credit Carryforwards | |
Valuation allowance for deferred tax assets | $ 0 |
California | State | |
Tax Credit Carryforwards | |
Total tax credit carryforwards | $ 72,567 |
Income Taxes - Carry Amounts of
Income Taxes - Carry Amounts of the Low Income Housing Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Income Taxes | ||
Low income housing investments | $ 5,246 | $ 6,126 |
Future commitments | $ 596 | $ 625 |
Income Taxes - Future Commitmen
Income Taxes - Future Commitments of the Low Income Housing Investments (Details) - Low income housing investments | Dec. 31, 2020USD ($) |
Future Commitments | |
2021 | $ 46,000 |
2022 through 2026 | $ 550,000 |
Income Taxes - Components of Lo
Income Taxes - Components of Low Income Housing Investment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes | ||
Low income housing tax credits | $ 839,000 | $ 511,000 |
Low income housing investment expense | $ 850,000 | $ 520,000 |
Equity Plan - General Disclosur
Equity Plan - General Disclosures (Details) - USD ($) | Oct. 11, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Equity Plan | |||
Number of shares available for future grants | 2,409,062 | ||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | ||
Presidio bank | |||
Equity Plan | |||
Consideration for Presidio stock options exchanged for Heritage Commerce Corp stock options | $ 7,426,000 | $ 7,426,000 | |
Options | |||
Equity Plan | |||
Vesting period | 4 years | ||
Expiration term | 10 years | ||
Heritage Commerce Corp stock options | 2,546,821 | 2,712,846 | |
Options | Presidio bank | |||
Equity Plan | |||
Heritage Commerce Corp stock options | 1,176,757 | ||
Restricted stock | |||
Equity Plan | |||
Number of equity awards issued (in shares) | 168,117 | ||
Nonqualified stock options | |||
Equity Plan | |||
Number of equity awards issued (in shares) | 329,500 |
Equity Plan - Stock Option Acti
Equity Plan - Stock Option Activity (Details) - Options | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Number of Shares | |
Outstanding at the beginning of the period (in shares) | 2,712,846 |
Granted (in shares) | 329,500 |
Exercised (in shares) | (381,184) |
Forfeited or expired (in shares) | (114,341) |
Outstanding at the end of the period (in shares) | 2,546,821 |
Vested or expected to vest (in shares) | 2,394,012 |
Exercisable at the end of the period (in shares) | 2,017,899 |
Weighted Average Exercise Price | |
Outstanding at the beginning of the period (in dollars per share) | $ / shares | $ 8.80 |
Granted (in dollars per share) | $ / shares | 9.11 |
Exercised (in dollars per share) | $ / shares | 4.50 |
Forfeited or expired (in dollars per share) | $ / shares | 12.93 |
Outstanding at the end of the period (in dollars per share) | $ / shares | $ 9.30 |
Additional Information | |
Weighted Average Remaining Contractual Life - Outstanding at the end of the period (in years) | 5 years 5 months 4 days |
Weighted Average Remaining Contractual Life - Vested or expected to vest (in years) | 5 years 5 months 4 days |
Weighted Average Remaining Contractual Life - Exercisable at the end of the period (in years) | 4 years 7 months 6 days |
Aggregate Intrinsic Value - Outstanding at the end of the period (in dollars) | $ | $ 3,473,312 |
Aggregate Intrinsic Value - Vested or expected to vest (in dollars) | $ | 3,264,913 |
Aggregate Intrinsic Value - Exercisable at the end of the period (in dollars) | $ | $ 3,473,312 |
Presidio bank | |
Number of Shares | |
Outstanding at the end of the period (in shares) | 1,176,757 |
Equity Plan - Information Relat
Equity Plan - Information Related to the Equity Plans for each of the Last Three Years (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Information Related to the Equity Plans | |||
Cash received from option exercise | $ 1,714,000 | $ 1,626,000 | $ 2,667,000 |
Options | |||
Information Related to the Equity Plans | |||
Intrinsic value of options exercised | 2,258,245 | 1,618,615 | 1,844,909 |
Cash received from option exercise | 1,713,737 | 1,626,113 | 2,667,305 |
Tax benefit realized from option exercises | $ 63,124 | $ 258,037 | $ 534,638 |
Weighted average fair value of options granted (in dollars per share) | $ 1.15 | $ 1.91 | $ 3.03 |
Equity Plan - Unrecognized Comp
Equity Plan - Unrecognized Compensation Cost - Nonvested Stock Options (Details) - Options | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Unrecognized Compensation Cost | |
Total unrecognized compensation cost related to nonvested stock options granted | $ 894,000 |
Expected weighted-average period for recognition of compensation costs related to nonvested stock options | 2 years 7 months 17 days |
Equity Plan - Assumptions Used
