Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | May 02, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-38317 | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 68-0270948 | |
Entity Address, Address Line One | 520 Third St, Fourth Floor | |
Entity Address, City or Town | Santa Rosa | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 95401 | |
City Area Code | 844 | |
Local Phone Number | 446-8201 | |
Title of 12(b) Security | Common stock, no par value | |
Trading Symbol | LBC | |
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 | false | |
Entity Shell Company | false | |
Entity Common Stock Shares Outstanding (in shares) | 51,125,410 | |
Amendment Flag | false | |
Entity Registrant Name | Luther Burbank Corp. | |
Entity Central Index Key | 0001475348 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED STATEMENTS OF FINA
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 147,963 | $ 138,413 |
Available for sale debt securities, at fair value | 624,859 | 647,317 |
Held to maturity debt securities, at amortized cost (fair value of $3,802 and $4,018 at March 31, 2022 and December 31, 2021, respectively) | 3,798 | 3,829 |
Equity securities, at fair value | 11,116 | 11,693 |
Loans receivable, net of allowance for loan losses of $33,035 and $35,535 at March 31, 2022 and December 31, 2021, respectively | 6,333,283 | 6,261,885 |
Accrued interest receivable | 18,014 | 17,761 |
Federal Home Loan Bank ("FHLB") stock, at cost | 22,563 | 23,411 |
Premises and equipment, net | 15,590 | 16,090 |
Goodwill | 3,297 | 3,297 |
Prepaid expenses and other assets | 80,343 | 56,261 |
Total assets | 7,260,826 | 7,179,957 |
Liabilities: | ||
Deposits | 5,601,247 | 5,538,243 |
FHLB advances | 751,647 | 751,647 |
Junior subordinated deferrable interest debentures | 61,857 | 61,857 |
Senior debt | ||
$95,000 face amount, 6.5% interest rate, due September 30, 2024 (less debt issuance costs of $307 and $338 at March 31, 2022 and December 31, 2021, respectively) | 94,693 | 94,662 |
Accrued interest payable | 153 | 118 |
Other liabilities and accrued expenses | 83,229 | 64,297 |
Total liabilities | 6,592,826 | 6,510,824 |
Commitments and contingencies (Note 16) | ||
Stockholders' equity: | ||
Preferred stock, no par value; 5,000,000 shares authorized; none issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 0 | 0 |
Common stock, no par value; 100,000,000 shares authorized; 51,403,914 and 51,682,398 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 401,102 | 406,904 |
Retained earnings | 278,856 | 262,141 |
Accumulated other comprehensive income (loss), net of taxes | (11,958) | 88 |
Total stockholders' equity | 668,000 | 669,133 |
Total liabilities and stockholders' equity | $ 7,260,826 | $ 7,179,957 |
CONSOLIDATED STATEMENTS OF FI_2
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (Parenthetical) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Statement of Financial Position [Abstract] | ||
Fair value of held-to-maturity securities | $ 3,802,000 | $ 4,018,000 |
Allowance for loan losses | $ 33,035,000 | $ 35,535,000 |
Debt Instrument [Line Items] | ||
Preferred stock shares authorized (in shares) | 5,000,000 | 5,000,000 |
Preferred stock shares issued (in shares) | 0 | 0 |
Preferred stock shares outstanding (in shares) | 0 | 0 |
Common stock shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock shares issued (in shares) | 51,403,914 | 51,682,398 |
Common stock shares outstanding (in shares) | 51,403,914 | 51,682,398 |
Senior Unsecured Term Notes, September 2014 | Senior Unsecured Term Notes | ||
Debt Instrument [Line Items] | ||
Principal | $ 95,000,000 | $ 95,000,000 |
Debt interest rate | 6.50% | |
Unamortized debt issuance costs | $ 307,000 | $ 338,000 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Interest and fee income: | ||
Loans | $ 53,633 | $ 54,058 |
Investment securities | 2,301 | 1,982 |
Cash, cash equivalents and restricted cash | 66 | 51 |
Total interest and fee income | 56,000 | 56,091 |
Interest expense: | ||
Deposits | 6,020 | 11,606 |
FHLB advances | 3,097 | 3,933 |
Junior subordinated deferrable interest debentures | 275 | 258 |
Senior debt | 1,574 | 1,575 |
Total interest expense | 10,966 | 17,372 |
Net interest income before provision for loan losses | 45,034 | 38,719 |
Reversal of provision for loan losses | (2,500) | (2,500) |
Net interest income after provision for loan losses | 47,534 | 41,219 |
Noninterest income: | ||
FHLB dividends | 354 | 367 |
Other income | (296) | (58) |
Total noninterest income | 58 | 309 |
Noninterest expense: | ||
Compensation and related benefits | 10,219 | 10,380 |
Deposit insurance premium | 481 | 472 |
Professional and regulatory fees | 539 | 484 |
Occupancy | 1,194 | 1,215 |
Depreciation and amortization | 603 | 655 |
Data processing | 988 | 973 |
Marketing | 458 | 292 |
Other expenses | 1,030 | 933 |
Total noninterest expense | 15,512 | 15,404 |
Income before provision for income taxes | 32,080 | 26,124 |
Provision for income taxes | 9,140 | 7,713 |
Net income | $ 22,940 | $ 18,411 |
Basic earnings per common share (in usd per share) | $ 0.45 | $ 0.35 |
Diluted earnings per common share (in usd per share) | 0.45 | 0.35 |
Dividends per common share (in usd per share) | $ 0.12 | $ 0.06 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 22,940 | $ 18,411 |
Unrealized loss on available for sale debt securities: | ||
Unrealized holding loss arising during the period | (16,965) | (3,815) |
Tax effect | 4,919 | 1,109 |
Total other comprehensive loss, net of tax | (12,046) | (2,706) |
Comprehensive income | $ 10,894 | $ 15,705 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Retained Earnings | Accumulated Other Comprehensive (Loss) Income (Net of Taxes) Available for Sale Securities |
Beginning balance (shares) at Dec. 31, 2020 | 52,220,266 | |||
Beginning balance at Dec. 31, 2020 | $ 613,691 | $ 414,120 | $ 192,834 | $ 6,737 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 18,411 | 18,411 | ||
Other comprehensive income (loss) | (2,706) | (2,706) | ||
Issuance of restricted stock awards (in shares) | 283,078 | |||
Settled restricted stock units (in shares) | 68,873 | |||
Shares withheld to pay taxes on stock based compensation (in shares) | (85,825) | |||
Shares withheld to pay taxes on stock based compensation | (901) | $ (901) | ||
Restricted stock forfeitures (in shares) | (52,798) | |||
Restricted stock forfeitures | (54) | $ (67) | 13 | |
Stock based compensation expense | 651 | $ 651 | ||
Shares repurchased (in shares) | (201,682) | |||
Shares repurchased | (2,101) | $ (2,101) | ||
Cash dividends | (3,022) | (3,022) | ||
Ending balance (shares) at Mar. 31, 2021 | 52,231,912 | |||
Ending balance at Mar. 31, 2021 | 623,969 | $ 411,702 | 208,236 | 4,031 |
Beginning balance (shares) at Dec. 31, 2021 | 51,682,398 | |||
Beginning balance at Dec. 31, 2021 | 669,133 | $ 406,904 | 262,141 | 88 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income | 22,940 | 22,940 | ||
Other comprehensive income (loss) | (12,046) | (12,046) | ||
Issuance of restricted stock awards (in shares) | 206,675 | |||
Settled restricted stock units (in shares) | 6,759 | |||
Shares withheld to pay taxes on stock based compensation (in shares) | (62,422) | |||
Shares withheld to pay taxes on stock based compensation | (875) | $ (875) | ||
Restricted stock forfeitures (in shares) | (4,100) | |||
Restricted stock forfeitures | (2) | $ (4) | 2 | |
Stock based compensation expense | 714 | $ 714 | ||
Shares repurchased (in shares) | (425,396) | |||
Shares repurchased | (5,637) | $ (5,637) | ||
Cash dividends | (6,227) | (6,227) | ||
Ending balance (shares) at Mar. 31, 2022 | 51,403,914 | |||
Ending balance at Mar. 31, 2022 | $ 668,000 | $ 401,102 | $ 278,856 | $ (11,958) |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Cash dividends (in usd per share) | $ 0.12 | $ 0.06 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 22,940 | $ 18,411 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 603 | 655 |
Reversal of provision for loan losses | (2,500) | (2,500) |
Amortization of deferred loan costs, net | 4,792 | 4,626 |
Amortization of premiums on investment securities, net | 337 | 657 |
Stock based compensation expense, net of forfeitures | 710 | 584 |
Change in fair value of mortgage servicing rights | 104 | 171 |
Change in fair value of equity securities | 577 | 211 |
Other items, net | 44 | 55 |
Effect of changes in: | ||
Accrued interest receivable | (253) | (386) |
Accrued interest payable | 35 | (654) |
Prepaid expenses and other assets | 4,293 | 1,773 |
Other liabilities and accrued expenses | 3,140 | 1,800 |
Net cash provided by operating activities | 34,822 | 25,403 |
Cash flows from investing activities: | ||
Proceeds from maturities, paydowns and calls of available for sale debt securities | 38,296 | 39,735 |
Proceeds from maturities and paydowns of held to maturity debt securities | 29 | 1,741 |
Purchases of available for sale debt securities | (33,140) | (90,113) |
Net (increase) decrease in loans receivable | (81,469) | 57,275 |
Purchase of loans, including discounts/premiums | 0 | (286,917) |
Redemption of FHLB stock, net | 848 | 0 |
Purchase of premises and equipment | (103) | (112) |
Net cash used in investing activities | (75,539) | (278,391) |
Cash flows from financing activities: | ||
Net increase in deposits | 63,004 | 127,579 |
Proceeds from long-term FHLB advances | 100,000 | 0 |
Repayment of long-term FHLB advances | (100,000) | (100,000) |
Net change in short-term FHLB advances | 0 | 134,200 |
Shares withheld for taxes on vested restricted stock | (875) | (901) |
Shares repurchased | (5,637) | (2,101) |
Cash paid for dividends | (6,225) | (3,009) |
Net cash provided by financing activities | 50,267 | 155,768 |
Increase (decrease) in cash, cash equivalents and restricted cash | 9,550 | (97,220) |
Cash, cash equivalents and restricted cash, beginning of period | 138,413 | 178,861 |
Cash, cash equivalents and restricted cash, end of period | 147,963 | 81,641 |
Supplemental disclosure of cash flow information: Cash paid during the period for: | ||
Interest | 10,931 | 18,026 |
Income taxes | 6 | 8 |
Non-cash investing activity: | ||
Lease liabilities arising from obtaining right-of-use assets | $ 16,255 | $ 0 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
NATURE OF OPERATIONS | NATURE OF OPERATIONS Organization Luther Burbank Corporation (the ‘‘Company’’), a California corporation headquartered in Santa Rosa, is the bank holding company for its wholly-owned subsidiary, Luther Burbank Savings (the "Bank"), and its wholly-owned subsidiary, Burbank Investor Services. The Company also owns Burbank Financial Inc., a real estate investment company that provides limited loan administrative support to the Bank, and all the common interests in Luther Burbank Statutory Trusts I and II, entities created to issue trust preferred securities. The Bank conducts its business from its headquarters in Gardena, California. It has ten full service branches in California located in Sonoma, Marin, Santa Clara, and Los Angeles Counties and one full service branch in Washington located in King County. Additionally, there are several loan production offices located throughout California, as well as a loan production office in Clackamas County, Oregon. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, these interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2021, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”), under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2022. The Company’s accounting and reporting policies conform to GAAP and to general practices within the banking industry. Use of Estimates Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited consolidated financial statements and the disclosures provided, and actual results could differ. Earnings Per Share ("EPS") Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the period. In determining the weighted average number of shares outstanding, vested restricted stock units are included. Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period. Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and units, calculated using the treasury stock method. (Dollars in thousands, except share amounts) Three Months Ended March 31, 2022 2021 Net income $ 22,940 $ 18,411 Weighted average basic common shares outstanding 51,337,488 51,982,731 Add: Dilutive effects of assumed vesting of restricted stock 76,931 115,507 Weighted average diluted common shares outstanding 51,414,419 52,098,238 Income per common share: Basic EPS $ 0.45 $ 0.35 Diluted EPS $ 0.45 $ 0.35 Anti-dilutive shares not included in calculation of diluted earnings per share 20 3,695 Adoption of New Financial Accounting Standards FASB ASU 2016-02 On January 1, 2022, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and subsequent amendments thereto, which requires the Company to recognize most leases on the balance sheet. The Company adopted the standard under a modified retrospective approach as of the date of adoption and elected to apply several of the available practical expedients, including carryover of historical lease determination and lease classification conclusions and accounting for lease and non-lease components in contracts in which the Company is a lessee as a single lease component. Adoption of the leasing standard resulted in the recognition of operating right-of-use assets of $15.8 million, and operating lease liabilities of $16.3 million as of January 1, 2022. These amounts were determined based on the present value of remaining minimum lease payments, discounted using the Company’s incremental borrowing rate as of the date of adoption. There was no material impact to the timing of expense or income recognition in the Company’s unaudited consolidated statements of income. Prior periods were not restated and continue to be presented under legacy GAAP. Disclosures about the Company’s leasing activities are presented in Note 6. FASB ASU 2022-01 In March 2022, the Financial Accounting Standards Board (“FASB”) issued guidance under the of the last-of-layer hedging method in Accounting Standards Codification ("ASC") 815 to expand the current single-layer method to allow multiple layers of a single closed portfolio to be hedged. To reflect the expansion, the last-of-layer method will be renamed the portfolio layer method. The amendments also expand the scope of and provide additional guidance specific to the portfolio layer method for hedge accounting. ASU 2022-01 will become effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
INVESTMENT SECURITIES | INVESTMENT SECURITIES Available for Sale The following table summarizes the amortized cost and the estimated fair value of available for sale debt securities as of the dates indicated: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value At March 31, 2022: Government and Government Sponsored Entities: Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") $ 414,904 $ 1,895 $ (10,196) $ 406,603 Residential MBS and CMOs 188,493 477 (8,624) 180,346 Agency bonds 10,275 225 — 10,500 Other asset backed securities ("ABS") 28,028 — (618) 27,410 Total available for sale debt securities $ 641,700 $ 2,597 $ (19,438) $ 624,859 At December 31, 2021: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 407,111 $ 3,281 $ (2,646) $ 407,746 Residential MBS and CMOs 200,775 1,225 (1,867) 200,133 Agency bonds 10,587 244 — 10,831 Other ABS 28,720 37 (150) 28,607 Total available for sale debt securities $ 647,193 $ 4,787 $ (4,663) $ 647,317 Net unrealized gains (losses) on available for sale investment securities are recorded as accumulated other comprehensive income (loss) within stockholders’ equity and totaled $(12.0) million and $88 thousand, net of $4.9 million and $(36) thousand in tax assets (liabilities), at March 31, 2022 and December 31, 2021, respectively. There were no sales or transfers of available for sale investment securities and no realized gains or losses on these securities during the three months ended March 31, 2022 or 2021. The following tables summarize the gross unrealized losses and fair value of available for sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: March 31, 2022 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Government and Government Sponsored Entities: Commercial MBS and CMOs $ 152,363 $ (6,982) $ 46,724 $ (3,214) $ 199,087 $ (10,196) Residential MBS and CMOs 115,227 (6,427) 19,497 (2,197) 134,724 (8,624) Agency bonds — — — — — — Other ABS 27,411 (618) — — 27,411 (618) Total available for sale debt securities $ 295,001 $ (14,027) $ 66,221 $ (5,411) $ 361,222 $ (19,438) At March 31, 2022, the Company held 86 residential MBS and CMOs of which 27 were in a loss position and five had been in a loss position for twelve months or more. The Company held 57 commercial MBS and CMOs of which 29 were in a loss position and five had been in a loss position for twelve months or more. The Company held three other ABS of which three were in a loss position and none had been in a loss position for twelve months or more. December 31, 2021 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Government and Government Sponsored Entities: Commercial MBS and CMOs $ 157,031 $ (2,632) $ 10,608 $ (14) $ 167,639 $ (2,646) Residential MBS and CMOs 118,803 (1,864) 247 (3) 119,050 (1,867) Other ABS $ 15,253 $ (150) $ — $ — $ 15,253 $ (150) Total available for sale debt securities $ 291,087 $ (4,646) $ 10,855 $ (17) $ 301,942 $ (4,663) At December 31, 2021, the Company held 88 residential MBS and CMOs of which 14 were in a loss position and four had been in a loss position for twelve months or more. The Company held 54 commercial MBS and CMOs of which 20 were in a loss position and two had been in a loss position for twelve months or more. The Company held three other ABS of which two were in a loss position and none had been in a loss position for twelve months or more. The unrealized losses on the Company’s investments were caused by interest rate changes. In addition, the contractual cash flows of these investments are guaranteed by the U.S. government or agencies sponsored by the U.S. government. Accordingly, it is expected that the