Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2023 | Nov. 07, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-38671 | |
Entity Registrant Name | CAPITAL BANCORP INC | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 52-2083046 | |
Entity Address, Address Line One | 2275 Research Boulevard | |
Entity Address, Address Line Two | Suite 600 | |
Entity Address, City or Town | Rockville | |
Entity Address, State or Province | MD | |
Entity Address, Postal Zip Code | 20850 | |
City Area Code | 301 | |
Local Phone Number | 468-8848 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | CBNK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,894,419 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001419536 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Assets | ||
Cash and due from banks | $ 13,767 | $ 19,963 |
Interest-bearing deposits at other financial institutions | 130,428 | 39,764 |
Federal funds sold | 1,957 | 20,688 |
Total cash and cash equivalents | 146,152 | 80,415 |
Investment securities available for sale | 206,055 | 252,481 |
Restricted investments | 4,340 | 7,362 |
Loans held for sale | 4,843 | 7,416 |
U.S. Small Business Administration (“SBA”) Payroll Protection Program (“PPP”) loans receivable, net of fees and costs | 750 | 2,163 |
Portfolio loans receivable, net of deferred fees and costs | 1,861,929 | 1,728,592 |
Less allowance for credit losses | (28,279) | (26,385) |
Total portfolio loans held for investment, net | 1,833,650 | 1,702,207 |
Premises and equipment, net | 5,297 | 3,386 |
Accrued interest receivable | 11,231 | 9,489 |
Deferred tax asset | 13,644 | 13,777 |
Bank owned life insurance | 37,315 | 36,524 |
Other assets | 9,207 | 8,435 |
Total assets | 2,272,484 | 2,123,655 |
Deposits | ||
Noninterest-bearing | 680,803 | 674,313 |
Interest-bearing | 1,287,185 | 1,083,759 |
Total deposits | 1,967,988 | 1,758,072 |
Federal Home Loan Bank advances | 22,000 | 107,000 |
Other borrowed funds | 12,062 | 12,062 |
Accrued interest payable | 5,204 | 1,031 |
Other liabilities | 22,352 | 21,475 |
Total liabilities | 2,029,606 | 1,899,640 |
Stockholders' equity | ||
Common stock, $.01 par value; 49,000,000 shares authorized; 13,896,062 issued and outstanding at September 30, 2023; 14,138,829 issued and outstanding at December 31, 2022 | 139 | 141 |
Additional paid-in capital | 54,549 | 58,190 |
Retained earnings | 206,033 | 182,435 |
Accumulated other comprehensive loss | (17,843) | (16,751) |
Total stockholders' equity | 242,878 | 224,015 |
Total liabilities and stockholders' equity | $ 2,272,484 | $ 2,123,655 |
Common stock, shares outstanding (in shares) | 13,896,062 | 14,138,829 |
Common stock, shares issued (in shares) | 13,896,062 | 14,138,829 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 49,000,000 | 49,000,000 |
Common stock, shares issued (in shares) | 13,896,062 | 14,138,829 |
Common stock, shares outstanding (in shares) | 13,896,062 | 14,138,829 |
Consolidated Statements of Inco
Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Interest income | ||||
Loans, including fees | $ 45,385 | $ 36,451 | $ 129,651 | $ 105,645 |
Investment securities available for sale | 1,089 | 1,362 | 3,732 | 2,510 |
Federal funds sold and other | 1,267 | 527 | 2,854 | 1,143 |
Total interest income | 47,741 | 38,340 | 136,237 | 109,298 |
Interest expense | ||||
Deposits | 10,703 | 1,386 | 27,866 | 3,234 |
Borrowed funds | 228 | 277 | 1,734 | 656 |
Total interest expense | 10,931 | 1,663 | 29,600 | 3,890 |
Net interest income | 36,810 | 36,677 | 106,637 | 105,408 |
Provision for credit losses | 2,280 | 1,260 | 6,802 | 4,247 |
Provision for credit losses on unfunded commitments | 24 | 0 | 5 | 0 |
Net interest income after provision for credit losses | 34,506 | 35,417 | 99,830 | 101,161 |
Noninterest income | ||||
Other income | 446 | 416 | 1,282 | 1,296 |
Total noninterest income | 6,326 | 7,108 | 19,039 | 23,811 |
Noninterest expenses | ||||
Salaries and employee benefits | 12,419 | 10,747 | 37,116 | 31,129 |
Occupancy and equipment | 1,351 | 1,138 | 4,100 | 3,476 |
Professional fees | 2,358 | 3,848 | 7,340 | 8,586 |
Data processing | 6,469 | 7,178 | 19,558 | 22,721 |
Advertising | 1,565 | 1,632 | 4,728 | 5,494 |
Loan processing | 426 | 625 | 1,435 | 1,352 |
Foreclosed real estate expenses (income), net | 1 | 0 | 7 | (183) |
Other operating | 3,457 | 2,926 | 9,576 | 9,804 |
Total noninterest expenses | 28,046 | 28,094 | 83,860 | 82,379 |
Income before income taxes | 12,786 | 14,431 | 35,009 | 42,593 |
Income tax expense | 2,998 | 3,336 | 8,168 | 9,779 |
Net income | $ 9,788 | $ 11,095 | $ 26,841 | $ 32,814 |
Basic earnings per share (in dollars per share) | $ 0.70 | $ 0.79 | $ 1.91 | $ 2.34 |
Diluted earnings per share (in dollars per share) | $ 0.70 | $ 0.77 | $ 1.90 | $ 2.29 |
Weighted average common shares outstanding: | ||||
Basic (in shares) | 13,932,848 | 14,030,408 | 14,038,230 | 14,008,885 |
Diluted (in shares) | 14,023,906 | 14,374,980 | 14,111,887 | 14,328,602 |
Service charges on deposits | ||||
Noninterest income | ||||
Noninterest income | $ 250 | $ 199 | $ 724 | $ 545 |
Credit card fees | ||||
Noninterest income | ||||
Noninterest income | 4,387 | 5,524 | 13,303 | 17,658 |
Mortgage banking revenue | ||||
Noninterest income | ||||
Noninterest income | $ 1,243 | $ 969 | $ 3,730 | $ 4,312 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 9,788 | $ 11,095 | $ 26,841 | $ 32,814 |
Other comprehensive income (loss): | ||||
Unrealized loss on investment securities available for sale | (1,820) | (5,684) | (883) | (22,026) |
Income tax benefit (expense) relating to the items above | 28 | 1,437 | (209) | 5,519 |
Other comprehensive loss | (1,792) | (4,247) | (1,092) | (16,507) |
Comprehensive income | $ 7,996 | $ 6,848 | $ 25,749 | $ 16,307 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (unaudited) - USD ($) $ in Thousands | Total | Impact of adoption of the CECL standard | Common Stock | Additional Paid-in Capital | Retained Earnings | Retained Earnings Impact of adoption of the CECL standard | Accumulated Other Comprehensive Loss |
Beginning balance (in shares) at Dec. 31, 2021 | 13,962,334 | ||||||
Beginning balance at Dec. 31, 2021 | $ 197,903 | $ 140 | $ 54,306 | $ 144,533 | $ (1,076) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 10,211 | 10,211 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | (6,747) | (6,747) | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 27,028 | ||||||
Stock options exercised, net of shares withheld for purchase price | 244 | 339 | (95) | ||||
Shares issued as compensation (in shares) | 11,158 | ||||||
Shares issued as compensation | 164 | 164 | |||||
Stock-based compensation | 417 | 417 | |||||
Cash dividends to stockholders | (700) | (700) | |||||
Ending balance (in shares) at Mar. 31, 2022 | 14,000,520 | ||||||
Ending balance at Mar. 31, 2022 | 201,492 | $ 140 | 55,226 | 153,949 | (7,823) | ||
Beginning balance (in shares) at Dec. 31, 2021 | 13,962,334 | ||||||
Beginning balance at Dec. 31, 2021 | 197,903 | $ 140 | 54,306 | 144,533 | (1,076) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 32,814 | ||||||
Ending balance (in shares) at Sep. 30, 2022 | 14,038,599 | ||||||
Ending balance at Sep. 30, 2022 | $ 214,005 | $ 140 | 56,532 | 174,916 | (17,583) | ||
Accounting Standards Update [Extensible List] | Accounting Standards Update 2016-13 [Member] | ||||||
Beginning balance (in shares) at Dec. 31, 2021 | 13,962,334 | ||||||
Beginning balance at Dec. 31, 2021 | $ 197,903 | $ 140 | 54,306 | 144,533 | (1,076) | ||
Ending balance (in shares) at Dec. 31, 2022 | 14,138,829 | 14,138,829 | |||||
Ending balance at Dec. 31, 2022 | $ 224,015 | $ (29) | $ 141 | 58,190 | 182,435 | $ (29) | (16,751) |
Beginning balance (in shares) at Mar. 31, 2022 | 14,000,520 | ||||||
Beginning balance at Mar. 31, 2022 | 201,492 | $ 140 | 55,226 | 153,949 | (7,823) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 11,508 | 11,508 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | (5,513) | (5,513) | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 6,638 | ||||||
Stock options exercised, net of shares withheld for purchase price | 77 | 84 | (7) | ||||
Shares issued as compensation (in shares) | 3,000 | ||||||
Shares issued as compensation | 37 | 37 | |||||
Stock-based compensation | 415 | 415 | |||||
Cash dividends to stockholders | (700) | (700) | |||||
Ending balance (in shares) at Jun. 30, 2022 | 14,010,158 | ||||||
Ending balance at Jun. 30, 2022 | 207,316 | $ 140 | 55,762 | 164,750 | (13,336) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 11,095 | 11,095 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | (4,247) | (4,247) | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 28,441 | ||||||
Stock options exercised, net of shares withheld for purchase price | 268 | 355 | (87) | ||||
Shares issued as compensation | 0 | ||||||
Stock-based compensation | 415 | 415 | |||||
Cash dividends to stockholders | (842) | (842) | |||||
Ending balance (in shares) at Sep. 30, 2022 | 14,038,599 | ||||||
Ending balance at Sep. 30, 2022 | $ 214,005 | $ 140 | 56,532 | 174,916 | (17,583) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 14,138,829 | 14,138,829 | |||||
Beginning balance at Dec. 31, 2022 | $ 224,015 | (29) | $ 141 | 58,190 | 182,435 | (29) | (16,751) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 9,735 | 9,735 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | 2,792 | 2,792 | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 63,064 | ||||||
Stock options exercised, net of shares withheld for purchase price | 589 | $ 1 | 782 | (194) | |||
Shares issued as compensation (in shares) | 28,081 | ||||||
Shares issued as compensation | 546 | 585 | (39) | ||||
Stock-based compensation | 438 | 438 | |||||
Cash dividends to stockholders | (850) | (850) | |||||
Shares repurchased and retired (in shares) | (146,937) | ||||||
Shares repurchased and retired | (2,719) | $ (1) | (2,718) | ||||
Ending balance (in shares) at Mar. 31, 2023 | 14,083,037 | ||||||
Ending balance at Mar. 31, 2023 | $ 234,517 | $ 141 | 57,277 | 191,058 | (13,959) | ||
Beginning balance (in shares) at Dec. 31, 2022 | 14,138,829 | 14,138,829 | |||||
Beginning balance at Dec. 31, 2022 | $ 224,015 | $ (29) | $ 141 | 58,190 | 182,435 | $ (29) | (16,751) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | $ 26,841 | ||||||
Ending balance (in shares) at Sep. 30, 2023 | 13,896,062 | 13,893,083 | |||||
Ending balance at Sep. 30, 2023 | $ 242,878 | $ 139 | 54,549 | 206,033 | (17,843) | ||
Beginning balance (in shares) at Mar. 31, 2023 | 14,083,037 | ||||||
Beginning balance at Mar. 31, 2023 | 234,517 | $ 141 | 57,277 | 191,058 | (13,959) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 7,318 | 7,318 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | (2,092) | (2,092) | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 34,687 | ||||||
Stock options exercised, net of shares withheld for purchase price | 423 | 429 | (6) | ||||
Shares issued as compensation (in shares) | 2,097 | ||||||
Shares issued as compensation | (11) | 26 | (37) | ||||
Stock-based compensation | 438 | 438 | |||||
Cash dividends to stockholders | (843) | (843) | |||||
Shares repurchased and retired (in shares) | (138,407) | ||||||
Shares repurchased and retired | (2,315) | $ (1) | (2,314) | ||||
Ending balance (in shares) at Jun. 30, 2023 | 13,981,414 | ||||||
Ending balance at Jun. 30, 2023 | 237,435 | $ 140 | 55,856 | 197,490 | (16,051) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 9,788 | 9,788 | |||||
Unrealized gain (loss) on investment securities available for sale, net of income taxes | (1,792) | (1,792) | |||||
Stock options exercised, net of repurchased shares withheld for purchase price (in shares) | 12,244 | ||||||
Stock options exercised, net of shares withheld for purchase price | 23 | 153 | (130) | ||||
Stock-based compensation | 441 | 441 | |||||
Cash dividends to stockholders | (1,115) | (1,115) | |||||
Shares repurchased and retired (in shares) | (100,575) | ||||||
Shares repurchased and retired | $ (1,902) | $ (1) | (1,901) | ||||
Ending balance (in shares) at Sep. 30, 2023 | 13,896,062 | 13,893,083 | |||||
Ending balance at Sep. 30, 2023 | $ 242,878 | $ 139 | $ 54,549 | $ 206,033 | $ (17,843) |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders' Equity (unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||||
Cash dividends to stockholders (in dollar per share) | $ 0.08 | $ 0.06 | $ 0.06 | $ 0.06 | $ 0.05 | $ 0.05 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 26,841 | $ 32,814 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Provision for credit losses | 6,802 | 4,247 |
Provision for credit losses on unfunded commitments | 5 | 0 |
Provision for mortgage put-back reserve, net | 12 | 6 |
Net amortization on investments | 82 | 520 |
Premises and equipment depreciation | 235 | 283 |
Lease asset amortization | 396 | 807 |
Increase in cash surrender value of BOLI | (791) | (761) |
Executive long-term incentive plan expense | 297 | 436 |
Stock-based compensation expense | 1,317 | 1,247 |
Director and employee compensation paid in Company stock | 535 | 201 |
Deferred income tax (benefit) expense | (76) | 1,264 |
Loss on marketable equity securities | 0 | 13 |
Valuation decrease on derivatives | 8 | 5 |
Gain on sale of foreclosed real estate | 0 | (20) |
Increase (decrease) in valuation of loans held for sale carried at fair value | 6 | (4,312) |
Proceeds from sales of loans held for sale | 144,871 | 269,446 |
Originations of loans held for sale | (142,304) | (256,020) |
Changes in assets and liabilities: | ||
(Increase) decrease in accrued interest receivable | (1,742) | 11 |
Increase (decrease) in taxes payable | 450 | (282) |
Increase in other assets | (781) | (1,880) |
Increase in accrued interest payable | 4,173 | 8 |
Increase (decrease) in other liabilities | 889 | (2,680) |
Net cash provided by operating activities | 41,225 | 45,353 |
Cash flows from investing activities | ||
Purchases of securities available for sale | 0 | (113,078) |
Proceeds from maturities, calls and paydowns of securities available for sale | 45,461 | 5,368 |
Net sales (purchases) of restricted investments | 3,022 | (129) |
Net decrease in SBA-PPP loans receivable | 1,413 | 105,623 |
Net increase in portfolio loans receivable | (139,049) | (127,356) |
Net purchases of premises and equipment | (2,542) | (1,020) |
Proceeds from sales of foreclosed real estate | 0 | 106 |
Net cash used in investing activities | (91,695) | (130,486) |
Net increase (decrease) in: | ||
Noninterest-bearing deposits | 6,490 | 18,383 |
Interest-bearing deposits | 203,426 | (77,929) |
Federal Home Loan Bank repayments | (85,000) | 0 |
Dividends paid | (2,808) | (2,242) |
Repurchase of common stock | (6,936) | 0 |
Net proceeds from exercise of stock options | 1,035 | 589 |
Net cash provided by (used for) financing activities | 116,207 | (61,199) |
Net increase (decrease) in cash and cash equivalents | 65,737 | (146,332) |
Cash and cash equivalents, beginning of year | 80,415 | 183,395 |
Cash and cash equivalents, end of period | 146,152 | 37,063 |
Noncash activities: | ||
Change in unrealized losses on investments | (883) | (22,026) |
Cash paid during the period for: | ||
Taxes | 7,704 | 8,797 |
Interest | $ 25,427 | $ 3,882 |
Nature of Business and Basis of
Nature of Business and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of Business and Basis of Presentation | Capital Bancorp, Inc. and Subsidiaries Notes to Unaudited Consolidated Financial Statements Note 1 - Nature of Business and Basis of Presentation Capital Bancorp, Inc. is a Maryland corporation and the bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville and Columbia, Maryland; Reston, Virginia; and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), the Bank’s residential mortgage banking arm, and issues credit cards through OpenSky®, a digitally-driven nationwide credit card platform providing secured, partially secured, and unsecured credit solutions. The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. At September 30, 2023, Church Street Capital had loans totaling $8.0 million with a collectively assessed allowance for credit losses (“ACL”) of $280 thousand. Refer to Note 5 - Portfolio Loans Receivable to the Unaudited Consolidated Financial Statements for further discussion of the consolidated ACL. In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities. Basis of presentation: The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with rules and regulations of the Securities and Exchange Commission (“SEC”) and include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. The statements do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments have been made which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Such adjustments are all of a normal and recurring nature. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto as of December 31, 2022, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The Company reports its activities as four business segments: commercial banking; mortgage lending; credit cards; and corporate activities. In determining the appropriateness of segment definition, the Company considers components of the business about which financial information is available and regularly evaluated relative to resource allocation and performance assessment. Significant accounting policies: The preparation of consolidated financial statements in accordance with GAAP requires estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The primary reference point for the estimates is historical experience and assumptions believed to be reasonable regarding the value of certain assets and liabilities that are not readily available from other sources. Estimates are evaluated on an ongoing basis. Actual results may materially differ from these estimates under different assumptions or conditions. Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest-bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods. Investment securities Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an ACL, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an ACL is recognized in other comprehensive income. Changes in the ACL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes an AFS security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2023, there was no ACL related to the AFS portfolio. Loans held for sale Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis. Interest on loans held for sale is credited to income based on the principal amounts outstanding. Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income. The Company elects to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet. U.S. Small Business Administration Paycheck Protection Program During the global COVID-19 pandemic, pursuant to the CARES Act and the Consolidated Appropriations Act, 2021, the United States Small Business Administration Payroll Protection Program (“SBA-PPP”) provided forgivable loans to small businesses to enable them to maintain payroll, hire back employees who had been laid off, and cover overhead. SBA-PPP loans have an interest rate of 1%, have two or five year terms, and carry a 100% guarantee of the SBA. The program ended on May 31, 2021. SBA-PPP loans are eligible to be forgiven by the SBA. Due to the unique nature of these provisions, SBA-PPP loans have been disclosed as a separate balance sheet item. Origination fees received by the SBA are capitalized into the carrying amount of the loans. The deferred fee income, net of origination costs, is recognized over the life of the loan as an adjustment to yield using the effective interest method. The remaining net deferred income is recognized upon forgiveness of the loan. Portfolio loans and the allowance for credit losses Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the ACL. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. For reporting purposes, the Company discontinues the accrual of interest at the earlier of the date any portion of the principal and/or interest is 90 days past due, or at such time as we determine that it is probable that not all principal and interest payments will be collected, and that collateral is insufficient to discharge the debt in full. When the interest accrual is discontinued, all unpaid accrued interest is reversed from income. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies. On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which replaces the incurred loss methodology for determining our provision for credit losses and ACL with an expected loss methodology that is referred to as the Current Expected Credit Loss model (“CECL”). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and held-to-maturity (“HTM”) debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASU 2016-02 “Leases (Topic 842)”. In addition, ASU 2016-13 made changes to the accounting for AFS debt securities. One such change is to require credit-related impairments to be recognized as an ACL rather than as a write-down of the security’s amortized cost basis when the Company does not intend to sell or believes that the Company will be required to sell the securities prior to recovery of the security’s amortized cost basis. The Company adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company does not own HTM debt securities. There was no ACL on available for sale securities at September 30, 2023. The following table illustrates the impact of the adoption of ASC 326, or the CECL standard. The adoption of the standard required an $804 thousand increase in the ACL and a $775 thousand reduction to the reserve for unfunded commitments (“RUC”). The improved precision of the calculation of the historical utilization of unfunded commitments gave rise to the reduction. The net impact of the adoption of the CECL standard to retained earnings was $29 thousand. January 1, 2023 (in thousands) Pre-adoption of the CECL standard As Reported Under ASC 326 Impact of adoption of the CECL standard Assets: Real estate: Residential $ 484,735 $ 484,735 $ — Commercial 664,551 664,551 — Construction 238,099 238,099 — Commercial and Industrial 220,221 220,221 — Credit card, net of reserve 128,434 128,434 — Other consumer 1,179 1,179 — Portfolio loans receivable, gross $ 1,737,219 $ 1,737,219 $ — Deferred origination fees, net (8,627) (8,627) — Allowance for credit losses (26,385) (27,189) (804) Portfolio loans receivable, net $ 1,702,207 $ 1,701,403 $ (804) Liabilities: Reserve for unfunded commitments $ 1,682 $ 907 $ (775) We maintain an ACL that represents management’s estimate of the expected credit losses and risks inherent in our loan portfolio. The amount of the ACL should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all. The allowance immediately recognizes lifetime expected credit losses when a financial asset is originated or purchased. The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged-off against the allowance when they are deemed uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. In determining the ACL, we estimate losses collectively based on quantitative analysis of historical credit losses adjusted for current conditions and reasonable and supportable forecasts of collectability of future cash flows over the remaining term of each financial instrument. The Company has elected to utilize a discounted cash flow methodology for all segments, except for the other consumer portfolio segment, which applies a simplified, remaining life approach. See further detail regarding our forecasting methodology in the “Discounted Cash Flow Method” section below. Quarterly, the Company utilizes a Qualitative Scorecard to consider the need to qualitatively adjust expected credit loss estimates for information not already captured in the quantitative loss estimation process, which may impact expected credit losses. The Qualitative Scorecard evaluates certain risk environments such as economic conditions, changes in the nature and volume of portfolios, changes in experience, depth, and ability of lending management, changes in volume and severity of past due loans and similar conditions, and changes in the value of underlying collateral. The scorecard results help the Company analyze directional consistency to risk conditions and circumstances that should be considered for each loan segment and to refine its estimates of expected credit losses. As of September 30, 2023, there have been no significant changes applied through the Qualitative Scorecard subsequent to implementation on January 1, 2023. Purchased Credit Deterioration Upon adoption of ASU 2016-13, loans which were identified as Purchase Credit Impaired under the incurred loss model are identified as Purchased Credit Deteriorated (“PCD”) loans at January 1, 2023 without reassessment. In future acquisitions, the Company may purchase loans, some of which have experienced more than insignificant credit deterioration since origination. In those cases, the Company will consider certain criteria including days past due, accrual status, risk rating, credit mark, and other relevant factors in assessing whether purchased loans are PCD. PCD loans are recorded at the amount paid and the Company will determine the initial ACL required for PCD assets with no impact to earnings. The loan’s purchase price and ACL is then the initial amortized cost basis for PCD loans. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent to initial recognition, PCD loans are subject to the same interest income recognition and impairment model as non-PCD loans, with changes to the ACL recorded through provision expense. Discounted Cash Flow Method The Company uses the discounted cash flow (“DCF”) method to estimate expected credit losses for each portfolio loan segment, with the exception of other consumer loans. For each of these loan segments, the Company generates cash flow projections at the instrument level. Payment expectations are adjusted for estimated prepayment speed and for probability and severity of a loss. The expected credit losses derived from the DCF are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The modeling of expected prepayment speeds is based on historical internal data. The contractual term excludes expected extensions, renewals and modifications. The Company uses regression analysis of historical internal and peer data to determine suitable portfolio segment level loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For the credit card portfolio, a major consideration in the determination of the ACL is our historical loss experience. The Company calculates the credit card ACL collectively, applying segmentation based on collateral positions: secured, partially secured, and unsecured. For all DCF models, the Company has elected to use a four quarter forecast period across all portfolio segments. After the forecasted period, the models will revert to a long run average of each economic factor over four quarters. The Company uses economic projections from reputable and independent third parties to inform its loss driver forecast over the forecast period. The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. An effective interest rate is calculated by the Company, adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition, to produce an instrument-level net present value of expected cash flows. The ACL reflects the difference between the amortized cost basis and the present value of the expected cash flows. Individual Evaluation The Company will evaluate individual instruments for expected credit losses when those instruments do not share similar risk characteristics with instruments evaluated on a collective basis. Instruments may be evaluated whether or not there is an expectation of collectability in place. Instruments evaluated individually are not included in the Company’s collective analysis. Collateral dependent or secured loans with respect to which the Company expects repayment to be provided substantially through the operation or sale of the collateral utilize a collateral-based methodology in which ACL is measured based on the difference between the net realizable value of the collateral and the amortized cost basis of the asset as of the measurement date. If the collateral valuation is equal to or greater than amortized cost, no reserve is applied. If a loan is not collateral dependent, the loan will be analyzed based on a forecast of future cash flows. Credit Losses on Off-Balance Sheet Credit Exposures The Company’s financial instruments include off-balance sheet credit instruments such as unfunded commitments to make loans, commercial letters of credit issued, and commitments to fund other investments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. The Company maintains RUC on off-balance sheet credit exposures through a provision reflected in other liabilities. Increases or decreases in the reserve are charged to or released from the provision for credit losses for unfunded commitments in the consolidated statements of income. The provision (credit) for credit losses on off-balance sheet exposures prior to January 1, 2023 was included in other noninterest expense in the consolidated statements of income. The RUC on off-balance credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model based on the segment loss factor and the estimated utilization rate of the unfunded commitments. The Company has analyzed its historic funding behavior at the segment level to determine an expected utilization rate. The above methodology for determining an appropriate ACL is based on a comprehensive analysis of the loan portfolio in accordance with ASC 326. The analysis considers all significant factors that affect the expected collectability of the portfolio and supports the expected credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment. Additional disclosure on the ACL, and qualitative factors can be found in Part II, Item 1A - Risk Factors and Note 5 - Portfolio Loans Receivable. Credit Losses on SBA-PPP loans and interest receivable The ACL for SBA-PPP loans was separately evaluated given the explicit government guarantee. The Company has incorporated historical experience with similar SBA guarantees and underwriting adjusted for reasonable and supportable forecasts and concluded the expected credit loss is zero and, therefore, no allowance has been assigned to these loans. The Company does not measure an ACL on accrued interest receivable balances because these balances are written off as a reduction to interest income when loans are placed on nonaccrual status. Loan modifications Effective January 1, 2023, the Company adopted ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. From time to time, the Company may elect to modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, to proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. These modifications may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Under ASU 2022-02, modifications to a loan for a borrower experiencing financial difficulty that have occurred in the current reporting period, are disclosed along with the impact of the modifications. During the three and nine months ended September 30, 2023, the Company did not have any such modifications. Premises and equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful life of the related property, generally over two Leases The Company accounts for leases according to ASU 2016-02, Leases (Topic 842), and applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term. Derivative financial instruments The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue. The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities , as amended. The Company recognizes all derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. Changes in fair value of derivatives designated and accounted for as cash flow hedges, to the extent they are effective as hedges, are recorded in other comprehensive income, net of deferred taxes. Any hedge ineffectiveness would be recognized in the income statement line item pertaining to the hedged item. As of September 30, 2023, there were no derivative instruments held which would require recognition by the Company. Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed. Financial assets that are recorded at fair value on a recurring basis include investment securities available for sale, loans held for sale, and derivative financial instruments. Financial liabilities that are recorded at fair value on a recurring basis are comprised of derivative financial instruments. Additional information is included in Note 8 - Fair Value. Bank-owned life insurance The Company had $37.3 million of bank-owned life insurance at September 30, 2023 and $36.5 million at December 31, 2022. The Company recognized income on bank-owned life insurance, which is included in other noninterest income, of $274 thousand for the three months ended September 30, 2023 and $255 thousand for the three months ended September 30, 2022, and recognized $791 thousand for the nine months ended September 30, 2023 and $761 thousand for the nine months ended September 30, 2022. Income taxes Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized when it is deemed more likely than not that the benefits of such deferred income taxes will be realized. Earnings per share Earnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method. At September 30, 2023, there were 282 thousand stock options excluded from the calculation as their effect would have been anti-dilutive, whereas at September 30, 2022 there were 141 thousand such options. Comprehensive loss The Company reports as comprehensive loss all changes in stockholders' equity during the year from non-stockholder sources. Other comprehensive loss refers to all components (income, expenses, gains, and losses) of comprehensive loss that are excluded from net income. The Company's only component of other comprehensive loss is unrealized losses on investment securities available for sale, net of income taxes. Information concerning the Company's accumulated other comprehensive loss as of September 30, 2023 and December 31, 2022 is as follows: (in thousands) September 30, 2023 December 31, 2022 Unrealized losses on securities available for sale $ (23,299) $ (22,416) Deferred tax benefit 5,456 5,665 Total accumulated comprehensive loss $ (17,843) $ (16,751) Recently issued accounting pronouncements: In March 2020, the Financial Accounting Standards Board (“FASB”) released ASU 2020-04 - Reference Rate Reform, Topic 848, which provides temporary guidance to ease the potential accounting burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is a result of London Interbank Offered Rate (“LIBOR”) likely being discontinued as an available benchmark rate. The standard is elective and provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, or other transactions that reference LIBOR, or another reference rate expected to be discontinued. The amendments in the update are effective for all entities between March 12, 2020 and an extended sunset date of December 31, 2024 which was extended by ASU 2022-06 issued by FASB in December 2022. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows. Reclassifications: Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity. Subsequent events: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the dat |
Cash and Cash Equivalents
Cash and Cash Equivalents | 9 Months Ended |
Sep. 30, 2023 | |
Cash and Cash Equivalents [Abstract] | |
Cash and Cash Equivalents | Cash and Cash EquivalentsCash and cash equivalents include cash and amounts due from banks, interest-bearing deposits and federal funds sold. The Bank is required by regulations to maintain an average cash reserve balance based on a percentage of deposits; however, on March 15, 2020, the Federal Reserve announced that reserve requirement ratios would be reduced to zero percent effective March 26, 2020, due to economic conditions, which eliminated the reserve requirement for all depository institutions. The reserve requirement is still at zero percent as of September 30, 2023. |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment SecuritiesThe amortized cost and estimated fair value of investment securities at September 30, 2023 and December 31, 2022 are summarized as follows: (in thousands) Amortized Unrealized Unrealized Fair September 30, 2023 U.S. Treasuries $ 171,496 $ — $ (16,683) $ 154,813 Municipal 10,807 — (2,890) 7,917 Corporate 5,000 — (660) 4,340 Asset-backed securities 7,318 14 (66) 7,266 Mortgage-backed securities 34,733 — (3,014) 31,719 Total $ 229,354 $ 14 $ (23,313) $ 206,055 December 31, 2022 U.S. Treasuries $ 215,486 $ — $ (16,037) $ 199,449 Municipal 10,815 — (2,803) 8,012 Corporate 5,000 — (400) 4,600 Asset-backed securities 7,970 — (259) 7,711 Mortgage-backed securities 35,626 — (2,917) 32,709 Total $ 274,897 $ — $ (22,416) $ 252,481 There were no securities sold during the nine months ended September 30, 2023 or the nine months ended September 30, 2022. There was no ACL on available for sale securities at September 30, 2023. Information related to unrealized losses in the investment portfolio as of September 30, 2023 and December 31, 2022 is summarized as follows: Less than 12 months 12 months or longer Total (in thousands) Fair Unrealized Fair Unrealized Fair Unrealized September 30, 2023 U.S. Treasuries $ — $ — $ 154,813 $ (16,683) $ 154,813 $ (16,683) Municipal — — 7,917 (2,890) 7,917 (2,890) Corporate — — 4,340 (660) 4,340 (660) Asset-backed securities — — 5,297 (66) 5,297 (66) Mortgage-backed securities — — 31,719 (3,014) 31,719 (3,014) Total $ — $ — $ 204,086 $ (23,313) $ 204,086 $ (23,313) December 31, 2022 U.S. Treasuries $ 82,102 $ (1,396) $ 117,347 $ (14,641) $ 199,449 $ (16,037) Municipal 1,452 (207) 6,560 (2,596) 8,012 (2,803) Corporate — — 4,600 (400) 4,600 (400) Asset-backed securities 6,156 (237) 1,555 (22) 7,711 (259) Mortgage-backed securities 22,067 (1,884) 10,642 (1,033) 32,709 (2,917) Total $ 111,777 $ (3,724) $ 140,704 $ (18,692) $ 252,481 $ (22,416) At September 30, 2023, there were twenty-four treasury securities, ten municipal securities, five corporate securities, nine mortgage-backed securities, and two asset-backed securities that had been in an unrealized loss position for greater than twelve months. At December 31, 2022, there were sixteen treasury securities, seven municipal securities, five corporate securities, one asset-backed security, and three mortgage-backed securities that had been in an unrealized loss position for greater than twelve months. Management believes that all unrealized losses at September 30, 2023 and December 31, 2022 resulted from changes in interest rates and current market conditions and not as a result of credit deterioration. Management has the ability and the intent to hold these investment securities until maturity or until they recover in value. Pledged securities totaled $150.0 million at September 30, 2023 and $0 at December 31, 2022. Contractual maturities of U.S. government and government-sponsored agencies, asset-backed, municipal, corporate and mortgage-backed securities at September 30, 2023 and December 31, 2022 are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. September 30, 2023 December 31, 2022 (in thousands) Amortized Fair Amortized Fair Within one year $ 40,024 $ 39,165 $ 53,739 $ 53,204 Over one to five years 110,756 98,920 88,165 82,538 Over five to ten years 26,223 21,524 79,090 68,805 Over ten years 10,300 7,461 10,307 7,514 Asset-backed securities (1) 7,318 7,266 7,970 7,711 Mortgage-backed securities (1) 34,733 31,719 35,626 32,709 Total $ 229,354 $ 206,055 $ 274,897 $ 252,481 _______________ (1) Asset-backed and Mortgage-backed securities are due in monthly installments. |
SBA-PPP Loans Receivable
SBA-PPP Loans Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
SBA-PPP Loans Receivable | Portfolio Loans Receivable Major classifications of portfolio loans receivable are as follows: Portfolio Loan Categories September 30, 2023 December 31, 2022 (in thousands) Amount Percent Amount Percent Real estate: Residential $ 558,147 30 % $ 484,735 28 % Commercial 670,594 35 % 664,551 38 % Construction 280,905 15 % 238,099 14 % Commercial and Industrial 236,782 13 % 220,221 13 % Credit card, net of reserve (1) 122,533 7 % 128,434 7 % Other consumer 948 — % 1,179 — % Portfolio loans receivable, gross 1,869,909 100 % 1,737,219 100 % Deferred origination fees, net (7,980) (8,627) Allowance for credit losses (28,279) (26,385) Portfolio loans receivable, net $ 1,833,650 $ 1,702,207 (1) Credit card loans are presented net of reserve for interest and fees. The Company makes loans to customers located primarily in the Washington, D.C. and Baltimore, Maryland metropolitan areas. Although the loan portfolio is diversified, its performance is influenced by the regional economy. The Company’s loan categories, excluding SBA-PPP loans, previously discussed in Note 4, are described below. Residential Real Estate Loans . One-to-four family mortgage loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences. Residential loans are originated through the commercial sales teams and Capital Bank Home Loans division. Residential loans also include home equity lines of credit. Owner-occupied residential real estate loans usually have fixed rates for five Commercial Real Estate Loans . Commercial real estate loans are originated on owner-occupied and non-owner-occupied properties. These loans may be adversely affected by conditions in the real estate markets or in the general economy. Business equity lines of credit totaling $14.2 million as of September 30, 2023, and $12.3 million as of December 31, 2022, are included in the commercial real estate loan category. Business equity lines of credit are commercial purpose lines of credit primarily secured by the business owners residential properties. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loans. As of September 30, 2023, there were approximately $305.8 million of owner-occupied commercial real estate loans, representing approximately 16.4% of the loan portfolio. In prior reporting periods, the Company classified certain commercial real estate loans as owner-occupied that should have been classified as non owner-occupied. For the reporting periods ended December 31, 2022 and March 31, 2023, the Company disclosed owner-occupied commercial real estate loans of $387.7 million and $377.4 million, respectively. Based on the revised classification metrics, the correct amount of owner-occupied commercial real estate loans at December 31, 2022 and March 31, 2023 was $300.8 million and $300.0 million, respectively. Commercial real estate loan terms are generally extended for 10 years or less and amortize generally over 25 years or less. The interest rates on commercial real estate loans generally have initial fixed rate terms that adjust typically at five years. Origination fees are routinely charged for services. Personal guarantees from the principal owners of the business are generally required, supported by a review of the principal owners’ personal financial statements and global debt service obligations. The properties securing the portfolio are diverse in type. This diversity may help reduce the exposure to adverse economic events that affect any single industry. Construction Loans . Construction loans are offered within the Company’s Washington, D.C. and Baltimore, Maryland metropolitan operating areas to builders, primarily for the construction of single-family homes and condominium and townhouse conversions or renovations and, to a lesser extent, to individuals. Construction loans typically have terms of 12 to 18 months. The Company frequently transitions the end purchaser to permanent financing or re-underwriting and sale into the secondary market through Capital Bank Home Loans. According to underwriting standards, the ratio of loan principal to collateral value, as established by an independent appraisal, cannot exceed 75% for investor-owned and 80% for owner-occupied properties, although exceptions are sometimes made. Semi-annual stress testing of the construction loan portfolio is conducted, and underlying real estate conditions are monitored as well as trends in sales outcomes versus underwriting valuations as part of ongoing risk management efforts. The borrowers’ progress in construction buildout is monitored against the original underwriting guidelines for construction milestones and completion timelines. Commercial and Industrial . In addition to other loan products, general commercial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, letters of credit and other loan products, are offered, primarily in target markets, and underwritten based on each borrower’s ability to service debt from income. These loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. Most commercial business loans are secured by a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment. Personal guaranties from the borrower or other principal are generally obtained. Credit Cards . Through the OpenSky ® credit card division, the Company offers secured, partially secured, and unsecured credit cards on a nationwide basis to under-banked populations and those looking to rebuild their credit scores through a fully digital and mobile platform. The secured lines of credit are secured by a noninterest-bearing demand account at the Bank in an amount equal to the full credit limit of the credit card. For the partially secured lines of credit, the Bank offers certain customers an unsecured line in excess of their secured line of credit by using a proprietary scoring model, which considers credit score and repayment history (typically a minimum of six months of on-time payments, but ultimately determined on a case-by-case basis). Partially secured and unsecured credit cards are only extended to existing secured card customers who have demonstrated sound credit behaviors. Approximately $98.1 million and $109.4 million in secured and partially secured credit card balances were protected by savings deposits held by the Company as of September 30, 2023 and December 31, 2022, respectively. Unsecured balances were $27.4 million and $26.8 million, respectively, for the same periods. Other Consumer Loans . To a limited extent and typically as an accommodation to existing customers, personal consumer loans, such as term loans, car loans and boat loans are offered. Purchased Credit Deterioration. There were no loans purchased with credit deterioration during the three and nine months ended September 30, 2023. During the three months ended September 30, 2023 the Company recorded a $284 thousand increase to the ACL, reflected in “Other”, from residual non-accretable discounts on acquired loans post CECL adoption. The following tables set forth the changes in the ACL and an allocation of the ACL by loan segment class for the three and nine months ended September 30, 2023 and September 30, 2022. Beginning Impact of Adopting the CECL Standard Other Provision (Release of Provision) for Charge-Offs Recoveries Ending (in thousands) Three Months Ended September 30, 2023 Real estate: Residential $ 5,419 $ — $ 91 $ 269 $ — $ — $ 5,779 Commercial 10,188 — 193 (199) — 39 10,221 Construction 1,868 — — 383 — — 2,251 Commercial and Industrial 4,296 — — (35) (77) 11 4,195 Credit card 5,707 — — 1,870 (1,753) — 5,824 Other consumer 17 — — (8) — — 9 Total $ 27,495 $ — $ 284 $ 2,280 $ (1,830) $ 50 $ 28,279 Nine Months Ended September 30, 2023 Real estate: Residential $ 5,481 $ (1,198) $ 91 $ 1,405 $ — $ — $ 5,779 Commercial 8,098 3,941 193 (2,050) — 39 10,221 Construction 3,782 (1,973) — 442 — — 2,251 Commercial and Industrial 2,935 1,073 — 1,186 (1,020) 21 4,195 Credit card 6,078 (1,045) — 5,827 (5,036) — 5,824 Other consumer 11 6 — (8) — — 9 Total $ 26,385 $ 804 $ 284 $ 6,802 $ (6,056) $ 60 $ 28,279 (in thousands) Beginning Provision (Release of Provision) for Charge-Offs Recoveries Ending Three Months Ended September 30, 2022 Real estate: Residential $ 5,863 $ 106 $ — $ — $ 5,969 Commercial 8,857 (489) — — 8,368 Construction 4,473 (468) — — 4,005 Commercial and Industrial 2,457 (262) — — 2,195 Credit card 4,759 2,373 (1,596) 8 5,544 Other consumer 10 — — — 10 Total $ 26,419 $ 1,260 $ (1,596) $ 8 $ 26,091 Nine Months Ended September 30, 2022 Real estate: Residential $ 5,612 $ 357 $ — $ — $ 5,969 Commercial 8,566 (198) — — 8,368 Construction 4,699 (694) — — 4,005 Commercial and Industrial 2,637 (442) — — 2,195 Credit card 3,655 5,226 (3,375) 38 5,544 Other consumer 12 (2) — — 10 Total $ 25,181 $ 4,247 $ (3,375) $ 38 $ 26,091 The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022. (in thousands) Allowance for Loan Losses Outstanding Portfolio December 31, 2022 Individually Collectively Individually Collectively Real estate: Residential $ — $ 5,481 $ 4,288 $ 480,447 Commercial — 8,098 1,563 662,988 Construction — 3,782 2,837 235,262 Commercial and Industrial 372 2,563 705 219,516 Credit card — 6,078 — 128,434 Other consumer — 11 — 1,179 Total $ 372 $ 26,013 $ 9,393 $ 1,727,826 Past due loans, segregated by age and class of loans, as of September 30, 2023 and December 31, 2022 were as follows: Portfolio Loans Past Due Loans Loans Loans Total Past Current Total Accruing Nonaccrual (in thousands) September 30, 2023 Real estate: Residential $ 1,761 $ 264 $ 11,889 $ 13,914 $ 544,233 $ 558,147 $ — $ 12,256 Commercial 826 — 582 1,408 669,186 670,594 — 582 Construction 1,512 2,568 2,033 6,113 274,792 280,905 — 2,033 Commercial and Industrial 574 219 353 1,146 235,636 236,782 — 353 Credit card 7,882 7,314 390 15,586 106,947 122,533 390 — Other consumer — — — — 948 948 — — Total $ 12,555 $ 10,365 $ 15,247 $ 38,167 $ 1,831,742 $ 1,869,909 $ 390 $ 15,224 Loans Loans Loans Total Past Current Total Accruing Nonaccrual December 31, 2022 Real estate: Residential $ 4 $ 142 $ 4,284 $ 4,430 $ 480,305 $ 484,735 $ — $ 4,288 Commercial — — 1,563 1,563 662,988 664,551 — 1,563 Construction 1,164 640 2,837 4,641 233,458 238,099 — 2,837 Commercial and Industrial 117 386 569 1,072 219,149 220,221 — 705 Credit card 8,473 7,455 363 16,291 112,143 128,434 363 — Other consumer — — — — 1,179 1,179 — — Total $ 9,758 $ 8,623 $ 9,616 $ 27,997 $ 1,709,222 $ 1,737,219 $ 363 $ 9,393 There were $8.8 million and $1.3 million of loans secured by one-to-four family residential properties in the process of foreclosure as of September 30, 2023 and December 31, 2022, respectively. The following presents the nonaccrual loans as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Interest Recognized on Nonaccrual Loans Total Nonaccrual Loans (in thousands) Real estate: Residential $ 11,653 $ 603 $ 12,256 $ 340 $ 4,288 Commercial 582 — 582 71 1,563 Construction 2,033 — 2,033 82 2,837 Commercial and Industrial 278 75 353 53 705 Total $ 14,546 $ 678 $ 15,224 $ 546 $ 9,393 The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans: • Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences. • Commercial real estate loans can be secured by either