Equity Plan - Assumptions Used to Estimate Fair Value (Details) - Options | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Assumptions Used to Estimate Fair Value | |||
Expected life in months | 72 months | 72 months | 72 months |
Volatility (as a percent) | 29.00% | 24.00% | 21.00% |
Weighted average risk-free interest rate (as a percent) | 0.53% | 2.23% | 2.88% |
Expected dividends (as a percent) | 5.71% | 3.95% | 2.64% |
Equity Plan - Restricted Stock
Equity Plan - Restricted Stock Activity (Details) - Restricted stock | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Number of Shares | |
Nonvested shares at the beginning of the period (in shares) | shares | 239,453 |
Granted (in shares) | shares | 168,117 |
Vested (in shares) | shares | (108,870) |
Nonvested shares at the end of the period (in shares) | shares | 298,700 |
Weighted Average Grant Date Fair Value | |
Nonvested shares at the beginning of the period (in dollars per share) | $ / shares | $ 11.23 |
Granted (in dollars per share) | $ / shares | 9.20 |
Vested (in dollars per share) | $ / shares | 13.19 |
Nonvested shares at the end of the period (in dollars per share) | $ / shares | $ 10.83 |
Equity Plan - Unrecognized Co_2
Equity Plan - Unrecognized Compensation Cost - Nonvested Restricted Stock Awards (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Unrecognized Compensation Cost | |||
Total compensation cost | $ 2,248,000 | $ 1,924,000 | $ 1,817,000 |
Total income tax expense (benefit) on share-based compensation cost | 301,000 | $ (146,000) | $ (424,000) |
Restricted stock | |||
Unrecognized Compensation Cost | |||
Total unrecognized compensation cost related to nonvested restricted stock awards | $ 2,198,000 | ||
Expected weighted-average period for recognition of compensation costs related to nonvested restricted stock awards | 1 year 9 months 3 days |
Benefit Plans - 401(k) Savings
Benefit Plans - 401(k) Savings Plan (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
401(k) Savings Plan | |||
Maximum discretionary contribution matched by employer for each employee's contribution | $ 3,000 | $ 3,000 | |
Contribution expense | $ 942,000 | $ 934,000 | $ 749,000 |
Benefit Plans - Employee Stock
Benefit Plans - Employee Stock Ownership Plan (Details) | 12 Months Ended |
Dec. 31, 2020itemshares | |
Employee Stock Ownership Plan | |
Minimum number of hours of service required for plan eligibility | item | 1,000 |
Number of shares of Company's common stock owned by ESOP | shares | 101,231 |
Benefit Plans - Deferred Compen
Benefit Plans - Deferred Compensation Plan (Details) - employee | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Deferred Compensation Plan | ||
Maximum percentage of bonus into deferred account | 100.00% | |
Percentage of regular salary into deferred account | 50.00% | |
Number of employees elected to participate in deferred compensation | 8 | 5 |
Benefit Plans - Defined Benefit
Benefit Plans - Defined Benefit Plans - Nonqualified Defined Benefit Pension Plan (Details) - Supplemental Retirement Plan | 12 Months Ended |
Dec. 31, 2020USD ($)employee | |
Supplemental Retirement Plan | |
Combined number of active and retired/terminated participants | employee | 53 |
Plan assets associated with the plan | $ | $ 0 |
Vesting period of defined benefit stated amount, minimum | 9 years |
Benefit Plans - Defined Benef_2
Benefit Plans - Defined Benefit Plans - Change in Projected Benefit Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Split-Dollar Life Insurance Benefit Plan | ||
Change in projected benefit obligation: | ||
Projected benefit obligation at beginning of year | $ 8,198 | $ 6,903 |
Interest cost | 246 | 278 |
Actuarial loss (gain) | 1,245 | 1,017 |
Projected benefit obligation at end of period | 9,689 | 8,198 |
Supplemental Retirement Plan | ||
Change in projected benefit obligation: | ||
Projected benefit obligation at beginning of year | 33,689 | 26,781 |
Projected benefit obligation of SERP agreements acquired from Presidio | 2,541 | |
Service cost | 492 | 263 |
Interest cost | 935 | 1,059 |
Actuarial loss (gain) | (3,008) | (4,182) |
Benefits paid | (3,118) | (1,137) |
Plan amendment | 398 | |
Projected benefit obligation at end of period | $ 35,404 | $ 33,689 |
Benefit Plans - Defined Benef_3
Benefit Plans - Defined Benefit Plans - Amounts Recognized in Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Split-Dollar Life Insurance Benefit Plan | ||
Amounts Recognized in Accumulated Other Comprehensive Loss | ||
Net actuarial loss | $ 5,170 | $ 3,776 |
Prior transition obligation | 970 | 1,059 |
Accumulated other comprehensive loss | 6,140 | 4,835 |
Supplemental Retirement Plan | ||