securities will not be settled at a price less than amortized cost. Because the decline in market value is attributable to changes in interest rates but not credit quality, and because the Company has the ability and intent to hold those investments until a recovery of fair value, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2022 or December 31, 2021. As of March 31, 2022 and December 31, 2021, there were no holdings of securities of any one issuer in an amount greater than 10% of stockholders' equity, other than the U.S. government and its agencies. Held to Maturity The following table summarizes the amortized cost and estimated fair value of held to maturity investment securities as of the dates indicated: (Dollars in thousands) Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Estimated Fair Value As of March 31, 2022: Government Sponsored Entities: Residential MBS $ 3,731 $ 18 $ (14) $ 3,735 Other investments 67 — — 67 Total held to maturity investment securities $ 3,798 $ 18 $ (14) $ 3,802 As of December 31, 2021: Government Sponsored Entities: Residential MBS $ 3,761 $ 189 $ — $ 3,950 Other investments 68 — — 68 Total held to maturity investment securities $ 3,829 $ 189 $ — $ 4,018 The following table summarizes the gross unrecognized losses and fair value of held to maturity investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrecognized loss position: Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrecognized Losses Fair Value Unrecognized Losses Fair Value Unrecognized Losses As of March 31, 2022: Government Sponsored Entities: Residential MBS $ 1,992 $ (14) $ — $ — $ 1,992 $ (14) At March 31, 2022, the Company had seven held to maturity residential MBS of which five were in a loss position and none had been in a loss position for twelve months or more. The unrecognized losses on the Company’s held to maturity investments at March 31, 2022 were caused by interest rate changes. In addition, the contractual cash flows of these investments are guaranteed by agencies sponsored by the U.S. government. Accordingly, it is expected that the securities will not be settled at a price less than amortized cost. Because the decline in market value is attributable to changes in interest rates but not credit quality, and because the Company has the ability and intent to hold those investments until maturity, the Company does not consider these investments to be other-than-temporarily impaired at March 31, 2022. The following table summarizes the scheduled maturities of available for sale and held to maturity investment securities as of March 31, 2022: March 31, 2022 (Dollars in thousands) Amortized Cost Fair Value Available for sale debt securities Five to ten years $ 10,275 $ 10,500 MBS, CMOs and other ABS 631,425 614,359 Total available for sale debt securities $ 641,700 $ 624,859 Held to maturity investments securities Five to ten years $ 67 $ 67 MBS 3,731 3,735 Total held to maturity debt securities $ 3,798 $ 3,802 The amortized cost and fair value of debt securities are shown by contractual maturity. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. As such, mortgage backed securities, collateralized mortgage obligations and other asset backed securities are not included in the maturity categories above and instead are shown separately. No securities were pledged as of March 31, 2022 or December 31, 2021. Equity Securities Equity securities consist of investments in a qualified community reinvestment fund. At March 31, 2022 and December 31, 2021, the fair value of equity securities totaled $11.1 million and $11.7 million, respectively. Changes in fair value are recognized in other noninterest income and totaled $(577) thousand and $(211) thousand during the three months ended March 31, 2022 and 2021, respectively. There were no sales of equity securities during the three months ended March 31, 2022 or 2021. |
LOANS
LOANS | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
LOANS | LOANS Loans consist of the following: (Dollars in thousands) March 31, December 31, Permanent mortgages on: Multifamily residential $ 4,232,227 $ 4,210,735 Single family residential 1,916,220 1,881,676 Commercial real estate 194,354 187,097 Construction and land loans 23,517 17,912 Total 6,366,318 6,297,420 Allowance for loan losses (33,035) (35,535) Loans held for investment, net $ 6,333,283 $ 6,261,885 Certain loans have been pledged to secure borrowing arrangements (see Note 8). The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment: (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land and Construction Total Three months ended March 31, 2022 Allowance for loan losses: Beginning balance allocated to portfolio segments $ 26,043 $ 7,224 $ 2,094 $ 174 $ 35,535 (Reversal of) provision for loan losses (1,892) (427) (212) 31 (2,500) Charge-offs — — — — — Recoveries — — — — — Ending balance allocated to portfolio segments $ 24,151 $ 6,797 $ 1,882 $ 205 $ 33,035 Three months ended March 31, 2021 Allowance for loan losses: Beginning balance allocated to portfolio segments $ 33,259 $ 9,372 $ 3,347 $ 236 $ 46,214 (Reversal of) provision for loan losses (2,421) 442 (476) (45) (2,500) Charge-offs — — — — — Recoveries — 2 — 50 52 Ending balance allocated to portfolio segments $ 30,838 $ 9,816 $ 2,871 $ 241 $ 43,766 The following table summarizes the allocation of the allowance for loan losses by impairment methodology: (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land and Construction Total As of March 31, 2022: Ending allowance balance allocated to: Loans individually evaluated for impairment $ — $ 25 $ — $ — $ 25 Loans collectively evaluated for impairment 24,151 6,772 1,882 205 33,010 Ending balance $ 24,151 $ 6,797 $ 1,882 $ 205 $ 33,035 Loans: Ending balance: individually evaluated for impairment $ 500 $ 5,643 $ — $ — $ 6,143 Ending balance: collectively evaluated for impairment 4,231,727 1,910,577 194,354 23,517 6,360,175 Ending balance $ 4,232,227 $ 1,916,220 $ 194,354 $ 23,517 $ 6,366,318 As of December 31, 2021: Ending allowance balance allocated to: Loans individually evaluated for impairment $ — $ 25 $ — $ — $ 25 Loans collectively evaluated for impairment 26,043 7,199 2,094 174 35,510 Ending balance $ 26,043 $ 7,224 $ 2,094 $ 174 $ 35,535 Loans: Ending balance: individually evaluated for impairment $ 505 $ 5,687 $ — $ — $ 6,192 Ending balance: collectively evaluated for impairment 4,210,230 1,875,989 187,097 17,912 6,291,228 Ending balance $ 4,210,735 $ 1,881,676 $ 187,097 $ 17,912 $ 6,297,420 The Company assigns a risk rating to all loans and periodically performs detailed reviews of all loans to identify credit risks and to assess the overall collectability of the portfolio. During these internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, as well as the financial performance and/or other characteristics of loan collateral. These credit quality indicators are used to assign a risk rating to each individual loan. The risk ratings can be grouped into six major categories, defined as follows: Pass assets are those which are performing according to contract and have no existing or known weaknesses deserving of management’s close attention. The basic underwriting criteria used to approve the loans are still valid, and all payments have essentially been made as planned. Watch assets are expected to have an event occurring in the near future that will lead to a change in risk rating with the change being either favorable or unfavorable. These assets require heightened monitoring of the event by management. Special mention assets have 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 assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard assets are inadequately protected by the current net worth and/or paying capacity of the obligor or by the collateral pledged. These assets have well-defined weaknesses: the primary source of repayment is gone or severely impaired (i.e., bankruptcy or loss of employment) and/or there has been a deterioration in collateral value. In addition, there is the distinct possibility that the Company will sustain some loss, either directly or indirectly (i.e., the cost of monitoring), if the deficiencies are not corrected. A deterioration in collateral value alone does not mandate that an asset be adversely classified if such factor does not indicate that the primary source of repayment is in jeopardy. Doubtful assets have the weaknesses of those classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable based on current facts, conditions and values. Loss assets are considered uncollectible and of such little value that their continuance as assets, without establishment of a specific valuation allowance or charge-off, is not warranted. This classification does not necessarily mean that an asset has absolutely no recovery or salvage value; but rather, it is not practical or desirable to defer writing off a basically worthless asset (or portion thereof) even though partial recovery may be affected in the future. The following table summarizes the loan portfolio allocated by management’s internal risk ratings at March 31, 2022 and December 31, 2021. (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land, Construction and NM Total As of March 31, 2022: Grade: Pass $ 4,165,085 $ 1,897,046 $ 188,236 $ 22,982 $ 6,273,349 Watch 50,535 16,071 5,150 535 72,291 Special mention 4,610 1,326 968 — 6,904 Substandard 11,997 1,777 — — 13,774 Total $ 4,232,227 $ 1,916,220 $ 194,354 $ 23,517 $ 6,366,318 As of December 31, 2021: Grade: Pass $ 4,129,767 $ 1,856,942 $ 180,950 $ 17,523 $ 6,185,182 Watch 66,062 22,946 6,147 389 95,544 Special mention 4,586 — — — 4,586 Substandard 10,320 1,788 — — 12,108 Total $ 4,210,735 $ 1,881,676 $ 187,097 $ 17,912 $ 6,297,420 The following table summarizes an aging analysis of the loan portfolio by the time past due at March 31, 2022 and December 31, 2021: (Dollars in thousands) 30 Days 60 Days 90+ Days Non-accrual Current Total As of March 31, 2022: Loans: Multifamily residential $ — $ 362 $ — $ 500 $ 4,231,365 $ 4,232,227 Single family residential 1,170 1,326 — 1,777 1,911,947 1,916,220 Commercial real estate — — — — 194,354 194,354 Land and construction — — — — 23,517 23,517 Total $ 1,170 $ 1,688 $ — $ 2,277 $ 6,361,183 $ 6,366,318 As of December 31, 2021: Loans: Multifamily residential $ — $ — $ — $ 505 $ 4,210,230 $ 4,210,735 Single family residential 271 — — 1,788 1,879,617 1,881,676 Commercial real estate — — — — 187,097 187,097 Land and construction — — — — 17,912 17,912 Total $ 271 $ — $ — $ 2,293 $ 6,294,856 $ 6,297,420 The following table summarizes information related to impaired loans at March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Multifamily residential $ 500 $ 577 $ — $ 505 $ 582 $ — Single family residential 4,813 5,004 — 4,847 5,033 — 5,313 5,581 — 5,352 5,615 — With an allowance recorded: Single family residential 830 827 25 840 836 25 830 827 25 840 836 25 Total: Multifamily residential 500 577 — 505 582 — Single family residential 5,643 5,831 25 5,687 5,869 25 $ 6,143 $ 6,408 $ 25 $ 6,192 $ 6,451 $ 25 The following table summarizes information related to impaired loans for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 (Dollars in thousands) Average Recorded Investment Interest Income Cash Basis Interest Average Recorded Investment Interest Income Cash Basis Interest With no related allowance recorded: Multifamily residential $ 503 $ 8 $ 8 $ 1,566 $ 5 $ 5 Single family residential 4,830 43 19 5,790 61 57 5,333 51 27 7,356 66 62 With an allowance recorded: Single family residential 835 6 — 871 7 — 835 6 — 871 7 — Total: Multifamily residential 503 8 8 1,566 5 5 Single family residential 5,665 49 19 6,661 68 57 $ 6,168 $ 57 $ 27 $ 8,227 $ 73 $ 62 The following table summarizes the recorded investment related to troubled debt restructurings ("TDRs") at March 31, 2022 and December 31, 2021: (Dollars in thousands) March 31, December 31, Troubled debt restructurings: Single family residential $ 1,607 $ 1,204 The Company has allocated $25 thousand of its allowance for loan losses for loans modified in TDRs at both March 31, 2022 and December 31, 2021. The Company does not have commitments to lend additional funds to borrowers with loans whose terms have been modified in TDRs. During the three months ended March 31, 2022, the Company modified the terms of one loan that qualified as a TDR. The following table provides details of this modification: (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Troubled debt restructurings: Single family residential 1 $ 405 $ 412 Terms of the modification above included suspension of loan payments for six months and a similar extension of the loan term. The TDR above resulted in no increase to the allowance for loan losses and no charge-offs primarily due to collateral support provided by the secondary source of repayment. There were no new TDRs during the three months ended March 31, 2021. The Company had no TDRs with a subsequent payment default within twelve months following the modification during the three months ended March 31, 2022 and 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. |
NONPERFORMING ASSETS
NONPERFORMING ASSETS | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
NONPERFORMING ASSETS | NONPERFORMING ASSETS Nonperforming assets include nonperforming loans plus real estate owned. The Company’s nonperforming assets at March 31, 2022 and December 31, 2021 are indicated below: (Dollars in thousands) March 31, December 31, Non-accrual loans: Multifamily residential $ 500 $ 505 Single family residential 1,777 1,788 Total non-accrual loans 2,277 2,293 Real estate owned — — Total nonperforming assets $ 2,277 $ 2,293 Interest income on non-accrual loans is subsequently recognized on a cash basis as long as the remaining unpaid principal amount of the loans are deemed to be fully collectible. If there is doubt regarding the collectability of the loan, then any interest payments received are applied to principal. Interest income was recognized on a cash basis on non-accrual loans during the three months ended March 31, 2022 and 2021 totaling $27 thousand and $62 thousand, respectively. Contractual interest not recorded on nonperforming loans during the three months ended March 31, 2022 and 2021 totaled $7 thousand and $16 thousand, respectively. |
MORTGAGE SERVICING RIGHTS
MORTGAGE SERVICING RIGHTS | 3 Months Ended |
Mar. 31, 2022 | |
Transfers and Servicing [Abstract] | |
MORTGAGE SERVICING RIGHTS | MORTGAGE SERVICING RIGHTSServicing loans for others generally consists of collecting mortgage payments, maintaining escrow accounts, disbursing payments to investors, and conducting foreclosure proceedings. Loan servicing income is recorded on the accrual basis and includes servicing fees from investors and certain charges collected from borrowers. Mortgage loans serviced for others are not reported as assets. The principal balances of these loans are as follows: (Dollars in thousands) March 31, December 31, Mortgage loans serviced for: Federal Home Loan Mortgage Corporation ("Freddie Mac") $ 105,741 $ 127,431 Other financial institutions 57,249 58,298 Total mortgage loans serviced for others $ 162,990 $ 185,729 Custodial account balances maintained in connection with serviced loans totaled $1.3 million and $5.0 million at March 31, 2022 and December 31, 2021, respectively. The Company measures servicing rights at fair value at each reporting date and reports changes in the fair value of servicing assets in earnings in the period in which the changes occur. Fair value is based on a valuation model that calculates the present value of estimated future net servicing income. Activities for mortgage servicing rights are as follows: Three Months Ended March 31, (Dollars in thousands) 2022 2021 Beginning balance $ 915 $ 1,599 Additions — — Disposals — — Changes in fair value due to changes in assumptions — — Other changes in fair value (104) (171) Ending balance $ 811 $ 1,428 |
LEASES
LEASES | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
LEASES | LEASES The Company leases various office premises under long-term operating lease agreements. These leases expire between 2022 and 2030, with certain leases containing five year renewal options. The Company includes lease extension options in the lease term if it is reasonably certain the Company will exercise the option, when considering the economic incentive to do so. Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. All of the Company’s leases are classified as operating leases and prior to the adoption of ASU 2016-02 on January 1, 2022, were not recognized on the Company's consolidated statements of financial condition. Upon adoption of the new lease standard on January 1, 2022, the Company recorded operating lease right-of-use assets and operating lease liabilities on the Company's consolidated statements of financial condition. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term. The Company uses its incremental borrowing rate at lease commencement to discount lease payments when the rate implicit in the lease is not readily determinable. The Company's incremental borrowing rate was based on the FHLB advance rate based on the lease term and other factors. In addition, the Company has elected to account for any non-lease components in its leases as part of the associated lease component. The Company also has elected to not recognize short-term leases with an original term of 12 months or less on the Company's consolidated statements of financial condition. Supplemental lease information as of or for the three months ended March 31, 2022 is as follows: (Dollars in thousands) Balance sheet: Operating lease right-of-use assets included in prepaid expenses and other assets $ 14,940 Operating lease liabilities included in other liabilities and accrued expenses $ 15,337 Income statement: Operating lease costs included in occupancy expense $ 929 Weighted average remaining lease term (years) of operating leases 4.9 Weighted average discount rate of operating leases 1.67 % Cash paid for amounts included in the measurement of operating lease liabilities $ 1,033 At March 31, 2022, future undiscounted lease payments with initial terms of one year or more are as follows: (Dollars in thousands) April 1 - December 31, 2022 $ 2,919 2023 3,560 2024 2,737 2025 2,311 2026 2,108 Thereafter 2,418 Total undiscounted lease payments 16,053 Less: Imputed interest (716) Net lease liabilities $ 15,337 |
