Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Mar. 10, 2023 | Jun. 30, 2022 | |
Document And Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity File Number | 001-35589 | ||
Entity Registrant Name | FS BANCORP, INC. | ||
Entity Incorporation, State or Country Code | WA | ||
Entity Tax Identification Number | 45-4585178 | ||
Entity Address, Address Line One | 6920 220th Street SW | ||
Entity Address, City or Town | Mountlake Terrace | ||
Entity Address, State or Province | WA | ||
Entity Address, Postal Zip Code | 98043 | ||
City Area Code | 425 | ||
Local Phone Number | 771-5299 | ||
Title of 12(b) Security | Common Stock, $0.01 par value per share | ||
Trading Symbol | FSBW | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Common Stock, Shares Outstanding | 7,738,283 | ||
Entity Public Float | $ 196,512,227 | ||
Auditor Name | Moss Adams LLP | ||
Auditor Firm ID | 659 | ||
Auditor Location | Everett, Washington | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001530249 | ||
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and due from banks | $ 10,525 | $ 12,043 |
Interest-bearing deposits at other financial institutions | 30,912 | 14,448 |
Total cash and cash equivalents | 41,437 | 26,491 |
Certificates of deposit at other financial institutions | 4,712 | 10,542 |
Securities available-for-sale, at fair value | 229,252 | 271,359 |
Securities held-to-maturity, net of allowance for credit losses of $31 and none, respectively (fair value of $7,929 and $8,128, respectively) | 8,469 | 7,500 |
Loans held for sale, at fair value | 20,093 | 125,810 |
Loans receivable, net (includes $14,035 and $16,083, at fair value, respectively) | 2,190,860 | 1,728,540 |
Accrued interest receivable | 11,144 | 7,594 |
Premises and equipment, net | 25,119 | 26,591 |
Operating lease right-of-use ("ROU") assets | 6,226 | 4,557 |
Federal Home Loan Bank ("FHLB") stock, at cost | 10,611 | 4,778 |
Other real estate owned ("OREO") | 570 | |
Deferred tax asset, net | 6,670 | |
Bank owned life insurance ("BOLI"), net | 36,799 | 37,092 |
Servicing rights, held at the lower of cost or fair value | 18,017 | 16,970 |
Goodwill | 2,312 | 2,312 |
Core deposit intangible, net | 3,369 | 4,060 |
Other assets | 17,238 | 12,195 |
TOTAL ASSETS | 2,632,898 | 2,286,391 |
LIABILITIES | ||
Noninterest-bearing accounts | 554,174 | 580,749 |
Interest-bearing accounts | 1,573,567 | 1,334,995 |
Total deposits | 2,127,741 | 1,915,744 |
Borrowings | 186,528 | 42,528 |
Principal amount | 50,000 | 50,000 |
Unamortized debt issuance costs | (539) | (606) |
Total subordinated notes less unamortized debt issuance costs | 49,461 | 49,394 |
Operating lease liabilities | 6,474 | 4,792 |
Deferred tax liability, net | 1,183 | |
Other liabilities | 30,997 | 25,243 |
Total liabilities | 2,401,201 | 2,038,884 |
COMMITMENTS AND CONTINGENCIES (NOTE 12) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock, $.01 par value; 5,000,000 shares authorized; none issued or outstanding | ||
Common stock, $.01 par value; 45,000,000 shares authorized; 7,736,185 and 8,169,887 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively | 77 | 82 |
Additional paid-in capital | 55,187 | 67,958 |
Retained earnings | 202,065 | 179,215 |
Accumulated other comprehensive (loss) income, net of tax | (25,632) | 252 |
Total stockholders' equity | 231,697 | 247,507 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,632,898 | $ 2,286,391 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares |
Items included in Consolidated Balance Sheets | ||
Allowance for credit losses | $ | $ 31 | $ 0 |
Securities held-to-maturity, at fair value | $ | 7,929 | 8,128 |
Loans receivable, at fair value | $ | $ 14,035 | $ 16,083 |
Preferred stock par value, in dollars per share | $ / shares | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value, in dollars per share | $ / shares | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 7,736,185 | 8,169,887 |
Common stock, shares outstanding | 7,736,185 | 8,169,887 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INTEREST INCOME | |||
Loans receivable, including fees | $ 111,648,000 | $ 90,737,000 | $ 84,128,000 |
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions | 7,046,000 | 5,637,000 | 4,709,000 |
Total interest and dividend income | 118,694,000 | 96,374,000 | 88,837,000 |
INTEREST EXPENSE | |||
Deposits | 9,420,000 | 6,929,000 | 11,980,000 |
Borrowings | 3,052,000 | 1,074,000 | 1,961,000 |
Subordinated notes | 1,942,000 | 1,722,000 | 776,000 |
Total interest expense | 14,414,000 | 9,725,000 | 14,717,000 |
NET INTEREST INCOME | 104,280,000 | 86,649,000 | 74,120,000 |
PROVISION FOR CREDIT LOSSES | 6,217,000 | 500,000 | 13,036,000 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 98,063,000 | 86,149,000 | 61,084,000 |
NONINTEREST INCOME | |||
Service charges and fee income | 8,525,000 | 4,349,000 | 2,373,000 |
Gain on sale of loans | 7,917,000 | 31,083,000 | 48,842,000 |
Gain on sale of investment securities | 300,000 | ||
Earnings on cash surrender value of BOLI | 876,000 | 866,000 | 870,000 |
Other noninterest income | 790,000 | 1,215,000 | 2,974,000 |
Total noninterest income | 18,108,000 | 37,513,000 | 55,359,000 |
NONINTEREST EXPENSE | |||
Salaries and benefits | 47,632,000 | 49,721,000 | 38,095,000 |
Operations | 10,743,000 | 10,791,000 | 10,471,000 |
Occupancy | 5,165,000 | 4,892,000 | 4,736,000 |
Data processing | 6,062,000 | 4,951,000 | 4,388,000 |
Loss on sale of OREO | 9,000 | 2,000 | |
OREO expenses | 4,000 | ||
Loan costs | 2,718,000 | 2,795,000 | 2,066,000 |
Professional and board fees | 3,154,000 | 3,181,000 | 2,797,000 |
Federal Deposit Insurance Corporation ("FDIC") insurance | 1,224,000 | 636,000 | 829,000 |
Marketing and advertising | 897,000 | 634,000 | 530,000 |
Acquisition cost | 898,000 | ||
Amortization of core deposit intangible | 691,000 | 691,000 | 706,000 |
(Recovery) impairment of servicing rights | (1,000) | (2,059,000) | 1,969,000 |
Total noninterest expense | 79,183,000 | 76,242,000 | 66,593,000 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 36,988,000 | 47,420,000 | 49,850,000 |
PROVISION FOR INCOME TAXES | 7,339,000 | 10,008,000 | 10,586,000 |
NET INCOME | $ 29,649,000 | $ 37,412,000 | $ 39,264,000 |
Basic earnings per share | $ 3.75 | $ 4.48 | $ 4.58 |
Diluted earnings per share | $ 3.70 | $ 4.37 | $ 4.49 |
CONSOLIDATED STATEMENTS OF IN_2
CONSOLIDATED STATEMENTS OF INCOME (Parenthetical) | Jul. 14, 2021 |
CONSOLIDATED STATEMENTS OF INCOME | |
Stock split, conversion ratio | 2 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income | $ 29,649 | $ 37,412 | $ 39,264 |
Securities available-for-sale: | |||
Unrealized (loss) gain during period | (41,849) | (5,150) | 3,754 |
Income tax benefit (provision) related to unrealized holding (loss) gain | 8,998 | 1,108 | (807) |
Reclassification adjustment for realized gain, net included in net income | (300) | ||
Income tax provision related to reclassification for realized gain, net | 65 | ||
Derivative financial instruments: | |||
Unrealized derivative gain (loss) during period | 9,844 | 1,706 | (1,429) |
Income tax (provision) benefit related to unrealized derivative gain (loss) | (2,116) | (367) | 307 |
Reclassification adjustment for realized (gain) loss, net included in net income | (970) | 538 | 198 |
Income tax provision (benefit) related to reclassification, net | 209 | (116) | (43) |
Other comprehensive (loss) income, net of tax | (25,884) | (2,281) | 1,745 |
COMPREHENSIVE INCOME | $ 3,765 | $ 35,131 | $ 41,009 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss), Net of Tax. | Unearned ESOP Shares | Total |
Beginning balance at Dec. 31, 2019 | $ 89 | $ 89,223 | $ 110,715 | $ 788 | $ (573) | $ 200,242 |
Balance (in shares) at Dec. 31, 2019 | 8,918,082 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 39,264 | 39,264 | ||||
Dividends paid | (3,574) | (3,574) | ||||
Share-based compensation | 1,020 | 1,020 | ||||
Restricted stock awards | $ 1 | 1 | ||||
Restricted stock awards (in shares) | 49,760 | |||||
Common stock repurchased - repurchase plan | $ (5) | (9,797) | (9,802) | |||
Common stock repurchased - repurchase plan (in shares) | (519,086) | |||||
Common stock repurchased for employee/director taxes paid on restricted stock awards | (35) | (35) | ||||
Common stock repurchased for employee/director taxes paid on restricted stock awards (in shares) | (1,640) | |||||
Stock options exercised, net | (161) | (161) | ||||
Stock options exercised, net (in shares) | 28,796 | |||||
Other comprehensive loss, net of tax | 1,745 | 1,745 | ||||
ESOP shares allocated | 1,025 | 282 | 1,307 | |||
Ending balance at Dec. 31, 2020 | $ 85 | 81,275 | 146,405 | 2,533 | (291) | 230,007 |
Balance (in shares) at Dec. 31, 2020 | 8,475,912 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 37,412 | 37,412 | ||||
Dividends paid | (4,602) | (4,602) | ||||
Share-based compensation | 1,446 | 1,446 | ||||
New credit standard (Topic 326) - impact in year of adoption (in shares) | 41,350 | |||||
Common stock repurchased - repurchase plan | $ (4) | (13,957) | (13,961) | |||
Common stock repurchased - repurchase plan (in shares) | (518,383) | |||||
Common stock repurchased for employee/director taxes paid on restricted stock awards | (211) | (211) | ||||
Common stock repurchased for employee/director taxes paid on restricted stock awards (in shares) | (5,970) | |||||
Stock options exercised, net | $ 1 | (2,077) | (2,076) | |||
Stock options exercised, net (in shares) | 176,978 | |||||
Other comprehensive loss, net of tax | (2,281) | (2,281) | ||||
ESOP shares allocated | 1,482 | $ 291 | 1,773 | |||
Ending balance at Dec. 31, 2021 | $ 82 | 67,958 | 179,215 | 252 | 247,507 | |
Balance (in shares) at Dec. 31, 2021 | 8,169,887 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 29,649 | 29,649 | ||||
Dividends paid | (7,096) | (7,096) | ||||
Share-based compensation | 1,971 | 1,971 | ||||
Issuance of common stock- employee stock purchase plan | 503 | 503 | ||||
Issuance of common stock- employee stock purchase plan (in shares) | 16,934 | |||||
Restricted stock awards (in shares) | 35,050 | |||||
New credit standard (Topic 326) - impact in year of adoption | 297 | 297 | ||||
Common stock repurchased - repurchase plan | $ (5) | (15,623) | (15,628) | |||
Common stock repurchased - repurchase plan (in shares) | (544,530) | |||||
Common stock repurchased for employee/director taxes paid on restricted stock awards | (190) | (190) | ||||
Common stock repurchased for employee/director taxes paid on restricted stock awards (in shares) | (6,150) | |||||
Stock options exercised, net | 568 | 568 | ||||
Stock options exercised, net (in shares) | 64,994 | |||||
Other comprehensive loss, net of tax | (25,884) | (25,884) | ||||
Ending balance at Dec. 31, 2022 | $ 77 | $ 55,187 | $ 202,065 | $ (25,632) | $ 231,697 | |
Balance (in shares) at Dec. 31, 2022 | 7,736,185 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) | 12 Months Ended | ||
Dec. 31, 2022 $ / shares | Dec. 31, 2021 $ / shares | Dec. 31, 2020 $ / shares | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | |||
Dividends paid (in dollars per share) | $ 0.90 | $ 0.56 | $ 0.42 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
CASH FLOWS FROM (USED BY) OPERATING ACTIVITIES | |||
Net income | $ 29,649 | $ 37,412 | $ 39,264 |
Adjustments to reconcile net income to net cash from operating activities | |||
Provision for credit losses | 6,217 | 500 | 13,036 |
Depreciation, amortization and accretion | 14,004 | 15,183 | 13,618 |
Compensation expense related to stock options and restricted stock awards | 1,971 | 1,446 | 1,020 |
ESOP compensation expense for allocated shares | 1,773 | 1,307 | |
Provision (benefit) for deferred income taxes | (844) | 1,750 | (2,390) |
Change in cash surrender value of BOLI | (876) | (866) | (870) |
Gain on sale of loans held for sale | (7,321) | (30,977) | (48,842) |
Gain on sale of portfolio loans | (596) | (106) | |
Gain on sale of investment securities | (300) | ||
Origination of loans held for sale | (566,898) | (1,353,636) | (1,730,665) |
Proceeds from sale of loans held for sale | 708,400 | 1,444,305 | 1,670,431 |
(Recovery) impairment of servicing rights | (1) | (2,059) | 1,969 |
Loss on sale of OREO | 9 | 2 | |
Changes in operating assets and liabilities | |||
Accrued interest receivable | (3,550) | (564) | (1,122) |
Other assets | 2,127 | (3,670) | 5,511 |
Other liabilities | 2,616 | (1,491) | 5,714 |
Net cash from (used by) operating activities | 184,898 | 109,009 | (32,317) |
Activity in securities available-for-sale: | |||
Proceeds from sale of investment securities | 0 | 0 | 12,214 |
Maturities, prepayments, and calls | 21,201 | 29,863 | 37,964 |
Purchases | (22,968) | (130,138) | (99,390) |
Activity in securities held-to-maturity: | |||
Purchases | (1,000) | (7,500) | |
Maturities of certificates of deposit at other financial institutions | 5,830 | 1,736 | 8,624 |
Portfolio loan originations and principal collections, net | (534,335) | (214,133) | (189,162) |
Proceeds from sale of portfolio loans | 39,034 | 2,699 | |
Purchase of portfolio loans | (5,736) | (1,618) | (32,743) |
Proceeds from sale of OREO, net | 145 | 81 | 76 |
Purchase of premises and equipment | (1,551) | (1,984) | (1,379) |
Proceeds from bank owned life insurance death benefits | 1,169 | ||
Change in FHLB stock, net | (5,833) | 2,661 | 606 |
Net cash used by investing activities | (504,044) | (310,833) | (270,690) |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Net increase in deposits | 211,935 | 241,537 | 281,431 |
Proceeds from borrowings | 3,003,617 | 148,907 | 601,158 |
Repayments of borrowings | (2,859,617) | (272,188) | (520,213) |
Dividends paid on common stock | (7,096) | (4,602) | (3,574) |
Net proceeds from issuance of subordinated notes | 49,333 | ||
Repayment of subordinated notes | (10,000) | ||
Proceeds (disbursements) from stock options exercised, net | 568 | (2,076) | (161) |
Common stock repurchased for employee/director taxes paid on restricted stock awards | (190) | (211) | (34) |
Issuance of common stock - employee stock purchase plan | 503 | ||
Common stock repurchased | (15,628) | (13,961) | (9,802) |
Net cash from financing activities | 334,092 | 136,739 | 348,805 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 14,946 | (65,085) | 45,798 |
CASH AND CASH EQUIVALENTS, beginning of year | 26,491 | 91,576 | 45,778 |
CASH AND CASH EQUIVALENTS, end of year | 41,437 | 26,491 | 91,576 |
Cash paid during the year for: | |||
Interest on deposits and borrowings | 10,968 | 8,174 | 14,584 |
Income taxes | 4,693 | 11,083 | 11,685 |
SUPPLEMENTARY DISCLOSURES OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES | |||
Change in unrealized (loss) gain on available-for-sale investment securities | (41,849) | (5,150) | 3,454 |
Change in unrealized gain (loss) on fair value and cash flow hedges | 8,857 | 2,244 | (1,231) |
Retention in gross mortgage servicing rights from loan sales | 5,400 | 9,760 | 11,139 |
OREO received in settlement of loans | 145 | ||
Transfer of closed retail branch to OREO | 570 | ||
Right-of-use assets in exchange for lease liabilities | $ 3,049 | $ 979 | $ 1,202 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 1 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations - a Financial Statement Presentation - Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points. Principles of Consolidation - Segment Reporting - Subsequent Events - On November 5, 2022, 1st Security Bank entered into a purchase and assumption agreement to acquire seven branches from Columbia State Bank. On February 24, 2023, the Bank completed the purchase of the branches. The seven branches are located in the communities of Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon and Goldendale and White Salmon, Washington. In connection with the purchase, the Bank acquired approximately $425.5 million in deposits and $65.8 million in associated loans based on February 24, 2023 financial information and subject to post-closing confirmation and adjustment review. For additional information see “Note 24 - Recent Developments.” Error Corrections Earnings Per Share Prior presentations of earnings per share were revised due to the improper inclusion of certain unvested shares of the Company’s commons stock in the denominator of basic and diluted earnings per share. As a result of the inclusion, earnings per share was understated for the years ended December 31, 2021 and 2020. Basic earnings per share for December 31, 2021 was updated to $4.48, from $4.42 as previously reported, and diluted earnings per share was updated to $4.37, from $4.32 as previously reported. Basic earnings per share for December 31, 2020 was updated to $4.58, from $4.57, as previously reported and diluted earnings per share was unchanged at $4.49. Management evaluated the materiality of this error from qualitative and quantitative perspectives and concluded that the error was immaterial to the prior period financial statements taken as a whole. Consequently, the financial statements for the prior periods include the impact of the correction of the error, and prior period financial statements have not been restated. The error correction did not affect total assets, net income, or cash flows for the periods. Deposits Prior presentation of interest-bearing and noninterest-bearing checking balances was revised due to the misclassification of certain checking products in previous periods. As a result of the misclassification, an interest-bearing checking balance of $121.2 million at December 31, 2021 Management evaluated the materiality of this error from qualitative and quantitative perspectives and concluded that the error was immaterial to the prior period financial statements taken as a whole. Consequently, the financial statements for the prior periods include the impact of the correction of the error, and prior period financial statements have not been restated. The error correction did not affect total assets, net income, or cash flows for the periods. Cash and Cash Equivalents - Securities - Management no longer evaluates securities for other-than-temporary impairment, as ASC Subtopic 326-30, Financial Instruments - Credit Losses - Available for Sale Debt Securities, changes the accounting for recognizing impairment on available for sale and held to maturity debt securities. Each quarter management evaluates impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value. Management considers the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors. Credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component recognized through the Provision for Credit Losses on the Consolidated Statements of Income. (See Note 2 - Investments). Federal Home Loan Bank Stock - respectively. The Bank was in compliance with the FHLB minimum investment requirement at December 31, 2022 and 2021. Management evaluates FHLB stock for impairment annually. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared with the capital stock amount for the FHLB and the length of time this situation has persisted; (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB; and (4) the liquidity position of the FHLB. Based on its evaluation, management determined that there was no impairment of FHLB stock at December 31, 2022 and 2021, respectively. Loans Held for Sale - Other Real Estate Owned - Derivatives - The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation. The Company’s hedging policies permit the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. If derivative instruments are designated as fair value hedges, and such hedges are highly effective, both the change in the fair value of the hedge and the hedged item are included in current earnings. If derivative instruments are designated as cash flow hedges, fair value adjustments related to the effective portion are recorded in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. Ineffective portions of cash flow hedges are reflected in earnings as they occur. Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the interest income or interest expense associated with the hedged item. During the life of the hedge, the Company formally assesses whether derivatives designated as hedging instruments continue to be highly effective in offsetting changes in the fair value or cash flows of hedged items. If it is determined that a hedge has ceased to be highly effective, the Company will discontinue hedge accounting prospectively. At such time, previous adjustments to the carrying value of the hedged item are reversed into current earnings and the derivative instrument is reclassified to a trading position recorded at fair value. For derivatives not designated as hedges, changes in fair value are recognized in earnings, in noninterest income. Loans Receivable - interest method based on the daily balance of the principal amount outstanding and is credited to income as earned. Loan fees, net of direct origination costs, are deferred and amortized over the life of the loan using the effective yield method. If the loan is repaid prior to maturity, the remaining unamortized net deferred loan origination fee is recognized in income at the time of repayment. Income Recognition on Nonaccrual Loans and Securities Allowance for Credit Losses on Held-to-Maturity Securities The held-to-maturity portfolio consists entirely of corporate securities. Securities are generally rated BBB- or higher. Securities are analyzed individually to establish a reserve. Allowance for Credit Losses on Available-for-Sale Securities Changes in the ACL are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities is not included in the estimate of credit losses. Allowance for Credit Losses on Loans Management utilizes relevant available information, from internal and external sources, relating to past events, current conditions, historical loss experience, and reasonable and supportable forecasts. The lookback period in the analysis includes historical data from 2009 to present. Adjustments to historical loss information are made when management determines historical data is not likely reflective of the current portfolio such as limited data sets or lack of default or loss history. Management may selectively apply external market data to subjectively adjust the Company’s own loss history including index or peer data. Accrued interest receivable is excluded from the estimate of credit losses for loans. Collective Assessment within each call report code by pass, watch, special mention, substandard, and doubtful. Other loan types are separated into their own cohorts due to specific risk characteristics for that pool of loans. The Company has elected a non-discounted cash flow methodology with probability of default (“PD”) and loss given default (“LGD”) for all call report code cohorts (“cohorts”), with the exception of the indirect and marine portfolios which are evaluated under a vintage methodology. The vintage methodology measures the expected loss calculation for future periods based on historical performance by the origination period of loans with similar life cycles and risk characteristics. Guaranteed portions of loans are measured with zero risk due to cash collateral and full guaranty. The PD calculation looks at the historical loan portfolio at particular points in time (each month during the lookback period) to determine the probability that loans in a certain cohort will default over the next 12-month period. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. In cohorts where the Company’s historical data is insufficient due to a minimal amount of default activity or zero defaults, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs. Additionally, management reviews all other cohorts to determine if index PDs should be used outside of these criteria. The LGD calculation looks at actual losses (net charge-offs) experienced over the entire lookback period for each cohort of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. All defaults (non-accrual, charge-off, or greater than 90 days past due) occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event (i.e., nonaccrual or charge-off). Due to very limited charge-off history, management uses index LGDs comprised of rates derived from the LGD experience of other community banks in place of the Company’s historical LGDs. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACLL. The calculation includes a 12-month PD forecast based on the Company’s regression model comparing peer nonperforming loan ratios to the national unemployment rate. After the forecast period, PD rates revert on a straight-line basis back to long-term historical average rates over a 12-month period. Due to very limited default history, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs. The Company recognizes that all significant factors that affect the collectability of the loan portfolio must be considered to determine the estimated credit losses as of the evaluation date. Furthermore, the methodology, in and of itself and even when selectively adjusted by comparison to market and peer data, does not provide a sufficient basis to determine the estimated credit losses. The Company adjusts the modeled historical losses by qualitative and environmental adjustments to incorporate all significant risks to form a sufficient basis to estimate the credit losses. Individual Assessment Where the primary and/or expected source of repayment of a specific loan is believed to be the future liquidation of available collateral, impairment will generally be measured based upon expected future collateral proceeds, net of disposition expenses including sales commissions as well as other costs potentially necessary to sell the asset(s) (i.e., past due taxes, liens, etc.). Estimates of future collateral proceeds will be based upon available appraisals, reference to recent valuations of comparable properties, use of consultants or other professionals with relevant market and/or property-specific knowledge, and any other sources of information believed appropriate by management under the specific circumstances. When appraisals are ordered to support the impairment analysis of an impaired loan, the appraisal is reviewed by the Company’s internal appraisal reviewer. Where the primary and/or expected source of repayment of a specific loan is believed to be the receipt of principal and interest payments from the borrower and/or the refinancing of the loan by another creditor, impairment will generally be measured based upon the present value of expected proceeds discounted at the contractual interest rate. Expected refinancing proceeds may be estimated from review of term sheets actually received by the borrower from other creditors and/or from the Company’s knowledge of terms generally available from other banks. Determining the Contractual Term Troubled Debt Restructurings Allowance for Credit Losses on Unfunded Commitments Premises and Equipment, Net - three Management reviews buildings, improvements and equipment for impairment on an annual basis or whenever events or changes in the circumstances indicate that the undiscounted cash flows for the property are less than its carrying value. If identified, an impairment loss is recognized through a charge to earnings based on the fair value of the property. Right of Use Lease Asset & Lease Liability - The Company leases retail space, office space, storage space, and equipment under operating leases. Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs in addition to the base rent. Certain leases also contain lease incentives, such as tenant improvement allowances and rent abatement. Variable lease payments are recognized as lease expense as they are incurred. The Company records an operating lease ROU asset and an operating lease liability for operating leases with a lease term greater than 12 months. The ROU asset and lease liability are recorded in “Other assets” and “Other liabilities”, respectively, on the Consolidated Balance Sheets. ROU 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. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Many of the Company’s leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule, which are factored into our determination of lease payments when appropriate. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Transfers of Financial Assets - transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Servicing Rights - Servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type, and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income. Capitalized servicing rights are stated separately on the Consolidated Balance Sheets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. Income Taxes - The Company follows the authoritative guidance issued related to accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It is the Company’s policy to record any penalties or interest arising from federal or state taxes as a component of income tax expense. Employee Stock Ownership Plan (“ESOP”) Earnings Per Share (“EPS”) Comprehensive Income (Loss) - for-sale, net of tax and unrealized holding gains (losses) on derivatives designated as hedges, net of tax recorded directly to equity. Financial Instruments - Restricted Assets - Marketing and Advertising Costs - Stock-Based Compensation - Goodwill - Business Combinations In the event that the fair value of net assets acquired exceeds the purchase price, including fair value of liabilities assumed, a bargain purchase gain is recorded on that acquisition. Acquired Loans For purchased non-credit-deteriorated loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loan. While credit discounts are included in the determination of the fair value for non-credit-deteriorated loans, since these discounts are expected to be accreted over the life of the loans, they cannot be used to offset the allowance for credit losses that must be recorded at the acquisition date. As a result, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment and is recognized as a provision for credit losses in the Consolidated Statement of Income. Any subsequent deterioration (improvement) in credit quality is recognized by recording a provision for (or reversal of) credit losses. Application of New Accounting Guidance in 2022 On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments - Credit Losses (Topic 326) Topic 326 The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2022 are presented under ASC 326. The adoption resulted in a decrease of $2.9 million to our allowance for credit losses on loans (“ACLL”), an increase of $2.4 million to our allowance for unfunded commitments and letters of credit, an increase of $72,000 to our allowance for held-to-maturity securities, and a net-of-tax cumulative-effect adjustment of $297,000 to increase the beginning balance of retained earnings. The Company finalized the adoption of ASC 326 as of January 1, 2022 as detailed in the following table: January 1, 2022 As Reported January 1, 2022 Pre-Topic 326 Impact of Topic 326 Assets Under Topic 326 Adoption Adoption Allowance for credit losses on debt securities held-to-maturity $ 72 $ — $ 72 Loans Commercial $ 1,728 $ 5,667 $ (3,939) Construction and development 2,328 4,448 (2,120) Home equity 455 279 176 One-to-four-family 3,656 1,424 2,232 Multi-family 1,397 2,980 (1,583) Indirect home improvement 9,394 3,540 5,854 Marine 900 702 198 Other consumer 64 38 26 Commercial and industrial 2,727 5,953 (3,226) Warehouse lending 127 583 (456) Unallocated — 21 (21) Allowance for credit losses on loans $ 22,776 $ 25,635 $ (2,859) Liabilities Allowance for credit losses on unfunded loan commitments $ 2,908 $ 499 $ 2,409 Total $ (378) The adoption of the CECL methodology resulted in an increase of retained earnings of $297,000, net of tax. RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform” (“Topic 848”) In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) |
INVESTMENTS
INVESTMENTS | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS | |
INVESTMENTS | NOTE 2 - INVESTMENTS The following tables present the amortized costs, unrealized gains, unrealized losses, and estimated fair values of securities available-for-sale and held-to-maturity, and ACL, at the dates indicated: December 31, 2022 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values ACL U.S. agency securities $ 21,153 $ — $ (3,865) $ 17,288 $ — Corporate securities 9,497 27 (979) 8,545 — Municipal bonds 144,200 21 (23,619) 120,602 — Mortgage-backed securities 82,424 — (12,458) 69,966 — U.S. Small Business Administration securities 14,519 — (1,668) 12,851 — Total securities available-for-sale 271,793 48 (42,589) 229,252 — SECURITIES HELD-TO-MATURITY Corporate securities 8,500 — (571) 7,929 31 Total securities held-to-maturity 8,500 — (571) 7,929 31 Total securities $ 280,293 $ 48 $ (43,160) $ 237,181 $ 31 December 31, 2021 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values U.S. agency securities $ 21,155 $ 133 $ (318) $ 20,970 Corporate securities 9,495 31 (524) 9,002 Municipal bonds 136,377 1,577 (2,521) 135,433 Mortgage-backed securities 88,641 1,457 (696) 89,402 U.S. Small Business Administration securities 16,383 235 (66) 16,552 Total securities available-for-sale 272,051 3,433 (4,125) 271,359 SECURITIES HELD-TO-MATURITY Corporate securities 7,500 628 — 8,128 Total securities held-to-maturity 7,500 628 — 8,128 Total securities $ 279,551 $ 4,061 $ (4,125) $ 279,487 The following table presents the activity in the ACL on securities held-to-maturity by major security type for the year indicated: SECURITIES HELD-TO-MATURITY For the Year Ended Corporate Securities December 31, 2022 Beginning allowance balance $ — Impact of adopting ASU 2016-13 72 Reversal of provision for credit losses (41) Securities charged-off — Recoveries — Total ending allowance balance $ 31 Management measures expected credit losses on held-to-maturity debt securities on an individual basis. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Accrued interest receivable on held-to-maturity debt securities totaled $116,000 and $113,000 as of December 31, 2022 and December 31, 2021, respectively and was $1.2 million and $1.1 million on available-for-sale debt securities as of December 31, 2022 and December 31, 2021, respectively. Accrued interest receivable on securities is reported in “Accrued interest receivable” on the Consolidated Balance Sheets and is excluded from the calculation of the ACL. The Bank monitors the credit quality of debt securities held-to-maturity quarterly through the use of credit rating, material event notices, and changes in market value. The following table summarizes the amortized cost of debt securities held-to-maturity at the dates indicated, aggregated by credit quality indicator: December 31, Corporate securities 2022 2021 BBB/BBB- $ 8,500 $ 7,500 At December 31, 2022, there were no debt securities held-to-maturity that were classified as either nonaccrual or 90 days or more past due and still accruing interest. At December 31, 2022, the Bank pledged 10 securities held at the FHLB of Des Moines with a carrying value of $13.5 million to secure Washington State public deposits of $15.6 million with a $6.3 million collateral requirement by the Washington Public Deposit Protection Commission. At December 31, 2021, the Bank pledged seven securities held at the FHLB of Des Moines with a carrying value of $8.1 million to secure Washington State public deposits of $13.9 million with a $5.6 million collateral requirement by the Washington Public Deposit Protection Commission. At December 31, 2022, the Bank pledged one security with a total carrying value of $2.8 million to secure interest rate swaps designated as cash flow hedges. See “Note 17- Derivatives” for detail on the Bank’s interest rate swaps. Investment securities that were in an unrealized loss position at the dates indicated are presented in the following tables, based on the length of time individual securities have been in an unrealized loss position. December 31, 2022 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized SECURITIES AVAILABLE-FOR-SALE Value Losses Value Losses Value Losses U.S. agency securities $ 3,823 $ (118) $ 13,465 $ (3,747) $ 17,288 $ (3,865) Corporate securities 2,494 (4) 4,026 (975) 6,520 (979) Municipal bonds 44,261 (5,794) 73,990 (17,825) 118,251 (23,619) Mortgage-backed securities 29,791 (3,188) 40,175 (9,270) 69,966 (12,458) U.S. Small Business Administration securities 10,807 (1,162) 2,044 (506) 12,851 (1,668) Total securities available-for-sale $ 91,176 $ (10,266) $ 133,700 $ (32,323) $ 224,876 $ (42,589) SECURITIES HELD-TO-MATURITY Corporate securities 7,929 (571) — — 7,929 (571) Total securities held-to-maturity 7,929 (571) — — 7,929 (571) Total $ 99,105 $ (10,837) $ 133,700 $ (32,323) $ 232,805 $ (43,160) December 31, 2021 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized SECURITIES AVAILABLE-FOR-SALE Value Losses Value Losses Value Losses U.S. agency securities $ 13,125 $ (105) $ 3,752 $ (213) $ 16,877 $ (318) Corporate securities — — 5,476 (524) 5,476 (524) Municipal bonds 72,098 (1,961) 14,116 (560) 86,214 (2,521) Mortgage-backed securities 33,291 (620) 3,825 (76) 37,116 (696) U.S. Small Business Administration securities 2,988 (66) — — 2,988 (66) Total securities available-for-sale $ 121,502 $ (2,752) $ 27,169 $ (1,373) $ 148,671 $ (4,125) There were seven held-to-maturity debt securities with unrealized losses less than one year and none with unrealized losses of more than one year at December 31, 2022. There were no held-to-maturity debt securities in an unrealized loss position as of December 31, 2021. There were 88 available-for-sale securities with unrealized losses of less than one year and 106 available-for-sale securities with an unrealized loss of more than one year at December 31, 2022. There were 75 available-for-sale securities with unrealized losses of less than one year and 17 available-for-sale securities with unrealized losses of more than one year at December 31, 2021. The unrealized losses associated with these securities are believed to be caused by changing market conditions that are considered to be temporary and the Company does not intend to sell the securities, and it is not likely to be required to sell these securities prior to maturity. Management monitors the published credit ratings of the issuers of the debt securities for material ratings or outlook changes. Substantially all of the Company’s municipal bond portfolio is comprised of obligations of states and political subdivisions located within the Company’s geographic footprint that are monitored through quarterly or annual financial review utilizing published credit ratings. All of the available-for-sale mortgage-backed securities and U.S. Small Business Administration securities in an unrealized loss position are issued or guaranteed by government-sponsored enterprises, and the available-for-sale corporate securities are all investment grade and monitored for rating or outlook changes. Based on the Company’s evaluation of these securities, no credit impairment was recorded for the years ended December 31, 2022 and 2021. The contractual maturities of securities available-for-sale and held-to-maturity at the dates indicated are listed below. Expected maturities of mortgage-backed securities may differ from contractual maturities because borrowers may have the right to call or prepay the obligations; therefore, these securities are classified separately with no specific maturity date. December 31, 2022 2021 SECURITIES AVAILABLE-FOR-SALE Amortized Fair Amortized Fair U.S. agency securities Cost Value Cost Value Due after one year through five years $ 4,874 $ 4,321 $ 959 $ 1,004 Due after five years through ten years 6,989 5,963 6,920 6,850 Due after ten years 9,290 7,004 13,276 13,116 Subtotal 21,153 17,288 21,155 20,970 Corporate securities Due within one year 1,000 997 — — Due after one year through five years 2,497 2,519 3,495 3,526 Due after five years through ten years 4,000 3,763 4,000 3,627 Due after ten years 2,000 1,266 2,000 1,849 Subtotal 9,497 8,545 9,495 9,002 Municipal bonds Due within one year 2,660 2,644 — — Due after one year through five years 1,038 1,012 3,724 3,850 Due after five years through ten years 6,341 5,771 6,857 7,035 Due after ten years 134,161 111,175 125,796 124,548 Subtotal 144,200 120,602 136,377 135,433 Mortgage-backed securities Federal National Mortgage Association (“FNMA”) 68,421 57,358 75,171 75,737 Federal Home Loan Mortgage Corporation (“FHLMC”) 9,290 8,424 9,606 9,768 Government National Mortgage Association (“GNMA”) 4,713 4,184 3,864 3,897 Subtotal 82,424 69,966 88,641 89,402 U.S. Small Business Administration securities Due after one year through five years 2,553 2,407 2,485 2,507 Due after five years through ten years 4,461 3,996 4,420 4,515 Due after ten years 7,505 6,448 9,478 9,530 Subtotal 14,519 12,851 16,383 16,552 Total securities available-for-sale 271,793 229,252 272,051 271,359 SECURITIES HELD-TO-MATURITY Corporate securities Due after five years through ten years 8,500 7,929 7,500 8,128 Total securities held-to-maturity 8,500 7,929 7,500 8,128 Total securities $ 280,293 $ 237,181 $ 279,551 $ 279,487 There were no sales proceeds, gains or losses from the sale of securities available-for-sale for both the years ended December 31, 2022 and 2021, compared to proceeds of $12.2 million and gains of $300,000 on the sale of securities available-for-sale for the year ended December 31, 2020. |
LOANS RECEIVABLE AND ALLOWANCE
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | 12 Months Ended |
Dec. 31, 2022 | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | NOTE 3 - LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS The composition of the loan portfolio was as follows at the dates indicated: December 31, REAL ESTATE LOANS 2022 2021 Commercial $ 334,059 $ 264,429 Construction and development 342,591 240,553 Home equity 55,387 41,017 One-to-four-family (excludes loans held for sale) 469,485 366,146 Multi-family 219,738 178,158 Total real estate loans 1,421,260 1,090,303 CONSUMER LOANS Indirect home improvement 495,941 336,285 Marine 70,567 82,778 Other consumer 3,064 2,980 Total consumer loans 569,572 422,043 COMMERCIAL BUSINESS LOANS Commercial and industrial (includes Paycheck Protection Program ("PPP") loans) 196,791 208,552 Warehouse lending 31,229 33,277 Total commercial business loans 228,020 241,829 Total loans receivable, gross 2,218,852 1,754,175 Allowance for credit losses on loans (1) (27,992) (25,635) Total loans receivable, net $ 2,190,860 $ 1,728,540 ______________________________ (1) Allowance for credit losses on loans in 2022 is reported using the CECL method and the allowance for loan losses in 2021 is reported using the incurred loss method. Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $7.8 million as of December 31, 2022 and $4.9 million as of December 31, 2021. Net loans include unamortized net discounts on acquired loans of $437,000 and $751,000 as of December 31, 2022 and 2021, respectively. Net loans do not include accrued interest receivable. Accrued interest receivable on loans was $9.6 million as of December 31, 2022 and $6.3 million as of December 31, 2021 and was reported in “Accrued interest receivable” on the Consolidated Balance Sheets. Most of the Company’s commercial and multi-family real estate, construction, residential, and commercial business lending activities are with customers located in Western Washington, near our newest loan production office in Vancouver, Washington, or near our loan production office located in the Tri-Cities, Washington. The Company originates real estate, consumer and commercial business loans, and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans, are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota, Nevada, Texas, Utah, Massachusetts, and Montana. Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms. At December 31, 2022, the Bank held approximately $840.2 million in loans that are pledged as collateral for FHLB advances, compared to approximately $761.6 million at December 31, 2021. The Bank held approximately $579.8 million in loans that are pledged as collateral for the FRB line of credit at December 31, 2022, compared to approximately $428.7 million at December 31, 2021. The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the manner in which management monitors performance and credit quality. The three loan portfolio segments are: (a) Real Estate Loans, (b) Consumer Loans and (c) Commercial Business Loans. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes: Real Estate Loans Commercial Lending. Loans originated by the Company primarily secured by income producing properties, including retail centers, warehouses, and office buildings located in our market areas. Construction and Development Lending Home Equity Lending One-to-Four-Family Real Estate Lending Multi-family Lending Consumer Loans Indirect Home Improvement Marine. Other Consumer. Commercial Business Loans Commercial and Industrial Lending (“C&I”) Warehouse Lending The following tables detail activity in the allowance for credit losses on loans and the allowance for loan losses by loan categories, at or for the years indicated: At or For the Year Ended December 31, 2022 ALLOWANCE FOR CREDIT Real Commercial LOSSES ON LOANS Estate Consumer Business Unallocated Total Beginning balance, prior to adoption of ASC 326 $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 Impact of adopting ASC 326 (5,234) 6,078 (3,682) (21) (2,859) Provision for credit losses on loans 2,559 3,158 906 — 6,623 Loans charged-off — (2,465) — — (2,465) Recoveries — 1,058 — — 1,058 Net Charge-offs — (1,407) — — (1,407) Total ending allowance balance $ 12,123 $ 12,109 $ 3,760 $ — $ 27,992 At or For the Year Ended December 31, 2021 Real Commercial ALLOWANCE FOR LOAN LOSSES Estate Consumer Business Unallocated Total Beginning balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 Provision for (reversal of) loan losses 952 (1,417) 1,635 (670) 500 Loans charged-off — (1,755) (38) — (1,793) Recoveries — 756 — — 756 Net charge-offs — (999) (38) — (1,037) Total ending allowance balance $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 Period end amount allocated to: Loans individually evaluated for impairment $ 23 $ 219 $ 921 $ — $ 1,163 Loans collectively evaluated for impairment 14,775 4,061 5,615 21 24,472 Ending balance $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 LOANS RECEIVABLE Loans individually evaluated for impairment $ 781 $ 629 $ 4,419 $ — $ 5,829 Loans collectively evaluated for impairment 1,089,522 421,414 237,410 — 1,748,346 Ending balance $ 1,090,303 $ 422,043 $ 241,829 $ — $ 1,754,175 At or For the Year Ended December 31, 2020 Commercial ALLOWANCE FOR LOAN LOSSES Real Estate Consumer Business Unallocated Total Beginning balance $ 6,206 $ 3,766 $ 3,254 $ 3 $ 13,229 Provision for loan losses 7,622 3,372 1,354 688 13,036 Charge-offs — (1,101) (22) — (1,123) Recoveries 18 659 353 — 1,030 Net recoveries (charge-offs) 18 (442) 331 — (93) Ending balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 Period end amount allocated to: Loans individually evaluated for impairment $ 15 $ 305 $ 990 $ — $ 1,310 Loans collectively evaluated for impairment 13,831 6,391 3,949 691 24,862 Ending balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 LOANS RECEIVABLE Loans individually evaluated for impairment $ 1,280 $ 871 $ 5,610 $ — $ 7,761 Loans collectively evaluated for impairment 922,261 373,282 267,849 — 1,563,392 Ending balance $ 923,541 $ 374,153 $ 273,459 $ — $ 1,571,153 Nonaccrual and Past Due Loans TDR Loans The Company had two TDR loans on nonaccrual totaling $3.7 million at December 31, 2022, compared to none at December 31, 2021. The two nonaccrual loans at December 31, 2022, consisted of commercial business loans. The Company had no commitments to lend additional funds on these restructured loans. The TDRs were the result of interest rate modifications and extended payment terms. The Company has not forgiven any principal on these loans. There were no TDRs which incurred a payment default within twelve months of the restructure date during the years ended December 31, 2022 and 2021. The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at the dates indicated: December 31, 2022 30-59 60-89 Days Days 90 Days Total Total Past Past or More Past Loans Non- REAL ESTATE LOANS Due Due Past Due Due Current Receivable Accrual (1) Commercial $ — $ — $ — $ — $ 334,059 $ 334,059 $ — Construction and development — — — — 342,591 342,591 — Home equity 29 104 16 149 55,238 55,387 46 One-to-four-family — — 463 463 469,022 469,485 920 Multi-family — — — — 219,738 219,738 — Total real estate loans 29 104 479 612 1,420,648 1,421,260 966 CONSUMER LOANS Indirect home improvement 2,298 685 532 3,515 492,426 495,941 1,076 Marine 650 385 86 1,121 69,446 70,567 267 Other consumer 32 37 5 74 2,990 3,064 9 Total consumer loans 2,980 1,107 623 4,710 564,862 569,572 1,352 COMMERCIAL BUSINESS LOANS Commercial and industrial 1 — 2,617 2,618 194,173 196,791 6,334 Warehouse lending — — — — 31,229 31,229 — Total commercial business loans 1 — 2,617 2,618 225,402 228,020 6,334 Total loans $ 3,010 $ 1,211 $ 3,719 $ 7,940 $ 2,210,912 $ 2,218,852 $ 8,652 December 31, 2021 30-59 60-89 Days Days 90 Days Total Total Past Past or More Past Loans Non- REAL ESTATE LOANS Due Due Past Due Due Current Receivable Accrual (1) Commercial $ — $ — $ — $ — $ 264,429 $ 264,429 $ — Construction and development — — — — 240,553 240,553 — Home equity — — 179 179 40,838 41,017 301 One-to-four-family 593 264 480 1,337 364,809 366,146 480 Multi-family — — — — 178,158 178,158 — Total real estate loans 593 264 659 1,516 1,088,787 1,090,303 781 CONSUMER LOANS Indirect home improvement 1,047 280 295 1,622 334,663 336,285 554 Marine 119 — — 119 82,659 82,778 57 Other consumer 11 2 18 31 2,949 2,980 18 Total consumer loans 1,177 282 313 1,772 420,271 422,043 629 COMMERCIAL BUSINESS LOANS Commercial and industrial 791 — — 791 207,761 208,552 4,419 Warehouse lending — — — — 33,277 33,277 — Total commercial business loans 791 — — 791 241,038 241,829 4,419 Total loans $ 2,561 $ 546 $ 972 $ 4,079 $ 1,750,096 $ 1,754,175 $ 5,829 ______________________________ (1) Includes past due loans as applicable. There were no loans 90 days or more past due and still accruing interest at both December 31, 2022 and 2021. Impaired Loans and the Allowance for Loan Losses - Financial Instruments - Credit Losses (Topic 326) The following table presents impaired loans with and without allowance reserves at December 31, 2021. Recorded investment includes the unpaid principal balance or the carrying amount of loans less charge-offs and net deferred loan fees. December 31, 2021 Unpaid WITH NO RELATED ALLOWANCE RECORDED Principal Recorded Related Real estate loans: Balance Investment Allowance Home equity $ 259 $ 227 $ — One-to-four-family 497 480 — 756 707 — WITH RELATED ALLOWANCE RECORDED Real estate loans: Home equity 92 74 23 Consumer loans: Indirect 551 554 193 Marine 56 57 20 Other consumer 18 18 6 Commercial business loans: Commercial and industrial 4,417 4,419 921 5,134 5,122 1,163 Total $ 5,890 $ 5,829 $ 1,163 The following table presents the average recorded investment in loans individually evaluated for impairment and the interest income recognized and received at and for the years indicated: At or For the Year Ended December 31, 2021 2020 WITH NO RELATED ALLOWANCE RECORDED Average Recorded Interest Income Average Recorded Interest Income Real estate loans: Investment Recognized Investment Recognized Commercial $ — $ — $ 996 $ — Construction and development 771 — — — Home equity 427 15 485 25 One-to-four-family 513 15 954 17 Consumer loans: Other consumer — — 3 — Commercial business loans: Commercial and industrial — — 100 37 1,711 30 2,538 79 WITH RELATED ALLOWANCE RECORDED Real estate loans: Home equity 57 — — — One-to-four-family 20 — 60 — Consumer loans: Indirect 643 38 675 60 Marine 77 6 40 3 Other consumer 8 1 1 — Commercial business loans: Commercial and industrial 4,779 276 2,531 162 5,584 321 3,307 225 Total $ 7,295 $ 351 $ 5,845 $ 304 Credit Quality Indicators As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans and (v) the general economic conditions in the Company’s markets. The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 considered “Pass” and loans in risk grades 7 to 10 are reported as classified loans in the Company’s allowance for loan loss analysis. A description of the 10 risk grades is as follows: ● Grades 1 and 2 - These grades include loans to very high quality borrowers with excellent or desirable business credit. ● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk. ● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk. ● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term. ● Grade 7 - This grade is for “Other Assets Especially Mentioned (OAEM)” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected. ● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected. ● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable. ● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off. Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification Policy, loans that are current or less than 90 days past due are graded “Pass” and risk graded “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell. Management may choose to conservatively risk rate credits even if paying in accordance with the loan’s repayment terms. Commercial real estate, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, nonowner-occupied commercial real estate borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. The following tables summarize risk rated loan balances by category as of December 31, 2022. Term loans that are renewed or extended for periods longer than 90 days are presented as new origination in the year of the most recent renewal or extension. December 31, 2022 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Converted Commercial 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 86,189 $ 76,030 $ 46,125 $ 38,930 $ 14,101 $ 55,271 $ — $ — $ 316,646 Watch 9,504 — 373 — — — — — 9,877 Special mention — — — 2,113 — — — — 2,113 Substandard — — — — 581 4,842 — — 5,423 Total commercial 95,693 76,030 46,498 41,043 14,682 60,113 — — 334,059 Construction and development Pass 193,084 118,724 21,966 8,379 — 438 — — 342,591 Total construction and development 193,084 118,724 21,966 8,379 — 438 — — 342,591 Home equity Pass 4,978 1,696 6,818 11 1,203 1,572 39,063 — 55,341 Substandard — — — — 13 33 — — 46 Total home equity 4,978 1,696 6,818 11 1,216 1,605 39,063 — 55,387 One-to-four-family Pass 166,388 129,282 82,461 31,878 15,837 40,526 — 199 466,571 Substandard — — — — 1,941 973 — — 2,914 Total one-to-four-family 166,388 129,282 82,461 31,878 17,778 41,499 — 199 469,485 Multi-family Pass 41,041 63,353 48,376 38,805 4,176 23,987 — — 219,738 Total multi-family 41,041 63,353 48,376 38,805 4,176 23,987 — — 219,738 Total real estate loans $ 501,184 $ 389,085 $ 206,119 $ 120,116 $ 37,852 $ 127,642 $ 39,063 $ 199 $ 1,421,260 December 31, 2022 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Converted Indirect home improvement 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 253,495 $ 123,264 $ 46,476 $ 31,251 $ 18,165 $ 22,205 $ 9 $ — $ 494,865 Substandard 347 213 137 62 169 148 — — 1,076 Total indirect home improvement 253,842 123,477 46,613 31,313 18,334 22,353 9 — 495,941 Marine Pass 27,904 11,762 15,139 6,224 5,415 3,856 — — 70,300 Substandard — — — 151 61 55 — — 267 Total marine 27,904 11,762 15,139 6,375 5,476 3,911 — — 70,567 Other consumer Pass 792 754 116 48 14 80 1,251 — 3,055 Substandard 1 5 — — — — 3 — 9 Total other consumer 793 759 116 48 14 80 1,254 — 3,064 Total consumer loans $ 282,539 $ 135,998 $ 61,868 $ 37,736 $ 23,824 $ 26,344 $ 1,263 $ — $ 569,572 December 31, 2022 COMMERCIAL Revolving Loans BUSINESS LOANS Term Loans by Year of Origination Converted Commercial and industrial 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 24,337 $ 22,561 $ 12,461 $ 3,940 $ 3,074 $ 7,701 $ 104,524 $ — $ 178,598 Watch — 1,127 2,932 — — 746 1,327 — 6,132 Special mention — — — 634 — — 963 — 1,597 Substandard — 1,586 1,265 2,291 190 3,739 1,093 300 10,464 Total commercial and industrial 24,337 25,274 16,658 6,865 3,264 12,186 107,907 300 196,791 Warehouse lending Pass — — — — — — 31,227 — 31,227 Watch — — — — — — 2 — 2 Total warehouse lending — — — — — — 31,229 — 31,229 Total commercial business loans $ 24,337 $ 25,274 $ 16,658 $ 6,865 $ 3,264 $ 12,186 $ 139,136 $ 300 $ 228,020 TOTAL LOANS RECEIVABLE, GROSS Pass $ 798,208 $ 547,426 $ 279,938 $ 159,466 $ 61,985 $ 155,636 $ 176,074 $ 199 $ 2,178,932 Watch 9,504 1,127 3,305 — — 746 1,329 — 16,011 Special mention — — — 2,747 — — 963 — 3,710 Substandard 348 1,804 1,402 2,504 2,955 9,790 1,096 300 20,199 Total loans receivable, gross $ 808,060 $ 550,357 $ 284,645 $ 164,717 $ 64,940 $ 166,172 $ 179,462 $ 499 $ 2,218,852 The following table summarizes risk rated loan balances by category as of December 31, 2021: December 31, 2021 Special Pass Watch Mention Substandard Doubtful Loss REAL ESTATE LOANS (1 - 5) (6) (7) (8) (9) (10) Total Commercial $ 253,092 $ 4,652 $ 5,769 $ 916 $ — $ — $ 264,429 Construction and development 240,553 — — — — — 240,553 Home equity 40,716 — — 301 — — 41,017 One-to-four-family 363,682 — — 2,464 — — 366,146 Multi-family 178,158 — — — — — 178,158 Total real estate loans 1,076,201 4,652 5,769 3,681 — — 1,090,303 CONSUMER LOANS Indirect home improvement 335,731 — — 554 — — 336,285 Marine 82,721 — — 57 — — 82,778 Other consumer 2,962 — — 18 — — 2,980 Total consumer loans 421,414 — — 629 — — 422,043 COMMERCIAL BUSINESS LOANS Commercial and industrial 188,767 4,182 1,829 13,774 — — 208,552 Warehouse lending 33,277 — — — — — 33,277 Total commercial business loans 222,044 4,182 1,829 13,774 — — 241,829 Total loans receivable, gross $ 1,719,659 $ 8,834 $ 7,598 $ 18,084 $ — $ — $ 1,754,175 The following table presents the amortized cost basis of loans on nonaccrual status at December 31, 2022. There were no loans 90 days or more past due and still accruing interest as of December 31, 2022. December 31, 2022 Nonaccrual with No Nonaccrual with Allowance for Credit Allowance for Credit Total REAL ESTATE LOANS Losses Losses Nonaccrual Home equity $ 46 $ — $ 46 One-to-four-family 920 — 920 966 — 966 CONSUMER LOANS Indirect home improvement — 1,076 1,076 Marine — 267 267 Other consumer — 9 9 — 1,352 1,352 COMMERCIAL BUSINESS LOANS Commercial and industrial — 6,334 6,334 Total $ 966 $ 7,686 $ 8,652 The Company recognized interest income on nonaccrual loans of $506,000, $351,000, and $304,000 during the years ended December 31, 2022, 2021, and 2020. The following table presents the amortized cost basis of collateral dependent loans by class of loans as of December 31, 2022: December 31, 2022 REAL ESTATE LOANS Real Estate Equipment Total Home equity $ 46 $ — $ 46 One-to-four-family 920 — 920 966 — 966 CONSUMER LOANS Indirect home improvement — 1,076 1,076 Marine — 267 267 — 1,343 1,343 COMMERCIAL BUSINESS LOANS Commercial and industrial — 6,334 6,334 Total $ 966 $ 7,677 $ 8,643 Related Party Loans Certain directors and executive officers or their related affiliates are customers of and have had banking transactions with the Company. Total loans to directors, executive officers, and their affiliates are subject to regulatory limitations. Outstanding loan balances of related party loans were as follows and were within regulatory limitations: At December 31, 2022 2021 Beginning balance $ 4,207 $ 3,797 Additions — 647 Repayments (762) (237) Ending balance $ 3,445 $ 4,207 The aggregate maximum loan balance of extended credit was $3.4 million and $4.3 million at December 31, 2022 and 2021, respectively, and includes the ending balances from the tables above. These loans and lines of credit were made in compliance with applicable laws on substantially the same terms (including interest rates and collateral) as those prevailing at the time for comparable transactions with other persons and do not involve more than the normal risk of collectability. |
SERVICING RIGHTS
SERVICING RIGHTS | 12 Months Ended |
Dec. 31, 2022 | |
SERVICING RIGHTS | |
SERVICING RIGHTS | NOTE 4 - SERVICING RIGHTS Loans serviced for others are not included on the Consolidated Balance Sheets. The unpaid principal balances of permanent loans serviced for others were $2.78 billion and $2.61 billion at December 31, 2022 and 2021, respectively. The following table summarizes mortgage servicing rights (“MSR”) activity at or for the years indicated: At or For the Year Ended December 31, 2022 2021 2020 Beginning balance, at the lower of cost or fair value $ 16,970 $ 12,595 $ 11,560 Additions 5,400 9,760 11,139 MSR amortized (4,354) (7,444) (8,135) Recovery (impairment) of servicing rights 1 2,059 (1,969) Ending balance, at the lower of cost or fair value $ 18,017 $ 16,970 $ 12,595 The fair value of the servicing rights’ assets was $35.5 million and $26.1 million at December 31, 2022 and December 31, 2021, respectively. Fair value adjustments to servicing rights are mainly due to market-based assumptions associated with discounted cash flows, loan prepayment speeds, and changes in interest rates. A significant change in prepayments of the loans in the servicing portfolio could result in significant changes in the valuation adjustments, thus creating potential volatility in the carrying amount of servicing rights. The following provides valuation assumptions used in determining the fair value of MSR at the dates indicated: At December 31, Key assumptions: 2022 2021 Weighted average discount rate 9.6 % 9.1 % Conditional prepayment rate (“CPR”) 8.2 % 13.8 % Weighted average life in years 7.8 5.9 Key economic assumptions of the current fair value for single family MSR are presented in the table below. Also presented is the sensitivity to market rate changes for the par rate coupon for a conventional one-to-four-family FNMA, FHLMC, GNMA, or FHLB serviced home loan. The table below references a 50 basis point and 100 basis point adverse rate change and the impact on prepayment speeds and discount rates at the dates indicated. December 31, 2022 2021 Aggregate portfolio principal balance $ 2,783,458 $ 2,609,776 Weighted average rate of note 3.4 % 3.2 % At December 31, 2022 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 8.2 % 8.6 % 9.3 % Fair value MSR $ 35,478 $ 34,997 $ 34,188 Percentage of MSR 1.3 % 1.3 % 1.2 % Discount rate 9.6 % 10.1 % 10.6 % Fair value MSR $ 35,478 $ 34,715 $ 33,984 Percentage of MSR 1.3 % 1.2 % 1.2 % At December 31, 2021 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 13.8 % 20.0 % 31.5 % Fair value MSR $ 26,070 $ 21,188 $ 15,348 Percentage of MSR 1.0 % 0.8 % 0.6 % Discount rate 9.1 % 9.6 % 10.1 % Fair value MSR $ 26,070 $ 25,586 $ 25,119 Percentage of MSR 1.0 % 1.0 % 1.0 % These sensitivities are hypothetical and should be used with caution as the tables above demonstrate the Company’s methodology for estimating the fair value of MSR which is highly sensitive to changes in key assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on the fair value of MSR. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in the assumption to the change in fair value may not be linear. Also, in these tables, the effects of a variation in a particular assumption on the fair value of MSR is calculated without changing any other assumption; in reality, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may provide an incentive to refinance; however, this may also indicate a slowing economy and an increase in the unemployment rate, which reduces the number of borrowers who qualify for refinancing), which may magnify or counteract the sensitivities. Thus, any measurement of the fair value of MSR is limited by the conditions existing and assumptions made at a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time. The Company recorded $7.1 million, $6.3 million, and $4.4 million of gross contractually specified servicing fees, late fees, and other ancillary fees resulting from servicing of loans for the years ended December 31, 2022, 2021, and 2020, respectively. The income, net of MSR amortization, is reported in “Service charges and fee income” on the Consolidated Statements of Income. |
PREMISES AND EQUIPMENT
PREMISES AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2022 | |
PREMISES AND EQUIPMENT | |
PREMISES AND EQUIPMENT | NOTE 5 - PREMISES AND EQUIPMENT Premises and equipment at the dates indicated were as follows: December 31, 2022 2021 Land $ 5,715 $ 6,008 Buildings 16,934 17,290 Furniture, fixtures, and equipment 16,226 15,307 Leasehold improvements 2,461 2,461 Building improvements 7,688 7,558 Projects in process 537 67 Subtotal 49,561 48,691 Less accumulated depreciation and amortization (24,442) (22,100) Total $ 25,119 $ 26,591 Depreciation and amortization expense for these assets totaled $2.5 million, $2.7 million, and $2.8 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
LEASES | NOTE 6 - LEASES The Company has operating leases for retail bank and home lending branches, loan production offices, and certain equipment. The Company’s leases have remaining lease terms of three months to seven years and six months, some of which include options to extend the leases for up to five years. The components of lease cost (included in occupancy expense on the Consolidated Statements of Income) for the years indicated are as follows: For Year Ended December 31, Lease cost: 2022 2021 2020 Operating lease cost $ 1,422 $ 1,433 $ 1,393 Short-term lease cost 21 5 11 Total lease cost $ 1,443 $ 1,438 $ 1,404 The following table provides supplemental information related to operating leases at or for the years indicated: Cash paid for amounts included in the At or For the Year Ended December 31, measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 1,431 $ 1,402 Weighted average remaining lease term- operating leases 4.6 years 4.8 years Weighted average discount rate- operating leases 2.42 % 2.17 % The Company’s leases typically do not contain a discount rate implicit in the lease contract. As an alternative, the discount rate used in determining the lease liability for each individual lease was the FHLB of Des Moines’ fixed advance rate. Maturities of operating lease liabilities at December 31, 2022 for future periods are as follows: 2023 $ 1,512 2024 1,462 2025 1,152 2026 1,030 2027 745 Thereafter 1,251 Total lease payments 7,152 Less imputed interest (678) Total $ 6,474 |
OTHER REAL ESTATE OWNED ("OREO"
OTHER REAL ESTATE OWNED ("OREO") | 12 Months Ended |
Dec. 31, 2022 | |
OTHER REAL ESTATE OWNED ("OREO") | |
OTHER REAL ESTATE OWNED ("OREO") | NOTE 7 - OTHER REAL ESTATE OWNED (“OREO”) The following table presents the activity related to OREO at and for the years indicated: At or For the Year Ended December 31, 2022 2021 2020 Beginning balance $ — $ 90 $ 168 Loans transferred to OREO 145 — — Closed retail branch transferred to OREO 570 — — Gross proceeds from sale of OREO (145) (81) (76) Loss on sale of OREO — (9) (2) Ending balance $ 570 $ — $ 90 There was one OREO property at December 31, 2022 and none at December 31, 2021. OREO holding costs were $10,000, none, and $4,000 for the years ended December 31, 2022, 2021 and 2020, respectively. There were $511,000 and $710,000 in mortgage loans collateralized by residential real estate property in the process of foreclosure at December 31, 2022 and 2021, respectively. |
DEPOSITS
DEPOSITS | 12 Months Ended |
Dec. 31, 2022 | |
DEPOSITS | |
DEPOSITS | NOTE 8 - DEPOSITS Deposits are summarized as follows at the dates indicated: December 31, 2022 2021 Noninterest-bearing checking (1) $ 537,938 $ 564,360 Interest-bearing checking (1)(2) 135,127 228,024 Savings 134,358 193,922 Money market (3) 574,290 552,357 Certificates of deposit less than $100,000 (4) 440,785 186,974 Certificates of deposit of $100,000 through $250,000 195,447 116,206 Certificates of deposit of $250,000 and over 93,560 57,512 Escrow accounts related to mortgages serviced (5) 16,236 16,389 Total $ 2,127,741 $ 1,915,744 ____________________________ (1) Prior presentation of noninterest-bearing and interest-bearing checking balances was revised due to misclassification of certain checking products in the previous period. As a result of the misclassification, interest-bearing checking balances totaling $121.2 million at December 31, 2021, were reclassified to noninterest-bearing checking for comparative purposes. Balances as of the dates and average values included herein have been updated to reflect the reclassification. (2) Includes $2.3 million and $90.0 million of brokered deposits at December 31, 2022 and 2021, respectively. (3) Includes $59.7 million and $5.0 million of brokered deposits at December 31, 2022 and 2021, respectively. (4) Includes $332.0 million and $97.6 million of brokered certificates of deposit at December 31, 2022 and 2021, respectively. (5) Noninterest-bearing accounts. Scheduled maturities of time deposits at December 31, 2022 for future years ending are as follows: December 31, 2022 Maturing in 2023 $ 472,231 Maturing in 2024 90,507 Maturing in 2025 113,434 Maturing in 2026 36,618 Maturing in 2027 16,947 Thereafter 55 Total $ 729,792 Interest expense by deposit category for the years indicated is as follows: Year Ended December 31, 2022 2021 2020 Interest-bearing checking $ 495 $ 282 $ 388 Savings and money market 3,775 1,604 2,458 Certificates of deposit 5,150 5,043 9,134 Total $ 9,420 $ 6,929 $ 11,980 The Company had related party deposits of approximately $5.7 million and $3.9 million at December 31, 2022 and 2021, respectively, which included deposits held for directors and executive officers. |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
DEBT | NOTE 9 - DEBT Borrowings The Bank is a member of the FHLB of Des Moines, which entitles it to certain benefits including a variety of borrowing options consisting of a secured credit line that allows both fixed and variable rate advances. The FHLB borrowings at December 31, 2022 and 2021, consisted of a warehouse securities credit line (“securities line”), which allows advances with interest rates fixed at the time of borrowing and a warehouse federal funds (“Fed Funds”) advance, which allows daily advances at variable interest rates. Credit capacity is primarily determined by the value of assets collateralized at the FHLB, funds on deposit at the FHLB, and stock owned by the Bank. Credit is limited to 45% of the Company’s total assets and available pledged assets. The Bank entered into an Advances, Pledges and Security Agreement with the FHLB for which specific loans are pledged to secure these credit lines. At December 31, 2022, loans of approximately $840.2 million were pledged to the FHLB. At December 31, 2022, the Bank’s total borrowing capacity was $601.7 million with the FHLB of Des Moines, with unused borrowing capacity of $414.8 million. In addition, all FHLB stock owned by the Company is collateral for credit lines. The Bank maintains a short-term borrowing line with the FRB with total credit based on eligible collateral. The Bank can borrow under the Term Auction or Term Facility at rates published by the San Francisco FRB. At December 31, 2022 and 2021, the Bank had approximately $579.8 million and $428.7 million, respectively, in pledged consumer loans with a Term Auction or Term Facility borrowing capacity of $205.8 million and $200.1 million, respectively, of which none was outstanding at either date. The Bank also had $101.0 million unsecured Fed Funds lines of credit with other financial institutions of which none was outstanding at December 31, 2022. Advances on these lines at the dates indicated were as follows: December 31, 2022 2021 Federal Home Loan Bank $ 186,528 $ 42,528 Total $ 186,528 $ 42,528 Scheduled maturities of Federal Home Loan Bank advances were as follows: Interest Years Ending December 31, Balances Rates 2023 $ 182,633 4.27 % 2024 3,895 2.27 % Total $ 186,528 Subordinated Notes On February 10, 2021, FS Bancorp completed the private placement of $50.0 million of its 3.75% fixed-to-floating rate subordinated notes due 2031 (the “Notes”) at an offering price equal to 100% of the aggregate principal amount of the Notes, resulting in net proceeds, after placement agent fees and offering expenses, of approximately $49.3 million. The interest rate on the Notes remains fixed equal to 3.75% for the first five years. After five years the interest rate changes to a floating interest rate tied to a benchmark rate, which is expected to be Three-Month Term Secured Overnight Financing Rate (“SOFR”), plus a spread of 337 The Notes are unsecured obligations and are subordinated in right of payment to all existing and future indebtedness, deposits and other liabilities of the Company's current and future subsidiaries, including the Bank’s deposits as well as the Company's subsidiaries' liabilities to general creditors and liabilities arising during the ordinary course of business. The Notes may be included in Tier 2 capital for the Company under current regulatory guidelines and interpretations. The maximum balance at any month end and the average balances and weighted average interest rates on debt during the years indicated were as follows: For the Year Ending December 31, 2022 2021 2020 Maximum balance: FHLB advances and Fed Funds $ 260,828 $ 102,528 $ 159,114 FRB — — 27,000 Fed Funds lines of credit — — — Subordinated notes 50,000 50,000 10,000 PPP Liquidity Facility — 59,349 74,112 Average balance: FHLB advances and Fed Funds 102,008 55,602 99,773 FRB 548 205 1,096 Fed Funds lines of credit 15 11 3 Subordinated notes 50,000 44,699 10,000 PPP Liquidity Facility — 7,310 46,965 Weighted average interest rates FHLB advances and Fed Funds 2.98 % 1.88 % 1.80 % FRB 1.69 % 0.25 % 0.25 % Fed Funds lines of credit 3.28 % 0.49 % 0.36 % Subordinated notes 3.75 % 3.75 % 6.50 % PPP Liquidity Facility — % 0.35 % 0.35 % |
EMPLOYEE BENEFITS
EMPLOYEE BENEFITS | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFITS | |
EMPLOYEE BENEFITS | NOTE 10 - EMPLOYEE BENEFITS On January 1, 2012, the Company established an ESOP for eligible employees of the Company and the Bank. Employees of the Company and the Bank are eligible to participate in the ESOP if they have been credited with at least 1,000 hours of service during the employees’ first 12 month period and based on the employee’s anniversary date will be vested in the ESOP. The employee will be 100% vested in the ESOP after two years of working at least 1,000 hours in each of those two years . The ESOP borrowed $2.6 million from FS Bancorp, Inc. and used those funds to acquire 518,420 shares of FS Bancorp, Inc. common stock in the open market at an average price of $5.09 per share during the second half of 2012. The Bank made contributions to the ESOP in amounts necessary to amortize the ESOP loan payable to FS Bancorp, Inc. over a period of 10 years , bearing interest at 2.30% . Intercompany expenses associated with the ESOP are eliminated in consolidation. Shares purchased by the ESOP with the loan proceeds are held in a suspense account and allocated to ESOP participants on a pro rata basis as principal and interest payments are made by the ESOP to FS Bancorp, Inc. The loan is secured by shares purchased with the loan proceeds and will be repaid by the ESOP with funds from the Bank’s discretionary contributions to the ESOP and earnings on the ESOP assets. Payments of principal and interest are due annually on December 31, the Company’s fiscal year end. On December 31, 2021, the ESOP paid the tenth annual and final installment of principal in the amount of $288,000 , plus accrued interest of $7,000 pursuant to the ESOP loan agreement. As shares are committed to be released from collateral, the Company reports compensation expense equal to the average daily market prices of the shares at December 31, 2021 for the prior 90 days. These shares become outstanding for earnings per share computations. The compensation expense is accrued monthly throughout the year. Dividends on allocated ESOP shares are recorded as a reduction of retained earnings; dividends on unallocated ESOP shares are recorded as a reduction of debt and accrued interest. Compensation expense related to the ESOP for the years ended December 31, 2021 and 2020, was $1.8 million, and $1.3 million, respectively. Shares held by the ESOP at December 31, 2022, 2021, and 2020, were as follows (shown as actual, post stock split): Balances at December 31, 2022 2021 2020 Allocated shares — — 427,488 Committed to be released shares — — — Unallocated shares — — 51,842 Total ESOP shares — — 479,330 Fair value of unallocated shares (in thousands) $ — $ — $ 1,307 All ESOP shares were allocated as of December 31, 2021. 401(k) Plan The Company has a salary deferral 401(k) Plan covering substantially all of its employees. Employees are eligible to participate in the 401(k) plan at the date of hire if they are 18 years of age. Eligible employees may contribute through payroll deductions and are 100% vested at all times in their deferral contributions account. The Company matches 100% for contributions of 1% to 3%, and 50% for contributions of 4% to 5%. There was a $1.9 million, $1.7 million, and $1.5 million matching contribution for the years ended December 31, 2022, 2021, and 2020, respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
INCOME TAXES | NOTE 11 - INCOME TAXES The components of income tax expense for the years indicated were as follows: Minnesot For the Year Ending December 31, Provision for income taxes 2022 2021 2020 Current $ 8,183 $ 8,258 $ 12,976 Deferred (844) 1,750 (2,390) Total provision for income taxes $ 7,339 $ 10,008 $ 10,586 A reconciliation of the effective income tax rate with the federal statutory tax rates at the dates indicated was as follows: December 31, 2022 2021 2020 Amount Rate Amount Rate Amount Rate Income tax provision at statutory rate $ 7,767 21.0 % $ 9,958 21.0 % $ 10,469 21.0 % Tax exempt income (852) (2.3) (492) (1.0) (292) (0.6) Nondeductible items resulting in increase in tax 31 0.1 28 — 57 0.1 Increase in tax resulting from other items 274 0.7 100 0.2 175 0.4 Equity compensation (146) (0.4) (883) (1.9) (46) (0.1) Executive compensation 265 0.7 979 2.1 8 — ESOP — — 318 0.7 215 0.4 Total $ 7,339 19.8 % $ 10,008 21.1 % $ 10,586 21.2 % Total deferred tax assets and liabilities at the dates indicated were as follows: Deferred Tax Assets December 31, 2022 2021 Net operating loss carryforward $ — $ 189 Allowance for credit losses 6,119 5,673 Non-accrued loan interest 11 — Restricted stock awards 101 121 Non-qualified stock options 438 265 Lease liability 1,392 1,030 Securities available-for-sale 9,146 149 Unfunded commitments 547 107 Other 234 45 Total deferred tax assets 17,988 7,579 Deferred Tax Liabilities Loan origination costs (2,123) (1,982) Servicing rights (3,874) (3,649) Stock dividend - FHLB stock (35) (35) Property, plant, and equipment (1,095) (1,036) Purchase accounting adjustments (727) (863) Lease right-of-use assets (1,338) (979) Interest rate swaps designated as cash flow hedge (2,126) (218) Total deferred tax liabilities (11,318) (8,762) Net deferred tax assets (liabilities) $ 6,670 $ (1,183) The Company files a U.S. Federal income tax return and Oregon and Idaho state returns, which are subject to examination by tax authorities for years 2019 and later. At December 31, 2022 and 2021, the Company had no uncertain tax positions. The Company recognizes interest and penalties in tax expense and at December 31, 2022, 2021 and 2020, the Company recognized no interest and penalties. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 12 - COMMITMENTS AND CONTINGENCIES Commitments - The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments. The following table provides a summary of the Company’s commitments at the dates indicated: COMMITMENTS TO EXTEND CREDIT December 31, REAL ESTATE LOANS 2022 2021 Commercial $ 1,260 $ 787 Construction and development 201,708 182,297 One-to-four-family (includes locks for saleable loans) 10,713 78,264 Home equity 77,566 67,596 Multi-family 2,999 3,434 Total real estate loans 294,246 332,378 CONSUMER LOANS 39,406 35,873 COMMERCIAL BUSINESS LOANS Commercial and industrial 150,109 126,220 Warehouse lending 64,781 64,160 Total commercial business loans 214,890 190,380 Total commitments to extend credit $ 548,542 $ 558,631 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Since many of the commitments are expected to expire without being drawn upon, the amount of the total commitments does not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation of the party. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate, and income-producing commercial properties. Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extensions of credit to existing customers. These lines of credit are uncollateralized and usually do not contain a specified maturity date and ultimately may not be drawn upon to the total extent to which the Company is committed. The Company’s ACL - unfunded loan commitments at December 31, 2022 and reserves for estimated losses from unfunded commitments at December 31, 2021 was $2.5 million and $499,000, respectively. The increase in the ACL - unfunded loan commitments reflects the adoption of CECL, as well as the increased provision for credit losses - unfunded loan commitments recorded during the year. One-to-four-family commitments included in the table above are accounted for as fair value derivatives and do not carry an associated reserve. The Company’s derivative positions are presented with discussion in “Note 17 - Derivatives.” The Company also sells one-to-four-family loans to the FHLB of Des Moines that require a limited level of recourse if the loans default and exceed a certain loss exposure. Specific to that recourse, the FHLB of Des Moines established a first loss account (“FLA”) related to the loans and required a credit enhancement (“CE”) obligation by the Bank to be utilized after the FLA is used. Based on loans sold through December 31, 2022, the total loans sold to the FHLB were $10.1 million with the FLA being $581,000 and the CE obligation at $389,000 or 3.8% of the loans outstanding. Management has established a holdback of 10% of the outstanding CE obligation, or $39,000, which is a part of the off-balance sheet holdback for loans sold. At December 31, 2022 and 2021, there were no loans sold to the FHLB of Des Moines greater than 30 days past their contractual payment due date. Contingent liabilities for loans held for sale The Company has entered into a severance agreement with its Chief Executive Officer (“CEO”). The severance agreement, subject to certain requirements, generally includes a lump sum payment to the CEO equal to 24 months of base compensation in the event their employment is involuntarily terminated, other than for cause or the executive terminates his employment with good reason, as defined in the severance agreement. The Company has entered into change of control agreements with its Chief Financial Officer, Chief Lending Officer, Chief Credit Officer, Chief Risk Officer, Chief Human Resources Officer, Senior Vice President Compliance Officer, Executive Vice President of Retail Banking and Marketing, and the Executive Vice President of Home Lending. The change of control agreements, subject to certain requirements, generally remain in effect until canceled by either party upon at least 24 months prior written notice. Under the change of control agreements, the executive generally will be entitled to a change of control payment from the Company if the executive is involuntarily terminated within six months preceding or 12 months after a change in control (as defined in the change of control agreements). In such an event, the executives would each be entitled to receive a cash payment in an amount equal to 12 months of their then current salary, subject to certain requirements in the change of control agreements. As a result of the nature of our activities, the Company is subject to various pending and threatened legal actions, which arise in the ordinary course of business. From time to time, subordination liens may create litigation which requires us to defend our lien rights. In the opinion of management, liabilities arising from these claims, if any, will not have a material effect on our financial position. The Company had no material pending legal actions at December 31, 2022. |
SIGNIFICANT CONCENTRATION OF CR
SIGNIFICANT CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2022 | |
SIGNIFICANT CONCENTRATION OF CREDIT RISK | |
SIGNIFICANT CONCENTRATION OF CREDIT RISK | NOTE 13 - SIGNIFICANT CONCENTRATION OF CREDIT RISK Most of the Company’s commercial and multi-family real estate, construction, residential, and commercial business lending activities are with customers located in Western Washington, near the one loan production office located in the Tri-Cities, Washington, and our newest loan production office in Vancouver, Washington. The Company originates real estate, consumer, and commercial business loans and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota, Nevada, Texas, Utah, Massachusetts, and Montana. Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms. The concentration on commercial real estate remains below the 300% of Risk Based Capital regulatory threshold and the subset of construction concentration, excluding owner-occupied loans is within Board approved limits. The construction, land development, and other land concentration represents more than 100% of the Bank’s total regulatory capital at 106.5% and is focused on in city, in fill vertical construction financing in King and Snohomish counties. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms. |
REGULATORY CAPITAL
REGULATORY CAPITAL | 12 Months Ended |
Dec. 31, 2022 | |
REGULATORY CAPITAL | |
REGULATORY CAPITAL | NOTE 14 - REGULATORY CAPITAL The Bank is subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. As of September 30, 2022, the Company opted to discontinue the community bank leverage ratio (“CBLR”) framework and return to the former risk-based capital adequacy framework. The Bank remains well capitalized under prompt corrective action provisions. The CBLR calculated for the Bank at December 31, 2021 was 12.2%. At December 31, 2021, the Bank was considered well capitalized under the CBLR framework with Tier 1 capital of $270.8 million and a minimum Tier 1 capital requirement of $189.3 million. Under the risk-based capital adequacy framework, quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to total average assets (as defined), and minimum ratios of Tier 1 total capital (as defined) and common equity Tier 1 (“CET 1”) capital to risk-weighted assets (as defined). The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET 1 capital ratios as set forth in the table below to be categorized as well capitalized. At December 31, 2022, the Bank was categorized as well capitalized under applicable regulatory requirements. There are no conditions or events since that notification that management believes have changed the Bank’s category. Management believes, at December 31, 2022, that the Bank met all capital adequacy requirements. The following table compares the Bank’s actual capital amounts and ratios at December 31, 2022 to their minimum and well capitalized regulatory capital requirements at that date (dollars in thousands): To be Well Capitalized Under Prompt For Capital For Capital Adequacy Corrective Actual Adequacy Purposes with Capital Buffer Action Provisions Bank Only Amount Ratio Amount Ratio Amount Ratio Amount Ratio At December 31, 2022 Total risk-based capital (to risk-weighted assets) $ 323,577 13.70 % $ 188,937 8.00 % $ 247,980 10.50 % $ 236,171 10.00 % Tier 1 risk-based capital (to risk-weighted assets) $ 294,043 12.45 % $ 141,703 6.00 % $ 200,746 8.50 % $ 188,937 8.00 % Tier 1 leverage capital (to average assets) $ 294,043 11.28 % $ 104,304 4.00 % $ N/A N/A $ 130,380 5.00 % CET 1 capital (to risk-weighted assets) $ 294,043 12.45 % $ 106,277 4.50 % $ 165,320 7.00 % $ 153,511 6.50 % In addition to the minimum CET 1, Tier 1, total capital, and leverage ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET 1 capital greater than 2.5% of risk-weighted assets above the required minimum levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses based on percentages of eligible retained income that could be utilized for such actions. At December 31, 2022, the Bank’s capital exceeded the conservation buffer. The Company is a bank holding company registered with the Federal Reserve. Bank holding companies are subject to capital adequacy requirements of the Federal Reserve under the Bank Holding Company Act of 1956, as amended, and the regulations of the Federal Reserve. Bank holding companies with less than $3.0 billion in assets are generally not subject to compliance with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy that a bank holding company is required to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations. If the Company were subject to regulatory guidelines for bank holding companies with $3.0 billion or more in assets at December 31, 2022, it would have exceeded all regulatory capital requirements. For informational purposes, the regulatory capital ratios calculated for the Company at December 31, 2022 were 9.7% for Tier 1 leverage-based capital, 10.7% for Tier 1 risk-based capital, 14.0% for total risk-based capital, and 10.7% for CET 1 capital ratio. The Tier 1 leverage-based capital ratio calculated for the Company at December 31, 2021 was 10.8%. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Dec. 31, 2022 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 15 - FAIR VALUE MEASUREMENTS The Company determines fair value based on the requirements established in ASC Topic 820 Fair Value Measurements, Topic 820 Financial Instruments - Overall (Subtopic 825-10), Recognition and Measurement of Financial Assets and Financial Liabilities, The following definitions describe the levels of inputs that may be used to measure fair value: Level 1 Level 2 Level 3 The following methods were used to estimate the fair value of certain assets and liabilities on a recurring and nonrecurring basis. Securities Mortgage Loans Held for Sale - Loans Receivable - Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including commercial, real estate and consumer loans. Each loan category is further segregated by fixed and adjustable-rate loans. The fair value of loans is calculated by discounting expected cash flows at rates at which similar loans are currently being made. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio. Certain residential mortgage loans were initially originated for sale and measured at fair value; after origination, the loans were transferred to loans held for investment. As of December 31, 2022 and 2021, there were $14.0 million and $16.1 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from held for sale to loans held for investment. The aggregate unpaid principal balance of these loans was $15.6 million and $16.1 million as of December 31, 2022 and 2021, respectively. Gains and losses from changes in fair value for these loans are reported in earnings as a component of “Other noninterest income” on the Consolidated Statements of Income. For the years ended December 31, 2022, 2021, and 2020, the Company recorded net decreases in fair value of $1.7 million and $29,000 , and a net increase in fair value of $15,000 , respectively. For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans (Level 2). Derivative Instruments - Other Real Estate Owned Loans Individually Evaluated - Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or when the Bank determines that foreclosure is probable, the expected credit loss is measured based on the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. As a practical expedient, the Bank measures the expected credit loss for a loan using the fair value of the collateral, if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Bank’s assessment as of the reporting date. In both cases, if the fair value of the collateral is less than the amortized cost basis of the loan, the Bank will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off by the subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported (Level 3). Servicing Rights The following table presents securities available-for-sale, mortgage loans held for sale, loans receivable, at fair value, and derivative assets and liabilities measured at fair value on a recurring basis at the dates indicated: Financial Assets At December 31, 2022 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 17,288 $ — $ 17,288 Corporate securities — 8,545 — 8,545 Municipal bonds — 120,602 — 120,602 Mortgage-backed securities — 69,966 — 69,966 U.S. Small Business Administration securities — 12,851 — 12,851 Mortgage loans held for sale, at fair value — 20,093 — 20,093 Loans receivable, at fair value — 14,035 — 14,035 Derivatives: Forward TBA mortgage-backed securities — 164 — 164 Interest rate lock commitments with customers — — 107 107 Interest rate swaps — 9,870 — 9,870 Total assets measured at fair value $ — $ 273,414 $ 107 $ 273,521 Financial Liabilities Derivatives: Mandatory and best effort forward commitments with investors $ — $ — $ (38) $ (38) Total liabilities measured at fair value $ — $ — $ (38) $ (38) Financial Assets At December 31, 2021 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 20,970 $ — $ 20,970 Corporate securities — 7,995 1,007 9,002 Municipal bonds — 135,302 131 135,433 Mortgage-backed securities — 89,402 — 89,402 U.S. Small Business Administration securities — 16,552 — 16,552 Mortgage loans held for sale, at fair value — 125,810 — 125,810 Loans receivable, at fair value — 16,083 — 16,083 Derivatives: Mandatory and best effort forward commitments with investors — — 808 808 Forward TBA mortgage-backed securities — 53 — 53 Interest rate swaps — 1,168 — 1,168 Interest rate lock commitments with customers — — 757 757 Total assets measured at fair value $ — $ 413,335 $ 2,703 $ 416,038 Financial Liabilities Derivatives: Interest rate swaps — (155) — (155) Total liabilities measured at fair value $ — $ (155) $ — $ (155) The following table presents impaired loans, OREO, and servicing rights measured at fair value on a nonrecurring basis at the dated indicated. The amounts disclosed below represent the fair values at the time the nonrecurring fair value measurements were evaluated. December 31, 2022 Level 1 Level 2 Level 3 Total Loans individually evaluated $ — $ — $ 8,652 $ 8,652 OREO — — 570 570 MSR — — 35,478 35,478 December 31, 2021 Level 1 Level 2 Level 3 Total Loans individually evaluated $ — $ — $ 5,829 $ 5,829 MSR — — 26,070 26,070 Quantitative Information about Level 3 Fair Value Measurements - Level 3 Significant Weighted Average Fair Value Valuation Unobservable December 31, December 31, Instruments Techniques Inputs Range 2022 2021 RECURRING Interest rate lock commitments with customers Quoted market prices Pull-through expectations 80% - 99% 92.5 % 93.3 % Individual forward sale commitments with investors Quoted market prices Pull-through expectations 80% - 99% 92.5 % 93.3 % NONRECURRING Loans individually evaluated Fair value of underlying collateral Discount applied to the obtained appraisal 10.0% 10.0 % 10.0 % OREO Fair value of collateral Discount applied to the obtained appraisal 10.0% 10.0 % N/A % MSR Industry sources Pre-payment speeds 0% - 50% 8.2 % 13.8 % The pull-through rate is based on historical loan closing rates for similar interest rate lock commitments. An increase or decrease in the pull-through rate would have a corresponding positive or negative fair value adjustment. The following table provides a reconciliation of assets and liabilities measured at fair value using significant unobservable inputs (Level 3) on a recurring basis during the years indicated: Purchases Net change in Net change in Beginning and Sales and Ending fair value for fair value for 2022 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 757 $ 3,215 $ (3,865) $ 107 $ (650) $ — Individual forward sale commitments with investors 808 6,383 (7,229) (38) (846) — 2021 Interest rate lock commitments with customers $ 4,024 $ 23,164 $ (26,431) $ 757 $ (3,267) $ — Individual forward sale commitments with investors (67) 2,526 (1,651) 808 875 — Securities available-for-sale, at fair value 1,111 40 (13) 1,138 — 27 2020 Interest rate lock commitments with customers $ 557 $ 53,281 $ (49,814) $ 4,024 $ 3,467 $ — Individual forward sale commitments with investors (195) (4,857) 4,985 (67) 128 — Securities available-for-sale, at fair value 1,162 — (51) 1,111 — (40) _____________________________ (1) Relating to items held at end of period included in income. (2) Relating to items held at end of period included in other comprehensive income. (Losses) gains on interest rate lock commitments and on forward sale commitments with investors carried at fair value are recorded in “Gain on sale of loans” on the Consolidated Statements of Income. The following table provides estimated fair values of the Company’s financial instruments at the dates indicated, whether or not recognized at fair value on the Consolidated Balance Sheets: December 31, December 31, 2022 2021 Financial Assets Carrying Fair Carrying Fair Level 1 inputs: Amount Value Amount Value Cash and cash equivalents $ 41,437 $ 41,437 $ 26,491 $ 26,491 Certificates of deposit at other financial institutions 4,712 4,712 10,542 10,542 Level 2 inputs: Securities available-for-sale, at fair value 229,252 229,252 270,221 270,221 Securities held-to-maturity 8,500 7,929 7,500 8,128 Loans held for sale, at fair value 20,093 20,093 125,810 125,810 FHLB stock, at cost 10,611 10,611 4,778 4,778 Forward TBA mortgage-backed securities 164 164 53 53 Loans receivable, at fair value 14,035 14,035 16,083 16,083 Interest rate swaps 9,870 9,870 1,168 1,168 Accrued interest receivable 11,144 11,144 7,594 7,594 Level 3 inputs: Securities available-for-sale, at fair value — — 1,138 1,138 Loans receivable, gross 2,204,817 2,153,769 1,738,092 1,725,651 MSR, held at lower of cost or fair value 18,017 35,478 16,970 26,070 Fair value interest rate locks with customers 107 107 757 757 Mandatory and best effort forward commitments with investors — — 808 808 Financial Liabilities Level 2 inputs: Deposits 2,127,741 2,105,926 1,915,744 1,912,498 Borrowings 186,528 186,188 42,528 43,365 Subordinated notes, excluding unamortized debt issuance costs 50,000 44,500 50,000 51,688 Accrued interest payable 2,270 2,270 766 766 Interest rate swaps — — 155 155 Level 3 inputs: Mandatory and best effort forward commitments with investors 38 38 — — |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 16 - EARNINGS PER SHARE The Company computes earnings per share using the two-class method, which is an earnings allocation method for computing earnings per share that treats a participating security as having rights to earnings that would otherwise have been available to common shareholders. Basic earnings per share are computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Unvested share-based awards containing non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and are included in the computation of earnings per share pursuant to the two-class method. Diluted earnings per share reflect the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For earnings per share calculations for 2021 and 2020, the ESOP shares committed to be released are included as outstanding shares for both basic and diluted earnings per share. All ESOP shares were allocated as of December 31, 2021. The following table presents a reconciliation of the components used to compute basic and diluted earnings per share at or for the years indicated: At or For the Year Ended December 31, Numerator (Dollars in thousands, except per share amounts): 2022 2021 2020 Net income $ 29,649 $ 37,412 $ 39,264 Dividends and undistributed earnings allocated to participating securities (554) (611) (545) Net income available to common shareholders $ 29,095 $ 36,801 $ 38,719 Denominator (shown as actual): Basic weighted average common shares outstanding 7,754,507 8,217,916 8,461,280 Dilutive shares 119,133 200,580 162,038 Diluted weighted average common shares outstanding 7,873,640 8,418,496 8,623,318 Basic earnings per share $ 3.75 $ 4.48 $ 4.58 Diluted earnings per share $ 3.70 $ 4.37 $ 4.49 Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive. 61,912 16,466 133,238 |
DERIVATIVES
DERIVATIVES | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVES | |
DERIVATIVES | NOTE 17 - DERIVATIVES The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s predominant derivative and hedging activities involve interest rate swaps related to certain borrowings, brokered deposits, investment securities, forward sales contracts, and commitments to extend credit associated with mortgage banking activities. Generally, these instruments help the Company manage exposure to market risk. Market risk represents the possibility that economic value or net interest income will be adversely affected by fluctuations in external factors such as market-driven interest rates and prices or other economic factors. Mortgage Banking Derivatives Not Designated as Hedges The Company regularly enters into commitments to originate and sell loans held for sale. The Company has exposure to movements in interest rates associated with written interest rate lock commitments with potential borrowers to originate one-to four-family loans that are intended to be sold and for closed one-to-four-family mortgage loans held for sale for which fair value accounting has been elected, that are awaiting sale and delivery into the secondary market. The Company economically hedges the risk of changing interest rates associated with these mortgage loan commitments by entering into forward sales contracts to sell one-to-four-family mortgage loans or into contracts to sell forward To-Be-Announced (“TBA”) mortgage-backed securities. These commitments and contracts are considered derivatives but have not been designated as hedging instruments for reporting purposes under U.S. GAAP. Rather, they are accounted for as free-standing derivatives, or economic hedges, with changes in the fair value of the derivatives reported in noninterest income or noninterest expense. The Bank recognizes all derivative instruments as either “Other assets” or “Other liabilities” on the Consolidated Balance Sheets and measures those instruments at fair value. Cash Flow Hedges The Company has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows attributable to changes in forecasted LIBOR based brokered deposits. These derivative instruments are designated as cash flow hedges. The hedged item is the LIBOR portion of the series of future adjustable-rate borrowings and deposits over the term of the interest rate swap. Accordingly, changes to the amount of interest payment cash flows for the hedged transactions attributable to a change in credit risk are excluded from management’s assessment of hedge effectiveness. The Bank tests for hedging effectiveness on a quarterly basis. The accumulated other comprehensive income is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Bank has not recorded any hedge ineffectiveness since inception. The Bank expects that approximately $3.8 million will be reclassified from accumulated other comprehensive loss as a decrease to interest expense over the next twelve months related to these cash flow hedges. Fair Value Hedges The Company is exposed to changes in the fair value of certain of its pools of prepayable fixed-rate assets due to changes in benchmark interest rates. The Company uses interest rate swaps to manage its exposure to changes in fair value on these instruments attributable to changes in the designated benchmark interest rate, the SOFR. Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable-rate payments over the life of the agreements without the exchange of the underlying notional amount. For derivatives designated and that qualify as fair value hedges, the gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk are recognized in interest income. As of December 31, 2022, the following amounts were recorded on the balance sheet related to cumulative-basis adjustment for fair value hedges. The Company had no fair value hedges at December 31, 2021. December 31, 2022 Line item in the statement of financial position in which the hedged Item is included Hedged Assets Investment securities (1) $ 55,893 $ 4,107 Total $ 55,893 $ 4,107 ____________________________________ 1) These amounts include the amortized cost basis of closed portfolios used in designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $242.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.1 million; and the amounts of the designated hedged items was $60.0 million. The following tables summarize the Company’s derivative instruments at the dates indicated. The Company has master netting agreements with derivative dealers with which it does business, but reflects gross assets and liabilities as “Other assets” and “Other liabilities”, respectively, on the Consolidated Balance Sheets, as follows: December 31, 2022 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 90,000 $ 5,780 $ — Fair value hedges: Interest rate swaps - securities $ 60,000 $ 4,090 $ — Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 8,837 107 — Mandatory and best effort forward commitments with investors 4,558 — 38 Forward TBA mortgage-backed securities 27,000 164 — December 31, 2021 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 90,000 $ 1,168 $ 155 Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 71,890 757 — Mandatory and best effort forward commitments with investors 74,375 808 — Forward TBA mortgage-backed securities 111,000 53 — The following table summarizes the effect of fair value and cash flow hedge accounting on the income statement for the years indicated: Year Ended December 31, 2022 2021 2020 Interest Interest Interest Interest Interest Interest Expense Income Expense Income Expense Income Deposits Securities Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 9,420 $ 7,046 $ 6,929 $ 5,637 $ 11,980 $ 4,709 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items $ — $ (4,107) $ — $ — $ — $ — Recognized on derivatives designated as hedging instruments — 4,103 — — — — Net expense recognized on fair value hedges $ — $ (4) $ — $ — $ — $ — Net gain (loss) on cash flow hedging relationships: Interest rate swaps - brokered deposits and borrowings Realized gains (losses) (pre-tax) reclassified from AOCI into net income $ 970 $ — $ (538) $ — $ (198) $ — Net income (expense) recognized on cash flow hedges $ 970 $ — $ (538) $ — $ (198) $ — Changes in the fair value of the non-hedging derivatives recognized in “Noninterest income” on the Consolidated Statements of Income and included in gain on sale of loans resulted in a net loss of $2.6 million and net gains of $5.1 million and $6.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table presents a summary of amounts outstanding in derivative financial instruments including those entered into in connection with the same counter-party under master netting agreements as of the years indicated. While these agreements are typically over-collateralized, GAAP requires disclosures in this table to limit the amount of such collateral to the amount of the related asset or liability for each counter-party. Gross Amounts Net Amounts of Assets Gross Amounts Not Offset Gross Amounts Offset in the Presented in the in the Statement of Financial Position Offsetting of derivative assets of Recognized Statement of Statement of Financial Cash Collateral at December 31, 2022 Assets Financial Position Financial Position Instruments Received Net Amount Interest rate swaps $ 9,870 $ — $ 9,870 $ — $ — $ 9,870 at December 31, 2021 Interest rate swaps $ 1,168 $ — $ 1,168 $ — $ — $ 1,168 Gross Amounts Net Amounts of Gross Amounts Not Offset Gross Amounts Offset in the Liabilities in the Statement of Financial Position Offsetting of derivative liabilities of Recognized Statement of Presented in the Statement Financial Cash Collateral at December 31, 2022 Liabilities Financial Position of Financial Position Instruments Posted Net Amount Interest rate swaps $ — $ — $ — $ — $ — $ — at December 31, 2021 Interest rate swaps $ 155 $ — $ 155 $ — $ 155 $ — Credit Risk-related Contingent Features The Company has interest rate swap agreements with certain of its derivative counterparties that contain a provision where if the Company either defaults or fails to maintain its status as a well or adequately capitalized institution, then the Company could be required to terminate the contracts or post additional collateral. As of December 31, 2022, the Company had no derivatives in a net liability position related to these agreements. The Company has minimum collateral posting thresholds with certain of its derivative counterparties and has posted collateral of securities with a carrying value of $2.8 million and cash of $680,000 to secure interest rate swap agreements as of December 31, 2022. The Company had posted cash collateral of $170,000 for TBA trades with counterparties at that date. In certain cases, the Company will have posted excess collateral, compared to total exposure due to initial margin requirements or day-to-day rate volatility. |
ACCUMULATED OTHER COMPREHENSIVE
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | 12 Months Ended |