owner-occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate. • Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction. • Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property. Collateral dependent loans amortized cost (in thousands) September 30, 2023 Real estate: Residential $ 12,364 Commercial 2,127 Construction 79 Commercial and Industrial 318 Total $ 14,888 Of the collateral dependent loans as of September 30, 2023, a specific reserve of $12 thousand was assessed for commercial and industrial loans. Prior to the adoption of the CECL standard, loans were considered impaired when, based on current information, management believed the Company would not collect all principal and interest payments according to contractual terms. Generally, loans were reviewed for impairment when the risk grade for a loan was downgraded to a classified asset category. For loans that were classified as impaired, an allowance was established when the collateral value, if the loan was collateral dependent, or the discounted cash flows of the impaired loan was lower than the carrying value of the loan. Loans were generally charged-off in part or in full when management determined the loan to be uncollectible. Impaired portfolio loans for the period ended December 31, 2022 were as follows: Unpaid Recorded Recorded Total Related Average Interest (in thousands) December 31, 2022 Real estate: Residential $ 4,476 $ 4,288 $ — $ 4,288 $ — $ 4,629 $ 149 Commercial 1,647 1,563 — 1,563 — 1,656 52 Construction 2,939 2,837 — 2,837 — 2,938 75 Commercial and Industrial 899 247 458 705 372 1,199 77 Total $ 9,961 $ 8,935 $ 458 $ 9,393 $ 372 $ 10,422 $ 353 The following tables summarize interest recognized on impaired loans for the period ended September 30, 2022: Interest Recognized on Impaired Portfolio Loans For the For the Three Months Ended September 30, 2022 For the For the Nine Months Ended September 30, 2022 (in thousands) Average Interest Average Interest Real estate: Residential $ 3,329 $ — $ 3,341 $ — Commercial 1,643 — 1,650 — Construction 2,939 — 2,938 — Commercial and Industrial 1,242 — 1,267 — Total $ 9,153 $ — $ 9,196 $ — Credit quality indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and general economic conditions in the Company’s market. From a credit risk standpoint, the Company utilizes a risk grading matrix to assign a risk grade to each of its loans. The classifications of loans reflect a judgment about the risk of expected credit loss associated with each loan. Credit quality indicators are reviewed and adjusted regularly to account for the degree of risk and expected credit loss that the Company believes to be appropriate for each financial asset. A description of the general characteristics of loans characterized as classified is as follows: Pass Loans characterized as pass includes loans graded exceptional, very good, good, satisfactory and pass/watch. The Company believes that there is a low likelihood of credit deterioration related to those loans that are considered pass. Special mention A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers. Substandard A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management. Doubtful A doubtful loan has all the weaknesses associated with a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period: September 30, 2023 Term Loans by Origination Year (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Residential – Real estate Pass $ 110,131 $ 139,619 $ 80,143 $ 79,163 $ 39,069 $ 92,404 $ — $ 540,529 Special Mention — — 135 3,693 — 519 — 4,347 Substandard — — — — 26 13,245 — 13,271 Doubtful — — — — — — — — Total 110,131 139,619 80,278 82,856 39,095 106,168 — 558,147 Commercial – Real estate Pass 32,279 186,338 157,964 69,462 96,973 118,278 — 661,294 Special Mention — 6,913 — — 808 997 — 8,718 Substandard — — — — 582 — — 582 Doubtful — — — — — — — — Total 32,279 193,251 157,964 69,462 98,363 119,275 — 670,594 Construction – Real estate Pass 118,709 73,164 50,359 25,027 7,239 2,470 — 276,968 Special Mention — — 1,282 — — 614 — 1,896 Substandard — — — — 597 1,444 — 2,041 Doubtful — — — — — — — — Total 118,709 73,164 51,641 25,027 7,836 4,528 — 280,905 Commercial and Industrial Pass 51,963 79,780 28,847 10,522 18,771 25,579 — 215,462 Special Mention — 161 17,799 2,434 48 284 — 20,726 Substandard — 98 251 — 42 203 — 594 Doubtful — — — — — — — — Total 51,963 80,039 46,897 12,956 18,861 26,066 — 236,782 Other consumer Pass 105 295 160 121 — 267 — 948 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 105 295 160 121 — 267 — 948 Credit card Ungraded — — — — — — 122,533 122,533 Portfolio loans receivable, gross $ 313,187 $ 486,368 $ 336,940 $ 190,422 $ 164,155 $ 256,304 $ 122,533 $ 1,869,909 September 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Gross Charge-offs Commercial and Industrial $ — $ 77 $ — $ — $ 943 $ — $ — $ 1,020 Credit card — — — — — — 5,036 5,036 Total $ — $ 77 $ — $ — $ 943 $ — $ 5,036 $ 6,056 The following table presents the balances of classified loans based on credit quality indicator as of December 31, 2022: (in thousands) Pass (1) Special Mention Substandard Doubtful Ungraded (2) Total December 31, 2022 Real estate: Residential $ 469,304 $ 9,966 $ 5,465 $ — $ — $ 484,735 Commercial 657,411 5,577 1,563 — — 664,551 Construction 235,262 — 2,837 — — 238,099 Commercial and Industrial 196,381 22,469 1,371 — — 220,221 Credit card — — — — 128,434 128,434 Other consumer 1,179 — — — — 1,179 Portfolio loans receivable, gross $ 1,559,537 $ 38,012 $ 11,236 $ — $ 128,434 $ 1,737,219 ________________________ (1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not individually graded. (2) Credit card loans are not individually graded. Outstanding loan commitments were as follows: (in thousands) September 30, 2023 December 31, 2022 Unused lines of credit Real Estate: Residential $ 16,635 $ 14,336 Residential - Home Equity 44,069 43,128 Commercial 21,483 36,609 Construction 115,478 93,913 Commercial and Industrial 43,948 45,747 Credit card (1) 115,637 111,227 Other consumer 298 102 Total $ 357,548 $ 345,062 Letters of credit $ 4,641 $ 5,105 ________________________ (1) Outstanding loan commitments in the credit card portfolio include $103.8 million and $106.9 million in secured and partially secured balances as of September 30, 2023 and December 31, 2022, respectively. Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will, at any given time, draw upon their lines in full. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee. The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for unfunded commitments and certain off-balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with increases or decreases in the reserve being charged to or released from operating expense. Activity for this account is as follows for the periods presented: Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 888 $ 1,631 $ 1,682 $ 1,736 Impact of adopting the CECL standard on January 1, 2023 — — (775) — Provision for (reversal of) reserve for unfunded commitments 24 51 5 (54) Balance at end of period $ 912 $ 1,682 $ 912 $ 1,682 The Company makes representations and warranties that loans sold to investors meet the investors’ program guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program non-compliance, early payment default, and fraud or borrower misrepresentations. The Company maintains a reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented: Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 1,182 $ 1,166 $ 1,174 $ 1,164 Provision for mortgage loan put-back reserve 4 4 12 6 Balance at end of period $ 1,186 $ 1,170 $ 1,186 $ 1,170 |
Paycheck Protection Program | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |
SBA-PPP Loans Receivable | Note 4 - SBA-PPP Loans Receivable SBA-PPP gross loans receivable totaled $0.8 million at September 30, 2023, and $2.2 million at December 31, 2022, and were all rated as pass credits and were not past due, nonaccrual or otherwise impaired. Unearned net fees associated with the SBA-PPP loans amounted to $17 thousand at September 30, 2023 and $31 thousand at December 31, 2022. SBA-PPP loans generated income of $11 thousand for the three months ended September 30, 2023 and $0.3 million for the three months ended September 30, 2022, of which, earned fees, primarily on loans forgiven by the SBA, represented $9 thousand and $0.2 million of the income, respectively. SBA-PPP loans generated income of $26 thousand for the nine months ended September 30, 2023 and $3.4 million for the nine months ended September 30, 2022, of which, earned fees, primarily on loans forgiven by the SBA, represented $14 thousand and $3.2 million of the income, respectively. |
Portfolio Loans Receivable
Portfolio Loans Receivable | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Portfolio Loans Receivable | Portfolio Loans Receivable Major classifications of portfolio loans receivable are as follows: Portfolio Loan Categories September 30, 2023 December 31, 2022 (in thousands) Amount Percent Amount Percent Real estate: Residential $ 558,147 30 % $ 484,735 28 % Commercial 670,594 35 % 664,551 38 % Construction 280,905 15 % 238,099 14 % Commercial and Industrial 236,782 13 % 220,221 13 % Credit card, net of reserve (1) 122,533 7 % 128,434 7 % Other consumer 948 — % 1,179 — % Portfolio loans receivable, gross 1,869,909 100 % 1,737,219 100 % Deferred origination fees, net (7,980) (8,627) Allowance for credit losses (28,279) (26,385) Portfolio loans receivable, net $ 1,833,650 $ 1,702,207 (1) Credit card loans are presented net of reserve for interest and fees. The Company makes loans to customers located primarily in the Washington, D.C. and Baltimore, Maryland metropolitan areas. Although the loan portfolio is diversified, its performance is influenced by the regional economy. The Company’s loan categories, excluding SBA-PPP loans, previously discussed in Note 4, are described below. Residential Real Estate Loans . One-to-four family mortgage loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences. Residential loans are originated through the commercial sales teams and Capital Bank Home Loans division. Residential loans also include home equity lines of credit. Owner-occupied residential real estate loans usually have fixed rates for five Commercial Real Estate Loans . Commercial real estate loans are originated on owner-occupied and non-owner-occupied properties. These loans may be adversely affected by conditions in the real estate markets or in the general economy. Business equity lines of credit totaling $14.2 million as of September 30, 2023, and $12.3 million as of December 31, 2022, are included in the commercial real estate loan category. Business equity lines of credit are commercial purpose lines of credit primarily secured by the business owners residential properties. Commercial loans that are secured by owner-occupied commercial real estate and primarily collateralized by operating cash flows are also included in this category of loans. As of September 30, 2023, there were approximately $305.8 million of owner-occupied commercial real estate loans, representing approximately 16.4% of the loan portfolio. In prior reporting periods, the Company classified certain commercial real estate loans as owner-occupied that should have been classified as non owner-occupied. For the reporting periods ended December 31, 2022 and March 31, 2023, the Company disclosed owner-occupied commercial real estate loans of $387.7 million and $377.4 million, respectively. Based on the revised classification metrics, the correct amount of owner-occupied commercial real estate loans at December 31, 2022 and March 31, 2023 was $300.8 million and $300.0 million, respectively. Commercial real estate loan terms are generally extended for 10 years or less and amortize generally over 25 years or less. The interest rates on commercial real estate loans generally have initial fixed rate terms that adjust typically at five years. Origination fees are routinely charged for services. Personal guarantees from the principal owners of the business are generally required, supported by a review of the principal owners’ personal financial statements and global debt service obligations. The properties securing the portfolio are diverse in type. This diversity may help reduce the exposure to adverse economic events that affect any single industry. Construction Loans . Construction loans are offered within the Company’s Washington, D.C. and Baltimore, Maryland metropolitan operating areas to builders, primarily for the construction of single-family homes and condominium and townhouse conversions or renovations and, to a lesser extent, to individuals. Construction loans typically have terms of 12 to 18 months. The Company frequently transitions the end purchaser to permanent financing or re-underwriting and sale into the secondary market through Capital Bank Home Loans. According to underwriting standards, the ratio of loan principal to collateral value, as established by an independent appraisal, cannot exceed 75% for investor-owned and 80% for owner-occupied properties, although exceptions are sometimes made. Semi-annual stress testing of the construction loan portfolio is conducted, and underlying real estate conditions are monitored as well as trends in sales outcomes versus underwriting valuations as part of ongoing risk management efforts. The borrowers’ progress in construction buildout is monitored against the original underwriting guidelines for construction milestones and completion timelines. Commercial and Industrial . In addition to other loan products, general commercial loans, including commercial lines of credit, working capital loans, term loans, equipment financing, letters of credit and other loan products, are offered, primarily in target markets, and underwritten based on each borrower’s ability to service debt from income. These loans are primarily made based on the identified cash flows of the borrower and secondarily, on the underlying collateral provided by the borrower. Most commercial business loans are secured by a lien on general business assets including, among other things, available real estate, accounts receivable, promissory notes, inventory and equipment. Personal guaranties from the borrower or other principal are generally obtained. Credit Cards . Through the OpenSky ® credit card division, the Company offers secured, partially secured, and unsecured credit cards on a nationwide basis to under-banked populations and those looking to rebuild their credit scores through a fully digital and mobile platform. The secured lines of credit are secured by a noninterest-bearing demand account at the Bank in an amount equal to the full credit limit of the credit card. For the partially secured lines of credit, the Bank offers certain customers an unsecured line in excess of their secured line of credit by using a proprietary scoring model, which considers credit score and repayment history (typically a minimum of six months of on-time payments, but ultimately determined on a case-by-case basis). Partially secured and unsecured credit cards are only extended to existing secured card customers who have demonstrated sound credit behaviors. Approximately $98.1 million and $109.4 million in secured and partially secured credit card balances were protected by savings deposits held by the Company as of September 30, 2023 and December 31, 2022, respectively. Unsecured balances were $27.4 million and $26.8 million, respectively, for the same periods. Other Consumer Loans . To a limited extent and typically as an accommodation to existing customers, personal consumer loans, such as term loans, car loans and boat loans are offered. Purchased Credit Deterioration. There were no loans purchased with credit deterioration during the three and nine months ended September 30, 2023. During the three months ended September 30, 2023 the Company recorded a $284 thousand increase to the ACL, reflected in “Other”, from residual non-accretable discounts on acquired loans post CECL adoption. The following tables set forth the changes in the ACL and an allocation of the ACL by loan segment class for the three and nine months ended September 30, 2023 and September 30, 2022. Beginning Impact of Adopting the CECL Standard Other Provision (Release of Provision) for Charge-Offs Recoveries Ending (in thousands) Three Months Ended September 30, 2023 Real estate: Residential $ 5,419 $ — $ 91 $ 269 $ — $ — $ 5,779 Commercial 10,188 — 193 (199) — 39 10,221 Construction 1,868 — — 383 — — 2,251 Commercial and Industrial 4,296 — — (35) (77) 11 4,195 Credit card 5,707 — — 1,870 (1,753) — 5,824 Other consumer 17 — — (8) — — 9 Total $ 27,495 $ — $ 284 $ 2,280 $ (1,830) $ 50 $ 28,279 Nine Months Ended September 30, 2023 Real estate: Residential $ 5,481 $ (1,198) $ 91 $ 1,405 $ — $ — $ 5,779 Commercial 8,098 3,941 193 (2,050) — 39 10,221 Construction 3,782 (1,973) — 442 — — 2,251 Commercial and Industrial 2,935 1,073 — 1,186 (1,020) 21 4,195 Credit card 6,078 (1,045) — 5,827 (5,036) — 5,824 Other consumer 11 6 — (8) — — 9 Total $ 26,385 $ 804 $ 284 $ 6,802 $ (6,056) $ 60 $ 28,279 (in thousands) Beginning Provision (Release of Provision) for Charge-Offs Recoveries Ending Three Months Ended September 30, 2022 Real estate: Residential $ 5,863 $ 106 $ — $ — $ 5,969 Commercial 8,857 (489) — — 8,368 Construction 4,473 (468) — — 4,005 Commercial and Industrial 2,457 (262) — — 2,195 Credit card 4,759 2,373 (1,596) 8 5,544 Other consumer 10 — — — 10 Total $ 26,419 $ 1,260 $ (1,596) $ 8 $ 26,091 Nine Months Ended September 30, 2022 Real estate: Residential $ 5,612 $ 357 $ — $ — $ 5,969 Commercial 8,566 (198) — — 8,368 Construction 4,699 (694) — — 4,005 Commercial and Industrial 2,637 (442) — — 2,195 Credit card 3,655 5,226 (3,375) 38 5,544 Other consumer 12 (2) — — 10 Total $ 25,181 $ 4,247 $ (3,375) $ 38 $ 26,091 The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022. (in thousands) Allowance for Loan Losses Outstanding Portfolio December 31, 2022 Individually Collectively Individually Collectively Real estate: Residential $ — $ 5,481 $ 4,288 $ 480,447 Commercial — 8,098 1,563 662,988 Construction — 3,782 2,837 235,262 Commercial and Industrial 372 2,563 705 219,516 Credit card — 6,078 — 128,434 Other consumer — 11 — 1,179 Total $ 372 $ 26,013 $ 9,393 $ 1,727,826 Past due loans, segregated by age and class of loans, as of September 30, 2023 and December 31, 2022 were as follows: Portfolio Loans Past Due Loans Loans Loans Total Past Current Total Accruing Nonaccrual (in thousands) September 30, 2023 Real estate: Residential $ 1,761 $ 264 $ 11,889 $ 13,914 $ 544,233 $ 558,147 $ — $ 12,256 Commercial 826 — 582 1,408 669,186 670,594 — 582 Construction 1,512 2,568 2,033 6,113 274,792 280,905 — 2,033 Commercial and Industrial 574 219 353 1,146 235,636 236,782 — 353 Credit card 7,882 7,314 390 15,586 106,947 122,533 390 — Other consumer — — — — 948 948 — — Total $ 12,555 $ 10,365 $ 15,247 $ 38,167 $ 1,831,742 $ 1,869,909 $ 390 $ 15,224 Loans Loans Loans Total Past Current Total Accruing Nonaccrual December 31, 2022 Real estate: Residential $ 4 $ 142 $ 4,284 $ 4,430 $ 480,305 $ 484,735 $ — $ 4,288 Commercial — — 1,563 1,563 662,988 664,551 — 1,563 Construction 1,164 640 2,837 4,641 233,458 238,099 — 2,837 Commercial and Industrial 117 386 569 1,072 219,149 220,221 — 705 Credit card 8,473 7,455 363 16,291 112,143 128,434 363 — Other consumer — — — — 1,179 1,179 — — Total $ 9,758 $ 8,623 $ 9,616 $ 27,997 $ 1,709,222 $ 1,737,219 $ 363 $ 9,393 There were $8.8 million and $1.3 million of loans secured by one-to-four family residential properties in the process of foreclosure as of September 30, 2023 and December 31, 2022, respectively. The following presents the nonaccrual loans as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Interest Recognized on Nonaccrual Loans Total Nonaccrual Loans (in thousands) Real estate: Residential $ 11,653 $ 603 $ 12,256 $ 340 $ 4,288 Commercial 582 — 582 71 1,563 Construction 2,033 — 2,033 82 2,837 Commercial and Industrial 278 75 353 53 705 Total $ 14,546 $ 678 $ 15,224 $ 546 $ 9,393 The Company has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans: • Residential real estate loans are primarily secured by owner-occupied primary residences and, to a lesser extent, investor-owned residences. • Commercial real estate loans can be secured by either owner-occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate. • Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction. • Commercial and industrial loans are generally secured by equipment, inventory, accounts receivable, and other commercial property. Collateral dependent loans amortized cost (in thousands) September 30, 2023 Real estate: Residential $ 12,364 Commercial 2,127 Construction 79 Commercial and Industrial 318 Total $ 14,888 Of the collateral dependent loans as of September 30, 2023, a specific reserve of $12 thousand was assessed for commercial and industrial loans. Prior to the adoption of the CECL standard, loans were considered impaired when, based on current information, management believed the Company would not collect all principal and interest payments according to contractual terms. Generally, loans were reviewed for impairment when the risk grade for a loan was downgraded to a classified asset category. For loans that were classified as impaired, an allowance was established when the collateral value, if the loan was collateral dependent, or the discounted cash flows of the impaired loan was lower than the carrying value of the loan. Loans were generally charged-off in part or in full when management determined the loan to be uncollectible. Impaired portfolio loans for the period ended December 31, 2022 were as follows: Unpaid Recorded Recorded Total Related Average Interest (in thousands) December 31, 2022 Real estate: Residential $ 4,476 $ 4,288 $ — $ 4,288 $ — $ 4,629 $ 149 Commercial 1,647 1,563 — 1,563 — 1,656 52 Construction 2,939 2,837 — 2,837 — 2,938 75 Commercial and Industrial 899 247 458 705 372 1,199 77 Total $ 9,961 $ 8,935 $ 458 $ 9,393 $ 372 $ 10,422 $ 353 The following tables summarize interest recognized on impaired loans for the period ended September 30, 2022: Interest Recognized on Impaired Portfolio Loans For the For the Three Months Ended September 30, 2022 For the For the Nine Months Ended September 30, 2022 (in thousands) Average Interest Average Interest Real estate: Residential $ 3,329 $ — $ 3,341 $ — Commercial 1,643 — 1,650 — Construction 2,939 — 2,938 — Commercial and Industrial 1,242 — 1,267 — Total $ 9,153 $ — $ 9,196 $ — Credit quality indicators As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to the risk grade of loans, the level of classified loans, net charge-offs, nonperforming loans, and general economic conditions in the Company’s market. From a credit risk standpoint, the Company utilizes a risk grading matrix to assign a risk grade to each of its loans. The classifications of loans reflect a judgment about the risk of expected credit loss associated with each loan. Credit quality indicators are reviewed and adjusted regularly to account for the degree of risk and expected credit loss that the Company believes to be appropriate for each financial asset. A description of the general characteristics of loans characterized as classified is as follows: Pass Loans characterized as pass includes loans graded exceptional, very good, good, satisfactory and pass/watch. The Company believes that there is a low likelihood of credit deterioration related to those loans that are considered pass. Special mention A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Borrowers may exhibit poor liquidity and leverage positions resulting from generally negative cash flow or negative trends in earnings. Access to alternative financing may be limited to finance companies for business borrowers and may be unavailable for commercial real estate borrowers. Substandard A substandard loan is inadequately protected by the current financial condition and paying capacity of the obligor or of the collateral pledged, if any. Substandard loans have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Borrowers may exhibit recent or unexpected unprofitable operations, an inadequate debt service coverage ratio, or marginal liquidity and capitalization. These loans require more intense supervision by Company management. Doubtful A doubtful loan has all the weaknesses associated with a substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period: September 30, 2023 Term Loans by Origination Year (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Residential – Real estate Pass $ 110,131 $ 139,619 $ 80,143 $ 79,163 $ 39,069 $ 92,404 $ — $ 540,529 Special Mention — — 135 3,693 — 519 — 4,347 Substandard — — — — 26 13,245 — 13,271 Doubtful — — — — — — — — Total 110,131 139,619 80,278 82,856 39,095 106,168 — 558,147 Commercial – Real estate Pass 32,279 186,338 157,964 69,462 96,973 118,278 — 661,294 Special Mention — 6,913 — — 808 997 — 8,718 Substandard — — — — 582 — — 582 Doubtful — — — — — — — — Total 32,279 193,251 157,964 69,462 98,363 119,275 — 670,594 Construction – Real estate Pass 118,709 73,164 50,359 25,027 7,239 2,470 — 276,968 Special Mention — — 1,282 — — 614 — 1,896 Substandard — — — — 597 1,444 — 2,041 Doubtful — — — — — — — — Total 118,709 73,164 51,641 25,027 7,836 4,528 — 280,905 Commercial and Industrial Pass 51,963 79,780 28,847 10,522 18,771 25,579 — 215,462 Special Mention — 161 17,799 2,434 48 284 — 20,726 Substandard — 98 251 — 42 203 — 594 Doubtful — — — — — — — — Total 51,963 80,039 46,897 12,956 18,861 26,066 — 236,782 Other consumer Pass 105 295 160 121 — 267 — 948 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 105 295 160 121 — 267 — 948 Credit card Ungraded — — — — — — 122,533 122,533 Portfolio loans receivable, gross $ 313,187 $ 486,368 $ 336,940 $ 190,422 $ 164,155 $ 256,304 $ 122,533 $ 1,869,909 September 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Gross Charge-offs Commercial and Industrial $ — $ 77 $ — $ — $ 943 $ — $ — $ 1,020 Credit card — — — — — — 5,036 5,036 Total $ — $ 77 $ — $ — $ 943 $ — $ 5,036 $ 6,056 The following table presents the balances of classified loans based on credit quality indicator as of December 31, 2022: (in thousands) Pass (1) Special Mention Substandard Doubtful Ungraded (2) Total December 31, 2022 Real estate: Residential $ 469,304 $ 9,966 $ 5,465 $ — $ — $ 484,735 Commercial 657,411 5,577 1,563 — — 664,551 Construction 235,262 — 2,837 — — 238,099 Commercial and Industrial 196,381 22,469 1,371 — — 220,221 Credit card — — — — 128,434 128,434 Other consumer 1,179 — — — — 1,179 Portfolio loans receivable, gross $ 1,559,537 $ 38,012 $ 11,236 $ — $ 128,434 $ 1,737,219 ________________________ (1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not individually graded. (2) Credit card loans are not individually graded. Outstanding loan commitments were as follows: (in thousands) September 30, 2023 December 31, 2022 Unused lines of credit Real Estate: Residential $ 16,635 $ 14,336 Residential - Home Equity 44,069 43,128 Commercial 21,483 36,609 Construction 115,478 93,913 Commercial and Industrial 43,948 45,747 Credit card (1) 115,637 111,227 Other consumer 298 102 Total $ 357,548 $ 345,062 Letters of credit $ 4,641 $ 5,105 ________________________ (1) Outstanding loan commitments in the credit card portfolio include $103.8 million and $106.9 million in secured and partially secured balances as of September 30, 2023 and December 31, 2022, respectively. Lines of credit are agreements to lend to a customer as long as there is no violation of any condition of the contract. Lines of credit generally have variable interest rates. Such lines do not represent future cash requirements because it is unlikely that all customers will, at any given time, draw upon their lines in full. Loan commitments generally have variable interest rates, fixed expiration dates, and may require payment of a fee. The Company's maximum exposure to credit loss in the event of nonperformance by the customer is the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. Management is not aware of any accounting loss to be incurred by funding these loan commitments. The Company maintains an estimated reserve for unfunded commitments and certain off-balance sheet items such as unfunded lines of credit, which is reflected in other liabilities, with increases or decreases in the reserve being charged to or released from operating expense. Activity for this account is as follows for the periods presented: Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 888 $ 1,631 $ 1,682 $ 1,736 Impact of adopting the CECL standard on January 1, 2023 — — (775) — Provision for (reversal of) reserve for unfunded commitments 24 51 5 (54) Balance at end of period $ 912 $ 1,682 $ 912 $ 1,682 The Company makes representations and warranties that loans sold to investors meet the investors’ program guidelines and that the information provided by the borrowers is accurate and complete. In the event of a default on a loan sold, the investor may have the right to make a claim for losses due to document deficiencies, program non-compliance, early payment default, and fraud or borrower misrepresentations. The Company maintains a reserve for potential losses on mortgage loans sold, which is reflected in other liabilities, with changes being charged to or released from operating expense. Activity in this reserve is as follows for the periods presented: Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 1,182 $ 1,166 $ 1,174 $ 1,164 Provision for mortgage loan put-back reserve 4 4 12 6 Balance at end of period $ 1,186 $ 1,170 $ 1,186 $ 1,170 |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Note 6 - Derivative Financial Instruments As part of its mortgage banking activities, the Company enters into interest rate lock commitments, which are commitments to originate loans whereby the interest rate on the loan is determined prior to funding and customers have locked into that interest rate. The Company then locks the loan and rate in with an investor and commits to deliver the loan if settlement occurs (Best Efforts). Certain loans under rate lock commitments are covered under forward sales contracts. Forward sales contracts are recorded at fair value with changes in fair value recorded in mortgage banking revenue. Interest rate lock commitments and commitments to deliver loans to investors are considered to be derivatives. The market value of interest rate lock commitments and best efforts contracts are not readily ascertainable with precision because they are not actively traded in stand-alone markets. The Company determines the fair value of rate lock commitments by estimating the fair value of the underlying asset, which is impacted by current interest rates and takes into consideration the probability that the rate lock commitments will close or will be funded. The following table reports the commitment and fair value amounts on the outstanding derivatives: (in thousands) September 30, 2023 December 31, 2022 Notional amount of open forward sales agreements $ — $ 1,750 Fair value of open forward delivery sales agreements — 9 Notional amount of interest rate lock commitments — 626 Fair value of interest rate lock commitments — 1 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company’s primary leasing activities relate to certain real estate leases entered into in support of the Company’s branch operations and back office operations. The Company leases four of its full service branches and three other locations for corporate/administration activities, operations, and loan production. All property leases under lease agreements have been designated as operating leases. The Company does not have leases designated as finance leases. The Company determines if an arrangement is a lease at inception. Operating lease ROU assets are included in premises and equipment, and operating lease liabilities are included as other liabilities in the consolidated balance sheets. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The historical weighted average discount rate was 3.65% at September 30, 2023 and 1.94% at December 31, 2022. The operating lease ROU asset also includes any lease pre-payments. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components, which the Company has elected to account for separately as the non-lease component amounts are readily determinable under most leases. As of September 30, 2023, the Company’s net lease ROU assets and related lease liabilities were $3.8 million and $4.0 million, respectively, compared to December 31, 2022 balances of $2.1 million of ROU assets and $2.4 million of lease liabilities, and have remaining terms ranging from one (in thousands) September 30, 2023 December 31, 2022 Lease Right of Use Asset: Lease asset $ 7,229 $ 5,171 Less: Accumulated amortization (3,470) (3,074) Net lease asset $ 3,759 $ 2,097 Lease Liability: Lease liability $ 7,378 5,327 Less: Accumulated amortization (3,397) (2,968) Net lease liability $ 3,981 $ 2,359 Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows: (in thousands) September 30, 2023 Amounts due in: 2023 $ 346 2024 1,120 2025 673 2026 621 2027 and thereafter 1,844 Total future lease payments 4,604 Discount of cash flows (623) Present value of net future lease payments $ 3,981 |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value Generally accepted accounting principles define fair value, establish a framework for measuring fair value, recommend disclosures about fair value, and establish a hierarchy for determining fair value measurement. The hierarchy includes three levels and is based upon the valuation techniques used to measure assets and liabilities. The three levels are as follows: Level 1 - Inputs to the valuation method are quoted prices (unadjusted) for identical assets or liabilities in active markets. This also includes certain U.S. Treasury and other U.S. Government and government agency securities actively traded in over-the-counter markets; Level 2 - Inputs to the valuation method include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and Level 3 - Inputs to the valuation method are unobservable and significant to the fair value measurement. Fair value measurements on a recurring basis Investment securities available for sale - The fair values of the Company's investment securities available for sale are provided by an independent pricing service. The fair values of the Company's securities are determined based on quoted prices for similar securities under Level 1 or Level 2 inputs. Loans held for sale - The fair value of loans held for sale is determined using Level 2 inputs of quoted prices for a similar asset, adjusted for specific attributes of that loan. Derivative financial instruments - Derivative instruments used to hedge residential mortgage loans held for sale and the related interest rate lock commitments include forward commitments to sell mortgage loans and are reported at fair value utilizing Level 2 inputs. The fair values of derivative financial instruments are based on derivative market data inputs as of the valuation date and the underlying value of mortgage loans for rate lock commitments. The Company has categorized its financial instruments measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 as follows: (in thousands) September 30, 2023 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs Investment securities available for sale U.S. Treasuries $ 154,813 $ 154,813 $ — $ — Municipal 7,917 — 7,917 — Corporate 4,340 — 4,340 — Asset-backed securities 7,266 — 7,266 — Mortgage-backed securities 31,719 — 31,719 — Total $ 206,055 $ 154,813 $ 51,242 $ — Loans held for sale $ 4,843 $ — $ 4,843 $ — Derivative assets $ — $ — $ — $ — Derivative liabilities $ — $ — $ — $ — December 31, 2022 Investment securities available for sale U.S. Treasuries $ 199,449 $ 199,449 $ — $ — Municipal 8,012 — 8,012 — Corporate 4,600 — 4,600 — Asset-backed securities 7,711 — 7,711 — Mortgage-backed securities 32,709 — 32,709 — Total $ 252,481 $ 199,449 $ 53,032 $ — Loans held for sale $ 7,416 $ — $ 7,416 $ — Derivative assets $ 10 $ — $ 10 $ — Derivative liabilities $ — $ — $ — $ — Financial instruments recorded using FASB ASC 825-10 Under FASB ASC 825-10, the Company may elect to report most financial instruments and certain other items at fair value on an instrument-by-instrument basis with changes in fair value reported in net income. After the initial adoption, the election is made at the acquisition of an eligible financial asset, financial liability or firm commitment or when certain specified reconsideration events occur. The fair value election, with respect to an item, may not be revoked once an election is made. The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity: Fair Value of Loans Held for Sale (in thousands) September 30, 2023 December 31, 2022 Aggregate fair value $ 4,843 $ 7,416 Contractual principal 3,035 6,808 Difference $ 1,808 $ 608 The Company has elected to account for loans held for sale at fair value to eliminate the mismatch that would occur by recording changes in market value on derivative instruments used to hedge loans held for sale while carrying the loans at the lower of cost or market. As of September 30, 2023 and December 31, 2022, there were no held for sale loans which were classified as nonaccrual. Fair value measurements on a nonrecurring basis Individually evaluated loans - The Company has measured expected credit losses based on the fair value of the loan's collateral and discounted cash flow analysis, where appropriate. Fair value of the collateral is generally determined based upon independent third-party appraisals of the properties, or discounted cash flows based upon the expected proceeds. These assets are included as Level 3 fair values. As of September 30, 2023 and December 31, 2022, the fair values consist of loan receivables of $15.3 million and $9.4 million, with specific reserves of $678 thousand and $372 thousand, respectively. Foreclosed real estate - The Company's foreclosed real estate is measured at fair value less cost to sell. Fair value is determined based on offers and/or appraisals. Cost to sell the real estate is based on standard market factors. The Company categorizes its foreclosed real estate as Level 3. As of September 30, 2023 and December 31, 2022, there was no foreclosed real estate held by the Company. The Company has categorized its financial instruments measured at fair value on a nonrecurring basis as of September 30, 2023 and December 31, 2022 as follows: (in thousands) September 30, 2023 December 31, 2022 Individually evaluated loans for credit loss, net Level 3 inputs 14,575 9,021 Total $ 14,575 9,021 The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2023 and December 31, 2022: Unobservable Inputs Valuation Technique Unobservable Inputs Range of Inputs Individually evaluated loans Appraised Value/Discounted Cash Flows Discounts to appraisals or cash flows for estimated holding and/or selling costs 0 to 25% Fair value of financial instruments Fair value information about financial instruments, whether or not recognized in the balance sheet, for which it is practical to estimate the value is based upon the characteristics of the instruments and relevant market information. Financial instruments include cash, evidence of ownership in an entity, or contracts that convey or impose on an entity the contractual right or obligation to either receive or deliver cash for another financial instrument. The information used to determine fair value is highly subjective in nature and, therefore, the results are imprecise. Subjective factors include, among other things, estimates of cash flows, risk characteristics, credit quality, and interest rates, all of which are subject to change. Since the fair value is estimated as of the balance sheet date, the amounts that will actually be realized or paid upon settlement or maturity on these various instruments could be significantly different. The fair value of the Company’s loan portfolio includes a credit risk assumption in the determination of the fair value of its loans. This credit risk assumption is intended to approximate the fair value that a market participant would realize in a hypothetical orderly transaction. The Company’s loan portfolio is initially fair valued using a segmented approach. The Company divides its loan portfolio into the following categories: variable rate loans, impaired loans, and all other loans. The results are then adjusted to account for credit risk as described above. However, the Company believes a further credit risk discount must be applied through the use of a discounted cash flow model to compensate for illiquidity risk, based on certain assumptions included within the discounted cash flow model, primarily the use of discount rates that better capture inherent credit risk over the lifetime of a loan. This consideration of enhanced credit risk provides an estimated exit price for the Company’s loan portfolio. For variable-rate loans that reprice frequently and have no significant change in credit risk, fair values approximate carrying values. Fair values for impaired loans are estimated using discounted cash flow models or based on the fair value of the underlying collateral. The fair value of cash and cash equivalents and investments in restricted stocks is the carrying amount. Restricted investments includes equity of the Federal Reserve and other banker’s banks. The fair value of noninterest-bearing deposits and securities sold under agreements to repurchase is the carrying amount. The fair value of checking, savings, and money market deposits is the amount payable on demand at the reporting date. Fair value of fixed maturity term accounts and individual retirement accounts is estimated using rates currently offered for accounts of similar remaining maturities. The fair value of certificates of deposit in other financial institutions is estimated based on interest rates currently offered for deposits of similar remaining maturities. The fair value of borrowings is estimated by discounting the value of contractual cash flows using current market rates for borrowings with similar terms and remaining maturities. The fair value of outstanding loan commitments, unused lines of credit, and letters of credit are not included in the table since the carrying value generally approximates fair value. These instruments generate fees that approximate those currently charged to originate similar commitments. The table below presents the carrying amount, fair value, and placement in the fair value hierarchy of the Company’s financial instruments. September 30, 2023 December 31, 2022 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial assets Level 1 Cash and due from banks $ 13,767 $ 13,767 $ 19,963 $ 19,963 Interest-bearing deposits at other financial institutions 130,428 130,428 39,764 39,764 Federal funds sold 1,957 1,957 20,688 20,688 Level 3 Portfolio loans receivable, net (1) $ 1,834,400 $ 1,821,205 $ 1,704,370 $ 1,659,283 Restricted investments 4,340 4,340 7,362 7,362 Financial liabilities Level 1 Noninterest-bearing deposits $ 680,803 $ 680,803 $ 674,313 $ 674,313 Level 3 Interest-bearing deposits $ 1,287,185 $ 1,285,398 $ 1,083,759 $ 1,090,553 FHLB advances and other borrowed funds 34,062 31,095 119,062 116,544 ________________________ (1) Includes SBA-PPP loans and portfolio loans. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segments | Note 9 - Segments The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The four segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky ® (the Company’s credit card division) and the Corporate Office. The following schedule presents financial information for each reportable segment at September 30, 2023 and September 30, 2022. For the Three Months Ended September 30, 2023 (in thousands) Commercial Bank CBHL OpenSky ® Corporate (2) Eliminations Consolidated Interest income $ 30,409 $ 111 $ 16,143 $ 1,162 $ (84) $ 47,741 Interest expense 10,736 32 — 247 (84) 10,931 Net interest income 19,673 79 16,143 915 — 36,810 Provision for credit losses 275 — 1,875 130 — 2,280 Provision for credit losses on unfunded commitments 24 — — — — 24 Net interest income after provision 19,374 79 14,268 785 — 34,506 Noninterest income 665 1,255 4,405 1 — 6,326 Noninterest expense (1) 15,784 1,502 10,637 123 — 28,046 Net income (loss) before taxes $ 4,255 $ (168) $ 8,036 $ 663 $ — $ 12,786 Total assets $ 2,102,749 $ 5,280 $ 116,318 $ 264,950 $ (216,813) $ 2,272,484 For the Three Months Ended September 30, 2022 Interest income $ 20,382 $ 102 $ 17,103 $ 812 $ (59) $ 38,340 Interest expense 1,449 40 — 233 (59) 1,663 Net interest income 18,933 62 17,103 579 — 36,677 Provision (release of provision) for loan losses (980) — 2,240 — — 1,260 Net interest income after provision 19,913 62 14,863 579 — 35,417 Noninterest income 468 1,115 5,524 1 — 7,108 Noninterest expense (1) 13,798 2,017 12,101 178 — 28,094 Net income (loss) before taxes $ 6,583 $ (840) $ 8,286 $ 402 $ — $ 14,431 Total assets $ 1,823,049 $ 7,664 $ 128,842 $ 234,731 $ (184,928) $ 2,009,358 For the Nine Months Ended September 30, 2023 (in thousands) Commercial Bank CBHL OpenSky ® Corporate (2) Eliminations Consolidated Interest income $ 85,451 $ 299 $ 47,441 $ 3,274 $ (228) $ 136,237 Interest expense 29,012 104 — 712 (228) 29,600 Net interest income 56,439 195 47,441 2,562 — 106,637 Provision for credit losses 849 — 5,823 130 — 6,802 Release of credit losses on unfunded commitments 5 — — — — 5 Net interest income after provision 55,585 195 41,618 2,432 — 99,830 Noninterest income 1,964 3,743 13,329 3 — 19,039 Noninterest expense (3) 46,701 4,564 32,146 449 — 83,860 Net income (loss) before taxes $ 10,848 $ (626) $ 22,801 $ 1,986 $ — $ 35,009 Total assets $ 2,102,749 $ 5,280 $ 116,318 $ 264,950 $ (216,813) $ 2,272,484 For the Nine Months Ended September 30, 2022 Interest income $ 57,794 $ 347 $ 48,823 $ 2,457 $ (123) $ 109,298 Interest expense 3,255 185 — 573 (123) 3,890 Net interest income 54,539 162 48,823 1,884 — 105,408 Provision (release of provision) for loan losses (980) — 5,227 — — 4,247 Net interest income after provision 55,519 162 43,596 1,884 — 101,161 Noninterest income 1,571 4,580 17,658 2 — 23,811 Noninterest expense (3) 38,741 6,364 36,923 351 — 82,379 Net income (loss) before taxes $ 18,349 $ (1,622) $ 24,331 $ 1,535 $ — $ 42,593 Total assets $ 1,823,049 $ 7,664 $ 128,842 $ 234,731 $ (184,928) $ 2,009,358 ________________________ (1) Noninterest expense includes $6.1 million and $6.6 million in data processing expense in OpenSky’s ® segment for the three months ended September 30, 2023 and 2022, respectively. (2) The Corporate segment invests idle cash in revenue producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company. (3) Noninterest expense includes $17.9 million and $20.9 million in data processing expense in OpenSky’s ® segment for the nine months ended September 30, 2023 and 2022, respectively. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||||||
Net income | $ 9,788 | $ 7,318 | $ 9,735 | $ 11,095 | $ 11,508 | $ 10,211 | $ 26,841 | $ 32,814 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Nature of Business and Basis _2
Nature of Business and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Nature of operations | Capital Bancorp, Inc. is a Maryland corporation and the bank holding company (the “Company”) for Capital Bank, N.A. (the “Bank”). The Company's primary operations are conducted by the Bank, which operates branches in Rockville and Columbia, Maryland; Reston, Virginia; and the District of Columbia. The Bank is principally engaged in the business of investing in commercial, real estate, and credit card loans and attracting deposits. The Company originates residential mortgages for sale in the secondary market through Capital Bank Home Loans (“CBHL”), the Bank’s residential mortgage banking arm, and issues credit cards through OpenSky®, a digitally-driven nationwide credit card platform providing secured, partially secured, and unsecured credit solutions. The Company formed Church Street Capital, LLC (“Church Street Capital”) in 2014 to provide short-term secured real estate financing to Washington, D.C. area investors and developers that may not meet all Bank credit criteria. At September 30, 2023, Church Street Capital had loans totaling $8.0 million with a collectively assessed allowance for credit losses (“ACL”) of $280 thousand. Refer to Note 5 - Portfolio Loans Receivable to the Unaudited Consolidated Financial Statements for further discussion of the consolidated ACL. In addition, the Company owns all of the stock of Capital Bancorp (MD) Statutory Trust I (the “Trust”). The Trust is a special purpose non-consolidated entity organized for the sole purpose of issuing trust preferred securities. |
Basis of presentation | Basis of presentation: The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with rules and regulations of the Securities and Exchange Commission (“SEC”) and include the activity of the Company and its wholly-owned subsidiaries, the Bank and Church Street Capital. The statements do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments have been made which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Such adjustments are all of a normal and recurring nature. All significant inter-company accounts and transactions have been eliminated in consolidation. The results of operations for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the full year. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto as of December 31, 2022, included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. |
Cash and cash equivalents | Cash and cash equivalents For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from financial institutions, interest-bearing deposits with financial institutions and federal funds sold. Generally, federal funds are sold for one-day periods. |