DEPOSITS
DEPOSITS | 3 Months Ended |
Mar. 31, 2022 | |
Deposits [Abstract] | |
DEPOSITS | DEPOSITS A summary of deposits at March 31, 2022 and December 31, 2021 is as follows: (Dollars in thousands) March 31, December 31, Money market savings $ 2,443,522 $ 2,294,367 Time deposits 2,209,375 2,335,141 Money market checking 612,201 580,325 Interest-bearing demand 172,242 176,126 Noninterest-bearing demand 163,907 152,284 Total $ 5,601,247 $ 5,538,243 The Company had time deposits that met or exceeded the FDIC insurance limit of $250 thousand of $961.8 million and $1.1 billion at March 31, 2022 and December 31, 2021, respectively. The Company utilizes brokered deposits as an additional source of funding. The Company had brokered deposits of $76.0 million and $25.8 million at March 31, 2022 and December 31, 2021, respectively. Maturities of the Company’s time deposits at March 31, 2022 are summarized as follows: (Dollars in thousands) April 1 - December 31, 2022 $ 1,787,146 2023 335,529 2024 26,210 2025 9,469 2026 44,225 Thereafter 6,796 Total $ 2,209,375 |
FEDERAL HOME LOAN BANK AND FEDE
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES | 3 Months Ended |
Mar. 31, 2022 | |
Advances from Federal Home Loan Banks [Abstract] | |
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES | FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES The Bank may borrow from the FHLB, on either a short-term or long-term basis, up to 40% of its assets, provided that adequate collateral has been pledged. As of March 31, 2022 and December 31, 2021, the Bank had pledged various mortgage loans totaling approximately $2.3 billion and $2.4 billion, respectively, as well as the FHLB stock held by the Bank, to secure these borrowing arrangements. The Bank has access to the Loan and Discount Window of the Federal Reserve Bank of San Francisco ("FRB"). Advances under this window are subject to the Bank providing qualifying collateral. Various mortgage loans totaling approximately $570.9 million and $583.0 million as of March 31, 2022 and December 31, 2021, respectively, secure this borrowing arrangement. There were no borrowings outstanding with the FRB as of March 31, 2022 or December 31, 2021. The following table discloses the Bank’s outstanding advances from the FHLB of San Francisco: Outstanding Balances As of March 31, 2022 (Dollars in thousands) March 31, December 31, Minimum Interest Rate Maximum Interest Rate Weighted Average Rate Maturity Dates Fixed rate long-term 751,647 751,647 0.38 % 7.33 % 1.75 % March 2023 to March 2030 The Bank's available borrowing capacity based on pledged loans to the FHLB and the FRB totaled $1.0 billion and $1.2 billion at March 31, 2022 and December 31, 2021, respectively. As of March 31, 2022 and December 31, 2021, the Bank had aggregate loan balances of $2.7 billion and $2.5 billion, respectively, available to pledge to the FHLB and FRB to increase its borrowing capacity. As of March 31, 2022 and December 31, 2021, the Bank pledged as collateral a $62.6 million FHLB letter of credit to Freddie Mac related to our multifamily securitization reimbursement obligation. Short-term borrowings are borrowings with original maturities of 90 days or less. During the three months ended March 31, 2022, there was a maximum amount of short-term borrowings outstanding of $135.3 million and an average amount outstanding of $21.7 million with a weighted average interest rate of 0.34%. During the three months ended March 31, 2021, there was a maximum amount of short-term borrowings outstanding of $203.6 million and an average amount outstanding of $88.8 million, with a weighted average interest rate of 0.14%. The following table summarizes scheduled principal payments on FHLB advances over the next five years as of March 31, 2022: (Dollars in thousands) April 1 - December 31, 2022 $ — 2023 250,000 2024 300,000 2025 101,500 2026 100,000 Thereafter 147 $ 751,647 |
JUNIOR SUBORDINATED DEFERRABLE
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES | JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES The Company formed two wholly-owned trust companies (the ‘‘Trusts’’) which issued guaranteed preferred beneficial interests (the "Trust Securities") in the Company’s junior subordinated deferrable interest debentures (the "Notes"). The Company is not considered the primary beneficiary of the Trusts and therefore, the Trusts are not consolidated in the Company’s financial statements, but rather the junior subordinated debentures are shown as a liability. The Company’s investment in the common securities of the Trusts, totaling $1.9 million, is included in other assets in the consolidated statements of financial condition. The sole asset of the Trusts are the Notes that they hold. The Trusts have invested the proceeds of such Trust Securities in the Notes. Each of the Notes has an interest rate equal to the corresponding Trust Securities distribution rate. The Company has the right to defer payment of interest on the Notes at any time or from time to time for a period not exceeding five years provided that no extension period may extend beyond the stated maturity of the relevant Notes. During any such extension period, distributions on the Trust Securities will also be deferred, and the Company’s ability to pay dividends on its common stock will be restricted. The Company has entered into contractual arrangements which, taken collectively, fully and unconditionally guarantee payment of: (i) accrued and unpaid distributions required to be paid on the Trust Securities; (ii) the redemption price with respect to any Trust Securities called for redemption by the Trusts; and (iii) payments due upon a voluntary or involuntary dissolution, winding up or liquidation of the Trusts. The Trust Securities are mandatorily redeemable upon maturity of the Notes, or upon earlier redemption as provided in the indenture. The Company has the right to redeem the Notes purchased by the Trusts, in whole or in part, on or after the redemption date. As specified in the indenture, if the Notes are redeemed prior to maturity, the redemption price will be the principal amount and any accrued but unpaid interest. The following table is a summary of the outstanding Trust Securities and Notes at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Date Maturity Rate Index Issuer Amount Rate Amount Rate Issued Date (Quarterly Reset) (Dollars in thousands) Luther Burbank Statutory Trust I $ 41,238 2.21 % $ 41,238 1.58 % 3/1/2006 6/15/2036 3 month LIBOR + 1.38% Luther Burbank Statutory Trust II $ 20,619 2.45 % $ 20,619 1.82 % 3/1/2007 6/15/2037 3 month LIBOR + 1.62% |
SENIOR DEBT
SENIOR DEBT | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
SENIOR DEBT | SENIOR DEBTIn September 2014, the Company issued $95 million in senior unsecured term notes to qualified institutional investors. The following table summarizes information on these notes as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 (Dollars in thousands) Principal Unamortized Debt Issuance Costs Principal Unamortized Debt Issuance Costs Maturity Date Fixed Interest Rate Senior Unsecured Term Notes $ 95,000 $ 307 $ 95,000 $ 338 9/30/2024 6.50 % |
DERIVATIVES AND HEDGING ACTIVIT
DERIVATIVES AND HEDGING ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVES AND HEDGING ACTIVITIES | DERIVATIVES AND HEDGING ACTIVITIES From time to time, the Company utilizes interest rate swaps and other derivative financial instruments as part of its asset liability management strategy to manage interest rate risk positions. Fair Value Hedges of Interest Rate Risk As of March 31, 2022, the Company held three two-year interest rate swaps with a total notional amount of $750 million. During the three months ended March 31, 2022, the Company entered into a new two-year swap agreement with a notional amount of $100.0 million. The other two swaps were entered into in February and June 2021. The swaps provide a hedge against the interest rate risk associated with both fixed rate loans and hybrid adjustable loans in their fixed rate period. Additionally, during the three months ended March 31, 2021, the Company also held two separate, two-year interest rate swaps with a total notional amount of $1.0 billion. These swaps, which were in equal notional amounts of $500.0 million, matured in June and August 2021, and provided a hedge against the interest rate risk related to certain hybrid multifamily loans which were in their fixed rate period. All outstanding swaps are designated as fair value hedges and involve the payment of a fixed rate amount to a counterparty in exchange for the Company receiving a variable rate payment over the life of the swaps without the exchange of the underlying notional amount. Any gain or loss on the derivatives, as well as any offsetting loss or gain on the hedged items attributable to the hedged risk are recognized in interest income on loans. The following table presents the effect of the Company’s interest rate swaps on the unaudited consolidated statements of income for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, (Dollars in thousands) 2022 2021 Derivative - interest rate swaps: Interest loss $ (65) $ (3,416) Hedged items - loans: Interest loss (13) (15) Net decrease in interest income $ (78) $ (3,431) The following table presents the fair value of the Company’s interest rate swaps, as well as their classification in the consolidated statements of financial condition as of March 31, 2022 and December 31, 2021: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives (Dollars in thousands) Notional Amount Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: As of March 31, 2022: Interest Rate Swaps $ 750,000 Prepaid Expenses and Other Assets $ 10,874 Other Liabilities and Accrued Expenses $ — As of December 31, 2021: Interest Rate Swaps $ 650,000 Prepaid Expenses and Other Assets $ 3,108 Other Liabilities and Accrued Expenses $ — As of March 31, 2022 and December 31, 2021, the following amounts were recorded in the consolidated statements of financial condition related to cumulative basis adjustments for its fair value hedges: Line Item in the Consolidated Statements of Financial Condition in Which the Hedged Items are Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Dollars in thousands) As of March 31, 2022: Loans receivable, net (1) $ 739,111 $ (10,889) As of December 31, 2021: Loans receivable, net (1) $ 646,890 $ (3,110) (1) These amounts include the amortized cost basis of portfolio loans used to designate hedging relationships in which the hedged items are the last layer expected to be remaining at the end of the hedging relationship. At March 31, 2022 and December 31, 2021, the amortized cost basis of the portfolio loans used in these hedging relationships were $1.1 billion and $1.0 billion, respectively; the cumulative basis adjustments associated with these hedging relationships were $(10.9) million and $(3.1) million, respectively, and the amount of the designated hedged items were $739.1 million and $646.9 million, respectively. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | STOCK BASED COMPENSATION The Company’s stock based compensation consists of restricted stock awards ("RSAs") and restricted stock units ("RSUs") granted under the Luther Burbank Corporation Omnibus Equity and Incentive Compensation Plan ("Omnibus Plan"). In connection with its initial public offering ("IPO") in December 2017, the Company granted RSUs in exchange for unvested phantom stock awards related to a then discontinued employee benefit plan that awarded phantom stock to certain key executives and nonemployee directors. The RSUs were granted on a per share basis, with the same vesting schedule and deferral elections that existed for the original phantom stock awards. Post IPO, the Company typically grants RSAs to nonemployee directors and certain employees on an annual basis. RSA grants vest after one year for nonemployee directors and ratably over three All RSAs and RSUs are granted at the fair value of the common stock at the time of the award. RSAs and RSUs are considered fixed awards as the number of shares and fair value are known at the date of grant and the fair value at the grant date is amortized over the vesting and/or service period. Non-cash stock compensation expense recognized for RSAs and RSUs for the three months ended March 31, 2022 totaled $710 thousand compared with $584 thousand for the three months ended March 31, 2021. The fair value of RSAs and RSUs that vested during the three months ended March 31, 2022 and 2021 totaled $2.6 million and $2.4 million, respectively. As of March 31, 2022 and December 31, 2021, there was $4.7 million and $2.6 million, respectively, of unrecognized compensation expense related to 445,331 and 489,703 unvested RSAs, respectively, which amounts were expected to be expensed over a weighted average period of 2.06 years and 1.69 years, respectively. As of March 31, 2022 and December 31, 2021, 84,727 and 91,486 shares, respectively, of RSUs were vested and remain unsettled per the original deferral elections. The following table summarizes share information about RSAs and RSUs: Three Months Ended March 31, 2022 2021 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Beginning of the period balance 581,189 $ 10.56 605,916 $ 10.93 Shares granted 206,675 13.81 283,078 10.07 Shares settled (253,706) 10.45 (265,655) 11.02 Shares forfeited (4,100) 11.93 (52,798) 10.26 End of the period balance 530,058 $ 11.87 570,541 $ 10.52 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair Value Hierarchy The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon: Level 1 - Quoted market prices for identical instruments traded in active exchange markets. Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 - Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions that market participants would use on pricing the asset or liability. Valuation techniques include management judgment and estimation which may be significant. Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. Management monitors the availability of observable market data to assess the appropriate classification of assets and liabilities within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities, or total earnings. The following methods and assumptions were used to estimate the fair value of financial instruments: For cash, cash equivalents and restricted cash, accrued interest receivable and payable, demand deposits and short-term borrowings, the carrying amount was estimated to be fair value. The fair value of accrued interest receivable/payable balances were determined using inputs and fair value measurements commensurate with the asset or liability from which the accrued interest is generated. Fair values for available for sale and held to maturity debt securities, which include primarily debt securities issued by U.S. government sponsored agencies, were based on quoted market prices for similar securities. Fair values for equity securities, which consist of investments in a qualified community reinvestment fund, were based on quoted market prices. Loans were valued using the exit price notion. The fair value was estimated using market quotes for similar assets or the present value of future cash flows, discounted using a market rate for similar products and giving consideration to estimated prepayment risk and credit risk. The fair value of loans was determined utilizing estimates resulting in a Level 3 classification. Impaired loans were measured for impairment based on the present value of expected future cash flows discounted at the loans' effective interest rate, except that as a practical expedient, the Company may measure impairment based on a loan’s observable market price, or the fair value of the collateral (net of estimated costs to sell) if the loan is collateral dependent. The fair value of impaired loans was determined utilizing estimates resulting in a Level 3 classification. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability. The fair value of servicing rights was determined using a valuation model that utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data. The fair values of derivatives were based on valuation models using observable market data as of the measurement date. Fair values for fixed-rate time deposits were estimated using discounted cash flow analyses using interest rates offered at each reporting date by the Company for time deposits with similar remaining maturities. For deposits with no contractual maturity, the fair value was assumed to equal the carrying value. The fair value of FHLB advances was estimated based on discounting the future cash flows using the market rate currently offered for similar terms. The fair value of subordinated debentures was based on an indication of value provided by a third-party broker. For senior debt, the fair value was based on an indication of value provided by a third-party broker. Fair Value of Financial Instruments The carrying and estimated fair values of the Company’s financial instruments were as follows: Fair Level Measurements Using (Dollars in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 As of March 31, 2022: Financial assets: Cash and cash equivalents $ 147,963 $ 147,963 $ 147,963 $ — $ — Debt securities: Available for sale 624,859 624,859 — 624,859 — Held to maturity 3,798 3,802 — 3,802 — Equity securities 11,116 11,116 — 11,116 — Loans receivable, net 6,333,283 6,354,197 — — 6,354,197 Accrued interest receivable 18,014 18,014 5 933 17,076 FHLB stock 22,563 N/A N/A N/A N/A Interest rate swaps 10,874 10,874 — 10,874 — Financial liabilities: Deposits $ 5,601,247 $ 5,583,142 $ 3,106,872 $ 2,476,270 $ — FHLB advances 751,647 733,659 — 733,659 — Junior subordinated deferrable interest debentures 61,857 59,519 — 59,519 — Senior debt 94,693 96,818 — 96,818 — Accrued interest payable 153 153 — 153 — As of December 31, 2021: Financial assets: Cash and cash equivalents $ 138,413 $ 138,413 $ 138,413 $ — $ — Debt securities: Available for sale 647,317 647,317 — 647,317 — Held to maturity 3,829 4,018 — 4,018 — Equity securities 11,693 11,693 — 11,693 — Loans receivable, net 6,261,885 6,297,548 — — 6,297,548 Accrued interest receivable 17,761 17,761 1 927 16,833 FHLB stock 23,411 N/A N/A N/A N/A Interest rate swaps 3,108 3,108 — 3,108 — Financial liabilities: Deposits $ 5,538,243 $ 5,541,417 $ 2,918,102 $ 2,623,315 $ — FHLB advances 751,647 755,981 — 755,981 — Junior subordinated deferrable interest debentures 61,857 61,545 — 61,545 — Senior debt 94,662 103,361 — 103,361 — Accrued interest payable 118 118 — 118 — These estimates do not reflect any premium or discount that could result from offering the Company’s entire holdings of a particular financial instrument for sale at one time, nor do they attempt to estimate the value of anticipated future business related to the instruments. In addition, the tax ramifications related to the realization of unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in any of these estimates. Assets and Liabilities Recorded at Fair Value The following table presents information about the Company’s assets and liabilities measured at fair value on a recurring and nonrecurring basis as of March 31, 2022 and December 31, 2021. Recurring Basis The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis: (Dollars in thousands) Fair Value Level 1 Level 2 Level 3 As of March 31, 2022: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 406,603 $ — $ 406,603 $ — Residential MBS and CMOs 180,346 — 180,346 — Agency bonds 10,500 — 10,500 — Other ABS 27,410 — 27,410 — Total available for sale debt securities $ 624,859 $ — $ 624,859 $ — Equity securities $ 11,116 $ — $ 11,116 $ — Mortgage servicing rights 811 — — 811 Interest rate swaps 10,874 — 10,874 — As of December 31, 2021: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 407,746 $ — $ 407,746 $ — Residential MBS and CMOs 200,133 — 200,133 — Agency bonds 10,831 — 10,831 — Other ABS 28,607 — 28,607 — Total available for sale debt securities $ 647,317 $ — $ 647,317 $ — Equity securities $ 11,693 $ — $ 11,693 $ — Mortgage servicing rights 915 — — 915 Interest rate swaps 3,108 — 3,108 — There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2022 or 2021. Non-recurring Basis The Company may be required, from time to time, to measure certain assets and liabilities at fair value on a non-recurring basis. These include assets that are measured at the lower of cost or market value that were recognized at fair value which was below cost at the reporting date. |