Dec. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | NOTE 18 - ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) The following were changes in accumulated other comprehensive income (loss) by component, net of tax, for the years indicated: Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2022 Instruments Securities Total Beginning balance $ 794 $ (542) $ 252 Other comprehensive income (loss) before reclassification, net of tax 7,728 (32,851) (25,123) Amounts reclassified from accumulated other comprehensive loss, net of tax (761) — (761) Net current period other comprehensive income (loss) 6,967 (32,851) (25,884) Ending balance $ 7,761 $ (33,393) $ (25,632) Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2021 Instruments Securities Total Beginning balance $ (967) $ 3,500 $ 2,533 Other comprehensive income (loss) before reclassification, net of tax 1,339 (4,042) (2,703) Amounts reclassified from accumulated other comprehensive income, net of tax 422 — 422 Net current period other comprehensive income (loss) 1,761 (4,042) (2,281) Ending balance $ 794 $ (542) $ 252 Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2020 Instruments Securities Total Beginning balance $ — $ 788 $ 788 Other comprehensive (loss) income before reclassification, net of tax (1,122) 2,947 1,825 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 155 (235) (80) Net current period other comprehensive (loss) income (967) 2,712 1,745 Ending balance $ (967) $ 3,500 $ 2,533 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | Stock Options and Restricted Stock On May 17, 2018, the shareholders of the Company approved the 2018 Equity Incentive Plan (the “2018 Plan”) that authorizes 1.3 million shares of the Company’s common stock to be awarded. The 2018 Plan provides for the grant of incentive stock options, non-qualified stock options, and up to 326,000 shares as restricted stock awards (“RSAs”) to directors, emeritus directors, officers, employees or advisory directors of the Company. At December 31, 2022, there were 342,096 shares available for future stock option awards and 109,410 shares available under the 2018 Plan. For the years ended December 31, 2022, 2021, and 2020, total share-based compensation expense was $2.0 million, $1.4 million, and $1.0 million, respectively. The related income tax benefit was $414,000, $304,000, and $214,000 for the years ended December 31, 2022, 2021, and 2020, respectively. Stock Options The 2018 plan consists of stock option awards that may be granted as incentive stock options or nonqualified stock options. Stock option awards generally vest over a one two The fair value of options granted was determined using the following weighted-average assumptions as of the grant date for the years indicated: For the Year Ended December 31, 2022 2021 2020 Dividend yield 2.59% 1.58% 1.97% Expected volatility 26.86% 37.10% 26.79% Risk-free interest rate 2.88% 1.01% 0.42% Expected term in years 6.5 6.5 6.5 Weighted-average grant date fair value per option granted $ 7.13 $ 10.67 $ 8.00 The following table presents a summary of the Company’s stock option plan awards during the years indicated (shown as actual). Share and per share data has been adjusted for all periods to reflect a two-for-one stock split effective July 14, 2021. Weighted-Average Weighted- Remaining Average Contractual Term In Aggregate Shares Exercise Price Years Intrinsic Value Outstanding at January 1, 2020 575,980 $ 18.49 6.77 $ 7,722,369 Granted 124,570 $ 21.35 — — Less exercised 28,796 $ 8.45 — $ 453,674 Forfeited or expired — — — — Outstanding at December 31, 2020 671,754 $ 19.45 6.58 $ 5,721,159 Outstanding at January 1, 2021 671,754 $ 19.45 6.58 $ 5,721,159 Granted 118,850 $ 35.46 — — Less exercised 176,978 $ 12.73 — $ 4,265,369 Forfeited or expired — — — — Outstanding at December 31, 2021 613,626 $ 25.24 7.17 $ 5,362,902 Outstanding at January 1, 2022 613,626 $ 25.24 7.17 $ 5,362,902 Granted 99,200 $ 30.94 — — Less exercised 64,994 $ 19.75 — $ 790,558 Forfeited or expired — — — — Outstanding at December 31, 2022 647,832 $ 26.67 6.84 $ 4,627,255 Expected to vest, assuming a 0.31% annual forfeiture rate at December 31, 2022 (1) 645,998 $ 26.66 6.84 $ 4,619,599 Exercisable at December 31, 2022 312,821 $ 24.03 5.46 $ 3,007,299 ___________________________ (1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options forfeited over 10 years. At December 31, 2022, there was $2.0 million of total unrecognized compensation cost related to nonvested stock options granted under the 2018 plan. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.3 years. Restricted Stock Awards The RSAs fair value is equal to the value of the market price of the Company’s common stock on the grant date and compensation expense is recognized over the vesting period of the awards based on the fair value of the restricted stock. Shares for the 2018 Plan generally vest over a one two The following table presents a summary of the Company’s nonvested awards during the years indicated (shown as actual). Share and per share data has been adjusted for all periods to reflect a two-for-one stock split effective July 14, 2021. Weighted-Average Grant-Date Fair Value Nonvested Shares Shares Per Share Nonvested at January 1, 2020 80,430 $ 26.82 Granted 49,760 21.35 Less vested 20,006 26.84 Forfeited or expired — — Nonvested at December 31, 2020 110,184 $ 24.35 Nonvested at January 1, 2021 110,184 $ 24.35 Granted 41,350 35.46 Less vested 29,862 24.78 Forfeited or expired — — Nonvested at December 31, 2021 121,672 $ 28.02 Nonvested at January 1, 2022 121,672 $ 28.02 Granted 35,050 30.94 Less vested 38,192 28.12 Forfeited or expired — — Nonvested at December 31, 2022 118,530 $ 28.85 At December 31, 2022, there was $2.9 million of total unrecognized compensation costs related to nonvested shares granted under the 2018 plan as RSAs. The cost is expected to be recognized over the remaining weighted-average vesting period of 3.3 years. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | NOTE 20 - BUSINESS SEGMENTS The Company’s business segments are determined based on the products and services provided, as well as the nature of the related business activities, and they reflect the manner in which financial information is currently evaluated by management. This process is dynamic and is based on management’s current view of the Company’s operations and is not necessarily comparable with similar information for other financial institutions. The Company defines its business segments by product type and customer segment which it has organized into two lines of business: commercial and consumer banking and home lending. The Company uses various management accounting methodologies to assign certain income statement items to the responsible operating segment, including: ● a funds transfer pricing (“FTP”) system, which allocates interest income credits and funding charges between the segments, assigning to each segment a funding credit for its liabilities, such as deposits, and a charge to fund its assets; ● a cost per loan serviced allocation based on the number of loans being serviced on the balance sheet and the number of loans serviced for third parties; ● an allocation based upon the approximate square footage utilized by the home lending segment in Company owned locations; ● an allocation of charges for services rendered to the segments by centralized functions, such as corporate overhead, which are generally based on the number of full-time employees (“FTEs”) in each segment; and ● an allocation of the Company’s consolidated income taxes which are based on the effective tax rate applied to the segment’s pretax income or loss. The FTP methodology is based on management’s estimated cost of originating funds including the cost of overhead for deposit generation. A description of the Company’s business segments and the products and services that they provide is as follows: Commercial and Consumer Banking Segment The commercial and consumer banking segment provides diversified financial products and services to our commercial and consumer customers through Bank branches, automated teller machines (“ATM”), online banking platforms, mobile banking apps, and telephone banking. These products and services include deposit products; residential, consumer, business and commercial real estate lending portfolios and cash management services. The Company originates consumer loans, commercial and multi-family real estate loans, construction loans for residential and multi-family construction, and commercial business loans. At December 31, 2022, the Company’s retail deposit branch network consisted of 20 branches in the Pacific Northwest. This segment is also responsible for the management of the investment portfolio and other assets of the Bank. Home Lending Segment The home lending segment originates one-to-four-family residential mortgage loans primarily for sale in the secondary markets as well as loans held for investment. The majority of mortgage loans are sold to or securitized by FNMA, FHLMC, GNMA or the FHLB of Des Moines, while the Company generally retains the right to service these loans. Loans originated under the guidelines of the Federal Housing Administration or (“FHA”), US Department of Veterans Affairs or VA, and United States Department of Agriculture or USDA are generally sold servicing released to a correspondent bank or mortgage company. The Company has the option to sell loans on a servicing-released or servicing-retained basis to securitizers and correspondent lenders. A small percentage of its loans are brokered to other lenders. On occasion, the Company may sell a portion of its MSR portfolio and may sell small pools of loans initially originated to be held in the loan portfolio. The Company manages the loan funding and the interest rate risk associated with the secondary market loan sales and the retained one-to-four-family mortgage servicing rights within this business segment. One-to-four-family loans originated for investment and held in this segment are allocated to the home lending segment with a corresponding provision expense and FTP for cost of funds. Segment Financial Results The tables below summarize the financial results for each segment based on the factors mentioned above within each segment at or for the years indicated: At or For the Year Ended December 31, 2022 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 93,358 $ 10,922 $ 104,280 Provision for credit losses on loans (2) (5,064) (1,153) (6,217) Noninterest income 10,158 7,950 18,108 Noninterest expense (59,723) (19,460) (79,183) Income (loss) before (provision) benefit for income taxes 38,729 (1,741) 36,988 (Provision) benefit for income taxes (7,684) 345 (7,339) Net income (loss) $ 31,045 $ (1,396) $ 29,649 Total average assets for period ended $ 2,018,263 $ 417,431 $ 2,435,694 FTEs 405 132 537 At or For the Year Ended December 31, 2021 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 78,306 $ 8,343 $ 86,649 (Provision for) reversal of loan losses (2) (2,613) 2,113 (500) Noninterest income 8,545 28,968 37,513 Noninterest expense (56,557) (19,685) (76,242) Income before provision for income taxes 27,681 19,739 47,420 Provision for income taxes (5,842) (4,166) (10,008) Net income $ 21,839 $ 15,573 $ 37,412 Total average assets for period ended $ 1,779,850 $ 409,363 $ 2,189,213 FTEs 384 152 536 At or For the Year Ended December 31, 2020 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 68,997 $ 5,123 $ 74,120 Provision for loan losses (2) (10,278) (2,758) (13,036) Noninterest income 10,551 44,808 55,359 Noninterest expense (49,242) (17,351) (66,593) Income before provision for income taxes 20,028 29,822 49,850 Provision for income taxes (4,253) (6,333) (10,586) Net income $ 15,775 $ 23,489 $ 39,264 Total average assets for period ended $ 1,543,681 $ 396,367 $ 1,940,048 FTEs 354 152 506 __________________________ (1) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets. (2) The provision for credit losses was calculated using the CECL methodology in 2022 and the provision for loan losses was calculated using the previous incurred loss methodology in 2021 and 2020. The change in methodology reflects shifts in allocation between segments due to various changes, to include adjustments to qualitative factors, changes in loan balances, and charge-off and recovery activity. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 21 - REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue Recognition In accordance with Topic 606, revenues are recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. To determine revenue recognition for arrangements that an entity determines are within the scope of Topic 606, the Company performs the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the Company satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that the entity will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. At contract inception, once the contract is determined to be within the scope of Topic 606, the Company assesses the goods or services that are promised within each contract and identifies those that contain performance obligations, and assesses whether each promised good or service is distinct. The Company then recognizes as revenue the amount of the transaction price that is allocated to the respective performance obligation when (or as) the performance obligation is satisfied. All the Company’s revenue from contracts with customers in-scope of ASC 606 is recognized in noninterest income and included in our commercial and consumer banking segment. The following table presents noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years indicated: For the Year Ended December 31, Noninterest income 2022 2021 2020 In-scope of Topic 606: Debit card interchange fees $ 2,266 $ 2,252 $ 1,879 Deposit service and account maintenance fees 919 757 786 Noninterest income (in-scope of Topic 606) 3,185 3,009 2,665 Noninterest income (out-of-scope of Topic 606) 14,923 34,504 52,694 Total noninterest income $ 18,108 $ 37,513 $ 55,359 Deposit Service and Account Maintenance Fees The Bank earns fees from its deposit customers for account maintenance, transaction-based services and overdraft charges. Account maintenance fees consist primarily of account fees and analyzed account fees charged on deposit accounts on a monthly basis. The performance obligation is satisfied and the fees are recognized on a monthly basis as the service period is completed. Transaction-based fees on deposits accounts are charged to deposit customers for specific services provided to the customer, such as wire fees, as well as charges against the account, such as fees for non-sufficient funds and overdrafts. The performance obligation is completed as the transaction occurs and the fees are recognized at the time each specific service is provided to the customer. Debit Interchange Income Debit and ATM interchange income represent fees earned when a debit card issued by the Bank is used. The Bank earns interchange fees from debit cardholder transactions through the Visa payment network. Interchange fees from cardholder transactions represent a percentage of the underlying transaction value and are recognized daily, concurrently with the transaction processing services provided to the cardholder. The performance obligation is satisfied and the fees are earned when the cost of the transaction is charged to the cardholders’ debit card. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 22 - GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill and certain other intangibles generally arise from business combinations accounted for under the acquisition method of accounting. Goodwill totaled $2.3 million at December 31, 2022 and 2021, and represents the excess of the total acquisition price paid over the fair value of the assets acquired, net of the fair values of liabilities assumed as a result of the purchase of four retail bank branches (“Branch Purchase”) from Bank of America on January 22, 2016. Goodwill is not amortized but is evaluated for impairment on an annual basis at December 31 of each year or whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company performed an impairment analysis at December 31, 2022 and determined that no impairment of goodwill existed. Core deposit intangible (“CDI”) is evaluated for impairment whenever events or changes in circumstances indicate that its carrying amount may not be recoverable, with any changes in estimated useful life accounted for prospectively over the revised remaining life. As of December 31, 2022, management believes that there have been no events or changes in the circumstances that would indicate a potential impairment of CDI. The following table summarizes the changes in the Company’s other intangible assets comprised solely of CDI for the years indicated: Other Intangible Assets Accumulated Gross CDI Amortization Net CDI Balance, December 31, 2019 $ 7,490 $ (2,033) $ 5,457 Amortization — (706) (706) Balance, December 31, 2020 7,490 (2,739) 4,751 Amortization — (691) (691) Balance, December 31, 2021 7,490 (3,430) 4,060 Amortization — (691) (691) Balance, December 31, 2022 $ 7,490 $ (4,121) $ 3,369 The CDI represents the fair value of the intangible core deposit base acquired in business combinations. The CDI will be amortized on a straight-line basis over 10 years for the CDI related to the Anchor Acquisition in November 2018 and on an accelerated basis over approximately nine years for the CDI related to the Branch Purchase. Total amortization expense was $691,000 for both years ended December 31, 2022 and 2021, and $706,000 for the year ended December 31, 2020. Amortization expense for CDI is expected to be as follows for the years ended December 31: 2023 $ 691 2024 621 2025 525 2026 525 2027 525 Thereafter 482 Total $ 3,369 |
PARENT COMPANY ONLY FINANCIAL I
PARENT COMPANY ONLY FINANCIAL INFORMATION | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY ONLY FINANCIAL INFORMATION | |
PARENT COMPANY ONLY FINANCIAL INFORMATION | NOTE 23 - PARENT COMPANY ONLY FINANCIAL INFORMATION The Condensed Balance Sheets, Statements of Income, and Statements of Cash Flows for the Company (Parent Only) are presented below: Condensed Balance Sheets December 31, Assets 2022 2021 Cash and due from banks $ 7,195 $ 19,883 Investment in subsidiary 274,092 277,390 Other assets 704 407 Total assets $ 281,991 $ 297,680 Liabilities and Stockholders' Equity Subordinated notes, net 49,461 49,394 Other liabilities 833 779 Total liabilities 50,294 50,173 Stockholders' equity 231,697 247,507 Total liabilities and stockholders' equity $ 281,991 $ 297,680 Condensed Statements of Income Year Ended December 31, 2022 2021 2020 Interest expense on subordinated note $ (1,942) $ (1,722) $ (776) Dividends received from subsidiary 9,110 9,800 20,862 Other expenses (274) (272) (195) Income before income tax benefit and equity in undistributed net income of subsidiary 6,894 7,806 19,891 Income tax benefit 465 419 204 Equity in undistributed earnings of subsidiary 22,290 29,187 19,169 Net income $ 29,649 $ 37,412 $ 39,264 Condensed Statements of Cash Flows Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income $ 29,649 $ 37,412 $ 39,264 Equity in undistributed net income of subsidiary (22,290) (29,187) (19,169) Amortization 67 61 115 ESOP compensation expense for allocated shares — 1,482 1,025 Share-based compensation expense related to stock options and restricted stock 1,971 1,446 1,020 Changes in operating assets and liabilities Other assets (297) (205) (30) Other liabilities 55 569 27 Net cash from operating activities 9,155 11,578 22,252 Cash flows (used by) from investing activities: Net proceeds from ESOP — 291 282 Investment in subsidiary — (25,000) — Net cash from (used by) investing activities — (24,709) 282 Cash flows (used by) from financing activities: Net proceeds from issuance of subordinated notes — 49,333 — Repayment of subordinated notes — (10,000) — Proceeds (disbursements) from stock options exercised 568 (2,076) (161) Common stock repurchased for employee/director taxes paid on restricted stock awards (190) (211) (34) Issuance of common stock - employee stock purchase plan 503 — — Common stock repurchased (15,628) (13,961) (9,802) Dividends paid on common stock (7,096) (4,602) (3,574) Net cash (used by) from financing activities (21,843) 18,483 (13,571) Net (decrease) increase in cash and cash equivalents (12,688) 5,352 8,963 Cash and cash equivalents, beginning of year 19,883 14,531 5,568 Cash and cash equivalents, end of year $ 7,195 $ 19,883 $ 14,531 |
RECENT DEVELOPMENTS
RECENT DEVELOPMENTS | 12 Months Ended |
Dec. 31, 2022 | |
RECENT DEVELOPMENTS | |