Amounts Recognized in Accumulated Other Comprehensive Loss | ||
Net actuarial loss | $ 12,445 | $ 9,714 |
Benefit Plans - Defined Benef_4
Benefit Plans - Defined Benefit Plans - Weighted-average Assumptions Used to Determine the Benefit Obligation at Year-end (Details) | Dec. 31, 2020 | Dec. 31, 2019 |
Supplemental Retirement Plan | ||
Weighted-average Assumptions Used to Determine the Benefit Obligation at Year-end | ||
Discount rate | 2.26% | 3.01% |
Split-Dollar Life Insurance Benefit Plan | ||
Weighted-average Assumptions Used to Determine the Benefit Obligation at Year-end | ||
Discount rate | 2.26% | 3.01% |
Benefit Plans - Defined Benef_5
Benefit Plans - Defined Benefit Plans - Estimated Benefit Payments over the Next Ten Years (Details) - Supplemental Retirement Plan $ in Thousands | Dec. 31, 2020USD ($) |
Estimated Benefit Payments | |
2021 | $ 2,123 |
2022 | 1,814 |
2023 | 1,918 |
2024 | 1,954 |
2025 | 2,026 |
2026 to 2030 | $ 11,465 |
Benefit Plans - Defined Benef_6
Benefit Plans - Defined Benefit Plans - Components of Pension Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Retirement Plan | ||
Components of net periodic benefit cost: | ||
Service cost | $ 492 | $ 263 |
Interest cost | 935 | 1,059 |
Amortization of prior transition obligation | 299 | |
Amortization of net actuarial loss | 387 | 184 |
Accelerated benefits for Presidio SERP agreements due to change in control | 1,465 | |
Net periodic benefit cost | 2,113 | 2,971 |
Amount recognized in other comprehensive income | 1,924 | 2,847 |
Split-Dollar Life Insurance Benefit Plan | ||
Components of net periodic benefit cost: | ||
Interest cost | 246 | 278 |
Amortization of prior transition obligation and actuarial losses | (60) | (96) |
Net periodic benefit cost | 186 | 182 |
Amount recognized in other comprehensive income | $ 1,305 | $ 1,113 |
Benefit Plans - Defined Benef_7
Benefit Plans - Defined Benefit Plans - Estimated Net Actuarial Loss and Prior Service Cost (Details) | Dec. 31, 2020USD ($) |
Supplemental Retirement Plan | |
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | |
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | $ 643,000 |
Split-Dollar Life Insurance Benefit Plan | |
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | |
Estimated net actuarial loss and prior service cost that will be amortized from accumulated other comprehensive loss into net periodic cost over next fiscal year | $ 90,000 |
Benefit Plans - Defined Benef_8
Benefit Plans - Defined Benefit Plans - Weighted-average Assumptions Used to Determine Net Periodic Cost (Details) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Retirement Plan | ||
Weighted-average Assumption Used to Determine Net Periodic Benefit Cost: | ||
Discount rate | 3.01% | 4.03% |
Split-Dollar Life Insurance Benefit Plan | ||
Weighted-average Assumption Used to Determine Net Periodic Benefit Cost: | ||
Discount rate | 3.01% | 4.03% |
Fair Value - Financial Assets a
Fair Value - Financial Assets and Liabilities Measured on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | $ 235,774 | $ 404,825 |
I/O strip receivables | 305 | 503 |
Agency mortgage-backed securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 175,326 | 284,361 |
U.S. Treasury | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | 60,448 | 120,464 |
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 | 60,448 | 120,464 |
Significant Other Observable Inputs (Level 2) | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
I/O strip receivables | 305 | 503 |
Significant Other Observable Inputs (Level 2) | Agency mortgage-backed securities | ||
Financial Assets and Liabilities Measured on a Recurring Basis | ||
Securities available-for-sale | $ 175,326 | $ 284,361 |
Fair Value - Impaired Loans Hel
Fair Value - Impaired Loans Held-for-investment - Additional Disclosures (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Carrying amount | ||
Impaired Loans Held-for-investment | ||
Foreclosed assets | $ 0 | $ 0 |
Fair Value - Carrying Amounts a
Fair Value - Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Securities available-for-sale | $ 235,774,000 | $ 404,825,000 |
Securities held-to-maturity | 304,927,000 | 368,107,000 |
Federal Home Loan Bank, Federal Reserve Bank stock and other investments, at cost | 33,522,000 | 29,842,000 |
I/O strips receivables | 305,000 | 503,000 |
Liabilities | ||
Subordinated Debt. | 39,740,000 | 39,554,000 |
Significant Other Observable Inputs (Level 2) | ||
Assets | ||
I/O strips receivables | 305,000 | 503,000 |
Carrying amount | ||
Assets | ||
Cash and cash equivalents | 1,131,073,000 | 457,370,000 |
Securities available-for-sale | 235,774,000 | 404,825,000 |