VARIABLE INTEREST ENTITIES (VIE
VARIABLE INTEREST ENTITIES (VIE) | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
VARIABLE INTEREST ENTITIES (VIE) | VARIABLE INTEREST ENTITIES ("VIE")The Company is involved with VIEs through its loan securitization activities. The Company evaluated its association with VIEs for consolidation purposes. Specifically, a VIE is to be consolidated by its primary beneficiary, the entity that has both the power to direct the activities that most significantly impact the VIE, and a variable interest that could potentially be significant to the VIE. A variable interest is a contractual, ownership or other interest whose value fluctuates with the changes in the value of the VIE's assets and liabilities. The assessment includes an evaluation of the Company's continuing involvement with the VIE and the nature and significance of its variable interests. Multifamily loan securitization With respect to the securitization transaction with Freddie Mac which settled September 27, 2017, the Company's variable interests reside with a reimbursement agreement entered into with Freddie Mac that obligates the Company to reimburse Freddie Mac for defaulted contractual principal and interest payments identified after the ultimate resolution of any defaulted loans. Such reimbursement obligations are not to exceed 10% of the original principal amount of the loans comprising the securitization pool. As part of the securitization transaction, the Company released all servicing obligations and rights to Freddie Mac who was designated as the Master Servicer. As Master Servicer, Freddie Mac appointed the Company with sub-servicing obligations, which include obligations to collect and remit payments of principal and interest, manage payments of taxes and insurance, and otherwise administer the underlying loans. The servicing of defaulted loans and foreclosed loans was assigned to a separate third party entity, independent of the Company and Freddie Mac. Freddie Mac, in its capacity as Master Servicer, can terminate the Company in its role as sub-servicer and direct such responsibilities accordingly. In evaluating the variable interests and continuing involvement in the VIE, the Company determined that it does not have the power to make significant decisions or direct the activities that most significantly impact the economic performance of the VIE's assets and liabilities. As sub-servicer of the loans, the Company does not have the authority to make significant decisions that influence the value of the VIE's net assets and therefore, is not the primary beneficiary of the VIE. Hence, the Company determined that the VIE associated with the multifamily securitization should not be included in the consolidated financial statements of the Company. |
LOAN SALE AND SECURITIZATION AC
LOAN SALE AND SECURITIZATION ACTIVITIES | 3 Months Ended |
Mar. 31, 2022 | |
Transfers and Servicing [Abstract] | |
LOAN SALE AND SECURITIZATION ACTIVITIES | LOAN SALE AND SECURITIZATION ACTIVITIES The Company periodically sells loans as part of its business operations and overall management of liquidity, assets and liabilities, and financial performance. The transfer of loans is executed in securitization or sale transactions. With respect to sale transactions, the Company's continuing involvement may or may not include ongoing servicing responsibilities and general representations and warranties. With respect to securitization sales, the Company executed its first and only transaction to date on September 27, 2017 with Freddie Mac. The transaction involved the sale of $626.0 million in originated multifamily loans through a Freddie Mac sponsored transaction. The Company's continuing involvement includes sub-servicing responsibilities, general representations and warranties, and a limited reimbursement obligation. As sub-servicer for Freddie Mac, the Bank is required to maintain a minimum net worth in accordance with GAAP of not less than $2.0 million. If the Bank's capital were to fall below this threshold, Freddie Mac would have the authority to terminate and assume the Bank’s sub-servicing duties. At March 31, 2022, the Bank’s net worth was $807.4 million which equates to its Tier 1 capital of $816.1 million plus goodwill of $3.3 million and accumulated other comprehensive loss related to net unrealized losses on available for sale securities of $12.0 million. General representations and warranties associated with loan sales and the securitization transaction require the Company to uphold various assertions that pertain to the underlying loans at the time of the transaction, including, but not limited to, compliance with relevant laws and regulations, absence of fraud, enforcement of liens, no environmental damages, and maintenance of relevant environmental insurance. Such representations and warranties are limited to those that do not meet the quality represented at the transaction date and do not pertain to a decline in value or future payment defaults. In circumstances where the Company breaches its representations and warranties, the Company would generally be required to cure such instances through a repurchase or substitution of the subject loan(s). With respect to the securitization transaction, the Company also has continuing involvement through a reimbursement agreement executed with Freddie Mac. To the extent the ultimate resolution of defaulted loans results in contractual principal and interest payments that are deficient, the Company is obligated to reimburse Freddie Mac for such amounts, not to exceed 10% of the original principal amount of the loans comprising the securitization pool at the closing date of September 27, 2017. The following table provides cash flows associated with the Company's loan sale activities: Three Months Ended March 31, (Dollars in thousands) 2022 2021 Servicing fees 97 171 The following table provides information about the loans transferred through sales or securitization and not recorded in the consolidated statements of financial condition, for which the Company's continuing involvement includes sub-servicing or servicing responsibilities and/or reimbursement obligations: (Dollars in thousands) Single Family Residential Multifamily Residential As of March 31, 2022: Principal balance of loans $ 11,882 $ 151,108 Loans 90+ days past due — — Charge-offs, net — — As of December 31, 2021: Principal balance of loans $ 12,243 $ 173,486 Loans 90+ days past due — — Charge-offs, net — — |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Financial Instruments with Off-Balance Sheet Risk The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments represent commitments to originate fixed and variable rate loans and loans in process, and involve, to varying degrees, credit risk and interest rate risk in excess of the amount recognized in the Company’s consolidated statements of financial condition. The Company’s exposure to credit loss in the event of nonperformance by the other party for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments to originate loans and lines of credit as it does for on-balance sheet instruments. As it relates to interest rate risk, the Company's exposure is generally limited to increases in interest rates that may result during the short period of time between the commitment and funding of fixed rate credit facilities and adjustable rate credit facilities with initial fixed rate periods. The limited timing risk associated with these credit facilities are considered within the Company's asset liability management process. Commitments to fund loans and lines of credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have expiration dates or other termination clauses. In addition, external market forces may impact the probability of commitments being exercised; therefore, total commitments outstanding do not necessarily represent future cash requirements. At March 31, 2022 and December 31, 2021, the Company had outstanding commitments of approximately $134.0 million and $132.8 million, respectively, for loans and lines of credit. Unfunded commitment reserves totaled $155 thousand and $153 thousand at March 31, 2022 and December 31, 2021, respectively. Contingencies At present, there are no pending or threatened proceedings against the Company which, if determined adversely, would have a material effect on the Company’s business, financial position, results of operations or cash flows. In the ordinary course of operations, the Company may be party to various legal proceedings. Correspondent Banking Agreements |
NATURE OF OPERATIONS (Policies)
NATURE OF OPERATIONS (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and, therefore, do not include all footnotes as would be necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows in conformity with accounting principles generally accepted in the United States of America (“GAAP”). However, these interim unaudited consolidated financial statements reflect all adjustments (consisting solely of normal recurring adjustments and accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and comprehensive income, changes in stockholders’ equity and cash flows for the interim periods presented. These unaudited consolidated financial statements have been prepared on a basis consistent with, and should be read in conjunction with, the audited consolidated financial statements as of and for the year ended December 31, 2021, and the notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission (the “SEC”), under the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). The unaudited consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results of operations that may be expected for any other interim period or for the year ending December 31, 2022. |
Use of Estimates | Use of EstimatesManagement is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates and assumptions affect the amounts reported in the unaudited consolidated financial statements and the disclosures provided, and actual results could differ. |
Earnings Per Share | Earnings Per Share ("EPS")Basic earnings per common share represents the amount of earnings for the period available to each share of common stock outstanding during the reporting period. Basic EPS is computed based upon net income divided by the weighted average number of common shares outstanding during the period. In determining the weighted average number of shares outstanding, vested restricted stock units are included. Diluted EPS represents the amount of earnings for the period available to each share of common stock outstanding including common stock that would have been outstanding assuming the issuance of common shares for all dilutive potential common shares outstanding during each reporting period. Diluted EPS is computed based upon net income divided by the weighted average number of common shares outstanding during each period, adjusted for the effect of dilutive potential common shares, such as restricted stock awards and units, calculated using the treasury stock method. |
New Financial Accounting Standards | Adoption of New Financial Accounting Standards FASB ASU 2016-02 On January 1, 2022, the Company adopted ASU No. 2016-02 “Leases (Topic 842)” and subsequent amendments thereto, which requires the Company to recognize most leases on the balance sheet. The Company adopted the standard under a modified retrospective approach as of the date of adoption and elected to apply several of the available practical expedients, including carryover of historical lease determination and lease classification conclusions and accounting for lease and non-lease components in contracts in which the Company is a lessee as a single lease component. Adoption of the leasing standard resulted in the recognition of operating right-of-use assets of $15.8 million, and operating lease liabilities of $16.3 million as of January 1, 2022. These amounts were determined based on the present value of remaining minimum lease payments, discounted using the Company’s incremental borrowing rate as of the date of adoption. There was no material impact to the timing of expense or income recognition in the Company’s unaudited consolidated statements of income. Prior periods were not restated and continue to be presented under legacy GAAP. Disclosures about the Company’s leasing activities are presented in Note 6. FASB ASU 2022-01 In March 2022, the Financial Accounting Standards Board (“FASB”) issued guidance under the of the last-of-layer hedging method in Accounting Standards Codification ("ASC") 815 to expand the current single-layer method to allow multiple layers of a single closed portfolio to be hedged. To reflect the expansion, the last-of-layer method will be renamed the portfolio layer method. The amendments also expand the scope of and provide additional guidance specific to the portfolio layer method for hedge accounting. ASU 2022-01 will become effective for public business entities for fiscal years beginning after December 15, 2022, with early adoption permitted. The adoption of this standard is not expected to have a material effect on the Company’s operating results or financial condition. |
Fair Value Measurements | Fair Value Hierarchy The Company groups its assets and liabilities measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. Valuations within these levels are based upon: Level 1 - Quoted market prices for identical instruments traded in active exchange markets. Level 2 - Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable or can be corroborated by observable market data. Level 3 - Model-based techniques that use at least one significant assumption not observable in the market. These unobservable assumptions reflect the Company’s estimates of assumptions that market participants would use on pricing the asset or liability. Valuation techniques include management judgment and estimation which may be significant. Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. Management monitors the availability of observable market data to assess the appropriate classification of assets and liabilities within the fair value hierarchy. Changes in economic conditions or model-based valuation techniques may require the transfer of financial instruments from one fair value level to another. In such instances, the transfer is reported at the beginning of the reporting period. Management evaluates the significance of transfers between levels based upon the nature of the financial instrument and size of the transfer relative to total assets, total liabilities, or total earnings. The following methods and assumptions were used to estimate the fair value of financial instruments: For cash, cash equivalents and restricted cash, accrued interest receivable and payable, demand deposits and short-term borrowings, the carrying amount was estimated to be fair value. The fair value of accrued interest receivable/payable balances were determined using inputs and fair value measurements commensurate with the asset or liability from which the accrued interest is generated. Fair values for available for sale and held to maturity debt securities, which include primarily debt securities issued by U.S. government sponsored agencies, were based on quoted market prices for similar securities. Fair values for equity securities, which consist of investments in a qualified community reinvestment fund, were based on quoted market prices. Loans were valued using the exit price notion. The fair value was estimated using market quotes for similar assets or the present value of future cash flows, discounted using a market rate for similar products and giving consideration to estimated prepayment risk and credit risk. The fair value of loans was determined utilizing estimates resulting in a Level 3 classification. Impaired loans were measured for impairment based on the present value of expected future cash flows discounted at the loans' effective interest rate, except that as a practical expedient, the Company may measure impairment based on a loan’s observable market price, or the fair value of the collateral (net of estimated costs to sell) if the loan is collateral dependent. The fair value of impaired loans was determined utilizing estimates resulting in a Level 3 classification. It was not practicable to determine the fair value of FHLB stock due to restrictions placed on its transferability. The fair value of servicing rights was determined using a valuation model that utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income and that can be validated against available market data. The fair values of derivatives were based on valuation models using observable market data as of the measurement date. Fair values for fixed-rate time deposits were estimated using discounted cash flow analyses using interest rates offered at each reporting date by the Company for time deposits with similar remaining maturities. For deposits with no contractual maturity, the fair value was assumed to equal the carrying value. The fair value of FHLB advances was estimated based on discounting the future cash flows using the market rate currently offered for similar terms. The fair value of subordinated debentures was based on an indication of value provided by a third-party broker. For senior debt, the fair value was based on an indication of value provided by a third-party broker. |