Investment securities | Investment securities Investment securities are classified as available for sale and carried at fair value with unrealized gains and losses included in stockholders’ equity on an after-tax basis. Premiums and discounts on investment securities are amortized or accreted using the interest method. Changes in the fair value of debt securities available for sale are included in stockholders’ equity as unrealized gains and losses, net of the related tax effect. Management evaluates all investments in an unrealized loss position on a quarterly basis, and more frequently when economic or market conditions warrant such evaluation. If the Company has the intent to sell the security or it is more likely than not that the Company will be required to sell the security, the security is written down to fair value and the entire loss is recorded in earnings. If either of the above criteria is not met, the Company evaluates whether the decline in fair value is the result of credit losses or other factors. In making the assessment, the Company may consider various factors including the extent to which fair value is less than amortized cost, performance on any underlying collateral, downgrades in the ratings of the security by a rating agency, the failure of the issuer to make scheduled interest or principal payments and adverse conditions specifically related to the security. If the assessment indicates that a credit loss exists, the present value of cash flows expected to be collected are compared to the amortized cost basis of the security and any excess is recorded as an ACL, limited by the amount that the fair value is less than the amortized cost basis. Any amount of unrealized loss that has not been recorded through an ACL is recognized in other comprehensive income. Changes in the ACL are recorded as provision for (or reversal of) credit loss expense. Losses are charged against the ACL when management believes an AFS security is confirmed to be uncollectible or when either of the criteria regarding intent or requirement to sell is met. At September 30, 2023, there was no ACL related to the AFS portfolio. |
Loans held for sale | Loans held for sale Mortgage loans originated and intended for sale are recorded at fair value, determined individually, as of the balance sheet date. Fair value is determined based on outstanding investor commitments, or in the absence of such commitments, based on current investor yield requirements. Gains and losses on loan sales are determined by the specific-identification method. The Company’s current practice is to sell residential mortgage loans on a servicing released basis. Interest on loans held for sale is credited to income based on the principal amounts outstanding. Upon sale and delivery, loans are legally isolated from the Company and the Company has no ability to restrict or constrain the ability of third‑party investors to pledge or exchange the mortgage loans. The Company does not have the entitlement or ability to repurchase the mortgage loans or unilaterally cause third‑party investors to put the mortgage loans back to the Company. Unrealized and realized gains on loan sales are determined using the specific-identification method and are recognized through mortgage banking activity in the Consolidated Statements of Income. The Company elects to measure loans held for sale at fair value to better align reported results with the underlying economic changes in value of the loans on the Company’s balance sheet. |
U.S. Small Business Administration Paycheck Protection Program | U.S. Small Business Administration Paycheck Protection Program During the global COVID-19 pandemic, pursuant to the CARES Act and the Consolidated Appropriations Act, 2021, the United States Small Business Administration Payroll Protection Program (“SBA-PPP”) provided forgivable loans to small businesses to enable them to maintain payroll, hire back employees who had been laid off, and cover overhead. SBA-PPP loans have an interest rate of 1%, have two or five year terms, and carry a 100% guarantee of the SBA. The program ended on May 31, 2021. SBA-PPP loans are eligible to be forgiven by the SBA. |
Portfolio loans and the allowance for credit losses | Portfolio loans and the allowance for credit losses Loans are stated at the principal amount outstanding, adjusted for deferred origination fees and costs, discounts on loans acquired, and the ACL. Interest is accrued based on the loan principal balances and stated interest rates. Origination fees and costs are recognized as an adjustment to the related loan yield using approximate interest methods. For credit card loans, loan origination fees and direct loan origination costs are amortized on a straight-line basis over a 12-month period. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. For reporting purposes, the Company discontinues the accrual of interest at the earlier of the date any portion of the principal and/or interest is 90 days past due, or at such time as we determine that it is probable that not all principal and interest payments will be collected, and that collateral is insufficient to discharge the debt in full. When the interest accrual is discontinued, all unpaid accrued interest is reversed from income. Generally, interest payments on nonaccrual loans are recorded as a reduction of the principal balance. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are generally charged-off in part or in full when management determines the loan to be uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies. On January 1, 2023, we adopted Accounting Standards Update (“ASU”) 2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”), which replaces the incurred loss methodology for determining our provision for credit losses and ACL with an expected loss methodology that is referred to as the Current Expected Credit Loss model (“CECL”). The measurement of expected credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivable and held-to-maturity (“HTM”) debt securities. It also applies to off-balance sheet credit exposures not accounted for as insurance (loan commitments, standby letters of credit, financial guarantees, and other similar instruments) and net investments in leases recognized by a lessor in accordance with ASU 2016-02 “Leases (Topic 842)”. In addition, ASU 2016-13 made changes to the accounting for AFS debt securities. One such change is to require credit-related impairments to be recognized as an ACL rather than as a write-down of the security’s amortized cost basis when the Company does not intend to sell or believes that the Company will be required to sell the securities prior to recovery of the security’s amortized cost basis. The Company adopted ASU 2016-13 using the modified retrospective method. Results for reporting periods beginning after January 1, 2023 are presented under ASU 2016-13 while prior period amounts continue to be reported in accordance with previously applicable GAAP. The Company does not own HTM debt securities. There was no ACL on available for sale securities at September 30, 2023. The following table illustrates the impact of the adoption of ASC 326, or the CECL standard. The adoption of the standard required an $804 thousand increase in the ACL and a $775 thousand reduction to the reserve for unfunded commitments (“RUC”). The improved precision of the calculation of the historical utilization of unfunded commitments gave rise to the reduction. The net impact of the adoption of the CECL standard to retained earnings was $29 thousand. January 1, 2023 (in thousands) Pre-adoption of the CECL standard As Reported Under ASC 326 Impact of adoption of the CECL standard Assets: Real estate: Residential $ 484,735 $ 484,735 $ — Commercial 664,551 664,551 — Construction 238,099 238,099 — Commercial and Industrial 220,221 220,221 — Credit card, net of reserve 128,434 128,434 — Other consumer 1,179 1,179 — Portfolio loans receivable, gross $ 1,737,219 $ 1,737,219 $ — Deferred origination fees, net (8,627) (8,627) — Allowance for credit losses (26,385) (27,189) (804) Portfolio loans receivable, net $ 1,702,207 $ 1,701,403 $ (804) Liabilities: Reserve for unfunded commitments $ 1,682 $ 907 $ (775) We maintain an ACL that represents management’s estimate of the expected credit losses and risks inherent in our loan portfolio. The amount of the ACL should not be interpreted as an indication that charge-offs in future periods will necessarily occur in those amounts, or at all. The allowance immediately recognizes lifetime expected credit losses when a financial asset is originated or purchased. The ACL is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged-off against the allowance when they are deemed uncollectible. Factors for charge-off that may be considered include: repayments deemed to be extended out beyond reasonable time frames, customer bankruptcy and lack of assets, and/or collateral deficiencies. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. In determining the ACL, we estimate losses collectively based on quantitative analysis of historical credit losses adjusted for current conditions and reasonable and supportable forecasts of collectability of future cash flows over the remaining term of each financial instrument. The Company has elected to utilize a discounted cash flow methodology for all segments, except for the other consumer portfolio segment, which applies a simplified, remaining life approach. See further detail regarding our forecasting methodology in the “Discounted Cash Flow Method” section below. Quarterly, the Company utilizes a Qualitative Scorecard to consider the need to qualitatively adjust expected credit loss estimates for information not already captured in the quantitative loss estimation process, which may impact expected credit losses. The Qualitative Scorecard evaluates certain risk environments such as economic conditions, changes in the nature and volume of portfolios, changes in experience, depth, and ability of lending management, changes in volume and severity of past due loans and similar conditions, and changes in the value of underlying collateral. The scorecard results help the Company analyze directional consistency to risk conditions and circumstances that should be considered for each loan segment and to refine its estimates of expected credit losses. As of September 30, 2023, there have been no significant changes applied through the Qualitative Scorecard subsequent to implementation on January 1, 2023. Purchased Credit Deterioration Upon adoption of ASU 2016-13, loans which were identified as Purchase Credit Impaired under the incurred loss model are identified as Purchased Credit Deteriorated (“PCD”) loans at January 1, 2023 without reassessment. In future acquisitions, the Company may purchase loans, some of which have experienced more than insignificant credit deterioration since origination. In those cases, the Company will consider certain criteria including days past due, accrual status, risk rating, credit mark, and other relevant factors in assessing whether purchased loans are PCD. PCD loans are recorded at the amount paid and the Company will determine the initial ACL required for PCD assets with no impact to earnings. The loan’s purchase price and ACL is then the initial amortized cost basis for PCD loans. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent to initial recognition, PCD loans are subject to the same interest income recognition and impairment model as non-PCD loans, with changes to the ACL recorded through provision expense. Discounted Cash Flow Method The Company uses the discounted cash flow (“DCF”) method to estimate expected credit losses for each portfolio loan segment, with the exception of other consumer loans. For each of these loan segments, the Company generates cash flow projections at the instrument level. Payment expectations are adjusted for estimated prepayment speed and for probability and severity of a loss. The expected credit losses derived from the DCF are estimated over the contractual term of the loans, adjusted for expected prepayments when appropriate. The modeling of expected prepayment speeds is based on historical internal data. The contractual term excludes expected extensions, renewals and modifications. The Company uses regression analysis of historical internal and peer data to determine suitable portfolio segment level loss drivers to utilize when modeling lifetime probability of default and loss given default. This analysis also determines how expected probability of default and loss given default will react to forecasted levels of the loss drivers. For the credit card portfolio, a major consideration in the determination of the ACL is our historical loss experience. The Company calculates the credit card ACL collectively, applying segmentation based on collateral positions: secured, partially secured, and unsecured. For all DCF models, the Company has elected to use a four quarter forecast period across all portfolio segments. After the forecasted period, the models will revert to a long run average of each economic factor over four quarters. The Company uses economic projections from reputable and independent third parties to inform its loss driver forecast over the forecast period. The combination of adjustments for credit expectations (default and loss) and timing expectations (prepayment, curtailment, and time to recovery) produces an expected cash flow stream at the instrument level. An effective interest rate is calculated by the Company, adjusted for any net deferred fees or costs, premium, or discount existing at the origination or acquisition, to produce an instrument-level net present value of expected cash flows. The ACL reflects the difference between the amortized cost basis and the present value of the expected cash flows. Individual Evaluation The Company will evaluate individual instruments for expected credit losses when those instruments do not share similar risk characteristics with instruments evaluated on a collective basis. Instruments may be evaluated whether or not there is an expectation of collectability in place. Instruments evaluated individually are not included in the Company’s collective analysis. Collateral dependent or secured loans with respect to which the Company expects repayment to be provided substantially through the operation or sale of the collateral utilize a collateral-based methodology in which ACL is measured based on the difference between the net realizable value of the collateral and the amortized cost basis of the asset as of the measurement date. If the collateral valuation is equal to or greater than amortized cost, no reserve is applied. If a loan is not collateral dependent, the loan will be analyzed based on a forecast of future cash flows. Credit Losses on Off-Balance Sheet Credit Exposures The Company’s financial instruments include off-balance sheet credit instruments such as unfunded commitments to make loans, commercial letters of credit issued, and commitments to fund other investments. The Company’s maximum exposure to credit loss in the event of nonperformance by the other party to the financial instrument for off-balance sheet loan commitments is represented by the contractual amount of the credit commitment. Loan commitments and lines of credit are generally made on the same terms, including with regard to collateral, as outstanding loans. The Company maintains RUC on off-balance sheet credit exposures through a provision reflected in other liabilities. Increases or decreases in the reserve are charged to or released from the provision for credit losses for unfunded commitments in the consolidated statements of income. The provision (credit) for credit losses on off-balance sheet exposures prior to January 1, 2023 was included in other noninterest expense in the consolidated statements of income. The RUC on off-balance credit exposures is estimated by loan segment at each balance sheet date under the current expected credit loss model based on the segment loss factor and the estimated utilization rate of the unfunded commitments. The Company has analyzed its historic funding behavior at the segment level to determine an expected utilization rate. The above methodology for determining an appropriate ACL is based on a comprehensive analysis of the loan portfolio in accordance with ASC 326. The analysis considers all significant factors that affect the expected collectability of the portfolio and supports the expected credit losses estimated by this process. It is important to recognize that the related process, methodology, and underlying assumptions require a substantial degree of judgment. Additional disclosure on the ACL, and qualitative factors can be found in Part II, Item 1A - Risk Factors and Note 5 - Portfolio Loans Receivable. Credit Losses on SBA-PPP loans and interest receivable The ACL for SBA-PPP loans was separately evaluated given the explicit government guarantee. The Company has incorporated historical experience with similar SBA guarantees and underwriting adjusted for reasonable and supportable forecasts and concluded the expected credit loss is zero and, therefore, no allowance has been assigned to these loans. The Company does not measure an ACL on accrued interest receivable balances because these balances are written off as a reduction to interest income when loans are placed on nonaccrual status. Loan modifications Effective January 1, 2023, the Company adopted ASU 2022-02 - Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures. From time to time, the Company may elect to modify the contractual terms of loans to a borrower experiencing financial difficulties as a way to mitigate loss, to proactively work with borrowers in financial difficulty, or to comply with regulations regarding the treatment of certain bankruptcy filing and discharge situations. These modifications may include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance or other actions. Under ASU 2022-02, modifications to a loan for a borrower experiencing financial difficulty that have occurred in the current reporting period, are disclosed along with the impact of the modifications. During the three and nine months ended September 30, 2023, the Company did not have any such modifications. |
Premises and equipment | Premises and equipment Premises and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated useful life of the related property, generally over two |
Leases | Leases The Company accounts for leases according to ASU 2016-02, Leases (Topic 842), and applies a right-of-use (“ROU”) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. The Company elected to apply the package of practical expedients permitting entities to not reassess: 1) whether any expired or existing contracts are or contain leases; 2) the lease classification for any expired or existing leases; and 3) initial direct costs for any existing leases. Additionally, as provided by ASU 2016-02, the Company elected not to apply the recognition requirements of ASC 842 to short-term leases, defined as leases with a term of 12 months or less, and to recognize the lease payments in net income on short-term leases on a straight-line basis over the lease term. |
Derivative financial instruments | Derivative financial instruments The Company enters into commitments to fund residential mortgage loans (interest rate locks) with the intention of selling them in the secondary market. The Company also enters into forward sales agreements for certain funded loans and loan commitments. The Company records unfunded commitments intended for loans held for sale and forward sales agreements at fair value with changes in fair value recorded as a component of mortgage banking revenue. Loans originated and intended for sale in the secondary market are carried at fair value. For pipeline loans which are not pre-sold to an investor, the Company endeavors to manage the interest rate risk on rate lock commitments by entering into forward sale contracts, whereby the Company obtains the right to deliver securities to investors in the future at a specified price. Such contracts are accounted for as derivatives and are recorded at fair value as derivative assets or liabilities, with changes in fair value recorded in mortgage banking revenue. The Company accounts for derivative instruments and hedging activities according to guidelines established in ASC 815-10, Accounting for Derivative Instruments and Hedging Activities |
Fair value measurements | Fair value measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for an asset or liability in an orderly transaction between market participants at the measurement date. The degree of management judgment involved in determining the fair value of a financial instrument is dependent upon the availability of quoted market prices or observable market inputs. For financial instruments that are traded actively and have quoted market prices or observable market inputs, there is minimal subjectivity involved in measuring fair value. However, when quoted market prices or observable market inputs are not fully available, significant management judgment may be necessary to estimate fair value. In developing our fair value estimates, we endeavor to maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines Level 1 valuations as those based on quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2 valuations include inputs based on quoted prices for similar assets or liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. Level 3 valuations are based on at least one significant assumption not observable in the market, or significant management judgment or estimation, some of which may be internally developed. |
Income taxes | Income taxes Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities, using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are recognized when it is deemed more likely than not that the benefits of such deferred income taxes will be realized. |
Earnings per share | Earnings per shareEarnings per share is computed by dividing net income available to common stockholders by the weighted average number of shares outstanding. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares outstanding, adjusted for the dilutive effect of stock options and restricted stock using the treasury stock method. |
Comprehensive loss | Comprehensive loss The Company reports as comprehensive loss all changes in stockholders' equity during the year from non-stockholder sources. Other comprehensive loss refers to all components (income, expenses, gains, and losses) of comprehensive loss that are excluded from net income. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements: In March 2020, the Financial Accounting Standards Board (“FASB”) released ASU 2020-04 - Reference Rate Reform, Topic 848, which provides temporary guidance to ease the potential accounting burden in accounting for, or recognizing the effects of, reference rate reform on financial reporting. The new standard is a result of London Interbank Offered Rate (“LIBOR”) likely being discontinued as an available benchmark rate. The standard is elective and provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, or other transactions that reference LIBOR, or another reference rate expected to be discontinued. The amendments in the update are effective for all entities between March 12, 2020 and an extended sunset date of December 31, 2024 which was extended by ASU 2022-06 issued by FASB in December 2022. The adoption of this guidance is not expected to have a material impact on the Company’s financial statements. Other accounting standards that have been issued or proposed by the FASB or other standards-setting bodies are not expected to have a material impact on the Company's financial position, results of operations or cash flows. |
Reclassifications | Reclassifications: Certain reclassifications have been made to amounts reported in prior periods to conform to the current period presentation. The reclassifications had no material effect on net income or total stockholders' equity. |
Subsequent events | Subsequent events: Subsequent events are events or transactions that occur after the balance sheet date but before financial statements are issued. Recognized subsequent events are events or transactions that provide additional evidence about conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements. Non-recognized subsequent events are events that provide evidence about conditions that did not exist at the date of the balance sheet but arose after that date. Management has reviewed events through the date the financial statements were available to be issued and no subsequent events occurred requiring accrual or disclosure. |
Nature of Business and Basis _3
Nature of Business and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Impact of the Adoption of Accounting Standards Update | The following table illustrates the impact of the adoption of ASC 326, or the CECL standard. The adoption of the standard required an $804 thousand increase in the ACL and a $775 thousand reduction to the reserve for unfunded commitments (“RUC”). The improved precision of the calculation of the historical utilization of unfunded commitments gave rise to the reduction. The net impact of the adoption of the CECL standard to retained earnings was $29 thousand. January 1, 2023 (in thousands) Pre-adoption of the CECL standard As Reported Under ASC 326 Impact of adoption of the CECL standard Assets: Real estate: Residential $ 484,735 $ 484,735 $ — Commercial 664,551 664,551 — Construction 238,099 238,099 — Commercial and Industrial 220,221 220,221 — Credit card, net of reserve 128,434 128,434 — Other consumer 1,179 1,179 — Portfolio loans receivable, gross $ 1,737,219 $ 1,737,219 $ — Deferred origination fees, net (8,627) (8,627) — Allowance for credit losses (26,385) (27,189) (804) Portfolio loans receivable, net $ 1,702,207 $ 1,701,403 $ (804) Liabilities: Reserve for unfunded commitments $ 1,682 $ 907 $ (775) |