Securities held-to-maturity | 297,389,000 | 366,560,000 |
Loans (including loans held-for-sale), net | 2,576,560,000 | 2,511,611,000 |
Federal Home Loan Bank, Federal Reserve Bank stock and other investments, at cost | 33,522,000 | 29,842,000 |
Accrued interest receivable | 10,546,000 | 10,915,000 |
I/O strips receivables | 305,000 | 503,000 |
Liabilities | ||
Time deposits | 153,407,000 | 168,034,000 |
Other deposits | 3,761,079,000 | 3,246,734,000 |
Subordinated Debt. | 39,740,000 | 39,554,000 |
Accrued interest payable | 545,000 | 707,000 |
Carried at fair value | ||
Assets | ||
Cash and cash equivalents | 1,131,073,000 | 457,370,000 |
Securities available-for-sale | 235,774,000 | 404,825,000 |
Securities held-to-maturity | 304,927,000 | 368,107,000 |
Loans (including loans held-for-sale), net | 2,574,692,000 | 2,513,329,000 |
Accrued interest receivable | 10,546,000 | 10,915,000 |
I/O strips receivables | 305,000 | 503,000 |
Liabilities | ||
Time deposits | 153,740,000 | 158,704,000 |
Other deposits | 3,761,079,000 | 3,246,734,000 |
Subordinated Debt. | 40,340,000 | 40,404,000 |
Accrued interest payable | 545,000 | 707,000 |
Carried at fair value | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Assets | ||
Cash and cash equivalents | 1,131,073,000 | 457,370,000 |
Securities available-for-sale | 60,448,000 | 120,464,000 |
Accrued interest receivable | 309,000 | 446,000 |
Carried at fair value | Significant Other Observable Inputs (Level 2) | ||
Assets | ||
Securities available-for-sale | 175,326,000 | 284,361,000 |
Securities held-to-maturity | 304,927,000 | 368,107,000 |
Loans (including loans held-for-sale), net | 1,699,000 | 1,052,000 |
Accrued interest receivable | 1,512,000 | 2,218,000 |
I/O strips receivables | 305,000 | 503,000 |
Liabilities | ||
Time deposits | 153,740,000 | 158,704,000 |
Other deposits | 3,761,079,000 | 3,246,734,000 |
Subordinated Debt. | 40,340,000 | 40,404,000 |
Accrued interest payable | 545,000 | 707,000 |
Carried at fair value | Significant Unobservable Inputs (Level 3) | ||
Assets | ||
Loans (including loans held-for-sale), net | 2,572,993,000 | 2,512,277,000 |
Accrued interest receivable | $ 8,725,000 | $ 8,251,000 |
Commitments and Loss Continge_3
Commitments and Loss Contingencies - Financial Instruments with Off-Balance Sheet Risk (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2020 | |
Commitments and Contingencies | |||
Commitments to extend credit, fixed rate | $ 124,609,000 | $ 158,817,000 | |
Commitments to extend credit, variable rate | 989,584,000 | 961,821,000 | |
Commitment to extend credit, total | $ 1,114,193,000 | $ 1,120,638,000 | |
Percentage of unused commitments to outstanding gross loans | 42.00% | 44.00% | |
Off-Balance Sheet, Credit Loss, Liability, Credit Loss Expenses (Reduction) | $ 192,000 | ||
Off-balance sheet credit exposures | 1,078,000 | $ 679,000 | |
Off-balance sheet, credit loss liability increase due to offsetting increase in loss factors in CECL model | 399,000 | ||
Restatement Adjustment | ASU 2016-03 - Topic 326 | |||
Commitments and Contingencies | |||
Off-balance sheet credit exposures | (207,000) | $ (207,000) | |
Unused lines of credit and commitments to make loans | |||
Commitments and Contingencies | |||
Commitments to extend credit, fixed rate | 121,560,000 | 147,372,000 | |
Commitments to extend credit, variable rate | 970,614,000 | 951,206,000 | |
Commitment to extend credit, total | 1,092,174,000 | 1,098,578,000 | |
Standby letters of credit | |||
Commitments and Contingencies | |||
Commitments to extend credit, fixed rate | 3,049,000 | 11,445,000 | |
Commitments to extend credit, variable rate | 18,970,000 | 10,615,000 | |
Commitment to extend credit, total | $ 22,019,000 | $ 22,060,000 |
Shareholders' Equity and Earn_3
Shareholders' Equity and Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Aug. 27, 2019 | Aug. 26, 2019 | |
Shareholders' Equity and Earnings Per Share | |||||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | 60,000,000 | |||||||
Reconciliation of factors used in computing basic and diluted earnings per common share | |||||||||||||
Net income | $ 11,623 | $ 11,197 | $ 10,618 | $ 1,861 | $ 5,685 | $ 11,277 | $ 11,353 | $ 12,146 | $ 35,299 | $ 40,461 | $ 35,331 | ||
Weighted average common shares outstanding for basic earnings per common share (in shares) | 59,478,343 | 46,684,384 | 41,469,211 | ||||||||||
Dilutive potential common shares | 690,796 | 1,221,845 | 713,728 | ||||||||||
Shares used in computing diluted earnings per common share (in shares) | 60,169,139 | 47,906,229 | 42,182,939 | ||||||||||
Basic earnings per share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.03 | $ 0.10 | $ 0.26 | $ 0.26 | $ 0.28 | $ 0.59 | $ 0.87 | $ 0.85 | ||