Derivatives | Any gain or loss on the derivatives, as well as any offsetting loss or gain on the hedged items attributable to the hedged risk are recognized in interest income on loans. |
Leases | The Company includes lease extension options in the lease term if it is reasonably certain the Company will exercise the option, when considering the economic incentive to do so. Leases are classified as operating or finance leases at the lease commencement date. Lease expense for operating leases and short-term leases is recognized on a straight-line basis over the lease term. All of the Company’s leases are classified as operating leases and prior to the adoption of ASU 2016-02 on January 1, 2022, were not recognized on the Company's consolidated statements of financial condition. Upon adoption of the new lease standard on January 1, 2022, the Company recorded operating lease right-of-use assets and operating lease liabilities on the Company's consolidated statements of financial condition. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized at the lease commencement date based on the estimated present value of lease payments over the lease term.The Company uses its incremental borrowing rate at lease commencement to discount lease payments when the rate implicit in the lease is not readily determinable. The Company's incremental borrowing rate was based on the FHLB advance rate based on the lease term and other factors. In addition, the Company has elected to account for any non-lease components in its leases as part of the associated lease component. The Company also has elected to not recognize short-term leases with an original term of 12 months or less on the Company's consolidated statements of financial condition. |
NATURE OF OPERATIONS (Tables)
NATURE OF OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | (Dollars in thousands, except share amounts) Three Months Ended March 31, 2022 2021 Net income $ 22,940 $ 18,411 Weighted average basic common shares outstanding 51,337,488 51,982,731 Add: Dilutive effects of assumed vesting of restricted stock 76,931 115,507 Weighted average diluted common shares outstanding 51,414,419 52,098,238 Income per common share: Basic EPS $ 0.45 $ 0.35 Diluted EPS $ 0.45 $ 0.35 Anti-dilutive shares not included in calculation of diluted earnings per share 20 3,695 |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Debt Securities, Available-for-sale | The following table summarizes the amortized cost and the estimated fair value of available for sale debt securities as of the dates indicated: (Dollars in thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value At March 31, 2022: Government and Government Sponsored Entities: Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") $ 414,904 $ 1,895 $ (10,196) $ 406,603 Residential MBS and CMOs 188,493 477 (8,624) 180,346 Agency bonds 10,275 225 — 10,500 Other asset backed securities ("ABS") 28,028 — (618) 27,410 Total available for sale debt securities $ 641,700 $ 2,597 $ (19,438) $ 624,859 At December 31, 2021: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 407,111 $ 3,281 $ (2,646) $ 407,746 Residential MBS and CMOs 200,775 1,225 (1,867) 200,133 Agency bonds 10,587 244 — 10,831 Other ABS 28,720 37 (150) 28,607 Total available for sale debt securities $ 647,193 $ 4,787 $ (4,663) $ 647,317 The following tables summarize the gross unrealized losses and fair value of available for sale debt securities, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position: March 31, 2022 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Government and Government Sponsored Entities: Commercial MBS and CMOs $ 152,363 $ (6,982) $ 46,724 $ (3,214) $ 199,087 $ (10,196) Residential MBS and CMOs 115,227 (6,427) 19,497 (2,197) 134,724 (8,624) Agency bonds — — — — — — Other ABS 27,411 (618) — — 27,411 (618) Total available for sale debt securities $ 295,001 $ (14,027) $ 66,221 $ (5,411) $ 361,222 $ (19,438) December 31, 2021 Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Government and Government Sponsored Entities: Commercial MBS and CMOs $ 157,031 $ (2,632) $ 10,608 $ (14) $ 167,639 $ (2,646) Residential MBS and CMOs 118,803 (1,864) 247 (3) 119,050 (1,867) Other ABS $ 15,253 $ (150) $ — $ — $ 15,253 $ (150) Total available for sale debt securities $ 291,087 $ (4,646) $ 10,855 $ (17) $ 301,942 $ (4,663) |
Schedule of Held-to-maturity Securities | The following table summarizes the amortized cost and estimated fair value of held to maturity investment securities as of the dates indicated: (Dollars in thousands) Amortized Cost Gross Unrecognized Gains Gross Unrecognized Losses Estimated Fair Value As of March 31, 2022: Government Sponsored Entities: Residential MBS $ 3,731 $ 18 $ (14) $ 3,735 Other investments 67 — — 67 Total held to maturity investment securities $ 3,798 $ 18 $ (14) $ 3,802 As of December 31, 2021: Government Sponsored Entities: Residential MBS $ 3,761 $ 189 $ — $ 3,950 Other investments 68 — — 68 Total held to maturity investment securities $ 3,829 $ 189 $ — $ 4,018 The following table summarizes the gross unrecognized losses and fair value of held to maturity investment securities, aggregated by investment category and length of time that individual securities have been in a continuous unrecognized loss position: Less than 12 Months 12 Months or More Total (Dollars in thousands) Fair Value Unrecognized Losses Fair Value Unrecognized Losses Fair Value Unrecognized Losses As of March 31, 2022: Government Sponsored Entities: Residential MBS $ 1,992 $ (14) $ — $ — $ 1,992 $ (14) |
Schedule of Debt Maturities of Available-for-sale and Held-to-maturity Securities | The following table summarizes the scheduled maturities of available for sale and held to maturity investment securities as of March 31, 2022: March 31, 2022 (Dollars in thousands) Amortized Cost Fair Value Available for sale debt securities Five to ten years $ 10,275 $ 10,500 MBS, CMOs and other ABS 631,425 614,359 Total available for sale debt securities $ 641,700 $ 624,859 Held to maturity investments securities Five to ten years $ 67 $ 67 MBS 3,731 3,735 Total held to maturity debt securities $ 3,798 $ 3,802 |
LOANS (Tables)
LOANS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Loans consist of the following: (Dollars in thousands) March 31, December 31, Permanent mortgages on: Multifamily residential $ 4,232,227 $ 4,210,735 Single family residential 1,916,220 1,881,676 Commercial real estate 194,354 187,097 Construction and land loans 23,517 17,912 Total 6,366,318 6,297,420 Allowance for loan losses (33,035) (35,535) Loans held for investment, net $ 6,333,283 $ 6,261,885 |
Schedule Allowance for Loan Losses | The following table summarizes activity in and the allocation of the allowance for loan losses by portfolio segment: (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land and Construction Total Three months ended March 31, 2022 Allowance for loan losses: Beginning balance allocated to portfolio segments $ 26,043 $ 7,224 $ 2,094 $ 174 $ 35,535 (Reversal of) provision for loan losses (1,892) (427) (212) 31 (2,500) Charge-offs — — — — — Recoveries — — — — — Ending balance allocated to portfolio segments $ 24,151 $ 6,797 $ 1,882 $ 205 $ 33,035 Three months ended March 31, 2021 Allowance for loan losses: Beginning balance allocated to portfolio segments $ 33,259 $ 9,372 $ 3,347 $ 236 $ 46,214 (Reversal of) provision for loan losses (2,421) 442 (476) (45) (2,500) Charge-offs — — — — — Recoveries — 2 — 50 52 Ending balance allocated to portfolio segments $ 30,838 $ 9,816 $ 2,871 $ 241 $ 43,766 The following table summarizes the allocation of the allowance for loan losses by impairment methodology: (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land and Construction Total As of March 31, 2022: Ending allowance balance allocated to: Loans individually evaluated for impairment $ — $ 25 $ — $ — $ 25 Loans collectively evaluated for impairment 24,151 6,772 1,882 205 33,010 Ending balance $ 24,151 $ 6,797 $ 1,882 $ 205 $ 33,035 Loans: Ending balance: individually evaluated for impairment $ 500 $ 5,643 $ — $ — $ 6,143 Ending balance: collectively evaluated for impairment 4,231,727 1,910,577 194,354 23,517 6,360,175 Ending balance $ 4,232,227 $ 1,916,220 $ 194,354 $ 23,517 $ 6,366,318 As of December 31, 2021: Ending allowance balance allocated to: Loans individually evaluated for impairment $ — $ 25 $ — $ — $ 25 Loans collectively evaluated for impairment 26,043 7,199 2,094 174 35,510 Ending balance $ 26,043 $ 7,224 $ 2,094 $ 174 $ 35,535 Loans: Ending balance: individually evaluated for impairment $ 505 $ 5,687 $ — $ — $ 6,192 Ending balance: collectively evaluated for impairment 4,210,230 1,875,989 187,097 17,912 6,291,228 Ending balance $ 4,210,735 $ 1,881,676 $ 187,097 $ 17,912 $ 6,297,420 |
Schedule of Loan Portfolio by Internal Risk Indicators | The following table summarizes the loan portfolio allocated by management’s internal risk ratings at March 31, 2022 and December 31, 2021. (Dollars in thousands) Multifamily Residential Single Family Residential Commercial Real Estate Land, Construction and NM Total As of March 31, 2022: Grade: Pass $ 4,165,085 $ 1,897,046 $ 188,236 $ 22,982 $ 6,273,349 Watch 50,535 16,071 5,150 535 72,291 Special mention 4,610 1,326 968 — 6,904 Substandard 11,997 1,777 — — 13,774 Total $ 4,232,227 $ 1,916,220 $ 194,354 $ 23,517 $ 6,366,318 As of December 31, 2021: Grade: Pass $ 4,129,767 $ 1,856,942 $ 180,950 $ 17,523 $ 6,185,182 Watch 66,062 22,946 6,147 389 95,544 Special mention 4,586 — — — 4,586 Substandard 10,320 1,788 — — 12,108 Total $ 4,210,735 $ 1,881,676 $ 187,097 $ 17,912 $ 6,297,420 |
Schedule or Past Due Loans Receivable | The following table summarizes an aging analysis of the loan portfolio by the time past due at March 31, 2022 and December 31, 2021: (Dollars in thousands) 30 Days 60 Days 90+ Days Non-accrual Current Total As of March 31, 2022: Loans: Multifamily residential $ — $ 362 $ — $ 500 $ 4,231,365 $ 4,232,227 Single family residential 1,170 1,326 — 1,777 1,911,947 1,916,220 Commercial real estate — — — — 194,354 194,354 Land and construction — — — — 23,517 23,517 Total $ 1,170 $ 1,688 $ — $ 2,277 $ 6,361,183 $ 6,366,318 As of December 31, 2021: Loans: Multifamily residential $ — $ — $ — $ 505 $ 4,210,230 $ 4,210,735 Single family residential 271 — — 1,788 1,879,617 1,881,676 Commercial real estate — — — — 187,097 187,097 Land and construction — — — — 17,912 17,912 Total $ 271 $ — $ — $ 2,293 $ 6,294,856 $ 6,297,420 |
Schedule of Impaired Loans Receivables | The following table summarizes information related to impaired loans at March 31, 2022 and December 31, 2021: As of March 31, 2022 As of December 31, 2021 (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance With no related allowance recorded: Multifamily residential $ 500 $ 577 $ — $ 505 $ 582 $ — Single family residential 4,813 5,004 — 4,847 5,033 — 5,313 5,581 — 5,352 5,615 — With an allowance recorded: Single family residential 830 827 25 840 836 25 830 827 25 840 836 25 Total: Multifamily residential 500 577 — 505 582 — Single family residential 5,643 5,831 25 5,687 5,869 25 $ 6,143 $ 6,408 $ 25 $ 6,192 $ 6,451 $ 25 The following table summarizes information related to impaired loans for the three months ended March 31, 2022 and 2021: Three Months Ended March 31, 2022 2021 (Dollars in thousands) Average Recorded Investment Interest Income Cash Basis Interest Average Recorded Investment Interest Income Cash Basis Interest With no related allowance recorded: Multifamily residential $ 503 $ 8 $ 8 $ 1,566 $ 5 $ 5 Single family residential 4,830 43 19 5,790 61 57 5,333 51 27 7,356 66 62 With an allowance recorded: Single family residential 835 6 — 871 7 — 835 6 — 871 7 — Total: Multifamily residential 503 8 8 1,566 5 5 Single family residential 5,665 49 19 6,661 68 57 $ 6,168 $ 57 $ 27 $ 8,227 $ 73 $ 62 |
Schedule of Troubled Debt Restructurings | The following table summarizes the recorded investment related to troubled debt restructurings ("TDRs") at March 31, 2022 and December 31, 2021: (Dollars in thousands) March 31, December 31, Troubled debt restructurings: Single family residential $ 1,607 $ 1,204 During the three months ended March 31, 2022, the Company modified the terms of one loan that qualified as a TDR. The following table provides details of this modification: (Dollars in thousands) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Troubled debt restructurings: Single family residential 1 $ 405 $ 412 |
NONPERFORMING ASSETS (Tables)
NONPERFORMING ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Receivables [Abstract] | |
Schedule of Nonperforming Assets | The Company’s nonperforming assets at March 31, 2022 and December 31, 2021 are indicated below: (Dollars in thousands) March 31, December 31, Non-accrual loans: Multifamily residential $ 500 $ 505 Single family residential 1,777 1,788 Total non-accrual loans 2,277 2,293 Real estate owned — — Total nonperforming assets $ 2,277 $ 2,293 |
MORTGAGE SERVICING RIGHTS (Tabl
MORTGAGE SERVICING RIGHTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Transfers and Servicing [Abstract] | |
Schedule of Mortgage Loans Serviced for Others | The principal balances of these loans are as follows: (Dollars in thousands) March 31, December 31, Mortgage loans serviced for: Federal Home Loan Mortgage Corporation ("Freddie Mac") $ 105,741 $ 127,431 Other financial institutions 57,249 58,298 Total mortgage loans serviced for others $ 162,990 $ 185,729 |
Schedule of Changes in Servicing Assets | Activities for mortgage servicing rights are as follows: Three Months Ended March 31, (Dollars in thousands) 2022 2021 Beginning balance $ 915 $ 1,599 Additions — — Disposals — — Changes in fair value due to changes in assumptions — — Other changes in fair value (104) (171) Ending balance $ 811 $ 1,428 |
LEASES (Tables)
LEASES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Schedule of Supplemental Lease Information | Supplemental lease information as of or for the three months ended March 31, 2022 is as follows: (Dollars in thousands) Balance sheet: Operating lease right-of-use assets included in prepaid expenses and other assets $ 14,940 Operating lease liabilities included in other liabilities and accrued expenses $ 15,337 Income statement: Operating lease costs included in occupancy expense $ 929 Weighted average remaining lease term (years) of operating leases 4.9 Weighted average discount rate of operating leases 1.67 % Cash paid for amounts included in the measurement of operating lease liabilities $ 1,033 |
Schedule of Future Undiscounted Lease Payments | At March 31, 2022, future undiscounted lease payments with initial terms of one year or more are as follows: (Dollars in thousands) April 1 - December 31, 2022 $ 2,919 2023 3,560 2024 2,737 2025 2,311 2026 2,108 Thereafter 2,418 Total undiscounted lease payments 16,053 Less: Imputed interest (716) Net lease liabilities $ 15,337 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Deposits [Abstract] | |
Schedule of Deposits | A summary of deposits at March 31, 2022 and December 31, 2021 is as follows: (Dollars in thousands) March 31, December 31, Money market savings $ 2,443,522 $ 2,294,367 Time deposits 2,209,375 2,335,141 Money market checking 612,201 580,325 Interest-bearing demand 172,242 176,126 Noninterest-bearing demand 163,907 152,284 Total $ 5,601,247 $ 5,538,243 |
Schedule of Certificate Account Maturities | Maturities of the Company’s time deposits at March 31, 2022 are summarized as follows: (Dollars in thousands) April 1 - December 31, 2022 $ 1,787,146 2023 335,529 2024 26,210 2025 9,469 2026 44,225 Thereafter 6,796 Total $ 2,209,375 |
FEDERAL HOME LOAN BANK AND FE_2
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Advances from Federal Home Loan Banks [Abstract] | |
Schedule of FHLB Advances | The following table discloses the Bank’s outstanding advances from the FHLB of San Francisco: Outstanding Balances As of March 31, 2022 (Dollars in thousands) March 31, December 31, Minimum Interest Rate Maximum Interest Rate Weighted Average Rate Maturity Dates Fixed rate long-term 751,647 751,647 0.38 % 7.33 % 1.75 % March 2023 to March 2030 The following table summarizes scheduled principal payments on FHLB advances over the next five years as of March 31, 2022: (Dollars in thousands) April 1 - December 31, 2022 $ — 2023 250,000 2024 300,000 2025 101,500 2026 100,000 Thereafter 147 $ 751,647 |