Schedule of Accumulated Other Comprehensive Loss | Information concerning the Company's accumulated other comprehensive loss as of September 30, 2023 and December 31, 2022 is as follows: (in thousands) September 30, 2023 December 31, 2022 Unrealized losses on securities available for sale $ (23,299) $ (22,416) Deferred tax benefit 5,456 5,665 Total accumulated comprehensive loss $ (17,843) $ (16,751) |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Amortized Cost and Estimated Fair Value of Investment | The amortized cost and estimated fair value of investment securities at September 30, 2023 and December 31, 2022 are summarized as follows: (in thousands) Amortized Unrealized Unrealized Fair September 30, 2023 U.S. Treasuries $ 171,496 $ — $ (16,683) $ 154,813 Municipal 10,807 — (2,890) 7,917 Corporate 5,000 — (660) 4,340 Asset-backed securities 7,318 14 (66) 7,266 Mortgage-backed securities 34,733 — (3,014) 31,719 Total $ 229,354 $ 14 $ (23,313) $ 206,055 December 31, 2022 U.S. Treasuries $ 215,486 $ — $ (16,037) $ 199,449 Municipal 10,815 — (2,803) 8,012 Corporate 5,000 — (400) 4,600 Asset-backed securities 7,970 — (259) 7,711 Mortgage-backed securities 35,626 — (2,917) 32,709 Total $ 274,897 $ — $ (22,416) $ 252,481 |
Schedule of Investment Portfolio in Continuous Unrealized Loss Position, Fair Value | Information related to unrealized losses in the investment portfolio as of September 30, 2023 and December 31, 2022 is summarized as follows: Less than 12 months 12 months or longer Total (in thousands) Fair Unrealized Fair Unrealized Fair Unrealized September 30, 2023 U.S. Treasuries $ — $ — $ 154,813 $ (16,683) $ 154,813 $ (16,683) Municipal — — 7,917 (2,890) 7,917 (2,890) Corporate — — 4,340 (660) 4,340 (660) Asset-backed securities — — 5,297 (66) 5,297 (66) Mortgage-backed securities — — 31,719 (3,014) 31,719 (3,014) Total $ — $ — $ 204,086 $ (23,313) $ 204,086 $ (23,313) December 31, 2022 U.S. Treasuries $ 82,102 $ (1,396) $ 117,347 $ (14,641) $ 199,449 $ (16,037) Municipal 1,452 (207) 6,560 (2,596) 8,012 (2,803) Corporate — — 4,600 (400) 4,600 (400) Asset-backed securities 6,156 (237) 1,555 (22) 7,711 (259) Mortgage-backed securities 22,067 (1,884) 10,642 (1,033) 32,709 (2,917) Total $ 111,777 $ (3,724) $ 140,704 $ (18,692) $ 252,481 $ (22,416) |
Schedule of Investments Classified by Contractual Maturity Date | Contractual maturities of U.S. government and government-sponsored agencies, asset-backed, municipal, corporate and mortgage-backed securities at September 30, 2023 and December 31, 2022 are shown below. Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations with or without call premiums or prepayment penalties. September 30, 2023 December 31, 2022 (in thousands) Amortized Fair Amortized Fair Within one year $ 40,024 $ 39,165 $ 53,739 $ 53,204 Over one to five years 110,756 98,920 88,165 82,538 Over five to ten years 26,223 21,524 79,090 68,805 Over ten years 10,300 7,461 10,307 7,514 Asset-backed securities (1) 7,318 7,266 7,970 7,711 Mortgage-backed securities (1) 34,733 31,719 35,626 32,709 Total $ 229,354 $ 206,055 $ 274,897 $ 252,481 _______________ (1) Asset-backed and Mortgage-backed securities are due in monthly installments. |
Portfolio Loans Receivable (Tab
Portfolio Loans Receivable (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Major classifications of portfolio loans receivable are as follows: Portfolio Loan Categories September 30, 2023 December 31, 2022 (in thousands) Amount Percent Amount Percent Real estate: Residential $ 558,147 30 % $ 484,735 28 % Commercial 670,594 35 % 664,551 38 % Construction 280,905 15 % 238,099 14 % Commercial and Industrial 236,782 13 % 220,221 13 % Credit card, net of reserve (1) 122,533 7 % 128,434 7 % Other consumer 948 — % 1,179 — % Portfolio loans receivable, gross 1,869,909 100 % 1,737,219 100 % Deferred origination fees, net (7,980) (8,627) Allowance for credit losses (28,279) (26,385) Portfolio loans receivable, net $ 1,833,650 $ 1,702,207 (1) Credit card loans are presented net of reserve for interest and fees. |
Schedule of Allowance for Credit Losses on Loans Receivables | The following tables set forth the changes in the ACL and an allocation of the ACL by loan segment class for the three and nine months ended September 30, 2023 and September 30, 2022. Beginning Impact of Adopting the CECL Standard Other Provision (Release of Provision) for Charge-Offs Recoveries Ending (in thousands) Three Months Ended September 30, 2023 Real estate: Residential $ 5,419 $ — $ 91 $ 269 $ — $ — $ 5,779 Commercial 10,188 — 193 (199) — 39 10,221 Construction 1,868 — — 383 — — 2,251 Commercial and Industrial 4,296 — — (35) (77) 11 4,195 Credit card 5,707 — — 1,870 (1,753) — 5,824 Other consumer 17 — — (8) — — 9 Total $ 27,495 $ — $ 284 $ 2,280 $ (1,830) $ 50 $ 28,279 Nine Months Ended September 30, 2023 Real estate: Residential $ 5,481 $ (1,198) $ 91 $ 1,405 $ — $ — $ 5,779 Commercial 8,098 3,941 193 (2,050) — 39 10,221 Construction 3,782 (1,973) — 442 — — 2,251 Commercial and Industrial 2,935 1,073 — 1,186 (1,020) 21 4,195 Credit card 6,078 (1,045) — 5,827 (5,036) — 5,824 Other consumer 11 6 — (8) — — 9 Total $ 26,385 $ 804 $ 284 $ 6,802 $ (6,056) $ 60 $ 28,279 (in thousands) Beginning Provision (Release of Provision) for Charge-Offs Recoveries Ending Three Months Ended September 30, 2022 Real estate: Residential $ 5,863 $ 106 $ — $ — $ 5,969 Commercial 8,857 (489) — — 8,368 Construction 4,473 (468) — — 4,005 Commercial and Industrial 2,457 (262) — — 2,195 Credit card 4,759 2,373 (1,596) 8 5,544 Other consumer 10 — — — 10 Total $ 26,419 $ 1,260 $ (1,596) $ 8 $ 26,091 Nine Months Ended September 30, 2022 Real estate: Residential $ 5,612 $ 357 $ — $ — $ 5,969 Commercial 8,566 (198) — — 8,368 Construction 4,699 (694) — — 4,005 Commercial and Industrial 2,637 (442) — — 2,195 Credit card 3,655 5,226 (3,375) 38 5,544 Other consumer 12 (2) — — 10 Total $ 25,181 $ 4,247 $ (3,375) $ 38 $ 26,091 The following tables present a summary of loan balances and the related allowance for loan losses summarized by loan category for each impairment method used as of December 31, 2022. (in thousands) Allowance for Loan Losses Outstanding Portfolio December 31, 2022 Individually Collectively Individually Collectively Real estate: Residential $ — $ 5,481 $ 4,288 $ 480,447 Commercial — 8,098 1,563 662,988 Construction — 3,782 2,837 235,262 Commercial and Industrial 372 2,563 705 219,516 Credit card — 6,078 — 128,434 Other consumer — 11 — 1,179 Total $ 372 $ 26,013 $ 9,393 $ 1,727,826 |
Schedule of Past Due Loans Receivables | Past due loans, segregated by age and class of loans, as of September 30, 2023 and December 31, 2022 were as follows: Portfolio Loans Past Due Loans Loans Loans Total Past Current Total Accruing Nonaccrual (in thousands) September 30, 2023 Real estate: Residential $ 1,761 $ 264 $ 11,889 $ 13,914 $ 544,233 $ 558,147 $ — $ 12,256 Commercial 826 — 582 1,408 669,186 670,594 — 582 Construction 1,512 2,568 2,033 6,113 274,792 280,905 — 2,033 Commercial and Industrial 574 219 353 1,146 235,636 236,782 — 353 Credit card 7,882 7,314 390 15,586 106,947 122,533 390 — Other consumer — — — — 948 948 — — Total $ 12,555 $ 10,365 $ 15,247 $ 38,167 $ 1,831,742 $ 1,869,909 $ 390 $ 15,224 Loans Loans Loans Total Past Current Total Accruing Nonaccrual December 31, 2022 Real estate: Residential $ 4 $ 142 $ 4,284 $ 4,430 $ 480,305 $ 484,735 $ — $ 4,288 Commercial — — 1,563 1,563 662,988 664,551 — 1,563 Construction 1,164 640 2,837 4,641 233,458 238,099 — 2,837 Commercial and Industrial 117 386 569 1,072 219,149 220,221 — 705 Credit card 8,473 7,455 363 16,291 112,143 128,434 363 — Other consumer — — — — 1,179 1,179 — — Total $ 9,758 $ 8,623 $ 9,616 $ 27,997 $ 1,709,222 $ 1,737,219 $ 363 $ 9,393 |
Schedule of Non-Accrual Loans | The following presents the nonaccrual loans as of September 30, 2023 and December 31, 2022: September 30, 2023 December 31, 2022 Nonaccrual with No Allowance for Credit Loss Nonaccrual with an Allowance for Credit Loss Total Nonaccrual Loans Interest Recognized on Nonaccrual Loans Total Nonaccrual Loans (in thousands) Real estate: Residential $ 11,653 $ 603 $ 12,256 $ 340 $ 4,288 Commercial 582 — 582 71 1,563 Construction 2,033 — 2,033 82 2,837 Commercial and Industrial 278 75 353 53 705 Total $ 14,546 $ 678 $ 15,224 $ 546 $ 9,393 Collateral dependent loans amortized cost (in thousands) September 30, 2023 Real estate: Residential $ 12,364 Commercial 2,127 Construction 79 Commercial and Industrial 318 Total $ 14,888 |
Schedule of Impaired Loans Receivables | Impaired portfolio loans for the period ended December 31, 2022 were as follows: Unpaid Recorded Recorded Total Related Average Interest (in thousands) December 31, 2022 Real estate: Residential $ 4,476 $ 4,288 $ — $ 4,288 $ — $ 4,629 $ 149 Commercial 1,647 1,563 — 1,563 — 1,656 52 Construction 2,939 2,837 — 2,837 — 2,938 75 Commercial and Industrial 899 247 458 705 372 1,199 77 Total $ 9,961 $ 8,935 $ 458 $ 9,393 $ 372 $ 10,422 $ 353 The following tables summarize interest recognized on impaired loans for the period ended September 30, 2022: Interest Recognized on Impaired Portfolio Loans For the For the Three Months Ended September 30, 2022 For the For the Nine Months Ended September 30, 2022 (in thousands) Average Interest Average Interest Real estate: Residential $ 3,329 $ — $ 3,341 $ — Commercial 1,643 — 1,650 — Construction 2,939 — 2,938 — Commercial and Industrial 1,242 — 1,267 — Total $ 9,153 $ — $ 9,196 $ — |
Schedule of Loans Receivables Credit Quality Indicators | The following table presents the balances of classified loans based on the most recent credit quality indicator analysis. Classified loans include Special Mention, Substandard and Doubtful loans. Pass classified loans include loans graded exceptional, very good, good, satisfactory, and pass/watch. Credit card loans are ungraded as they are not individually graded. Charge-offs presented represent gross charge-offs recognized in the current period: September 30, 2023 Term Loans by Origination Year (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Residential – Real estate Pass $ 110,131 $ 139,619 $ 80,143 $ 79,163 $ 39,069 $ 92,404 $ — $ 540,529 Special Mention — — 135 3,693 — 519 — 4,347 Substandard — — — — 26 13,245 — 13,271 Doubtful — — — — — — — — Total 110,131 139,619 80,278 82,856 39,095 106,168 — 558,147 Commercial – Real estate Pass 32,279 186,338 157,964 69,462 96,973 118,278 — 661,294 Special Mention — 6,913 — — 808 997 — 8,718 Substandard — — — — 582 — — 582 Doubtful — — — — — — — — Total 32,279 193,251 157,964 69,462 98,363 119,275 — 670,594 Construction – Real estate Pass 118,709 73,164 50,359 25,027 7,239 2,470 — 276,968 Special Mention — — 1,282 — — 614 — 1,896 Substandard — — — — 597 1,444 — 2,041 Doubtful — — — — — — — — Total 118,709 73,164 51,641 25,027 7,836 4,528 — 280,905 Commercial and Industrial Pass 51,963 79,780 28,847 10,522 18,771 25,579 — 215,462 Special Mention — 161 17,799 2,434 48 284 — 20,726 Substandard — 98 251 — 42 203 — 594 Doubtful — — — — — — — — Total 51,963 80,039 46,897 12,956 18,861 26,066 — 236,782 Other consumer Pass 105 295 160 121 — 267 — 948 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total 105 295 160 121 — 267 — 948 Credit card Ungraded — — — — — — 122,533 122,533 Portfolio loans receivable, gross $ 313,187 $ 486,368 $ 336,940 $ 190,422 $ 164,155 $ 256,304 $ 122,533 $ 1,869,909 September 30, 2023 (in thousands) 2023 2022 2021 2020 2019 Prior Revolving Total Gross Charge-offs Commercial and Industrial $ — $ 77 $ — $ — $ 943 $ — $ — $ 1,020 Credit card — — — — — — 5,036 5,036 Total $ — $ 77 $ — $ — $ 943 $ — $ 5,036 $ 6,056 The following table presents the balances of classified loans based on credit quality indicator as of December 31, 2022: (in thousands) Pass (1) Special Mention Substandard Doubtful Ungraded (2) Total December 31, 2022 Real estate: Residential $ 469,304 $ 9,966 $ 5,465 $ — $ — $ 484,735 Commercial 657,411 5,577 1,563 — — 664,551 Construction 235,262 — 2,837 — — 238,099 Commercial and Industrial 196,381 22,469 1,371 — — 220,221 Credit card — — — — 128,434 128,434 Other consumer 1,179 — — — — 1,179 Portfolio loans receivable, gross $ 1,559,537 $ 38,012 $ 11,236 $ — $ 128,434 $ 1,737,219 ________________________ (1) Pass includes loans graded exceptional, very good, good, satisfactory and pass/watch, in addition to credit cards and consumer credits that are not individually graded. (2) Credit card loans are not individually graded. |
Schedule of Outstanding Loan Commitments | Outstanding loan commitments were as follows: (in thousands) September 30, 2023 December 31, 2022 Unused lines of credit Real Estate: Residential $ 16,635 $ 14,336 Residential - Home Equity 44,069 43,128 Commercial 21,483 36,609 Construction 115,478 93,913 Commercial and Industrial 43,948 45,747 Credit card (1) 115,637 111,227 Other consumer 298 102 Total $ 357,548 $ 345,062 Letters of credit $ 4,641 $ 5,105 ________________________ (1) Outstanding loan commitments in the credit card portfolio include $103.8 million and $106.9 million in secured and partially secured balances as of September 30, 2023 and December 31, 2022, respectively. |
Schedule of Credit Losses for Financing Receivables | Activity for this account is as follows for the periods presented: Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 888 $ 1,631 $ 1,682 $ 1,736 Impact of adopting the CECL standard on January 1, 2023 — — (775) — Provision for (reversal of) reserve for unfunded commitments 24 51 5 (54) Balance at end of period $ 912 $ 1,682 $ 912 $ 1,682 Three months ended Nine months ended (in thousands) September 30, 2023 September 30, 2022 September 30, 2023 September 30, 2022 Balance at beginning of period $ 1,182 $ 1,166 $ 1,174 $ 1,164 Provision for mortgage loan put-back reserve 4 4 12 6 Balance at end of period $ 1,186 $ 1,170 $ 1,186 $ 1,170 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The following table reports the commitment and fair value amounts on the outstanding derivatives: (in thousands) September 30, 2023 December 31, 2022 Notional amount of open forward sales agreements $ — $ 1,750 Fair value of open forward delivery sales agreements — 9 Notional amount of interest rate lock commitments — 626 Fair value of interest rate lock commitments — 1 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Schedule of Assets and Liabilities, Lessee | The Company’s lease information is summarized as follows: (in thousands) September 30, 2023 December 31, 2022 Lease Right of Use Asset: Lease asset $ 7,229 $ 5,171 Less: Accumulated amortization (3,470) (3,074) Net lease asset $ 3,759 $ 2,097 Lease Liability: Lease liability $ 7,378 5,327 Less: Accumulated amortization (3,397) (2,968) Net lease liability $ 3,981 $ 2,359 |
Schedule of Lessee, Operating Lease, Liability, Maturity | Future minimum payments for operating leases with initial or remaining terms of one year or more are as follows: (in thousands) September 30, 2023 Amounts due in: 2023 $ 346 2024 1,120 2025 673 2026 621 2027 and thereafter 1,844 Total future lease payments 4,604 Discount of cash flows (623) Present value of net future lease payments $ 3,981 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company has categorized its financial instruments measured at fair value on a recurring basis as of September 30, 2023 and December 31, 2022 as follows: (in thousands) September 30, 2023 Total Level 1 Inputs Level 2 Inputs Level 3 Inputs Investment securities available for sale U.S. Treasuries $ 154,813 $ 154,813 $ — $ — Municipal 7,917 — 7,917 — Corporate 4,340 — 4,340 — Asset-backed securities 7,266 — 7,266 — Mortgage-backed securities 31,719 — 31,719 — Total $ 206,055 $ 154,813 $ 51,242 $ — Loans held for sale $ 4,843 $ — $ 4,843 $ — Derivative assets $ — $ — $ — $ — Derivative liabilities $ — $ — $ — $ — December 31, 2022 Investment securities available for sale U.S. Treasuries $ 199,449 $ 199,449 $ — $ — Municipal 8,012 — 8,012 — Corporate 4,600 — 4,600 — Asset-backed securities 7,711 — 7,711 — Mortgage-backed securities 32,709 — 32,709 — Total $ 252,481 $ 199,449 $ 53,032 $ — Loans held for sale $ 7,416 $ — $ 7,416 $ — Derivative assets $ 10 $ — $ 10 $ — Derivative liabilities $ — $ — $ — $ — |
Schedule of Fair Value of Loans Held For Sale | The following table reflects the difference between the fair value carrying amount of loans held for sale, measured at fair value under FASB ASC 825-10, and the aggregate unpaid principal amount the Company is contractually entitled to receive at maturity: Fair Value of Loans Held for Sale (in thousands) September 30, 2023 December 31, 2022 Aggregate fair value $ 4,843 $ 7,416 Contractual principal 3,035 6,808 Difference $ 1,808 $ 608 |
Schedule of Fair Value Measurements, Nonrecurring | (in thousands) September 30, 2023 December 31, 2022 Individually evaluated loans for credit loss, net Level 3 inputs 14,575 9,021 Total $ 14,575 9,021 |
Schedule of Fair Value Measurement Inputs and Valuation Techniques | The following table provides information describing the unobservable inputs used in Level 3 fair value measurements at September 30, 2023 and December 31, 2022: Unobservable Inputs Valuation Technique Unobservable Inputs Range of Inputs Individually evaluated loans Appraised Value/Discounted Cash Flows Discounts to appraisals or cash flows for estimated holding and/or selling costs 0 to 25% |
Schedule of Fair Value Measurements, Recurring and Nonrecurring | September 30, 2023 December 31, 2022 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value Financial assets Level 1 Cash and due from banks $ 13,767 $ 13,767 $ 19,963 $ 19,963 Interest-bearing deposits at other financial institutions 130,428 130,428 39,764 39,764 Federal funds sold 1,957 1,957 20,688 20,688 Level 3 Portfolio loans receivable, net (1) $ 1,834,400 $ 1,821,205 $ 1,704,370 $ 1,659,283 Restricted investments 4,340 4,340 7,362 7,362 Financial liabilities Level 1 Noninterest-bearing deposits $ 680,803 $ 680,803 $ 674,313 $ 674,313 Level 3 Interest-bearing deposits $ 1,287,185 $ 1,285,398 $ 1,083,759 $ 1,090,553 FHLB advances and other borrowed funds 34,062 31,095 119,062 116,544 ________________________ (1) Includes SBA-PPP loans and portfolio loans. |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | The following schedule presents financial information for each reportable segment at September 30, 2023 and September 30, 2022. For the Three Months Ended September 30, 2023 (in thousands) Commercial Bank CBHL OpenSky ® Corporate (2) Eliminations Consolidated Interest income $ 30,409 $ 111 $ 16,143 $ 1,162 $ (84) $ 47,741 Interest expense 10,736 32 — 247 (84) 10,931 Net interest income 19,673 79 16,143 915 — 36,810 Provision for credit losses 275 — 1,875 130 — 2,280 Provision for credit losses on unfunded commitments 24 — — — — 24 Net interest income after provision 19,374 79 14,268 785 — 34,506 Noninterest income 665 1,255 4,405 1 — 6,326 Noninterest expense (1) 15,784 1,502 10,637 123 — 28,046 Net income (loss) before taxes $ 4,255 $ (168) $ 8,036 $ 663 $ — $ 12,786 Total assets $ 2,102,749 $ 5,280 $ 116,318 $ 264,950 $ (216,813) $ 2,272,484 For the Three Months Ended September 30, 2022 Interest income $ 20,382 $ 102 $ 17,103 $ 812 $ (59) $ 38,340 Interest expense 1,449 40 — 233 (59) 1,663 Net interest income 18,933 62 17,103 579 — 36,677 Provision (release of provision) for loan losses (980) — 2,240 — — 1,260 Net interest income after provision 19,913 62 14,863 579 — 35,417 Noninterest income 468 1,115 5,524 1 — 7,108 Noninterest expense (1) 13,798 2,017 12,101 178 — 28,094 Net income (loss) before taxes $ 6,583 $ (840) $ 8,286 $ 402 $ — $ 14,431 Total assets $ 1,823,049 $ 7,664 $ 128,842 $ 234,731 $ (184,928) $ 2,009,358 For the Nine Months Ended September 30, 2023 (in thousands) Commercial Bank CBHL OpenSky ® Corporate (2) Eliminations Consolidated Interest income $ 85,451 $ 299 $ 47,441 $ 3,274 $ (228) $ 136,237 Interest expense 29,012 104 — 712 (228) 29,600 Net interest income 56,439 195 47,441 2,562 — 106,637 Provision for credit losses 849 — 5,823 130 — 6,802 Release of credit losses on unfunded commitments 5 — — — — 5 Net interest income after provision 55,585 195 41,618 2,432 — 99,830 Noninterest income 1,964 3,743 13,329 3 — 19,039 Noninterest expense (3) 46,701 4,564 32,146 449 — 83,860 Net income (loss) before taxes $ 10,848 $ (626) $ 22,801 $ 1,986 $ — $ 35,009 Total assets $ 2,102,749 $ 5,280 $ 116,318 $ 264,950 $ (216,813) $ 2,272,484 For the Nine Months Ended September 30, 2022 Interest income $ 57,794 $ 347 $ 48,823 $ 2,457 $ (123) $ 109,298 Interest expense 3,255 185 — 573 (123) 3,890 Net interest income 54,539 162 48,823 1,884 — 105,408 Provision (release of provision) for loan losses (980) — 5,227 — — 4,247 Net interest income after provision 55,519 162 43,596 1,884 — 101,161 Noninterest income 1,571 4,580 17,658 2 — 23,811 Noninterest expense (3) 38,741 6,364 36,923 351 — 82,379 Net income (loss) before taxes $ 18,349 $ (1,622) $ 24,331 $ 1,535 $ — $ 42,593 Total assets $ 1,823,049 $ 7,664 $ 128,842 $ 234,731 $ (184,928) $ 2,009,358 ________________________ (1) Noninterest expense includes $6.1 million and $6.6 million in data processing expense in OpenSky’s ® segment for the three months ended September 30, 2023 and 2022, respectively. (2) The Corporate segment invests idle cash in revenue producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company. (3) Noninterest expense includes $17.9 million and $20.9 million in data processing expense in OpenSky’s ® segment for the nine months ended September 30, 2023 and 2022, respectively. |
Nature of Business and Basis _4
Nature of Business and Basis of Presentation - Additional Information (Details) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment shares | Sep. 30, 2022 USD ($) shares | Dec. 31, 2022 USD ($) | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Loans outstanding | $ 1,833,650 | $ 1,833,650 | $ 1,702,207 | ||
Allowance for credit losses | 280 | $ 280 | |||
Number of reportable segments | segment | 4 | ||||
Derivative Asset Statement Of Financial Position, Extensible Enumeration, Not Disclosed Flag | balance sheet | ||||
Bank owned life insurance | 37,315 | $ 37,315 | $ 36,524 | ||
Other non interest income | $ 274 | $ 255 | $ 791 | $ 761 | |
Stock Options | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Antidilutive securities excluded from computation of earnings per share (in shares) | shares | 282 | 141 | |||
Minimum | Premises and equipment | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Useful lives | 2 years | 2 years | |||
Maximum | Premises and equipment | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Useful lives | 7 years | 7 years | |||
Church Street Capital | |||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |||||
Loans outstanding | $ 8,000 | $ 8,000 |
Nature of Business and Basis _5
Nature of Business and Basis of Presentation - Impact of the Adoption of Accounting Standards Update (Details) - USD ($) $ in Thousands | Jan. 01, 2023 | Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Reduction to retained earnings | $ (242,878) | $ (237,435) | $ (234,517) | $ (224,015) | $ (214,005) | $ (207,316) | $ (201,492) | $ (197,903) | |
Portfolio loans receivable, gross | 1,869,909 | 1,737,219 | |||||||
Deferred origination fees, net | (7,980) | (8,627) | |||||||
Allowance for credit losses | (28,279) | (27,495) | (26,385) | (26,091) | (26,419) | (25,181) | |||
Portfolio loans receivable, net | 1,833,650 | 1,702,207 | |||||||
Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Reduction to retained earnings | (206,033) | (197,490) | $ (191,058) | (182,435) | (174,916) | (164,750) | $ (153,949) | (144,533) | |
As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | $ 1,737,219 | ||||||||
Deferred origination fees, net | (8,627) | ||||||||
Allowance for credit losses | (27,189) | ||||||||
Portfolio loans receivable, net | 1,701,403 | ||||||||
Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Increase (decrease) in credit loss reserve | 804 | ||||||||
Reduction to retained earnings | 29 | ||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Deferred origination fees, net | 0 | ||||||||
Allowance for credit losses | (804) | 0 | (804) | ||||||
Portfolio loans receivable, net | (804) | ||||||||
Impact of adoption of the CECL standard | Retained Earnings | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Reduction to retained earnings | 29 | ||||||||
Unfunded Commitments | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses | (912) | (888) | (1,682) | (1,682) | (1,631) | (1,736) | |||
Liabilities: Reserve for unfunded commitments | 1,682 | ||||||||
Unfunded Commitments | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Increase (decrease) in credit loss reserve | (775) | ||||||||
Liabilities: Reserve for unfunded commitments | 907 | ||||||||
Unfunded Commitments | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Allowance for credit losses | 0 | 775 | 0 | 0 | |||||
Liabilities: Reserve for unfunded commitments | (775) | ||||||||
Residential | Real estate | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 558,147 | 484,735 | |||||||
Allowance for credit losses | (5,779) | (5,419) | (5,481) | (5,969) | (5,863) | (5,612) | |||
Residential | Real estate | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 484,735 | ||||||||
Residential | Real estate | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Allowance for credit losses | 0 | 1,198 | |||||||
Commercial | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 236,782 | 220,221 | |||||||
Allowance for credit losses | (4,195) | (4,296) | (2,935) | (2,195) | (2,457) | (2,637) | |||
Commercial | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 220,221 | ||||||||
Commercial | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Allowance for credit losses | 0 | (1,073) | |||||||
Commercial | Real estate | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 670,594 | 664,551 | |||||||