Diluted earnings per share (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.03 | $ 0.10 | $ 0.26 | $ 0.26 | $ 0.28 | $ 0.59 | $ 0.84 | $ 0.84 | ||
Number of shares not in computing diluted earnings per common share | 1,524,757 | 789,065 | 534,106 |
Capital Requirements - General
Capital Requirements - General Information (Details) | Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Capital Requirements | |||
Period to delay the estimated impact of the adoption of the CECL Standard to regulatory capital as the company elected the option | 2 years | ||
Addition period for transition | 3 years | ||
HBC (Wholly-owned Subsidiary) | |||
Capital Requirements | |||
Capital conservation buffer (as a percent) | 2.50% | 2.50% |
Capital Requirements - Tabular
Capital Requirements - Tabular Disclosure (Details) $ in Thousands | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Total Capital (to risk-weighted assets) | ||
Actual, Amount | $ 483,870 | $ 457,158 |
Required For Capital Adequacy Purposes, Amount | $ 307,067 | $ 329,306 |
Actual, Ratio (as a percent) | 16.5 | 14.6 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 10.5 | 10.5 |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 410,307 | $ 393,432 |
Required For Capital Adequacy Purposes, Amount | $ 248,578 | $ 266,581 |
Actual, Ratio (as a percent) | 14 | 12.5 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.5 | 8.5 |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 410,307 | $ 393,432 |
Required For Capital Adequacy Purposes, Amount | $ 204,711 | $ 219,538 |
Actual, Ratio (as a percent) | 14.00% | 12.50% |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 7.00% | 7.00% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | $ 410,307 | $ 393,432 |
Required For Capital Adequacy Purposes, Amount | $ 180,281 | $ 161,677 |
Actual, Ratio (as a percent) | 9.1 | 9.7 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4 | 4 |
HBC (Wholly-owned Subsidiary) | ||
Total Capital (to risk-weighted assets) | ||
Actual, Amount | $ 461,933 | $ 435,757 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 292,258 | 313,485 |
Required For Capital Adequacy Purposes, Amount | $ 306,871 | $ 329,159 |
Actual, Ratio (as a percent) | 15.8 | 13.9 |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 10 | 10 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 10.5 | 10.5 |
Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 428,109 | $ 411,585 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 233,806 | 250,788 |
Required For Capital Adequacy Purposes, Amount | $ 248,419 | $ 266,462 |
Actual, Ratio (as a percent) | 14.6 | 13.1 |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 8 | 8 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 8.5 | 8.5 |
Common Equity Tier 1 Capital (to risk-weighted assets) | ||
Actual, Amount | $ 428,109 | $ 411,585 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 189,968 | 203,765 |
Required For Capital Adequacy Purposes, Amount | $ 204,580 | $ 219,439 |
Actual, Ratio (as a percent) | 14.60% | 13.10% |
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% | 7.00% |
Tier 1 Capital (to average assets) | ||
Actual, Amount | $ 428,109 | $ 411,585 |
To Be Well Capitalized Under Regulatory Requirements, Amount | 225,263 | 202,013 |
Required For Capital Adequacy Purposes, Amount | $ 180,211 | $ 161,611 |
Actual, Ratio (as a percent) | 9.5 | 10.2 |
To Be Well Capitalized Under Regulatory Requirements, Ratio (as a percent) | 5 | 5 |
Required For Capital Adequacy Purposes, Ratio (as a percent) | 4 | 4 |
Capital Requirements - Dividend
Capital Requirements - Dividends to Parent (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash dividend | ||
Subordinated Debt. | $ 39,740,000 | $ 39,554,000 |
HCC (Parent) | ||
Cash dividend | ||
Subordinated Debt. | 39,740,000 | 39,554,000 |
HBC (Wholly-owned Subsidiary) | ||
Cash dividend | ||
Cash dividend available | 21,996,000 | |
Dividends paid to parent company | $ 32,000,000 | $ 22,500,000 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Non-interest Income In-scope of Topic 606 | $ 3,650 | $ 4,510 | $ 4,113 | ||||||||
Non-interest Income Out-of-scope of Topic 606 | 6,272 | 5,734 | 5,461 | ||||||||
Total noninterest income | $ 2,056 | $ 2,595 | $ 2,078 | $ 3,193 | $ 2,393 | $ 2,618 | $ 2,765 | $ 2,468 | 9,922 | 10,244 | 9,574 |
Service charges and fees on deposit accounts | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Non-interest Income In-scope of Topic 606 | $ 2,859 | $ 4,510 | $ 4,113 | ||||||||
Revenue, Product and Service [Extensible List] | Service charges and fees on deposit accounts | Service charges and fees on deposit accounts | Service charges and fees on deposit accounts | ||||||||