JUNIOR SUBORDINATED DEFERRABL_2
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Outstanding Trust Securities | The following table is a summary of the outstanding Trust Securities and Notes at March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 Date Maturity Rate Index Issuer Amount Rate Amount Rate Issued Date (Quarterly Reset) (Dollars in thousands) Luther Burbank Statutory Trust I $ 41,238 2.21 % $ 41,238 1.58 % 3/1/2006 6/15/2036 3 month LIBOR + 1.38% Luther Burbank Statutory Trust II $ 20,619 2.45 % $ 20,619 1.82 % 3/1/2007 6/15/2037 3 month LIBOR + 1.62% |
SENIOR DEBT (Tables)
SENIOR DEBT (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | The following table summarizes information on these notes as of March 31, 2022 and December 31, 2021: March 31, 2022 December 31, 2021 (Dollars in thousands) Principal Unamortized Debt Issuance Costs Principal Unamortized Debt Issuance Costs Maturity Date Fixed Interest Rate Senior Unsecured Term Notes $ 95,000 $ 307 $ 95,000 $ 338 9/30/2024 6.50 % |
DERIVATIVES AND HEDGING ACTIV_2
DERIVATIVES AND HEDGING ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Interest Rate Swap on the Consolidated Statements of Income | The following table presents the effect of the Company’s interest rate swaps on the unaudited consolidated statements of income for the three months ended March 31, 2022 and 2021: For the Three Months Ended March 31, (Dollars in thousands) 2022 2021 Derivative - interest rate swaps: Interest loss $ (65) $ (3,416) Hedged items - loans: Interest loss (13) (15) Net decrease in interest income $ (78) $ (3,431) |
Schedule of Interest Rate Swap on Consolidated Balance Sheet | The following table presents the fair value of the Company’s interest rate swaps, as well as their classification in the consolidated statements of financial condition as of March 31, 2022 and December 31, 2021: Fair Values of Derivative Instruments Asset Derivatives Liability Derivatives (Dollars in thousands) Notional Amount Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments: As of March 31, 2022: Interest Rate Swaps $ 750,000 Prepaid Expenses and Other Assets $ 10,874 Other Liabilities and Accrued Expenses $ — As of December 31, 2021: Interest Rate Swaps $ 650,000 Prepaid Expenses and Other Assets $ 3,108 Other Liabilities and Accrued Expenses $ — |
Schedule of Amounts Recorded on the Balance Sheet Related to Cumulative Adjustments on Fair Value Hedges | As of March 31, 2022 and December 31, 2021, the following amounts were recorded in the consolidated statements of financial condition related to cumulative basis adjustments for its fair value hedges: Line Item in the Consolidated Statements of Financial Condition in Which the Hedged Items are Included Carrying Amount of the Hedged Assets Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets (Dollars in thousands) As of March 31, 2022: Loans receivable, net (1) $ 739,111 $ (10,889) As of December 31, 2021: Loans receivable, net (1) $ 646,890 $ (3,110) |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Restricted Stock Activity | The following table summarizes share information about RSAs and RSUs: Three Months Ended March 31, 2022 2021 Number of Shares Weighted Average Grant Date Fair Value Number of Shares Weighted Average Grant Date Fair Value Beginning of the period balance 581,189 $ 10.56 605,916 $ 10.93 Shares granted 206,675 13.81 283,078 10.07 Shares settled (253,706) 10.45 (265,655) 11.02 Shares forfeited (4,100) 11.93 (52,798) 10.26 End of the period balance 530,058 $ 11.87 570,541 $ 10.52 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Assets and Liabilities | The carrying and estimated fair values of the Company’s financial instruments were as follows: Fair Level Measurements Using (Dollars in thousands) Carrying Amount Fair Value Level 1 Level 2 Level 3 As of March 31, 2022: Financial assets: Cash and cash equivalents $ 147,963 $ 147,963 $ 147,963 $ — $ — Debt securities: Available for sale 624,859 624,859 — 624,859 — Held to maturity 3,798 3,802 — 3,802 — Equity securities 11,116 11,116 — 11,116 — Loans receivable, net 6,333,283 6,354,197 — — 6,354,197 Accrued interest receivable 18,014 18,014 5 933 17,076 FHLB stock 22,563 N/A N/A N/A N/A Interest rate swaps 10,874 10,874 — 10,874 — Financial liabilities: Deposits $ 5,601,247 $ 5,583,142 $ 3,106,872 $ 2,476,270 $ — FHLB advances 751,647 733,659 — 733,659 — Junior subordinated deferrable interest debentures 61,857 59,519 — 59,519 — Senior debt 94,693 96,818 — 96,818 — Accrued interest payable 153 153 — 153 — As of December 31, 2021: Financial assets: Cash and cash equivalents $ 138,413 $ 138,413 $ 138,413 $ — $ — Debt securities: Available for sale 647,317 647,317 — 647,317 — Held to maturity 3,829 4,018 — 4,018 — Equity securities 11,693 11,693 — 11,693 — Loans receivable, net 6,261,885 6,297,548 — — 6,297,548 Accrued interest receivable 17,761 17,761 1 927 16,833 FHLB stock 23,411 N/A N/A N/A N/A Interest rate swaps 3,108 3,108 — 3,108 — Financial liabilities: Deposits $ 5,538,243 $ 5,541,417 $ 2,918,102 $ 2,623,315 $ — FHLB advances 751,647 755,981 — 755,981 — Junior subordinated deferrable interest debentures 61,857 61,545 — 61,545 — Senior debt 94,662 103,361 — 103,361 — Accrued interest payable 118 118 — 118 — |
Schedule of Fair Value of Assets Measured on a Recurring Basis | The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis: (Dollars in thousands) Fair Value Level 1 Level 2 Level 3 As of March 31, 2022: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 406,603 $ — $ 406,603 $ — Residential MBS and CMOs 180,346 — 180,346 — Agency bonds 10,500 — 10,500 — Other ABS 27,410 — 27,410 — Total available for sale debt securities $ 624,859 $ — $ 624,859 $ — Equity securities $ 11,116 $ — $ 11,116 $ — Mortgage servicing rights 811 — — 811 Interest rate swaps 10,874 — 10,874 — As of December 31, 2021: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 407,746 $ — $ 407,746 $ — Residential MBS and CMOs 200,133 — 200,133 — Agency bonds 10,831 — 10,831 — Other ABS 28,607 — 28,607 — Total available for sale debt securities $ 647,317 $ — $ 647,317 $ — Equity securities $ 11,693 $ — $ 11,693 $ — Mortgage servicing rights 915 — — 915 Interest rate swaps 3,108 — 3,108 — |
Schedule of Fair Value of Liabilities Measured on a Recurring Basis | The Company is required or permitted to record the following assets and liabilities at fair value on a recurring basis: (Dollars in thousands) Fair Value Level 1 Level 2 Level 3 As of March 31, 2022: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 406,603 $ — $ 406,603 $ — Residential MBS and CMOs 180,346 — 180,346 — Agency bonds 10,500 — 10,500 — Other ABS 27,410 — 27,410 — Total available for sale debt securities $ 624,859 $ — $ 624,859 $ — Equity securities $ 11,116 $ — $ 11,116 $ — Mortgage servicing rights 811 — — 811 Interest rate swaps 10,874 — 10,874 — As of December 31, 2021: Financial Assets: Available for sale debt securities: Government and Government Sponsored Entities: Commercial MBS and CMOs $ 407,746 $ — $ 407,746 $ — Residential MBS and CMOs 200,133 — 200,133 — Agency bonds 10,831 — 10,831 — Other ABS 28,607 — 28,607 — Total available for sale debt securities $ 647,317 $ — $ 647,317 $ — Equity securities $ 11,693 $ — $ 11,693 $ — Mortgage servicing rights 915 — — 915 Interest rate swaps 3,108 — 3,108 — |
LOAN SALE AND SECURITIZATION _2
LOAN SALE AND SECURITIZATION ACTIVITIES (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Transfers and Servicing [Abstract] | |
Schedule of Cash Flows From Loan Sale Activities | The following table provides cash flows associated with the Company's loan sale activities: Three Months Ended March 31, (Dollars in thousands) 2022 2021 Servicing fees 97 171 |
Schedule of Loans Transfered Through Sale or Securitization | The following table provides information about the loans transferred through sales or securitization and not recorded in the consolidated statements of financial condition, for which the Company's continuing involvement includes sub-servicing or servicing responsibilities and/or reimbursement obligations: (Dollars in thousands) Single Family Residential Multifamily Residential As of March 31, 2022: Principal balance of loans $ 11,882 $ 151,108 Loans 90+ days past due — — Charge-offs, net — — As of December 31, 2021: Principal balance of loans $ 12,243 $ 173,486 Loans 90+ days past due — — Charge-offs, net — — |
NATURE OF OPERATIONS - Narrativ
NATURE OF OPERATIONS - Narrative (Details) $ in Thousands | Mar. 31, 2022USD ($)branch | Jan. 01, 2022USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets included in prepaid expenses and other assets | $ 14,940 | |
Operating lease liabilities included in other liabilities and accrued expenses | $ 15,337 | |
Cumulative Effect, Period of Adoption, Adjustment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease right-of-use assets included in prepaid expenses and other assets | $ 15,800 | |
Operating lease liabilities included in other liabilities and accrued expenses | $ 16,300 | |
Sonoma, Marin, Santa Clara, and Los Angeles Counties | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of full service branches | branch | 10 | |
King County, Washington | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Number of full service branches | branch | 1 |
NATURE OF OPERATIONS - Earnings
NATURE OF OPERATIONS - Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Accounting Policies [Abstract] | ||
Net income | $ 22,940 | $ 18,411 |
Weighted average common shares outstanding - basic (in shares) | 51,337,488 | 51,982,731 |
Add: Dilutive effects of assumed vesting of restricted stock (in shares) | 76,931 | 115,507 |
Weighted average common shares outstanding - diluted (in shares) | 51,414,419 | 52,098,238 |
Basic earnings per common share (in usd per share) | $ 0.45 | $ 0.35 |
Diluted earnings per common share (in usd per share) | $ 0.45 | $ 0.35 |
Anti-dilutive shares not included in calculation of diluted earnings per share (in shares) | 20 | 3,695 |
INVESTMENT SECURITIES - Availab
INVESTMENT SECURITIES - Available-for-sale Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | $ 641,700 | $ 647,193 |
Gross Unrealized Gains | 2,597 | 4,787 |
Gross Unrealized Losses | (19,438) | (4,663) |
Estimated Fair Value | 624,859 | 647,317 |
Fair Value | ||
Less than 12 Months | 295,001 | 291,087 |
12 Months or More | 66,221 | 10,855 |
Total | 361,222 | 301,942 |
Unrealized Losses | ||
Less than 12 Months | (14,027) | (4,646) |
12 Months or More | (5,411) | (17) |
Total | (19,438) | (4,663) |
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 414,904 | 407,111 |
Gross Unrealized Gains | 1,895 | 3,281 |
Gross Unrealized Losses | (10,196) | (2,646) |
Estimated Fair Value | 406,603 | 407,746 |
Fair Value | ||
Less than 12 Months | 152,363 | 157,031 |
12 Months or More | 46,724 | 10,608 |
Total | 199,087 | 167,639 |
Unrealized Losses | ||
Less than 12 Months | (6,982) | (2,632) |
12 Months or More | (3,214) | (14) |
Total | (10,196) | (2,646) |
Residential MBS and CMOs | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 188,493 | 200,775 |
Gross Unrealized Gains | 477 | 1,225 |
Gross Unrealized Losses | (8,624) | (1,867) |
Estimated Fair Value | 180,346 | 200,133 |
Fair Value | ||
Less than 12 Months | 115,227 | 118,803 |
12 Months or More | 19,497 | 247 |
Total | 134,724 | 119,050 |
Unrealized Losses | ||
Less than 12 Months | (6,427) | (1,864) |
12 Months or More | (2,197) | (3) |
Total | (8,624) | (1,867) |
Agency bonds | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 10,275 | 10,587 |
Gross Unrealized Gains | 225 | 244 |
Gross Unrealized Losses | 0 | 0 |
Estimated Fair Value | 10,500 | 10,831 |
Fair Value | ||
Less than 12 Months | 0 | |
12 Months or More | 0 | |
Total | 0 | |
Unrealized Losses | ||
Less than 12 Months | 0 | |
12 Months or More | 0 | |
Total | 0 | |
Other ABS | ||
Debt Securities, Available-for-sale [Line Items] | ||
Amortized Cost | 28,028 | 28,720 |
Gross Unrealized Gains | 0 | 37 |
Gross Unrealized Losses | (618) | (150) |
Estimated Fair Value | 27,410 | 28,607 |
Fair Value | ||
Less than 12 Months | 27,411 | 15,253 |
12 Months or More | 0 | 0 |
Total | 27,411 | 15,253 |
Unrealized Losses | ||
Less than 12 Months | (618) | (150) |
12 Months or More | 0 | 0 |
Total | $ (618) | $ (150) |
INVESTMENT SECURITIES - Narrati
INVESTMENT SECURITIES - Narrative (Details) | 3 Months Ended | |||
Mar. 31, 2022USD ($)security | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($)security | Dec. 31, 2020USD ($) | |
Debt Securities, Available-for-sale [Line Items] | ||||
Cumulative effect of change in accounting principal | $ | $ 668,000,000 | $ 623,969,000 | $ 669,133,000 | $ 613,691,000 |
Debt securities, available-for-sale, realized gain | $ | 0 | 0 | ||
Debt securities, available-for-sale, realized loss | $ | 0 | 0 | ||
Equity securities, at fair value | $ | $ 11,116,000 | $ 11,693,000 | ||
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Debt securities, available-for-sale, number of positions | 57 | 54 | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 29 | 20 | ||
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, number of positions | 5 | 2 | ||
Residential MBS | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Debt securities, available-for-sale, number of positions | 86 | 88 | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 27 | 14 | ||
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, number of positions | 5 | 4 | ||
Held-to-maturity securities, number of positions | 7 | |||
Held-to-maturity securities, unrealized loss position, number of positions | 5 | |||
Held-to-maturity Securities, Unrealized Loss Position 12 Months or More, Number of Positions | 0 | |||
Other ABS | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Debt securities, available-for-sale, number of positions | 3 | 3 | ||
Debt securities, available-for-sale, unrealized loss position, number of positions | 3 | 2 | ||
Debt securities, available-for-sale, continuous unrealized loss position, 12 months or longer, number of positions | 0 | 0 | ||
CRA Qualified Investment Fund | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Equity securities, at fair value | $ | $ 11,100,000 | $ 11,700,000 | ||
Equity Securities, FV-NI, Realized Gain (Loss) | $ | (577,000) | (211,000) | ||
Accumulated Other Comprehensive (Loss) Income (Net of Taxes) Available for Sale Securities | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cumulative effect of change in accounting principal | $ | (11,958,000) | 4,031,000 | 88,000 | 6,737,000 |
Unrealized gain on available-for-sale investment securities tax liability | $ | (4,900,000) | 36,000 | ||
Retained Earnings | ||||
Debt Securities, Available-for-sale [Line Items] | ||||
Cumulative effect of change in accounting principal | $ | $ 278,856,000 | $ 208,236,000 | $ 262,141,000 | $ 192,834,000 |
INVESTMENT SECURITIES - Held-to
INVESTMENT SECURITIES - Held-to-maturity Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Five to ten years | $ 10,275 | |
Amortized Cost | 641,700 | $ 647,193 |
Fair Value | ||
Five to ten years | 10,500 | |
Fair Value | 624,859 | 647,317 |
MBS, CMOs and other ABS | ||
Amortized Cost | ||
MBS, CMOs and other ABS | 631,425 | |
Fair Value | ||
MBS, CMOs and other ABS | 614,359 | |
Residential MBS and CMOs | ||
Amortized Cost | ||
Amortized Cost | 188,493 | 200,775 |
Fair Value | ||
Fair Value | $ 180,346 | $ 200,133 |
INVESTMENT SECURITIES - Continu
INVESTMENT SECURITIES - Continuous Unrealized Loss Positions (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | $ 3,798 | $ 3,829 |
Gross Unrecognized Gains | 18 | 189 |
Gross Unrecognized Losses | (14) | 0 |
Estimated Fair Value | 3,802 | 4,018 |
Residential MBS | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 3,731 | 3,761 |
Gross Unrecognized Gains | 18 | 189 |
Gross Unrecognized Losses | (14) | 0 |
Estimated Fair Value | 3,735 | 3,950 |
Less than 12 Months | 1,992 | |
Less than 12 Months | (14) | |
12 Months or More | 0 | |
12 Months or More | 0 | |
Total | 1,992 | |
Total | (14) | |
Other investments | ||
Schedule of Held-to-maturity Securities [Line Items] | ||
Amortized Cost | 67 | 68 |
Gross Unrecognized Gains | 0 | 0 |
Gross Unrecognized Losses | 0 | 0 |
Estimated Fair Value | $ 67 | $ 68 |
INVESTMENT SECURITIES - Schedul
INVESTMENT SECURITIES - Schedule of Investment Securities Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Amortized Cost | ||
Five to ten years | $ 67 | |
Amortized Cost | 3,798 | $ 3,829 |
Fair Value | ||
Five to ten years | 67 | |
Estimated Fair Value | 3,802 | 4,018 |
MBS | ||
Amortized Cost | ||
MBS | 3,731 | |
Fair Value | ||
MBS | 3,735 | |
Residential MBS and CMOs | ||
Amortized Cost | ||
Amortized Cost | 3,731 | 3,761 |
Fair Value | ||
Estimated Fair Value | 3,735 | $ 3,950 |
Fair Value | ||
Less than 12 Months | 1,992 | |
12 Months or More | 0 | |
Total | 1,992 | |
Unrecognized Losses | ||
Less than 12 Months | (14) | |
12 Months or More | 0 | |
Total | $ (14) |
LOANS - Loans Receivable (Detai
LOANS - Loans Receivable (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | $ 6,366,318 | $ 6,297,420 | ||
Allowance for loan losses | (33,035) | (35,535) | $ (43,766) | $ (46,214) |
Loans held for investment, net | 6,333,283 | 6,261,885 | ||
Multifamily residential | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 4,232,227 | 4,210,735 | ||
Allowance for loan losses | (24,151) | (26,043) | (30,838) | (33,259) |
Multifamily residential | Permanent mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 4,232,227 | 4,210,735 | ||
Single family residential | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 1,916,220 | 1,881,676 | ||
Allowance for loan losses | (6,797) | (7,224) | (9,816) | (9,372) |
Single family residential | Permanent mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 1,916,220 | 1,881,676 | ||
Commercial real estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 194,354 | 187,097 | ||
Allowance for loan losses | (1,882) | (2,094) | (2,871) | (3,347) |