Allowance for credit losses | (10,221) | (10,188) | (8,098) | (8,368) | (8,857) | (8,566) | |||
Commercial | Real estate | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 664,551 | ||||||||
Commercial | Real estate | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Allowance for credit losses | 0 | (3,941) | |||||||
Construction | Real estate | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 280,905 | 238,099 | |||||||
Allowance for credit losses | (2,251) | (1,868) | (3,782) | (4,005) | (4,473) | (4,699) | |||
Construction | Real estate | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 238,099 | ||||||||
Construction | Real estate | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Allowance for credit losses | 0 | 1,973 | |||||||
Consumer | Credit card, net of reserve | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 122,533 | 128,434 | |||||||
Allowance for credit losses | (5,824) | (5,707) | (6,078) | (5,544) | (4,759) | (3,655) | |||
Consumer | Credit card, net of reserve | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 128,434 | ||||||||
Consumer | Credit card, net of reserve | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 0 | ||||||||
Allowance for credit losses | 0 | 1,045 | |||||||
Consumer | Other consumer | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 948 | 1,179 | |||||||
Allowance for credit losses | $ (9) | (17) | (11) | $ (10) | $ (10) | $ (12) | |||
Consumer | Other consumer | As Reported Under ASC 326 | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | 1,179 | ||||||||
Consumer | Other consumer | Impact of adoption of the CECL standard | |||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||
Portfolio loans receivable, gross | $ 0 | ||||||||
Allowance for credit losses | $ 0 | $ (6) |
Nature of Business and Basis _6
Nature of Business and Basis of Presentation - Comprehensive Loss (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Total accumulated comprehensive loss | $ (17,843) | $ (16,751) |
Accumulated Net Investment Gain (Loss) Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||
Unrealized losses on securities available for sale | (23,299) | (22,416) |
Deferred tax benefit | 5,456 | 5,665 |
Total accumulated comprehensive loss | $ (17,843) | $ (16,751) |
Investment Securities - Amortiz
Investment Securities - Amortized Cost to Estimated Fair Value (Details) | 9 Months Ended | ||
Sep. 30, 2023 USD ($) security | Sep. 30, 2022 security | Dec. 31, 2022 USD ($) | |
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | $ 229,354,000 | $ 274,897,000 | |
Unrealized Gains | 14,000 | 0 | |
Unrealized Losses | (23,313,000) | (22,416,000) | |
Fair Value | $ 206,055,000 | 252,481,000 | |
Number of securities sold | security | 0 | 0 | |
Allowance for credit losses on available for sale securities | $ 0 | ||
Pledged securities | 150,000,000 | 0 | |
U.S. Treasuries | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 171,496,000 | 215,486,000 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (16,683,000) | (16,037,000) | |
Fair Value | 154,813,000 | 199,449,000 | |
Municipal | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 10,807,000 | 10,815,000 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (2,890,000) | (2,803,000) | |
Fair Value | 7,917,000 | 8,012,000 | |
Corporate | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 5,000,000 | 5,000,000 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (660,000) | (400,000) | |
Fair Value | 4,340,000 | 4,600,000 | |
Asset-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 7,318,000 | 7,970,000 | |
Unrealized Gains | 14,000 | 0 | |
Unrealized Losses | (66,000) | (259,000) | |
Fair Value | 7,266,000 | 7,711,000 | |
Mortgage-backed securities | |||
Debt Securities, Available-for-sale [Line Items] | |||
Amortized Cost | 34,733,000 | 35,626,000 | |
Unrealized Gains | 0 | 0 | |
Unrealized Losses | (3,014,000) | (2,917,000) | |
Fair Value | $ 31,719,000 | $ 32,709,000 |
Investment Securities - Unreali
Investment Securities - Unrealized Losses (Details) $ in Thousands | Sep. 30, 2023 USD ($) security | Dec. 31, 2022 USD ($) security |
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | $ 0 | $ 111,777 |
AFS, Less than 12 months, Unrealized Losses | 0 | (3,724) |
AFS,12 Months or Longer, Fair Value | 204,086 | 140,704 |
AFS, 12 months or longer, Unrealized Losses | (23,313) | (18,692) |
AFS,Total, Fair Value | 204,086 | 252,481 |
AFS, Total, Unrealized Losses | (23,313) | (22,416) |
U.S. Treasuries | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | 0 | 82,102 |
AFS, Less than 12 months, Unrealized Losses | 0 | (1,396) |
AFS,12 Months or Longer, Fair Value | 154,813 | 117,347 |
AFS, 12 months or longer, Unrealized Losses | (16,683) | (14,641) |
AFS,Total, Fair Value | 154,813 | 199,449 |
AFS, Total, Unrealized Losses | $ (16,683) | $ (16,037) |
Number of securities in a loss position for greater than twelve months | security | 24 | 16 |
Municipal | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | $ 0 | $ 1,452 |
AFS, Less than 12 months, Unrealized Losses | 0 | (207) |
AFS,12 Months or Longer, Fair Value | 7,917 | 6,560 |
AFS, 12 months or longer, Unrealized Losses | (2,890) | (2,596) |
AFS,Total, Fair Value | 7,917 | 8,012 |
AFS, Total, Unrealized Losses | $ (2,890) | $ (2,803) |
Number of securities in a loss position for greater than twelve months | security | 10 | 7 |
Corporate | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | $ 0 | $ 0 |
AFS, Less than 12 months, Unrealized Losses | 0 | 0 |
AFS,12 Months or Longer, Fair Value | 4,340 | 4,600 |
AFS, 12 months or longer, Unrealized Losses | (660) | (400) |
AFS,Total, Fair Value | 4,340 | 4,600 |
AFS, Total, Unrealized Losses | $ (660) | $ (400) |
Number of securities in a loss position for greater than twelve months | security | 5 | 5 |
Asset-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | $ 0 | $ 6,156 |
AFS, Less than 12 months, Unrealized Losses | 0 | (237) |
AFS,12 Months or Longer, Fair Value | 5,297 | 1,555 |
AFS, 12 months or longer, Unrealized Losses | (66) | (22) |
AFS,Total, Fair Value | 5,297 | 7,711 |
AFS, Total, Unrealized Losses | $ (66) | $ (259) |
Number of securities in a loss position for greater than twelve months | security | 2 | 1 |
Mortgage-backed securities | ||
Debt Securities, Available-for-sale [Line Items] | ||
AFS, Less than 12 Months, Fair Value | $ 0 | $ 22,067 |
AFS, Less than 12 months, Unrealized Losses | 0 | (1,884) |
AFS,12 Months or Longer, Fair Value | 31,719 | 10,642 |
AFS, 12 months or longer, Unrealized Losses | (3,014) | (1,033) |
AFS,Total, Fair Value | 31,719 | 32,709 |
AFS, Total, Unrealized Losses | $ (3,014) | $ (2,917) |
Number of securities in a loss position for greater than twelve months | security | 9 | 3 |
Investment Securities - By Matu
Investment Securities - By Maturity Dates (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Within one year | $ 40,024 | $ 53,739 |
Over one to five years | 110,756 | 88,165 |
Over five to ten years | 26,223 | 79,090 |
Over ten years | 10,300 | 10,307 |
Asset/Mortgage-backed securities | 229,354 | 274,897 |
Fair Value | ||
Within one year | 39,165 | 53,204 |
Over one to five years | 98,920 | 82,538 |
Over five to ten years | 21,524 | 68,805 |
Over ten years | 7,461 | 7,514 |
Fair Value | 206,055 | 252,481 |
Asset-backed securities | ||
Amortized Cost | ||
Asset/Mortgage-backed securities | 7,318 | 7,970 |
Fair Value | ||
Fair Value | 7,266 | 7,711 |
Mortgage-backed securities | ||
Amortized Cost | ||
Asset/Mortgage-backed securities | 34,733 | 35,626 |
Fair Value | ||
Fair Value | $ 31,719 | $ 32,709 |
SBA-PPP Loans Receivable (Detai
SBA-PPP Loans Receivable (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Portfolio loans receivable, gross | $ 1,869,909 | $ 1,869,909 | $ 1,737,219 | ||
Commercial and Industrial | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Portfolio loans receivable, gross | 236,782 | 236,782 | 220,221 | ||
Commercial and Industrial | Paycheck Protection Program | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
Portfolio loans receivable, gross | 800 | 800 | 2,200 | ||
Unearned net fees | 17 | 17 | $ 31 | ||
Interest income | 11 | $ 300 | 26 | $ 3,400 | |
Earned fees | $ 9 | $ 200 | $ 14 | $ 3,200 |
Portfolio Loans Receivable - Cl
Portfolio Loans Receivable - Classification of Loans (Details) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Jun. 30, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 1,869,909 | $ 1,737,219 | ||||
Loans receivable, gross percent | 100% | 100% | ||||
Deferred origination fees, net | $ (7,980) | $ (8,627) | ||||
Allowance for credit losses | (28,279) | $ (27,495) | (26,385) | $ (26,091) | $ (26,419) | $ (25,181) |
Total portfolio loans held for investment, net | 1,833,650 | 1,702,207 | ||||
Residential | Real estate: | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 558,147 | $ 484,735 | ||||
Loans receivable, gross percent | 30% | 28% | ||||
Allowance for credit losses | $ (5,779) | (5,419) | $ (5,481) | (5,969) | (5,863) | (5,612) |
Residential | Real estate: | Owner Occupied Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial commitment term | 30 years | |||||
Residential | Real estate: | Owner Occupied Real Estate | Minimum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Fixed interest rate term | 5 years | |||||
Residential | Real estate: | Owner Occupied Real Estate | Maximum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Fixed interest rate term | 7 years | |||||
Residential | Real estate: | Investor Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial commitment term | 25 years | |||||
Balloon payment period | 5 years | |||||
Covenant compliance, debt service coverage ratio | 1.15 | |||||
Commercial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 236,782 | $ 220,221 | ||||
Loans receivable, gross percent | 13% | 13% | ||||
Allowance for credit losses | $ (4,195) | (4,296) | $ (2,935) | (2,195) | (2,457) | (2,637) |
Commercial | Real estate: | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 670,594 | $ 664,551 | ||||
Loans receivable, gross percent | 35% | 38% | ||||
Allowance for credit losses | $ (10,221) | (10,188) | $ (8,098) | (8,368) | (8,857) | (8,566) |
Fixed interest rate term | 5 years | |||||
Initial commitment term | 10 years | |||||
Business equity lines of credit | $ 14,200 | 12,300 | ||||
Amortization period | 25 years | |||||
Commercial | Real estate: | Owner Occupied Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 305,800 | 377,400 | 387,700 | |||
Percent of real estate portfolio | 16.40% | |||||
Commercial | Real estate: | Owner Occupied Real Estate | Revision of Prior Period, Adjustment | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | 300,000 | 300,800 | ||||
Construction | Real estate: | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 280,905 | $ 238,099 | ||||
Loans receivable, gross percent | 15% | 14% | ||||
Allowance for credit losses | $ (2,251) | (1,868) | $ (3,782) | (4,005) | (4,473) | (4,699) |
Construction | Real estate: | Minimum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial commitment term | 12 months | |||||
Construction | Real estate: | Maximum | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Initial commitment term | 18 months | |||||
Construction | Real estate: | Owner Occupied Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal to collateral value ratio, percent | 80% | |||||
Construction | Real estate: | Investor Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Principal to collateral value ratio, percent | 75% | |||||
Consumer | Credit card, net of reserve | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 122,533 | $ 128,434 | ||||
Loans receivable, gross percent | 7% | 7% | ||||
Allowance for credit losses | $ (5,824) | (5,707) | $ (6,078) | (5,544) | (4,759) | (3,655) |
Consumer | Credit card, net of reserve | Savings Deposits | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 103,800 | 106,900 | ||||
Repayment history used for scoring model | 6 months | |||||
Consumer | Credit card, net of reserve | Savings Deposit Held By Company | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 98,100 | 109,400 | ||||
Consumer | Credit card, net of reserve | Unsecured Credit Cards | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | 27,400 | 26,800 | ||||
Consumer | Other consumer | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Portfolio loans receivable, gross | $ 948 | $ 1,179 | ||||
Loans receivable, gross percent | 0% | 0% | ||||
Allowance for credit losses | $ (9) | $ (17) | $ (11) | $ (10) | $ (10) | $ (12) |
Portfolio Loans Receivable - Ac
Portfolio Loans Receivable - Accretable Discount (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2023 | Sep. 30, 2023 | |
Receivables [Abstract] | ||
Credit deterioration | $ 0 | |
Increase in allowance for credit loss | $ 284,000 | $ 284,000 |
Portfolio Loans Receivable - Al
Portfolio Loans Receivable - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | $ 27,495 | $ 26,419 | $ 26,385 | $ 25,181 | |
Other | 284 | 284 | |||
Provision (Release of Provision) for Credit Losses | 2,280 | 1,260 | 6,802 | 4,247 | |
Charge-Offs | (1,830) | (1,596) | (6,056) | (3,375) | |
Recoveries | 50 | 8 | 60 | 38 | |
Ending Balance | 28,279 | 26,091 | 28,279 | 26,091 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 678 | 678 | $ 372 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 26,013 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 9,393 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 1,727,826 | ||||
Impact of adoption of the CECL standard | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | 804 | |||
Residential | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 5,419 | 5,863 | 5,481 | 5,612 | |
Other | 91 | 91 | |||
Provision (Release of Provision) for Credit Losses | 269 | 106 | 1,405 | 357 | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending Balance | 5,779 | 5,969 | 5,779 | 5,969 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 603 | 603 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 5,481 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 4,288 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 480,447 | ||||
Residential | Impact of adoption of the CECL standard | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | (1,198) | |||
Commercial | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 4,296 | 2,457 | 2,935 | 2,637 | |
Other | 0 | 0 | |||
Provision (Release of Provision) for Credit Losses | (35) | (262) | 1,186 | (442) | |
Charge-Offs | (77) | 0 | (1,020) | 0 | |
Recoveries | 11 | 0 | 21 | 0 | |
Ending Balance | 4,195 | 2,195 | 4,195 | 2,195 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 75 | 75 | 372 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 2,563 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 705 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 219,516 | ||||
Commercial | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 10,188 | 8,857 | 8,098 | 8,566 | |
Other | 193 | 193 | |||
Provision (Release of Provision) for Credit Losses | (199) | (489) | (2,050) | (198) | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 39 | 0 | 39 | 0 | |
Ending Balance | 10,221 | 8,368 | 10,221 | 8,368 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 8,098 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 1,563 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 662,988 | ||||
Commercial | Impact of adoption of the CECL standard | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | 1,073 | |||
Commercial | Impact of adoption of the CECL standard | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | 3,941 | |||
Construction | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 1,868 | 4,473 | 3,782 | 4,699 | |
Other | 0 | 0 | |||
Provision (Release of Provision) for Credit Losses | 383 | (468) | 442 | (694) | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending Balance | 2,251 | 4,005 | 2,251 | 4,005 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | 0 | 0 | ||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 3,782 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 2,837 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 235,262 | ||||
Construction | Impact of adoption of the CECL standard | Real estate: | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | (1,973) | |||
Consumer | Credit card, net of reserve | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 5,707 | 4,759 | 6,078 | 3,655 | |
Other | 0 | 0 | |||
Provision (Release of Provision) for Credit Losses | 1,870 | 2,373 | 5,827 | 5,226 | |
Charge-Offs | (1,753) | (1,596) | (5,036) | (3,375) | |
Recoveries | 0 | 8 | 0 | 38 | |
Ending Balance | 5,824 | 5,544 | 5,824 | 5,544 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | ||||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 6,078 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 0 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | 128,434 | ||||
Consumer | Other consumer | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 17 | 10 | 11 | 12 | |
Other | 0 | 0 | |||
Provision (Release of Provision) for Credit Losses | (8) | 0 | (8) | (2) | |
Charge-Offs | 0 | 0 | 0 | 0 | |
Recoveries | 0 | 0 | 0 | 0 | |
Ending Balance | 9 | $ 10 | 9 | $ 10 | |
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Individually | 0 | ||||
Allowance for Loan Losses Ending Balance Evaluated for Impairment: Collectively | 11 | ||||
Outstanding Loan Balances Evaluated for Impairment - Individually | 0 | ||||
Outstanding Loan Balances Evaluated for Impairment - Collectively | $ 1,179 | ||||
Consumer | Impact of adoption of the CECL standard | Credit card, net of reserve | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | 0 | (1,045) | |||
Consumer | Impact of adoption of the CECL standard | Other consumer | |||||
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | |||||
Beginning balance | $ 0 | $ 6 |
Portfolio Loans Receivable - Pa
Portfolio Loans Receivable - Past Due Financing Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | $ 1,869,909 | $ 1,737,219 |
Accruing Loans 90 or More Days Past Due | 390 | 363 |
Nonaccrual Loans | 15,224 | 9,393 |
Residential Real Estate | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 8,800 | 1,300 |
Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 12,555 | 9,758 |
Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 10,365 | 8,623 |
Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 15,247 | 9,616 |
Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 38,167 | 27,997 |
Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 1,831,742 | 1,709,222 |
Residential | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 558,147 | 484,735 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Nonaccrual Loans | 12,256 | 4,288 |
Residential | Real estate: | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 1,761 | 4 |
Residential | Real estate: | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 264 | 142 |
Residential | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 11,889 | 4,284 |
Residential | Real estate: | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 13,914 | 4,430 |
Residential | Real estate: | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 544,233 | 480,305 |
Commercial | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 236,782 | 220,221 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Nonaccrual Loans | 353 | 705 |
Commercial | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 574 | 117 |
Commercial | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 219 | 386 |
Commercial | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 353 | 569 |
Commercial | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 1,146 | 1,072 |
Commercial | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 235,636 | 219,149 |
Commercial | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 670,594 | 664,551 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Nonaccrual Loans | 582 | 1,563 |
Commercial | Real estate: | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 826 | 0 |
Commercial | Real estate: | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 0 | 0 |
Commercial | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 582 | 1,563 |
Commercial | Real estate: | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 1,408 | 1,563 |
Commercial | Real estate: | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 669,186 | 662,988 |
Construction | Real estate: | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 280,905 | 238,099 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Nonaccrual Loans | 2,033 | 2,837 |
Construction | Real estate: | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 1,512 | 1,164 |
Construction | Real estate: | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 2,568 | 640 |
Construction | Real estate: | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 2,033 | 2,837 |
Construction | Real estate: | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 6,113 | 4,641 |
Construction | Real estate: | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 274,792 | 233,458 |
Consumer | Credit card, net of reserve | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 122,533 | 128,434 |
Accruing Loans 90 or More Days Past Due | 390 | 363 |
Nonaccrual Loans | 0 | 0 |
Consumer | Credit card, net of reserve | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 7,882 | 8,473 |
Consumer | Credit card, net of reserve | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 7,314 | 7,455 |
Consumer | Credit card, net of reserve | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 390 | 363 |
Consumer | Credit card, net of reserve | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 15,586 | 16,291 |
Consumer | Credit card, net of reserve | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 106,947 | 112,143 |
Consumer | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 948 | 1,179 |
Accruing Loans 90 or More Days Past Due | 0 | 0 |
Nonaccrual Loans | 0 | 0 |
Consumer | Other consumer | Loans 30-59 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 0 | 0 |
Consumer | Other consumer | Financial Asset, 60 to 89 Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 0 | 0 |
Consumer | Other consumer | Loans 90 or More Days Past Due | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 0 | 0 |
Consumer | Other consumer | Total Past Due Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | 0 | 0 |
Consumer | Other consumer | Current Loans | ||
Financing Receivable, Past Due [Line Items] | ||
Portfolio loans receivable, gross | $ 948 | $ 1,179 |
Portfolio Loans Receivable - Sc
Portfolio Loans Receivable - Schedule of Non-Accrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Loss | $ 14,546 | |
Nonaccrual with an Allowance for Credit Loss | 678 | $ 372 |
Nonaccrual Loans | 15,224 | 9,393 |
Interest Recognized on Nonaccrual Loans | 546 | |
Financing receivable, troubled debt restructuring | 14,888 | |
Residential | Real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Loss | 11,653 | |
Nonaccrual with an Allowance for Credit Loss | 603 | 0 |
Nonaccrual Loans | 12,256 | 4,288 |
Interest Recognized on Nonaccrual Loans | 340 | |
Financing receivable, troubled debt restructuring | 12,364 | |
Commercial and Industrial | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Loss | 278 | |
Nonaccrual with an Allowance for Credit Loss | 75 | 372 |
Nonaccrual Loans | 353 | 705 |
Interest Recognized on Nonaccrual Loans | 53 | |
Financing receivable, troubled debt restructuring | 318 | |
Commercial and Industrial | Real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Loss | 582 | |
Nonaccrual with an Allowance for Credit Loss | 0 | 0 |
Nonaccrual Loans | 582 | 1,563 |
Interest Recognized on Nonaccrual Loans | 71 | |
Financing receivable, troubled debt restructuring | 2,127 | |
Commercial and Industrial | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Financing receivable, troubled debt restructuring | 12 | |
Construction | Real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with No Allowance for Credit Loss | 2,033 | |
Nonaccrual with an Allowance for Credit Loss | 0 | 0 |
Nonaccrual Loans | 2,033 | 2,837 |
Interest Recognized on Nonaccrual Loans | 82 | |
Financing receivable, troubled debt restructuring | 79 | |
Consumer | Other consumer | ||
Financing Receivable, Past Due [Line Items] | ||
Nonaccrual with an Allowance for Credit Loss | 0 | |
Nonaccrual Loans | $ 0 | $ 0 |
Portfolio Loans Receivable - Im
Portfolio Loans Receivable - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Impaired [Line Items] | ||||
Unpaid Contractual Principal Balance | $ 9,961 | |||
Recorded Investment With No Allowance | 8,935 | |||
Recorded Investment With Allowance | 458 | |||
Total Recorded Investment | 9,393 | |||
Related Allowance | 372 | |||
Average Recorded Investment Year to Date | $ 10,422 | $ 9,153 | $ 9,196 | |
Interest Recognized Year to Date | 353 | 0 | 0 | |
Residential | Real estate: | ||||
Financing Receivable, Impaired [Line Items] | ||||
Unpaid Contractual Principal Balance | 4,476 | |||
Recorded Investment With No Allowance | 4,288 | |||
Recorded Investment With Allowance | 0 | |||
Total Recorded Investment | 4,288 | |||
Related Allowance | 0 | |||
Average Recorded Investment Year to Date | 4,629 | 3,329 | 3,341 | |
Interest Recognized Year to Date | 149 | 0 | 0 | |
Commercial | ||||
Financing Receivable, Impaired [Line Items] | ||||
Unpaid Contractual Principal Balance | 899 | |||