Gain on the disposition of foreclosed assets | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Non-interest Income In-scope of Topic 606 | $ 791 | ||||||||||
Revenue, Product and Service [Extensible List] | Gain on the disposition of foreclosed assets | Gain on the disposition of foreclosed assets | Gain on the disposition of foreclosed assets |
Noninterest Expense (Details)
Noninterest Expense (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Noninterest Expense | ||||||||||
Salaries and employee benefits | $ 50,927,000 | $ 50,754,000 | $ 43,762,000 | |||||||
Occupancy and equipment | 8,018,000 | 6,647,000 | 5,411,000 | |||||||
Professional fees | 5,338,000 | 3,259,000 | 1,969,000 | |||||||
Amortization of intangible assets | 3,751,000 | 2,739,000 | 1,943,000 | |||||||
Software subscriptions | 3,102,000 | 2,397,000 | 2,343,000 | |||||||
Data processing | 2,770,000 | 2,890,000 | 1,978,000 | |||||||
Insurance expense | 2,286,000 | 1,864,000 | 1,685,000 | |||||||
Supplemental retirement plan cost | 1,724,000 | 1,240,000 | 202,000 | |||||||
Other | 11,595,000 | 13,108,000 | 16,228,000 | |||||||
Total noninterest expense, excluding merger-related costs | 89,511,000 | 84,898,000 | 75,521,000 | |||||||
Salaries and employee benefits merger-related costs | 356,000 | 6,580,000 | 3,569,000 | |||||||
Other merger-related costs | 2,245,000 | 4,500,000 | 5,598,000 | |||||||
Total merger-related costs | $ 101,000 | $ 17,000 | $ 59,000 | $ 2,424,000 | $ 9,879,000 | $ 661,000 | $ 540,000 | $ 2,601,000 | $ 11,080,000 | $ 9,167,000 |
Business Segment Information -
Business Segment Information - Business Segments (Details) | 12 Months Ended |
Dec. 31, 2020segment | |
Focus | |
Business Segment Information | |
Number of business segments | 2 |
Business Segment Information _2
Business Segment Information - Operating Statements (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Operating Income | |||||||||||
Interest income | $ 36,145,000 | $ 36,252,000 | $ 37,132,000 | $ 40,942,000 | $ 42,471,000 | $ 33,250,000 | $ 33,489,000 | $ 33,449,000 | $ 150,471,000 | $ 142,659,000 | $ 129,845,000 |
Total interest expense | 1,940,000 | 2,087,000 | 2,192,000 | 2,362,000 | 3,242,000 | 2,625,000 | 2,573,000 | 2,407,000 | 8,581,000 | 10,847,000 | 7,822,000 |
Net interest income | 34,205,000 | 34,165,000 | 34,940,000 | 38,580,000 | 39,229,000 | 30,625,000 | 30,916,000 | 31,042,000 | 141,890,000 | 131,812,000 | 122,023,000 |
Provision for credit losses on loans | (1,348,000) | 197,000 | 1,114,000 | 13,270,000 | 3,223,000 | (576,000) | (740,000) | (1,061,000) | 13,233,000 | 846,000 | 7,421,000 |
Net interest income after provision | 35,553,000 | 33,968,000 | 33,826,000 | 25,310,000 | 36,006,000 | 31,201,000 | 31,656,000 | 32,103,000 | 128,657,000 | 130,966,000 | 114,602,000 |
Noninterest income | 2,056,000 | 2,595,000 | 2,078,000 | 3,193,000 | 2,393,000 | 2,618,000 | 2,765,000 | 2,468,000 | 9,922,000 | 10,244,000 | 9,574,000 |
Noninterest expense | 21,557,000 | 21,168,000 | 21,012,000 | 25,774,000 | 30,626,000 | 17,909,000 | 18,445,000 | 17,918,000 | 89,511,000 | 84,898,000 | 75,521,000 |
Income before income taxes | 16,052,000 | 15,395,000 | 14,892,000 | 2,729,000 | 7,773,000 | 15,910,000 | 15,976,000 | 16,653,000 | 49,068,000 | 56,312,000 | 48,655,000 |
Income tax expense | 4,429,000 | 4,198,000 | 4,274,000 | 868,000 | 2,088,000 | 4,633,000 | 4,623,000 | 4,507,000 | 13,769,000 | 15,851,000 | 13,324,000 |
Net income | 11,623,000 | 11,197,000 | 10,618,000 | 1,861,000 | 5,685,000 | 11,277,000 | 11,353,000 | $ 12,146,000 | 35,299,000 | 40,461,000 | 35,331,000 |
Total assets | 4,634,114,000 | 4,109,463,000 | 4,634,114,000 | 4,109,463,000 | 3,096,562,000 | ||||||
Loans, net of deferred fees | 2,619,261,000 | 2,533,844,000 | 2,619,261,000 | 2,533,844,000 | 1,886,405,000 | ||||||
Goodwill | 167,631,000 | 167,420,000 | 167,631,000 | 167,420,000 | 83,753,000 | ||||||
Total merger-related costs | 101,000 | $ 17,000 | $ 59,000 | $ 2,424,000 | 9,879,000 | $ 661,000 | $ 540,000 | 2,601,000 | 11,080,000 | 9,167,000 | |
Banking | |||||||||||
Operating Income | |||||||||||
Interest income | 139,744,000 | 130,971,000 | 115,147,000 | ||||||||
Intersegment interest allocations | 923,000 | 1,182,000 | 1,856,000 | ||||||||
Total interest expense | 8,581,000 | 10,847,000 | 7,822,000 | ||||||||
Net interest income | 132,086,000 | 121,306,000 | 109,181,000 | ||||||||
Provision for credit losses on loans | 12,928,000 | 517,000 | 7,224,000 | ||||||||
Net interest income after provision | 119,158,000 | 120,789,000 | 101,957,000 | ||||||||
Noninterest income | 9,277,000 | 9,643,000 | 8,662,000 | ||||||||