Commercial real estate | Permanent mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 194,354 | 187,097 | ||
Construction and land loans | Permanent mortgages | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 23,517 | 17,912 | ||
Land and Construction | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loans held for investment, gross | 23,517 | 17,912 | ||
Allowance for loan losses | $ (205) | $ (174) | $ (241) | $ (236) |
LOANS - Allowance for Loan Loss
LOANS - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance allocated to portfolio segments | $ 35,535 | $ 46,214 | |
Reversal of provision for loan losses | (2,500) | (2,500) | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 52 | |
Ending balance allocated to portfolio segments | 33,035 | 43,766 | |
Ending allowance balance allocated to: | |||
Loans individually evaluated for impairment | 25 | $ 25 | |
Loans collectively evaluated for impairment | 33,010 | 35,510 | |
Ending balance | 33,035 | 43,766 | 35,535 |
Loans: | |||
Ending balance: individually evaluated for impairment | 6,143 | 6,192 | |
Ending balance: collectively evaluated for impairment | 6,360,175 | 6,291,228 | |
Ending balance | 6,366,318 | 6,297,420 | |
Multifamily residential | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance allocated to portfolio segments | 26,043 | 33,259 | |
Reversal of provision for loan losses | (1,892) | (2,421) | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Ending balance allocated to portfolio segments | 24,151 | 30,838 | |
Ending allowance balance allocated to: | |||
Loans individually evaluated for impairment | 0 | 0 | |
Loans collectively evaluated for impairment | 24,151 | 26,043 | |
Ending balance | 24,151 | 30,838 | 26,043 |
Loans: | |||
Ending balance: individually evaluated for impairment | 500 | 505 | |
Ending balance: collectively evaluated for impairment | 4,231,727 | 4,210,230 | |
Ending balance | 4,232,227 | 4,210,735 | |
Single family residential | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance allocated to portfolio segments | 7,224 | 9,372 | |
Reversal of provision for loan losses | (427) | 442 | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 2 | |
Ending balance allocated to portfolio segments | 6,797 | 9,816 | |
Ending allowance balance allocated to: | |||
Loans individually evaluated for impairment | 25 | 25 | |
Loans collectively evaluated for impairment | 6,772 | 7,199 | |
Ending balance | 6,797 | 9,816 | 7,224 |
Loans: | |||
Ending balance: individually evaluated for impairment | 5,643 | 5,687 | |
Ending balance: collectively evaluated for impairment | 1,910,577 | 1,875,989 | |
Ending balance | 1,916,220 | 1,881,676 | |
Commercial real estate | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance allocated to portfolio segments | 2,094 | 3,347 | |
Reversal of provision for loan losses | (212) | (476) | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 0 | |
Ending balance allocated to portfolio segments | 1,882 | 2,871 | |
Ending allowance balance allocated to: | |||
Loans individually evaluated for impairment | 0 | 0 | |
Loans collectively evaluated for impairment | 1,882 | 2,094 | |
Ending balance | 1,882 | 2,871 | 2,094 |
Loans: | |||
Ending balance: individually evaluated for impairment | 0 | 0 | |
Ending balance: collectively evaluated for impairment | 194,354 | 187,097 | |
Ending balance | 194,354 | 187,097 | |
Land and Construction | |||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance allocated to portfolio segments | 174 | 236 | |
Reversal of provision for loan losses | 31 | (45) | |
Charge-offs | 0 | 0 | |
Recoveries | 0 | 50 | |
Ending balance allocated to portfolio segments | 205 | 241 | |
Ending allowance balance allocated to: | |||
Loans individually evaluated for impairment | 0 | 0 | |
Loans collectively evaluated for impairment | 205 | 174 | |
Ending balance | 205 | $ 241 | 174 |
Loans: | |||
Ending balance: individually evaluated for impairment | 0 | 0 | |
Ending balance: collectively evaluated for impairment | 23,517 | 17,912 | |
Ending balance | $ 23,517 | $ 17,912 |
LOANS - Portfolio Allocated by
LOANS - Portfolio Allocated by Internal Risk Ratings (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | $ 6,366,318 | $ 6,297,420 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 6,273,349 | 6,185,182 |
Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 72,291 | 95,544 |
Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 6,904 | 4,586 |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 13,774 | 12,108 |
Multifamily residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 4,232,227 | 4,210,735 |
Multifamily residential | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 4,165,085 | 4,129,767 |
Multifamily residential | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 50,535 | 66,062 |
Multifamily residential | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 4,610 | 4,586 |
Multifamily residential | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 11,997 | 10,320 |
Single family residential | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 1,916,220 | 1,881,676 |
Single family residential | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 1,897,046 | 1,856,942 |
Single family residential | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 16,071 | 22,946 |
Single family residential | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 1,326 | 0 |
Single family residential | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 1,777 | 1,788 |
Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 194,354 | 187,097 |
Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 188,236 | 180,950 |
Commercial real estate | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 5,150 | 6,147 |
Commercial real estate | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 968 | 0 |
Commercial real estate | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Land and Construction | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 23,517 | 17,912 |
Land and Construction | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 22,982 | 17,523 |
Land and Construction | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 535 | 389 |
Land and Construction | Special mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Land and Construction | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans held for investment, gross | $ 0 | $ 0 |
LOANS - Aging Analysis (Details
LOANS - Aging Analysis (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Past Due [Line Items] | ||
Non-accrual | $ 2,277 | $ 2,293 |
Loans held for investment, gross | 6,366,318 | 6,297,420 |
30 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 1,170 | 271 |
60 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 1,688 | 0 |
90+ Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 6,361,183 | 6,294,856 |
Multifamily residential | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual | 500 | 505 |
Loans held for investment, gross | 4,232,227 | 4,210,735 |
Multifamily residential | 30 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Multifamily residential | 60 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 362 | 0 |
Multifamily residential | 90+ Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Multifamily residential | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 4,231,365 | 4,210,230 |
Single family residential | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual | 1,777 | 1,788 |
Loans held for investment, gross | 1,916,220 | 1,881,676 |
Single family residential | 30 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 1,170 | 271 |
Single family residential | 60 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 1,326 | 0 |
Single family residential | 90+ Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Single family residential | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 1,911,947 | 1,879,617 |
Commercial real estate | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual | 0 | 0 |
Loans held for investment, gross | 194,354 | 187,097 |
Commercial real estate | 30 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Commercial real estate | 60 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Commercial real estate | 90+ Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Commercial real estate | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 194,354 | 187,097 |
Land and Construction | ||
Financing Receivable, Past Due [Line Items] | ||
Non-accrual | 0 | 0 |
Loans held for investment, gross | 23,517 | 17,912 |
Land and Construction | 30 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Land and Construction | 60 Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Land and Construction | 90+ Days | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | 0 | 0 |
Land and Construction | Current | ||
Financing Receivable, Past Due [Line Items] | ||
Loans held for investment, gross | $ 23,517 | $ 17,912 |
LOANS - Impaired Loans (Details
LOANS - Impaired Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Recorded Investment | |||
With no related allowance recorded | $ 5,313 | $ 5,352 | |
With an allowance recorded | 830 | 840 | |
Total | 6,143 | 6,192 | |
Unpaid Principal Balance | |||
With no related allowance recorded | 5,581 | 5,615 | |
With an allowance recorded | 827 | 836 | |
Total | 6,408 | 6,451 | |
Related Allowance | 25 | 25 | |
Average Recorded Investment | |||
With no related allowance recorded | 5,333 | $ 7,356 | |
With an allowance recorded | 835 | 871 | |
Total | 6,168 | 8,227 | |
Interest Income | |||
With no related allowance recorded | 51 | 66 | |
With an allowance recorded | 6 | 7 | |
Total | 57 | 73 | |
Cash Basis Interest | |||
With no related allowance recorded | 27 | 62 | |
With an allowance recorded | 0 | 0 | |
Total | 27 | 62 | |
Multifamily residential | |||
Recorded Investment | |||
With no related allowance recorded | 500 | 505 | |
Total | 500 | 505 | |
Unpaid Principal Balance | |||
With no related allowance recorded | 577 | 582 | |
Total | 577 | 582 | |
Related Allowance | 0 | 0 | |
Average Recorded Investment | |||
With no related allowance recorded | 503 | 1,566 | |
Total | 503 | 1,566 | |
Interest Income | |||
With no related allowance recorded | 8 | 5 | |
Total | 8 | 5 | |
Cash Basis Interest | |||
With no related allowance recorded | 8 | 5 | |
Total | 8 | 5 | |
Single family residential | |||
Recorded Investment | |||
With no related allowance recorded | 4,813 | 4,847 | |
With an allowance recorded | 830 | 840 | |
Total | 5,643 | 5,687 | |
Unpaid Principal Balance | |||
With no related allowance recorded | 5,004 | 5,033 | |
With an allowance recorded | 827 | 836 | |
Total | 5,831 | 5,869 | |
Related Allowance | 25 | $ 25 | |
Average Recorded Investment | |||
With no related allowance recorded | 4,830 | 5,790 | |
With an allowance recorded | 835 | 871 | |
Total | 5,665 | 6,661 | |
Interest Income | |||
With no related allowance recorded | 43 | 61 | |
With an allowance recorded | 6 | 7 | |
Total | 49 | 68 | |
Cash Basis Interest | |||
With no related allowance recorded | 19 | 57 | |
With an allowance recorded | 0 | 0 | |
Total | $ 19 | $ 57 |
LOANS - Troubled Debt Restructu
LOANS - Troubled Debt Restructurings (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)loan | Mar. 31, 2021USD ($)loan | Dec. 31, 2021USD ($) | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Number of Contracts | loan | 1 | 0 | |
Modifications, suspension of loan payments, term | 6 months | ||
Allowance for credit loss, increase from troubled debt restructuring | $ 0 | ||
Impaired, troubled debt restructuring, write-down | $ 0 | ||
Subsequent default, number of loans | loan | 0 | 0 | |
Single family residential | |||
Financing Receivable, Troubled Debt Restructuring [Line Items] | |||
Recorded investment | $ 1,607,000 | $ 1,204,000 | |
Related allowance | $ 25,000 | $ 25,000 | |
Number of Contracts | loan | 1 | ||
Pre-Modification Outstanding Recorded Investment | $ 405,000 | ||
Post-Modification Outstanding Recorded Investment | $ 412,000 |
NONPERFORMING ASSETS (Details)
NONPERFORMING ASSETS (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Financing Receivable, Past Due [Line Items] | |||
Total non-accrual loans | $ 2,277 | $ 2,293 | |
Real estate owned | 0 | 0 | |
Total nonperforming assets | 2,277 | 2,293 | |
Interest income recognized on non-accrual loans | 27 | $ 62 | |
Contractual interest not accrued during the quarter | 7 | $ 16 | |
Multifamily residential | |||
Financing Receivable, Past Due [Line Items] | |||
Total non-accrual loans | 500 | 505 | |
Single family residential | |||
Financing Receivable, Past Due [Line Items] | |||
Total non-accrual loans | $ 1,777 | $ 1,788 |
MORTGAGE SERVICING RIGHTS - Mor
MORTGAGE SERVICING RIGHTS - Mortgage Loans Serviced for Others (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | $ 162,990 | $ 185,729 |
Federal Home Loan Mortgage Corporation ("Freddie Mac") | ||
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | 105,741 | 127,431 |
Other financial institutions | ||
Schedule of Loans Serviced for Others [Line Items] | ||
Total mortgage loans serviced for others | $ 57,249 | $ 58,298 |
MORTGAGE SERVICING RIGHTS - Nar
MORTGAGE SERVICING RIGHTS - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Custodial account balances maintained in connection with serviced loans | $ 1.3 | $ 5 |
Discount rate used to calculate fair value of MSRs | 10.00% | 10.00% |
Default rate used to calculate fair value of MSRs | 5.00% | 5.00% |
Minimum | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Prepayment speed rate used to calculate fair value of MSRs | 5.60% | 7.60% |
Maximum | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Prepayment speed rate used to calculate fair value of MSRs | 48.40% | 48.80% |
Weighted Average | ||
Assumption for Fair Value as of Balance Sheet Date of Assets or Liabilities that relate to Transferor's Continuing Involvement [Line Items] | ||
Prepayment speed rate used to calculate fair value of MSRs | 27.70% | 29.20% |
MORTGAGE SERVICING RIGHTS - M_2
MORTGAGE SERVICING RIGHTS - Mortgage Servicing Rights Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Beginning balance | $ 915 | $ 1,599 |
Additions | 0 | 0 |
Disposals | 0 | 0 |
Changes in fair value due to changes in assumptions | 0 | 0 |
Other changes in fair value | (104) | (171) |
Ending balance | $ 811 | $ 1,428 |
LEASES (Details)
LEASES (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Leases [Abstract] | |
Renewal term | 5 years |
Operating lease right-of-use assets included in prepaid expenses and other assets | $ 14,940 |
Operating lease liabilities included in other liabilities and accrued expenses | 15,337 |
Operating lease costs included in occupancy expense | $ 929 |
Weighted average remaining lease term (years) of operating leases | 4 years 10 months 24 days |
Weighted average discount rate of operating leases | 1.67% |
Cash paid for amounts included in the measurement of operating lease liabilities | $ 1,033 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
April 1 - December 31, 2022 | 2,919 |
2023 | 3,560 |
2024 | 2,737 |
2025 | 2,311 |
2026 | 2,108 |
Thereafter | 2,418 |
Total undiscounted lease payments | 16,053 |
Less: Imputed interest | (716) |
Net lease liabilities | $ 15,337 |
DEPOSITS - Deposits (Details)
DEPOSITS - Deposits (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Deposits, by Type [Abstract] | ||
Time deposits | $ 2,209,375 | $ 2,335,141 |
Money market savings | 2,443,522 | 2,294,367 |
Interest-bearing demand | 172,242 | 176,126 |
Money market checking | 612,201 | 580,325 |
Noninterest-bearing demand | 163,907 | 152,284 |
Deposits | $ 5,601,247 | $ 5,538,243 |
DEPOSITS - Narrative (Details)
DEPOSITS - Narrative (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Deposits [Abstract] | ||
Certificates of deposit that meet or exceed FDIC insurance limit | $ 961.8 | $ 1,100 |
Brokered deposits | $ 76 | $ 25.8 |
DEPOSITS - Maturities (Details)
DEPOSITS - Maturities (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Maturities of Time Deposits, Twelve months ending March 31, | |
April 1 - December 31, 2022 | $ 1,787,146 |
2023 | 335,529 |
2024 | 26,210 |
2025 | 9,469 |
2026 | 44,225 |
Thereafter | 6,796 |
Time Deposits | $ 2,209,375 |
FEDERAL HOME LOAN BANK AND FE_3
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES - Narrative (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Short-term Debt [Line Items] | |||
FHLB advances, maximum percentage of assets | 40.00% | ||
Loans held for investment, gross | $ 6,366,318,000 | $ 6,297,420,000 | |
Borrowing capacity based on pledged loans to the FRB and FHLB | 1,000,000,000 | 1,200,000,000 | |
Loans available to be pledged as collateral | 2,700,000,000 | 2,500,000,000 | |
Maximum short-term debt outstanding during period | 135,300,000 | $ 203,600,000 | |
Average short-term debt outstanding during period | $ 21,700,000 | ||
Weighted average interest rate | 0.34% | ||
FHLB Advances | |||
Short-term Debt [Line Items] | |||
Letters of credit pledged as collateral | $ 62,600,000 | 62,600,000 | |
FHLB Advances | Asset Pledged as Collateral | |||
Short-term Debt [Line Items] | |||
Loans held for investment, gross | 2,300,000,000 | 2,400,000,000 | |
FRB Advances | |||
Short-term Debt [Line Items] | |||
Borrowings outstanding | 0 | 0 | |
FRB Advances | Asset Pledged as Collateral | |||
Short-term Debt [Line Items] | |||
Loans held for investment, gross | $ 570,900,000 | $ 583,000,000 |
FEDERAL HOME LOAN BANK AND FE_4
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES - FHLB Advances (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Outstanding Balances | $ 751,647 | $ 751,647 |
FHLB of San Francisco | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Outstanding Balances | 751,647 | |
FHLB of San Francisco | Fixed rate long-term | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Outstanding Balances | $ 751,647 | $ 751,647 |
FHLB of San Francisco | Fixed rate long-term | Minimum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest rate | 0.38% | |
FHLB of San Francisco | Fixed rate long-term | Maximum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest rate | 7.33% | |