Recorded Investment With No Allowance | 247 | |||
Recorded Investment With Allowance | 458 | |||
Total Recorded Investment | 705 | |||
Related Allowance | 372 | |||
Average Recorded Investment Year to Date | 1,199 | 1,242 | 1,267 | |
Interest Recognized Year to Date | 77 | 0 | 0 | |
Commercial | Real estate: | ||||
Financing Receivable, Impaired [Line Items] | ||||
Unpaid Contractual Principal Balance | 1,647 | |||
Recorded Investment With No Allowance | 1,563 | |||
Recorded Investment With Allowance | 0 | |||
Total Recorded Investment | 1,563 | |||
Related Allowance | 0 | |||
Average Recorded Investment Year to Date | 1,656 | 1,643 | 1,650 | |
Interest Recognized Year to Date | 52 | 0 | 0 | |
Construction | Real estate: | ||||
Financing Receivable, Impaired [Line Items] | ||||
Unpaid Contractual Principal Balance | 2,939 | |||
Recorded Investment With No Allowance | 2,837 | |||
Recorded Investment With Allowance | 0 | |||
Total Recorded Investment | 2,837 | |||
Related Allowance | $ 0 | |||
Average Recorded Investment Year to Date | 2,938 | 2,939 | 2,938 | |
Interest Recognized Year to Date | $ 75 | $ 0 | $ 0 |
Portfolio Loans Receivable - In
Portfolio Loans Receivable - Interest Recognized on Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2022 | |
Financing Receivable, Impaired [Line Items] | |||
Average Recorded Investment | $ 10,422 | $ 9,153 | $ 9,196 |
Interest Recognized | 353 | 0 | 0 |
Residential | Real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Average Recorded Investment | 4,629 | 3,329 | 3,341 |
Interest Recognized | 149 | 0 | 0 |
Commercial and Industrial | |||
Financing Receivable, Impaired [Line Items] | |||
Average Recorded Investment | 1,199 | 1,242 | 1,267 |
Interest Recognized | 77 | 0 | 0 |
Commercial and Industrial | Real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Average Recorded Investment | 1,656 | 1,643 | 1,650 |
Interest Recognized | 52 | 0 | 0 |
Construction | Real estate | |||
Financing Receivable, Impaired [Line Items] | |||
Average Recorded Investment | 2,938 | 2,939 | 2,938 |
Interest Recognized | $ 75 | $ 0 | $ 0 |
Portfolio Loans Receivable - Cr
Portfolio Loans Receivable - Credit Quality Indicators and Charge-offs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Term Loans by Origination Year | |||||
2023 | $ 313,187 | $ 313,187 | |||
2022 | 486,368 | 486,368 | |||
2021 | 336,940 | 336,940 | |||
2020 | 190,422 | 190,422 | |||
2019 | 164,155 | 164,155 | |||
Prior | 256,304 | 256,304 | |||
Revolving | 122,533 | 122,533 | |||
Portfolio loans receivable, gross | 1,869,909 | 1,869,909 | $ 1,737,219 | ||
Gross Charge-offs | |||||
Total | 1,830 | $ 1,596 | 6,056 | $ 3,375 | |
Pass | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 1,559,537 | ||||
Special Mention | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 38,012 | ||||
Substandard | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 11,236 | ||||
Doubtful | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 128,434 | ||||
Residential | Real estate: | |||||
Term Loans by Origination Year | |||||
2023 | 110,131 | 110,131 | |||
2022 | 139,619 | 139,619 | |||
2021 | 80,278 | 80,278 | |||
2020 | 82,856 | 82,856 | |||
2019 | 39,095 | 39,095 | |||
Prior | 106,168 | 106,168 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 558,147 | 558,147 | 484,735 | ||
Gross Charge-offs | |||||
Total | 0 | 0 | 0 | 0 | |
Residential | Real estate: | Pass | |||||
Term Loans by Origination Year | |||||
2023 | 110,131 | 110,131 | |||
2022 | 139,619 | 139,619 | |||
2021 | 80,143 | 80,143 | |||
2020 | 79,163 | 79,163 | |||
2019 | 39,069 | 39,069 | |||
Prior | 92,404 | 92,404 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 540,529 | 540,529 | 469,304 | ||
Residential | Real estate: | Special Mention | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 135 | 135 | |||
2020 | 3,693 | 3,693 | |||
2019 | 0 | 0 | |||
Prior | 519 | 519 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 4,347 | 4,347 | 9,966 | ||
Residential | Real estate: | Substandard | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 26 | 26 | |||
Prior | 13,245 | 13,245 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 13,271 | 13,271 | 5,465 | ||
Residential | Real estate: | Doubtful | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Residential | Real estate: | Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Commercial | |||||
Term Loans by Origination Year | |||||
2023 | 51,963 | 51,963 | |||
2022 | 80,039 | 80,039 | |||
2021 | 46,897 | 46,897 | |||
2020 | 12,956 | 12,956 | |||
2019 | 18,861 | 18,861 | |||
Prior | 26,066 | 26,066 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 236,782 | 236,782 | 220,221 | ||
Gross Charge-offs | |||||
2023 | 0 | ||||
2022 | 77 | ||||
2021 | 0 | ||||
2020 | 0 | ||||
2019 | 943 | ||||
Prior | 0 | ||||
Revolving | 0 | ||||
Total | 77 | 0 | 1,020 | 0 | |
Commercial | Pass | |||||
Term Loans by Origination Year | |||||
2023 | 51,963 | 51,963 | |||
2022 | 79,780 | 79,780 | |||
2021 | 28,847 | 28,847 | |||
2020 | 10,522 | 10,522 | |||
2019 | 18,771 | 18,771 | |||
Prior | 25,579 | 25,579 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 215,462 | 215,462 | 196,381 | ||
Commercial | Special Mention | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 161 | 161 | |||
2021 | 17,799 | 17,799 | |||
2020 | 2,434 | 2,434 | |||
2019 | 48 | 48 | |||
Prior | 284 | 284 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 20,726 | 20,726 | 22,469 | ||
Commercial | Substandard | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 98 | 98 | |||
2021 | 251 | 251 | |||
2020 | 0 | 0 | |||
2019 | 42 | 42 | |||
Prior | 203 | 203 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 594 | 594 | 1,371 | ||
Commercial | Doubtful | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Commercial | Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Commercial | Real estate: | |||||
Term Loans by Origination Year | |||||
2023 | 32,279 | 32,279 | |||
2022 | 193,251 | 193,251 | |||
2021 | 157,964 | 157,964 | |||
2020 | 69,462 | 69,462 | |||
2019 | 98,363 | 98,363 | |||
Prior | 119,275 | 119,275 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 670,594 | 670,594 | 664,551 | ||
Gross Charge-offs | |||||
Total | 0 | 0 | 0 | 0 | |
Commercial | Real estate: | Pass | |||||
Term Loans by Origination Year | |||||
2023 | 32,279 | 32,279 | |||
2022 | 186,338 | 186,338 | |||
2021 | 157,964 | 157,964 | |||
2020 | 69,462 | 69,462 | |||
2019 | 96,973 | 96,973 | |||
Prior | 118,278 | 118,278 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 661,294 | 661,294 | 657,411 | ||
Commercial | Real estate: | Special Mention | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 6,913 | 6,913 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 808 | 808 | |||
Prior | 997 | 997 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 8,718 | 8,718 | 5,577 | ||
Commercial | Real estate: | Substandard | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 582 | 582 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 582 | 582 | 1,563 | ||
Commercial | Real estate: | Doubtful | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Commercial | Real estate: | Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Construction | Real estate: | |||||
Term Loans by Origination Year | |||||
2023 | 118,709 | 118,709 | |||
2022 | 73,164 | 73,164 | |||
2021 | 51,641 | 51,641 | |||
2020 | 25,027 | 25,027 | |||
2019 | 7,836 | 7,836 | |||
Prior | 4,528 | 4,528 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 280,905 | 280,905 | 238,099 | ||
Gross Charge-offs | |||||
Total | 0 | 0 | 0 | 0 | |
Construction | Real estate: | Pass | |||||
Term Loans by Origination Year | |||||
2023 | 118,709 | 118,709 | |||
2022 | 73,164 | 73,164 | |||
2021 | 50,359 | 50,359 | |||
2020 | 25,027 | 25,027 | |||
2019 | 7,239 | 7,239 | |||
Prior | 2,470 | 2,470 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 276,968 | 276,968 | 235,262 | ||
Construction | Real estate: | Special Mention | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 1,282 | 1,282 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 614 | 614 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 1,896 | 1,896 | 0 | ||
Construction | Real estate: | Substandard | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 597 | 597 | |||
Prior | 1,444 | 1,444 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 2,041 | 2,041 | 2,837 | ||
Construction | Real estate: | Doubtful | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Construction | Real estate: | Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Other consumer | |||||
Term Loans by Origination Year | |||||
2023 | 105 | 105 | |||
2022 | 295 | 295 | |||
2021 | 160 | 160 | |||
2020 | 121 | 121 | |||
2019 | 0 | 0 | |||
Prior | 267 | 267 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 948 | 948 | 1,179 | ||
Gross Charge-offs | |||||
Total | 0 | 0 | 0 | 0 | |
Consumer | Other consumer | Pass | |||||
Term Loans by Origination Year | |||||
2023 | 105 | 105 | |||
2022 | 295 | 295 | |||
2021 | 160 | 160 | |||
2020 | 121 | 121 | |||
2019 | 0 | 0 | |||
Prior | 267 | 267 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 948 | 948 | 1,179 | ||
Consumer | Other consumer | Special Mention | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Consumer | Other consumer | Substandard | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Consumer | Other consumer | Doubtful | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 0 | 0 | |||
Portfolio loans receivable, gross | 0 | 0 | 0 | ||
Consumer | Other consumer | Ungraded | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Credit card, net of reserve | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 122,533 | 122,533 | 128,434 | ||
Gross Charge-offs | |||||
2023 | 0 | ||||
2022 | 0 | ||||
2021 | 0 | ||||
2020 | 0 | ||||
2019 | 0 | ||||
Prior | 0 | ||||
Revolving | 5,036 | ||||
Total | 1,753 | $ 1,596 | 5,036 | $ 3,375 | |
Consumer | Credit card, net of reserve | Pass | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Credit card, net of reserve | Special Mention | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Credit card, net of reserve | Substandard | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Credit card, net of reserve | Doubtful | |||||
Term Loans by Origination Year | |||||
Portfolio loans receivable, gross | 0 | ||||
Consumer | Credit card, net of reserve | Ungraded | |||||
Term Loans by Origination Year | |||||
2023 | 0 | 0 | |||
2022 | 0 | 0 | |||
2021 | 0 | 0 | |||
2020 | 0 | 0 | |||
2019 | 0 | 0 | |||
Prior | 0 | 0 | |||
Revolving | 122,533 | 122,533 | |||
Portfolio loans receivable, gross | $ 122,533 | 122,533 | $ 128,434 | ||
Gross Charge-offs | |||||
Gross Charge-offs | |||||
2023 | 0 | ||||
2022 | 77 | ||||
2021 | 0 | ||||
2020 | 0 | ||||
2019 | 943 | ||||
Prior | 0 | ||||
Revolving | 5,036 | ||||
Total | $ 6,056 |
Portfolio Loans Receivable - Tr
Portfolio Loans Receivable - Trouble Debt Restructuring (Details) $ in Thousands | Sep. 30, 2023 USD ($) |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Financing receivable, troubled debt restructuring | $ 14,888 |
Residential | Real estate | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |
Financing receivable, troubled debt restructuring | $ 12,364 |
Portfolio Loans Receivable - Ou
Portfolio Loans Receivable - Outstanding Loan Commitments (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | $ 1,869,909 | $ 1,737,219 |
Residential | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 558,147 | 484,735 |
Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 236,782 | 220,221 |
Commercial and Industrial | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 670,594 | 664,551 |
Construction | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 280,905 | 238,099 |
Consumer | Credit card, net of reserve | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 122,533 | 128,434 |
Consumer | Credit card, net of reserve | Savings Deposits | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 103,800 | 106,900 |
Consumer | Other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Portfolio loans receivable, gross | 948 | 1,179 |
Commitments to Extend Credit | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 357,548 | 345,062 |
Letters of credit | 4,641 | 5,105 |
Commitments to Extend Credit | Residential | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 16,635 | 14,336 |
Commitments to Extend Credit | Residential | Residential - Home Equity | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 44,069 | 43,128 |
Commitments to Extend Credit | Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 43,948 | 45,747 |
Commitments to Extend Credit | Commercial and Industrial | Real estate: | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 21,483 | 36,609 |
Commitments to Extend Credit | Construction | Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 115,478 | 93,913 |
Commitments to Extend Credit | Consumer | Credit card, net of reserve | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | 115,637 | 111,227 |
Commitments to Extend Credit | Consumer | Other consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Unused lines of credit | $ 298 | $ 102 |
Portfolio Loans Receivable - _2
Portfolio Loans Receivable - Activity in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ 27,495 | $ 26,419 | $ 26,385 | $ 25,181 |
Provision for (reversal of) reserve for unfunded commitments | 2,280 | 1,260 | 6,802 | 4,247 |
Ending Balance | 28,279 | 26,091 | 28,279 | 26,091 |
Impact of adoption of the CECL standard | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 0 | 804 | ||
Unfunded Lines of Credit | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 888 | 1,631 | 1,682 | 1,736 |
Provision for (reversal of) reserve for unfunded commitments | 24 | 51 | 5 | (54) |
Ending Balance | 912 | 1,682 | 912 | 1,682 |
Unfunded Lines of Credit | Impact of adoption of the CECL standard | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 0 | 0 | (775) | 0 |
Mortgage Loans Sold | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | 1,182 | 1,166 | 1,174 | 1,164 |
Provision for (reversal of) reserve for unfunded commitments | 4 | 4 | 12 | 6 |
Ending Balance | $ 1,186 | $ 1,170 | $ 1,186 | $ 1,170 |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Open Forward Delivery Sales Agreements | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | $ 0 | $ 1,750 |
Derivative liabilities | 0 | 9 |
Interest Rate Lock Commitments | ||
Derivatives, Fair Value [Line Items] | ||
Notional amount | 0 | 626 |
Fair value of interest rate lock commitments | $ 0 | $ 1 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) branch location | Dec. 31, 2022 USD ($) | |
Lessee, Lease, Description [Line Items] | ||
Number of full service branches | branch | 4 | |
Number of other locations | location | 3 | |
Weighted average discount rate | 3.65% | 1.94% |
ROU assets | $ 3,759 | $ 2,097 |
Net lease liability | $ 3,981 | $ 2,359 |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining term of contract | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining term of contract | 9 years |
Leases - Assets and Liabilities
Leases - Assets and Liabilities and Lease Payment Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Lease asset | $ 7,229 | $ 5,171 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Premises and equipment, net | Premises and equipment, net |
Less: Accumulated amortization | $ (3,470) | $ (3,074) |
Net lease asset | 3,759 | 2,097 |
Lease liability | $ 7,378 | $ 5,327 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other liabilities | Other liabilities |
Less: Accumulated amortization | $ (3,397) | $ (2,968) |
Net lease liability | 3,981 | 2,359 |
Amounts due in: | ||
2023 | 346 | |
2024 | 1,120 | |
2025 | 673 | |
2026 | 621 | |
2027 and thereafter | 1,844 | |
Total future lease payments | 4,604 | |
Discount of cash flows | (623) | |
Present value of net future lease payments | $ 3,981 | $ 2,359 |
Fair Value - Financial Instrume
Fair Value - Financial Instruments Measured at FV on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 206,055 | $ 252,481 |
Loans held for sale | 4,843 | 7,416 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 206,055 | 252,481 |
Loans held for sale | 4,843 | 7,416 |
Derivative assets | 0 | 10 |
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 154,813 | 199,449 |
Loans held for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 51,242 | 53,032 |
Loans held for sale | 4,843 | 7,416 |
Derivative assets | 0 | 10 |
Derivative liabilities | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Derivative assets | 0 | 0 |
Derivative liabilities | 0 | 0 |
U.S. Treasuries | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 154,813 | 199,449 |
U.S. Treasuries | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 154,813 | 199,449 |
U.S. Treasuries | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 154,813 | 199,449 |
U.S. Treasuries | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
U.S. Treasuries | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Municipal | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,917 | 8,012 |
Municipal | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,917 | 8,012 |
Municipal | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Municipal | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,917 | 8,012 |
Municipal | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 4,340 | 4,600 |
Corporate | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 4,340 | 4,600 |
Corporate | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Corporate | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 4,340 | 4,600 |
Corporate | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Asset-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,266 | 7,711 |
Asset-backed securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,266 | 7,711 |
Asset-backed securities | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Asset-backed securities | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 7,266 | 7,711 |
Asset-backed securities | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 31,719 | 32,709 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 31,719 | 32,709 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 1 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 0 | 0 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 2 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | 31,719 | 32,709 |
Mortgage-backed securities | Fair Value, Measurements, Recurring | Level 3 Inputs | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investment securities available for sale | $ 0 | $ 0 |
Fair Value - Loans Held For Sal
Fair Value - Loans Held For Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans held for sale | $ 4,843 | $ 7,416 |
Aggregate fair value | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans held for sale | 4,843 | 7,416 |
Contractual principal | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans held for sale | 3,035 | 6,808 |
Difference | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Loans held for sale | $ 1,808 | $ 608 |
Fair Value - Impaired Loans and
Fair Value - Impaired Loans and Foreclosed Real Estate (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Investment With No Allowance | $ 8,935,000 | |
Nonaccrual with an Allowance for Credit Loss | $ 678,000 | 372,000 |
Individually evaluated loans for credit loss, net | 9,393,000 | |
Fair Value, Measurements, Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Recorded Investment With No Allowance | 15,300,000 | 9,400,000 |
Foreclosed real estate | 0 | 0 |
Individually evaluated loans for credit loss, net | $ 14,575,000 | $ 9,021,000 |
Minimum | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, discounts to appraisals or cash flows for estimated holding and/or selling costs, percent | 0% | |
Maximum | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired loans, discounts to appraisals or cash flows for estimated holding and/or selling costs, percent | 25% |
Fair Value - Financial Instru_2
Fair Value - Financial Instruments Carrying Amount, FV and Placement (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Financial assets | ||
Cash and due from banks | $ 13,767 | $ 19,963 |
Interest-bearing deposits at other financial institutions | 130,428 | 39,764 |
Federal funds sold | 1,957 | 20,688 |
Carrying Amount | Level 1 | ||
Financial assets | ||
Cash and due from banks | 13,767 | 19,963 |
Interest-bearing deposits at other financial institutions | 130,428 | 39,764 |
Federal funds sold | 1,957 | 20,688 |
Financial liabilities | ||
Noninterest-bearing deposits | 680,803 | 674,313 |
Carrying Amount | Level 3 | ||
Financial assets | ||
Loans receivable, net | 1,834,400 | 1,704,370 |
Restricted investments | 4,340 | 7,362 |
Financial liabilities | ||
Interest-bearing deposits | 1,287,185 | 1,083,759 |
FHLB advances and other borrowed funds | 34,062 | 119,062 |
Fair Value | Level 1 | ||
Financial assets | ||
Cash and due from banks | 13,767 | 19,963 |
Interest-bearing deposits at other financial institutions | 130,428 | 39,764 |
Federal funds sold | 1,957 | 20,688 |
Financial liabilities | ||
Noninterest-bearing deposits | 680,803 | 674,313 |
Fair Value | Level 3 | ||
Financial assets | ||
Loans receivable, net | 1,821,205 | 1,659,283 |
Restricted investments | 4,340 | 7,362 |
Financial liabilities | ||
Interest-bearing deposits | 1,285,398 | 1,090,553 |
FHLB advances and other borrowed funds | $ 31,095 | $ 116,544 |
Segments (Details)
Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 4 | ||||
Interest income | $ 47,741 | $ 38,340 | $ 136,237 | $ 109,298 | |
Interest expense | 10,931 | 1,663 | 29,600 | 3,890 | |
Net interest income | 36,810 | 36,677 | 106,637 | 105,408 | |
Provision (release of provision) for loan losses | 2,280 | 1,260 | 6,802 | 4,247 | |
Provision for credit losses on unfunded commitments | 24 | 0 | 5 | 0 | |
Net interest income after provision | 34,506 | 35,417 | 99,830 | 101,161 | |
Noninterest income | 6,326 | 7,108 | 19,039 | 23,811 | |
Noninterest expense | 28,046 | 28,094 | 83,860 | 82,379 | |
Net income (loss) before taxes | 12,786 | 14,431 | 35,009 | 42,593 | |
Total assets | 2,272,484 | 2,009,358 | 2,272,484 | 2,009,358 | $ 2,123,655 |
Eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | (84) | (59) | (228) | (123) | |
Interest expense | (84) | (59) | (228) | (123) | |
Net interest income | 0 | 0 | 0 | 0 | |
Provision (release of provision) for loan losses | 0 | 0 | 0 | 0 | |
Provision for credit losses on unfunded commitments | 0 | 0 | |||
Net interest income after provision | 0 | 0 | 0 | 0 | |
Noninterest income | 0 | 0 | 0 | 0 | |
Noninterest expense | 0 | 0 | 0 | 0 | |
Net income (loss) before taxes | 0 | 0 | 0 | 0 | |
Total assets | (216,813) | (184,928) | (216,813) | (184,928) | |
Commercial Bank | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 30,409 | 20,382 | 85,451 | 57,794 | |
Interest expense | 10,736 | 1,449 | 29,012 | 3,255 | |
Net interest income | 19,673 | 18,933 | 56,439 | 54,539 | |
Provision (release of provision) for loan losses | 275 | (980) | 849 | (980) | |
Provision for credit losses on unfunded commitments | 24 | 5 | |||
Net interest income after provision | 19,374 | 19,913 | 55,585 | 55,519 | |
Noninterest income | 665 | 468 | 1,964 | 1,571 | |
Noninterest expense | 15,784 | 13,798 | 46,701 | 38,741 | |
Net income (loss) before taxes | 4,255 | 6,583 | 10,848 | 18,349 | |
Total assets | 2,102,749 | 1,823,049 | 2,102,749 | 1,823,049 | |
CBHL | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 111 | 102 | 299 | 347 | |
Interest expense | 32 | 40 | 104 | 185 | |
Net interest income | 79 | 62 | 195 | 162 | |
Provision (release of provision) for loan losses | 0 | 0 | 0 | 0 | |
Provision for credit losses on unfunded commitments | 0 | 0 | |||
Net interest income after provision | 79 | 62 | 195 | 162 | |
Noninterest income | 1,255 | 1,115 | 3,743 | 4,580 | |
Noninterest expense | 1,502 | 2,017 | 4,564 | 6,364 | |
Net income (loss) before taxes | (168) | (840) | (626) | (1,622) | |
Total assets | 5,280 | 7,664 | 5,280 | 7,664 | |
Open Sky | |||||
Segment Reporting Information [Line Items] | |||||
Noninterest expense | 6,100 | 6,600 | 17,900 | 20,900 | |
Open Sky | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 16,143 | 17,103 | 47,441 | 48,823 | |
Interest expense | 0 | 0 | 0 | 0 | |
Net interest income | 16,143 | 17,103 | 47,441 | 48,823 | |
Provision (release of provision) for loan losses | 1,875 | 2,240 | 5,823 | 5,227 | |
Provision for credit losses on unfunded commitments | 0 | 0 | |||
Net interest income after provision | 14,268 | 14,863 | 41,618 | 43,596 | |
Noninterest income | 4,405 | 5,524 | 13,329 | 17,658 | |
Noninterest expense | 10,637 | 12,101 | 32,146 | 36,923 | |
Net income (loss) before taxes | 8,036 | 8,286 | 22,801 | 24,331 | |
Total assets | 116,318 | 128,842 | 116,318 | 128,842 | |
Corporate | Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Interest income | 1,162 | 812 | 3,274 | 2,457 | |
Interest expense | 247 | 233 | 712 | 573 | |
Net interest income | 915 | 579 | 2,562 | 1,884 | |
Provision (release of provision) for loan losses | 130 | 0 | 130 | 0 | |
Provision for credit losses on unfunded commitments | 0 | 0 | |||
Net interest income after provision | 785 | 579 | 2,432 | 1,884 | |
Noninterest income | 1 | 1 | 3 | 2 | |
Noninterest expense | 123 | 178 | 449 | 351 | |
Net income (loss) before taxes | 663 | 402 | 1,986 | 1,535 | |
Total assets | $ 264,950 | $ 234,731 | $ 264,950 | $ 234,731 |