Noninterest expense | 83,149,000 | 78,159,000 | 69,164,000 | ||||||||
Intersegment expense allocations | 404,000 | 547,000 | 753,000 | ||||||||
Income before income taxes | 45,690,000 | 52,820,000 | 42,208,000 | ||||||||
Income tax expense | 12,770,000 | 14,819,000 | 11,418,000 | ||||||||
Net income | 32,920,000 | 38,001,000 | 30,790,000 | ||||||||
Total assets | 4,567,239,000 | 4,045,801,000 | 4,567,239,000 | 4,045,801,000 | 3,028,721,000 | ||||||
Loans, net of deferred fees | 2,572,060,000 | 2,487,864,000 | 2,572,060,000 | 2,487,864,000 | 1,832,815,000 | ||||||
Goodwill | 154,587,000 | 154,376,000 | 154,587,000 | 154,376,000 | 70,709,000 | ||||||
Total merger-related costs | 2,601,000 | 11,080,000 | 9,167,000 | ||||||||
Factoring | |||||||||||
Operating Income | |||||||||||
Interest income | 10,727,000 | 11,688,000 | 14,698,000 | ||||||||
Intersegment interest allocations | (923,000) | (1,182,000) | (1,856,000) | ||||||||
Net interest income | 9,804,000 | 10,506,000 | 12,842,000 | ||||||||
Provision for credit losses on loans | 305,000 | 329,000 | 197,000 | ||||||||
Net interest income after provision | 9,499,000 | 10,177,000 | 12,645,000 | ||||||||
Noninterest income | 645,000 | 601,000 | 912,000 | ||||||||
Noninterest expense | 6,362,000 | 6,739,000 | 6,357,000 | ||||||||
Intersegment expense allocations | (404,000) | (547,000) | (753,000) | ||||||||
Income before income taxes | 3,378,000 | 3,492,000 | 6,447,000 | ||||||||
Income tax expense | 999,000 | 1,032,000 | 1,906,000 | ||||||||
Net income | 2,379,000 | 2,460,000 | 4,541,000 | ||||||||
Total assets | 66,875,000 | 63,662,000 | 66,875,000 | 63,662,000 | 67,841,000 | ||||||
Loans, net of deferred fees | 47,201,000 | 45,980,000 | 47,201,000 | 45,980,000 | 53,590,000 | ||||||
Goodwill | 13,044,000 | 13,044,000 | 13,044,000 | 13,044,000 | 13,044,000 | ||||||
HCC (Parent) | |||||||||||
Operating Income | |||||||||||
Total interest expense | 2,321,000 | 2,314,000 | 2,315,000 | ||||||||
Income before income taxes | 26,416,000 | 17,223,000 | 11,655,000 | ||||||||
Income tax expense | (1,628,000) | (1,481,000) | (1,515,000) | ||||||||
Net income | 35,299,000 | 40,461,000 | $ 35,331,000 | ||||||||
Total assets | $ 617,940,000 | $ 616,889,000 | $ 617,940,000 | $ 616,889,000 |
Parent Company only Condensed_3
Parent Company only Condensed Financial Information - Balance Sheets (Details) - USD ($) | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets | ||||
Cash and cash equivalents | $ 1,131,073,000 | $ 457,370,000 | ||
Total assets | 4,634,114,000 | 4,109,463,000 | $ 3,096,562,000 | |
Liabilities and Shareholders' Equity | ||||
Subordinated debt, net of issuance costs | 39,740,000 | 39,554,000 | ||
Shareholder's equity | 577,889,000 | 576,708,000 | $ 367,466,000 | $ 271,239,000 |
Total liabilities and shareholders' equity | 4,634,114,000 | 4,109,463,000 | ||
HCC (Parent) | ||||
Assets | ||||
Cash and cash equivalents | 20,378,000 | 20,260,000 | ||
Investment in subsidiary bank | 595,681,000 | 594,868,000 | ||
Other assets | 1,881,000 | 1,761,000 | ||
Total assets | 617,940,000 | 616,889,000 | ||
Liabilities and Shareholders' Equity | ||||
Subordinated debt, net of issuance costs | 39,740,000 | 39,554,000 | ||
Other liabilities | 311,000 | 627,000 | ||
Shareholder's equity | 577,889,000 | 576,708,000 | ||
Total liabilities and shareholders' equity | $ 617,940,000 | $ 616,889,000 |
Parent Company only Condensed_4
Parent Company only Condensed Financial Information - Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Condensed statements of income | |||||||||||
Interest expense | $ (1,940) | $ (2,087) | $ (2,192) | $ (2,362) | $ (3,242) | $ (2,625) | $ (2,573) | $ (2,407) | $ (8,581) | $ (10,847) | $ (7,822) |
Income before income taxes | 16,052 | 15,395 | 14,892 | 2,729 | 7,773 | 15,910 | 15,976 | 16,653 | 49,068 | 56,312 | 48,655 |
Income tax benefit | (4,429) | (4,198) | (4,274) | (868) | (2,088) | (4,633) | (4,623) | (4,507) | (13,769) | (15,851) | (13,324) |
Net income | $ 11,623 | $ 11,197 | $ 10,618 | $ 1,861 | $ 5,685 | $ 11,277 | $ 11,353 | $ 12,146 | 35,299 | 40,461 | 35,331 |
HCC (Parent) | |||||||||||
Condensed statements of income | |||||||||||
Dividend from subsidiary bank | 32,000 | 22,500 | 17,000 | ||||||||
Other Income | 121 | ||||||||||
Interest expense | (2,321) | (2,314) | (2,315) | ||||||||
Other expenses | (3,263) | (3,084) | (3,030) | ||||||||
Income before income taxes | 26,416 | 17,223 | 11,655 | ||||||||
Equity in undistributed net income of subsidiary bank | 7,255 | 21,757 | 22,161 | ||||||||
Income tax benefit | 1,628 | 1,481 | 1,515 | ||||||||
Net income | $ 35,299 | $ 40,461 | $ 35,331 |
Parent Company only Condensed_5