FHLB of San Francisco | Fixed rate long-term | Weighted Average | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Interest rate | 1.75% |
FEDERAL HOME LOAN BANK AND FE_5
FEDERAL HOME LOAN BANK AND FEDERAL RESERVE BANK ADVANCES - Schedule of Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | ||
Outstanding advances from FHLB | $ 751,647 | $ 751,647 |
FHLB of San Francisco | ||
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | ||
April 1 - December 31, 2022 | 0 | |
2023 | 250,000 | |
2024 | 300,000 | |
2025 | 101,500 | |
2026 | 100,000 | |
Thereafter | 147 | |
Outstanding advances from FHLB | $ 751,647 |
JUNIOR SUBORDINATED DEFERRABL_3
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES - Narrative (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($)trust | |
Investment Holdings [Line Items] | |
Number of wholly-owned trust companies | trust | 2 |
Trusts | |
Investment Holdings [Line Items] | |
Investment in common securities | $ | $ 1.9 |
Trust Preferred Securities Subject to Mandatory Redemption | Trusts | |
Investment Holdings [Line Items] | |
Interest deferment period (not exceeding) | 5 years |
JUNIOR SUBORDINATED DEFERRABL_4
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES - Schedule of Trusts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||
Amount | $ 61,857 | $ 61,857 |
Trust Preferred Securities Subject to Mandatory Redemption | Luther Burbank Statutory Trust I | Trusts | ||
Debt Instrument [Line Items] | ||
Amount | $ 41,238 | $ 41,238 |
Rate | 2.21% | 1.58% |
Trust Preferred Securities Subject to Mandatory Redemption | Luther Burbank Statutory Trust I | Trusts | LIBOR | ||
Debt Instrument [Line Items] | ||
Rate Index (Quarterly Reset) | 1.38% | |
Trust Preferred Securities Subject to Mandatory Redemption | Luther Burbank Statutory Trust II | Trusts | ||
Debt Instrument [Line Items] | ||
Amount | $ 20,619 | $ 20,619 |
Rate | 2.45% | 1.82% |
Trust Preferred Securities Subject to Mandatory Redemption | Luther Burbank Statutory Trust II | Trusts | LIBOR | ||
Debt Instrument [Line Items] | ||
Rate Index (Quarterly Reset) | 1.62% |
SENIOR DEBT - Narrative (Detail
SENIOR DEBT - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2014 |
Senior Unsecured Term Notes, September 2014 | Senior Unsecured Term Notes | |||
Debt Instrument [Line Items] | |||
Principal | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 |
SENIOR DEBT - Schedule of Debt
SENIOR DEBT - Schedule of Debt (Details) - Senior Unsecured Term Notes, September 2014 - Senior Unsecured Term Notes - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2014 |
Debt Instrument [Line Items] | |||
Principal | $ 95,000,000 | $ 95,000,000 | $ 95,000,000 |
Unamortized Debt Issuance Costs | $ 307,000 | $ 338,000 | |
Fixed Interest Rate | 6.50% |
DERIVATIVES AND HEDGING ACTIV_3
DERIVATIVES AND HEDGING ACTIVITIES - Narrative (Details) | 3 Months Ended | ||
Mar. 31, 2022USD ($)instrument | Mar. 31, 2021USD ($)instrument | Dec. 31, 2021USD ($) | |
Derivative [Line Items] | |||
Cumulative amount of last-of-layer fair value hedging basis adjustments | $ (10,900,000) | $ (3,100,000) | |
Carrying amount of the last-of-layer hedged assets | 739,100,000 | 646,900,000 | |
Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Closed portfolio loans used in hedging relationship | 1,100,000,000 | 1,000,000,000 | |
Cumulative amount of last-of-layer fair value hedging basis adjustments | (10,889,000) | (3,110,000) | |
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||
Derivative [Line Items] | |||
Notional amounts | 750,000,000 | 650,000,000 | |
Carrying amount of the last-of-layer hedged assets | $ 739,111,000 | $ 646,890,000 | |
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap | Three Derivative Instruments Held | |||
Derivative [Line Items] | |||
Number of agreements entered into | instrument | 3 | ||
Term of contract | 2 years | ||
Notional amounts | $ 750,000,000 | ||
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap | One Derivative Instrument Held | |||
Derivative [Line Items] | |||
Term of contract | 2 years | ||
Notional amounts | $ 100,000,000 | ||
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap | Two Derivative Instruments Held | |||
Derivative [Line Items] | |||
Number of agreements entered into | instrument | 2 | ||
Term of contract | 2 years | ||
Number of instruments matured during the period | instrument | 2 | ||
Notional amount matured during the period | $ 1,000,000,000 | ||
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap One | Two Derivative Instruments Held | |||
Derivative [Line Items] | |||
Notional amount matured during the period | 500,000,000 | ||
Fair Value Hedging | Designated as Hedging Instrument | Interest Rate Swap Two | Two Derivative Instruments Held | |||
Derivative [Line Items] | |||
Notional amount matured during the period | $ 500,000,000 |
DERIVATIVES AND HEDGING ACTIV_4
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Interest Rate Swap on Consolidated Statement of Income (Details) - Interest Rate Swap - Designated as Hedging Instrument - Fair Value Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Net decrease in interest income | $ (78) | $ (3,431) |
Interest Income on Loans | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Derivative - interest rate swap, interest income | (65) | (3,416) |
Hedged items - loans, interest income | $ (13) | $ (15) |
DERIVATIVES AND HEDGING ACTIV_5
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Interest Rate Swap on Consolidated Balance Sheet (Details) - Interest Rate Swap - Designated as Hedging Instrument - Fair Value Hedging - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Notional Amount | $ 750,000,000 | $ 650,000,000 |
Prepaid Expenses and Other Current Assets | ||
Derivatives, Fair Value [Line Items] | ||
Asset Derivatives, Fair Value | 10,874,000 | 3,108,000 |
Other Liabilities and Accrued Expenses | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 0 | $ 0 |
DERIVATIVES AND HEDGING ACTIV_6
DERIVATIVES AND HEDGING ACTIVITIES - Schedule of Amounts Recorded on the Balance Sheet Related to Cumulative Adjustments on Fair Value Hedges (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 739,100 | $ 646,900 |
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | (10,900) | (3,100) |
Interest Rate Swap | Designated as Hedging Instrument | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Assets | (10,889) | (3,110) |
Interest Rate Swap | Designated as Hedging Instrument | Fair Value Hedging | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 739,111 | $ 646,890 |
STOCK BASED COMPENSATION - Narr
STOCK BASED COMPENSATION - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock reserved for new awards (in shares) | 3,360,000 | ||
Common stock available for grant (in shares) | 1,658,769 | 1,861,344 | |
RSUs and RSAs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 710 | $ 584 | |
Fair value of awards vested | 2,600 | $ 2,400 | |
Unrecognized compensation expense | $ 4,700 | $ 2,600 | |
Restricted stock awards or units granted (in shares) | 445,331 | 489,703 | |
Period of recognition for unrecognized compensation expense | 2 years 21 days | 1 year 8 months 8 days | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Restricted stock units vested (in shares) | 84,727 | 91,486 | |
Non-employee directors | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 1 year | ||
Minimum | Employees | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Maximum | Employees | Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years |
STOCK BASED COMPENSATION - Awar
STOCK BASED COMPENSATION - Awards Activity (Details) - RSUs and RSAs - $ / shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Number of Shares | ||
Beginning of the period balance (in shares) | 581,189 | 605,916 |
Shares granted (in shares) | 206,675 | 283,078 |
Shares settled (in shares) | (253,706) | (265,655) |
Shares forfeited (in shares) | (4,100) | (52,798) |
End of the period balance (in shares) | 530,058 | 570,541 |
Weighted Average Grant Date Fair Value | ||
Beginning of the period balance (in usd per share) | $ 10.56 | $ 10.93 |
Shares granted (in usd per share) | 13.81 | 10.07 |
Shares settled (in usd per share) | 10.45 | 11.02 |
Shares forfeited (in usd per share) | 11.93 | 10.26 |
End of the period balance (in usd per share) | $ 11.87 | $ 10.52 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Debt securities: | ||
Available for sale debt securities, at fair value | $ 624,859 | $ 647,317 |
Held to maturity | 3,802 | 4,018 |
Equity securities | 11,116 | 11,693 |
Carrying Amount | ||
Financial assets: | ||
Cash and cash equivalents | 147,963 | 138,413 |
Debt securities: | ||
Available for sale debt securities, at fair value | 624,859 | 647,317 |
Held to maturity | 3,798 | 3,829 |
Equity securities | 11,116 | 11,693 |
Loans receivable, net | 6,333,283 | 6,261,885 |
Accrued interest receivable | 18,014 | 17,761 |
FHLB stock | 22,563 | 23,411 |
Interest rate swaps | 10,874 | 3,108 |
Financial liabilities: | ||
Deposits | 5,601,247 | 5,538,243 |
FHLB advances | 751,647 | 751,647 |
Junior subordinated deferrable interest debentures | 61,857 | 61,857 |
Senior debt | 94,693 | 94,662 |
Accrued interest payable | 153 | 118 |
Fair Value | ||
Financial assets: | ||
Cash and cash equivalents | 147,963 | 138,413 |
Debt securities: | ||
Available for sale debt securities, at fair value | 624,859 | 647,317 |
Held to maturity | 3,802 | 4,018 |
Equity securities | 11,116 | 11,693 |
Loans receivable, net | 6,354,197 | 6,297,548 |
Accrued interest receivable | 18,014 | 17,761 |
Interest rate swaps | 10,874 | 3,108 |
Financial liabilities: | ||
Deposits | 5,583,142 | 5,541,417 |
FHLB advances | 733,659 | 755,981 |
Junior subordinated deferrable interest debentures | 59,519 | 61,545 |
Senior debt | 96,818 | 103,361 |
Accrued interest payable | 153 | 118 |
Fair Value | Level 1 | ||
Financial assets: | ||
Cash and cash equivalents | 147,963 | 138,413 |
Debt securities: | ||
Available for sale debt securities, at fair value | 0 | 0 |
Held to maturity | 0 | 0 |
Equity securities | 0 | 0 |
Loans receivable, net | 0 | 0 |
Accrued interest receivable | 5 | 1 |
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Deposits | 3,106,872 | 2,918,102 |
FHLB advances | 0 | 0 |
Junior subordinated deferrable interest debentures | 0 | 0 |
Senior debt | 0 | 0 |
Accrued interest payable | 0 | 0 |
Fair Value | Level 2 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Debt securities: | ||
Available for sale debt securities, at fair value | 624,859 | 647,317 |
Held to maturity | 3,802 | 4,018 |
Equity securities | 11,116 | 11,693 |
Loans receivable, net | 0 | 0 |
Accrued interest receivable | 933 | 927 |
Interest rate swaps | 10,874 | 3,108 |
Financial liabilities: | ||
Deposits | 2,476,270 | 2,623,315 |
FHLB advances | 733,659 | 755,981 |
Junior subordinated deferrable interest debentures | 59,519 | 61,545 |
Senior debt | 96,818 | 103,361 |
Accrued interest payable | 153 | 118 |
Fair Value | Level 3 | ||
Financial assets: | ||
Cash and cash equivalents | 0 | 0 |
Debt securities: | ||
Available for sale debt securities, at fair value | 0 | 0 |
Held to maturity | 0 | 0 |
Equity securities | 0 | 0 |
Loans receivable, net | 6,354,197 | 6,297,548 |
Accrued interest receivable | 17,076 | 16,833 |
Interest rate swaps | 0 | 0 |
Financial liabilities: | ||
Deposits | 0 | 0 |
FHLB advances | 0 | 0 |
Junior subordinated deferrable interest debentures | 0 | 0 |
Senior debt | 0 | 0 |
Accrued interest payable | $ 0 | $ 0 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets and Liabilities Recorded at Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | Dec. 31, 2020 |
Financial assets: | ||||
Available for sale debt securities, at fair value | $ 624,859 | $ 647,317 | ||
Equity securities | 11,116 | 11,693 | ||
Mortgage servicing rights | 811 | 915 | $ 1,428 | $ 1,599 |
Financial liabilities: | ||||
Impaired loans | 830 | 840 | ||
With no related allowance recorded | 5,313 | 5,352 | ||
Residential MBS | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 180,346 | 200,133 | ||
Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 406,603 | 407,746 | ||
Other ABS | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 27,410 | 28,607 | ||
Agency bonds | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 10,500 | 10,831 | ||
Fair Value | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 624,859 | 647,317 | ||
Equity securities | 11,116 | 11,693 | ||
Interest rate swaps | 10,874 | 3,108 | ||
Fair Value | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Interest rate swaps | 0 | 0 | ||
Fair Value | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 624,859 | 647,317 | ||
Equity securities | 11,116 | 11,693 | ||
Interest rate swaps | 10,874 | 3,108 | ||
Fair Value | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Interest rate swaps | 0 | 0 | ||
Fair Value | Recurring Basis | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 624,859 | 647,317 | ||
Equity securities | 11,116 | 11,693 | ||
Mortgage servicing rights | 811 | 915 | ||
Interest rate swaps | 10,874 | 3,108 | ||
Fair Value | Recurring Basis | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Mortgage servicing rights | 0 | 0 | ||
Interest rate swaps | 0 | 0 | ||
Fair Value | Recurring Basis | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 624,859 | 647,317 | ||
Equity securities | 11,116 | 11,693 | ||
Mortgage servicing rights | 0 | 0 | ||
Interest rate swaps | 10,874 | 3,108 | ||
Fair Value | Recurring Basis | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Equity securities | 0 | 0 | ||
Mortgage servicing rights | 811 | 915 | ||
Interest rate swaps | 0 | 0 | ||
Fair Value | Recurring Basis | Residential MBS | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 180,346 | 200,133 | ||
Fair Value | Recurring Basis | Residential MBS | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Residential MBS | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 180,346 | 200,133 | ||
Fair Value | Recurring Basis | Residential MBS | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 406,603 | 407,746 | ||
Fair Value | Recurring Basis | Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 406,603 | 407,746 | ||
Fair Value | Recurring Basis | Commercial mortgage backed securities ("MBS") and collateralized mortgage obligations ("CMOs") | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Other ABS | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 27,410 | 28,607 | ||
Fair Value | Recurring Basis | Other ABS | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Other ABS | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 27,410 | 28,607 | ||
Fair Value | Recurring Basis | Other ABS | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Agency bonds | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 10,500 | 10,831 | ||
Fair Value | Recurring Basis | Agency bonds | Level 1 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Fair Value | Recurring Basis | Agency bonds | Level 2 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 10,500 | 10,831 | ||
Fair Value | Recurring Basis | Agency bonds | Level 3 | ||||
Financial assets: | ||||
Available for sale debt securities, at fair value | 0 | 0 | ||
Single family residential | ||||
Financial liabilities: | ||||
Impaired loans | 830 | 840 | ||
With no related allowance recorded | $ 4,813 | $ 4,847 |
VARIABLE INTEREST ENTITIES (V_2
VARIABLE INTEREST ENTITIES (VIE) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | ||
Liabilities | $ 6,592,826 | $ 6,510,824 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Maximum loss exposure as a percentage of original principal amount | 10.00% | |
Maximum loss exposure | $ 62,600 | |
Liabilities | $ 615 | $ 727 |
LOAN SALE AND SECURITIZATION _3
LOAN SALE AND SECURITIZATION ACTIVITIES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Sep. 27, 2017 | |
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | |||
Minimum net worth | $ 2,000 | ||
Actual net worth | 807,400 | ||
Tier 1 Leverage Ratio | 816,100 | ||
Goodwill | 3,297 | $ 3,297 | |
Accumulated other comprehensive income (loss), net of taxes | $ (11,958) | $ 88 | |
Multifamily Loan Securitization | |||
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | |||
Maximum loss exposure as a percentage of original principal amount | 10.00% | ||
Loans receivable | Multifamily residential | Permanent mortgages | |||
Fair Value Assumption, Date of Securitization or Asset-backed Financing Arrangement, Transferor's Continuing Involvement, Servicing Assets or Liabilities [Line Items] | |||
Amount of loans sold | $ 626,000 |
LOAN SALE AND SECURITIZATION _4
LOAN SALE AND SECURITIZATION ACTIVITIES - Cash Flow from Sale of Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Transfers and Servicing [Abstract] | ||
Servicing fees | $ 97 | $ 171 |
LOAN SALE AND SECURITIZATION _5
LOAN SALE AND SECURITIZATION ACTIVITIES - Loans Transferred Through Loans or Securitization (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Single family residential | ||
Derecognized Assets, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items] | ||
Principal balance of loans | $ 11,882 | $ 12,243 |
Loans 90+ days past due | 0 | 0 |
Charge-offs, net | 0 | 0 |
Multifamily residential | ||
Derecognized Assets, Securitized or Asset-backed Financing Arrangement Assets and any Other Financial Assets Managed Together [Line Items] | ||
Principal balance of loans | 151,108 | 173,486 |
Loans 90+ days past due | 0 | 0 |
Charge-offs, net | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($) | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Leased Assets [Line Items] | ||
Cash balances held at other institutions that exceed FDIC insured limits | $ 25,700,000 | $ 25,500,000 |
Federal Funds | Line of Credit | ||
Operating Leased Assets [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | 50,000,000 | 50,000,000 |
Commitments to Extend Credit | ||
Operating Leased Assets [Line Items] | ||
Real estate loan funding commitments | 134,000,000 | 132,800,000 |
Unfunded Loan Commitment | ||
Operating Leased Assets [Line Items] | ||
Reserve recorded on real estate loan funding commitments | $ 155,000 | $ 153,000 |