Parent Company only Condensed Financial Information - Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | |||||||||||
Net Income | $ 11,623 | $ 11,197 | $ 10,618 | $ 1,861 | $ 5,685 | $ 11,277 | $ 11,353 | $ 12,146 | $ 35,299 | $ 40,461 | $ 35,331 |
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Amortization of restricted stock award, net | 1,689 | 1,283 | 1,109 | ||||||||
Net cash provided by operating activities | 58,086 | 50,343 | 48,572 | ||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from exercise of stock options | 1,714 | 1,626 | 2,667 | ||||||||
Net cash provided by (used in) financing activities | 470,025 | (28,780) | (277,882) | ||||||||
Net increase in cash and cash equivalents | 673,703 | 292,802 | (151,654) | ||||||||
Cash and cash equivalents, beginning of period | 457,370 | 164,568 | 457,370 | 164,568 | 316,222 | ||||||
Cash and cash equivalents, end of period | 1,131,073 | 457,370 | 1,131,073 | 457,370 | 164,568 | ||||||
HCC (Parent) | |||||||||||
Cash flows from operating activities: | |||||||||||
Net Income | 35,299 | 40,461 | 35,331 | ||||||||
Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
Amortization of restricted stock award, net | 1,689 | 1,283 | 1,109 | ||||||||
Equity in undistributed net income of subsidiary bank | (7,255) | (21,757) | (22,161) | ||||||||
Net change in other assets and liabilities | (250) | 12 | (64) | ||||||||
Net cash provided by operating activities | 29,483 | 19,999 | 14,215 | ||||||||
Cash flows from financing activities: | |||||||||||
Payment of cash dividends | (31,079) | (22,723) | (18,464) | ||||||||
Proceeds from exercise of stock options | 1,714 | 1,626 | 2,667 | ||||||||
Net cash provided by (used in) financing activities | (29,365) | (21,097) | (15,797) | ||||||||
Net increase in cash and cash equivalents | 118 | (1,098) | (1,582) | ||||||||
Cash and cash equivalents, beginning of period | $ 20,260 | $ 21,358 | 20,260 | 21,358 | 22,940 | ||||||
Cash and cash equivalents, end of period | $ 20,378 | $ 20,260 | $ 20,378 | $ 20,260 | $ 21,358 |
Quarterly Financial Data (Una_3
Quarterly Financial Data (Unaudited) - Selected Unaudited Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Quarterly Financial Data (Unaudited) | |||||||||||
Interest income | $ 36,145 | $ 36,252 | $ 37,132 | $ 40,942 | $ 42,471 | $ 33,250 | $ 33,489 | $ 33,449 | $ 150,471 | $ 142,659 | $ 129,845 |
Interest expense | 1,940 | 2,087 | 2,192 | 2,362 | 3,242 | 2,625 | 2,573 | 2,407 | 8,581 | 10,847 | 7,822 |
Net interest income | 34,205 | 34,165 | 34,940 | 38,580 | 39,229 | 30,625 | 30,916 | 31,042 | 141,890 | 131,812 | 122,023 |
Provision (recapture) for credit losses on loans | (1,348) | 197 | 1,114 | 13,270 | 3,223 | (576) | (740) | (1,061) | 13,233 | 846 | 7,421 |
Net interest income after provision for credit losses on loans | 35,553 | 33,968 | 33,826 | 25,310 | 36,006 | 31,201 | 31,656 | 32,103 | 128,657 | 130,966 | 114,602 |
Noninterest income | 2,056 | 2,595 | 2,078 | 3,193 | 2,393 | 2,618 | 2,765 | 2,468 | 9,922 | 10,244 | 9,574 |
Noninterest expense | 21,557 | 21,168 | 21,012 | 25,774 | 30,626 | 17,909 | 18,445 | 17,918 | 89,511 | 84,898 | 75,521 |
Income before income taxes | 16,052 | 15,395 | 14,892 | 2,729 | 7,773 | 15,910 | 15,976 | 16,653 | 49,068 | 56,312 | 48,655 |
Income tax expense | 4,429 | 4,198 | 4,274 | 868 | 2,088 | 4,633 | 4,623 | 4,507 | 13,769 | 15,851 | 13,324 |
Net income | $ 11,623 | $ 11,197 | $ 10,618 | $ 1,861 | $ 5,685 | $ 11,277 | $ 11,353 | $ 12,146 | $ 35,299 | $ 40,461 | $ 35,331 |
Earnings per common share: | |||||||||||
Basic (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.03 | $ 0.10 | $ 0.26 | $ 0.26 | $ 0.28 | $ 0.59 | $ 0.87 | $ 0.85 |
Diluted (in dollars per share) | $ 0.19 | $ 0.19 | $ 0.18 | $ 0.03 | $ 0.10 | $ 0.26 | $ 0.26 | $ 0.28 | $ 0.59 | $ 0.84 | $ 0.84 |
Quarterly Financial Data (Una_4
Quarterly Financial Data (Unaudited) - Acquisition and Integration Costs (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2020 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Business Combinations | ||||||||||
Total merger-related costs | $ 101,000 | $ 17,000 | $ 59,000 | $ 2,424,000 | $ 9,879,000 | $ 661,000 | $ 540,000 | $ 2,601,000 | $ 11,080,000 | $ 9,167,000 |
Banking | ||||||||||
Business Combinations | ||||||||||
Total merger-related costs | $ 2,601,000 | $ 11,080,000 | $ 9,167,000 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jan. 28, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||||
Quarterly cash dividends declared to holders of common stock | $ 0.52 | $ 0.48 | $ 0.44 | |
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Quarterly cash dividends declared to holders of common stock | $ 0.13 |