RECENT DEVELOPMENTS | NOTE 24 - RECENT DEVELOPMENTS Acquisition of Seven Columbia State Bank Branches On February 24, 2023, 1st Security Bank purchased seven branches from Columbia State Bank. The acquisition includes the branch banking operations of a total of seven retail bank branches located in the communities of Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon and Goldendale and White Salmon, Washington. In connection with the acquisition, 1st Security Bank acquired approximately $425.5 million of deposits, $65.8 million of performing loans and the bank facilities and certain other assets of the acquired branches. In consideration of the purchased assets and transferred liabilities, 1st Security Bank paid (a) the recorded investment of the loans acquired, (b) the net book value, or approximately $6.4 million, for the bank facilities and certain assets located at the acquired branches, and (c) a deposit premium of 4.15% for core deposits and 2.5% for public funds on substantially all of the deposits assumed, which equated to approximately $16.8 million. The acquisition settled by Columbia State Bank paying cash of approximately $337.3 million to 1st Security Bank for the difference between these amounts and the total deposits assumed. The branch purchase was accounted for under the acquisition method in accordance with ASC 805, “Business Combinations,” and accordingly the assets and liabilities were recorded at their fair values on the date of acquisition. Determining the fair value of assets and liabilities is a complicated process involving significant judgment regarding methods and assumptions used to calculate estimated fair values. Fair values are preliminary and subject to refinement for up to one year after the closing date of the acquisition as information relative to closing date fair values become available. The initial accounting for the business combination is incomplete at this time and therefore, the estimated fair values of assets acquired and liabilities assumed at the date of acquisition has been excluded. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Financial Statement Presentation | Financial Statement Presentation - Amounts presented in the consolidated financial statements and footnote tables are rounded and presented to the nearest thousands of dollars except per share amounts. If the amounts are above $1.0 million, they are rounded one decimal point, and if they are above $1.0 billion, they are rounded two decimal points. |
Principles of Consolidation | Principles of Consolidation - |
Segment Reporting | Segment Reporting - |
Subsequent Events | Subsequent Events - On November 5, 2022, 1st Security Bank entered into a purchase and assumption agreement to acquire seven branches from Columbia State Bank. On February 24, 2023, the Bank completed the purchase of the branches. The seven branches are located in the communities of Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon and Goldendale and White Salmon, Washington. In connection with the purchase, the Bank acquired approximately $425.5 million in deposits and $65.8 million in associated loans based on February 24, 2023 financial information and subject to post-closing confirmation and adjustment review. For additional information see “Note 24 - Recent Developments.” |
Error Corrections | Error Corrections Earnings Per Share Prior presentations of earnings per share were revised due to the improper inclusion of certain unvested shares of the Company’s commons stock in the denominator of basic and diluted earnings per share. As a result of the inclusion, earnings per share was understated for the years ended December 31, 2021 and 2020. Basic earnings per share for December 31, 2021 was updated to $4.48, from $4.42 as previously reported, and diluted earnings per share was updated to $4.37, from $4.32 as previously reported. Basic earnings per share for December 31, 2020 was updated to $4.58, from $4.57, as previously reported and diluted earnings per share was unchanged at $4.49. Management evaluated the materiality of this error from qualitative and quantitative perspectives and concluded that the error was immaterial to the prior period financial statements taken as a whole. Consequently, the financial statements for the prior periods include the impact of the correction of the error, and prior period financial statements have not been restated. The error correction did not affect total assets, net income, or cash flows for the periods. Deposits Prior presentation of interest-bearing and noninterest-bearing checking balances was revised due to the misclassification of certain checking products in previous periods. As a result of the misclassification, an interest-bearing checking balance of $121.2 million at December 31, 2021 Management evaluated the materiality of this error from qualitative and quantitative perspectives and concluded that the error was immaterial to the prior period financial statements taken as a whole. Consequently, the financial statements for the prior periods include the impact of the correction of the error, and prior period financial statements have not been restated. The error correction did not affect total assets, net income, or cash flows for the periods. |
Cash and Cash Equivalents | Cash and Cash Equivalents - |
Securities | Securities - Management no longer evaluates securities for other-than-temporary impairment, as ASC Subtopic 326-30, Financial Instruments - Credit Losses - Available for Sale Debt Securities, changes the accounting for recognizing impairment on available for sale and held to maturity debt securities. Each quarter management evaluates impairment where there has been a decline in fair value below the amortized cost basis of a security to determine whether there is a credit loss associated with the decline in fair value. Management considers the nature of the collateral, potential future changes in collateral values, default rates, delinquency rates, third-party guarantees, credit ratings, interest rate changes since purchase, volatility of the security’s fair value and historical loss information for financial assets secured with similar collateral among other factors. Credit losses are calculated individually, rather than collectively, using a discounted cash flow method, whereby management compares the present value of expected cash flows with the amortized cost basis of the security. The credit loss component recognized through the Provision for Credit Losses on the Consolidated Statements of Income. (See Note 2 - Investments). |
Federal Home Loan Bank Stock | Federal Home Loan Bank Stock - respectively. The Bank was in compliance with the FHLB minimum investment requirement at December 31, 2022 and 2021. Management evaluates FHLB stock for impairment annually. Management’s determination of whether these investments are impaired is based on its assessment of the ultimate recoverability of cost rather than by recognizing temporary declines in value. The determination of whether a decline affects the ultimate recoverability of cost is influenced by criteria such as (1) the significance of any decline in net assets of the FHLB as compared with the capital stock amount for the FHLB and the length of time this situation has persisted; (2) commitments by the FHLB to make payments required by law or regulation and the level of such payments in relation to the operating performance of the FHLB; (3) the impact of legislative and regulatory changes on institutions and, accordingly, the customer base of the FHLB; and (4) the liquidity position of the FHLB. Based on its evaluation, management determined that there was no impairment of FHLB stock at December 31, 2022 and 2021, respectively. |
Loans Held for Sale | Loans Held for Sale - |
Other Real Estate Owned | Other Real Estate Owned - |
Derivatives | Derivatives - The accounting for changes in the fair value of derivatives depends on the intended use of the derivative and resulting designation. The Company’s hedging policies permit the use of various derivative financial instruments to manage interest rate risk or to hedge specified assets and liabilities. To qualify for hedge accounting, derivatives must be highly effective at reducing the risk associated with the exposure being hedged and must be designated as a hedge at the inception of the derivative contract. If derivative instruments are designated as fair value hedges, and such hedges are highly effective, both the change in the fair value of the hedge and the hedged item are included in current earnings. If derivative instruments are designated as cash flow hedges, fair value adjustments related to the effective portion are recorded in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. Ineffective portions of cash flow hedges are reflected in earnings as they occur. Actual cash receipts and/or payments and related accruals on derivatives related to hedges are recorded as adjustments to the interest income or interest expense associated with the hedged item. During the life of the hedge, the Company formally assesses whether derivatives designated as hedging instruments continue to be highly effective in offsetting changes in the fair value or cash flows of hedged items. If it is determined that a hedge has ceased to be highly effective, the Company will discontinue hedge accounting prospectively. At such time, previous adjustments to the carrying value of the hedged item are reversed into current earnings and the derivative instrument is reclassified to a trading position recorded at fair value. For derivatives not designated as hedges, changes in fair value are recognized in earnings, in noninterest income. |
Loans Receivable | Loans Receivable - interest method based on the daily balance of the principal amount outstanding and is credited to income as earned. Loan fees, net of direct origination costs, are deferred and amortized over the life of the loan using the effective yield method. If the loan is repaid prior to maturity, the remaining unamortized net deferred loan origination fee is recognized in income at the time of repayment. Income Recognition on Nonaccrual Loans and Securities |
Allowance for Credit Losses on Held-to-Maturity Securities | Allowance for Credit Losses on Held-to-Maturity Securities The held-to-maturity portfolio consists entirely of corporate securities. Securities are generally rated BBB- or higher. Securities are analyzed individually to establish a reserve. |
Allowance for Credit Losses on Available-for-Sale Securities | Allowance for Credit Losses on Available-for-Sale Securities Changes in the ACL are recorded as a provision for (or reversal of) credit loss expense. Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities is not included in the estimate of credit losses. |
Allowance for Credit Losses on Loans | Allowance for Credit Losses on Loans Management utilizes relevant available information, from internal and external sources, relating to past events, current conditions, historical loss experience, and reasonable and supportable forecasts. The lookback period in the analysis includes historical data from 2009 to present. Adjustments to historical loss information are made when management determines historical data is not likely reflective of the current portfolio such as limited data sets or lack of default or loss history. Management may selectively apply external market data to subjectively adjust the Company’s own loss history including index or peer data. Accrued interest receivable is excluded from the estimate of credit losses for loans. |
Collective Assessment | Collective Assessment within each call report code by pass, watch, special mention, substandard, and doubtful. Other loan types are separated into their own cohorts due to specific risk characteristics for that pool of loans. The Company has elected a non-discounted cash flow methodology with probability of default (“PD”) and loss given default (“LGD”) for all call report code cohorts (“cohorts”), with the exception of the indirect and marine portfolios which are evaluated under a vintage methodology. The vintage methodology measures the expected loss calculation for future periods based on historical performance by the origination period of loans with similar life cycles and risk characteristics. Guaranteed portions of loans are measured with zero risk due to cash collateral and full guaranty. The PD calculation looks at the historical loan portfolio at particular points in time (each month during the lookback period) to determine the probability that loans in a certain cohort will default over the next 12-month period. A default is defined as a loan that has moved to past due 90 days and greater, nonaccrual status, or experienced a charge-off during the period. In cohorts where the Company’s historical data is insufficient due to a minimal amount of default activity or zero defaults, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs. Additionally, management reviews all other cohorts to determine if index PDs should be used outside of these criteria. The LGD calculation looks at actual losses (net charge-offs) experienced over the entire lookback period for each cohort of loans. The aggregate loss amount is divided by the exposure at default to determine an LGD rate. All defaults (non-accrual, charge-off, or greater than 90 days past due) occurring during the lookback period are included in the denominator, whether a loss occurred or not and exposure at default is determined by the loan balance immediately preceding the default event (i.e., nonaccrual or charge-off). Due to very limited charge-off history, management uses index LGDs comprised of rates derived from the LGD experience of other community banks in place of the Company’s historical LGDs. The Company utilizes reasonable and supportable forecasts of future economic conditions when estimating the ACLL. The calculation includes a 12-month PD forecast based on the Company’s regression model comparing peer nonperforming loan ratios to the national unemployment rate. After the forecast period, PD rates revert on a straight-line basis back to long-term historical average rates over a 12-month period. Due to very limited default history, management uses index PDs comprised of rates derived from the PD experience of other community banks in place of the Company’s historical PDs. The Company recognizes that all significant factors that affect the collectability of the loan portfolio must be considered to determine the estimated credit losses as of the evaluation date. Furthermore, the methodology, in and of itself and even when selectively adjusted by comparison to market and peer data, does not provide a sufficient basis to determine the estimated credit losses. The Company adjusts the modeled historical losses by qualitative and environmental adjustments to incorporate all significant risks to form a sufficient basis to estimate the credit losses. |
Individual Assessment | Individual Assessment Where the primary and/or expected source of repayment of a specific loan is believed to be the future liquidation of available collateral, impairment will generally be measured based upon expected future collateral proceeds, net of disposition expenses including sales commissions as well as other costs potentially necessary to sell the asset(s) (i.e., past due taxes, liens, etc.). Estimates of future collateral proceeds will be based upon available appraisals, reference to recent valuations of comparable properties, use of consultants or other professionals with relevant market and/or property-specific knowledge, and any other sources of information believed appropriate by management under the specific circumstances. When appraisals are ordered to support the impairment analysis of an impaired loan, the appraisal is reviewed by the Company’s internal appraisal reviewer. Where the primary and/or expected source of repayment of a specific loan is believed to be the receipt of principal and interest payments from the borrower and/or the refinancing of the loan by another creditor, impairment will generally be measured based upon the present value of expected proceeds discounted at the contractual interest rate. Expected refinancing proceeds may be estimated from review of term sheets actually received by the borrower from other creditors and/or from the Company’s knowledge of terms generally available from other banks. |
Determining the Contractual Term | Determining the Contractual Term |
Troubled Debt Restructurings | Troubled Debt Restructurings |
Allowance for Credit Losses on Unfunded Commitments | Allowance for Credit Losses on Unfunded Commitments |
Premises and Equipment, Net | Premises and Equipment, Net - three Management reviews buildings, improvements and equipment for impairment on an annual basis or whenever events or changes in the circumstances indicate that the undiscounted cash flows for the property are less than its carrying value. If identified, an impairment loss is recognized through a charge to earnings based on the fair value of the property. |
Right of Use Lease Asset & Lease Liability | Right of Use Lease Asset & Lease Liability - The Company leases retail space, office space, storage space, and equipment under operating leases. Most leases require the Company to pay real estate taxes, maintenance, insurance and other similar costs in addition to the base rent. Certain leases also contain lease incentives, such as tenant improvement allowances and rent abatement. Variable lease payments are recognized as lease expense as they are incurred. The Company records an operating lease ROU asset and an operating lease liability for operating leases with a lease term greater than 12 months. The ROU asset and lease liability are recorded in “Other assets” and “Other liabilities”, respectively, on the Consolidated Balance Sheets. ROU 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. ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. Many of the Company’s leases contain various provisions for increases in rental rates, based either on changes in the published Consumer Price Index or a predetermined escalation schedule, which are factored into our determination of lease payments when appropriate. Substantially all of the leases provide the Company with the option to extend the lease term one or more times following expiration of the initial term. The ROU asset and lease liability terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. |
Transfers of Financial Assets and Servicing Rights | Transfers of Financial Assets - transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity. Servicing Rights - Servicing assets are evaluated quarterly for impairment based upon the fair value of the rights as compared to amortized cost. Impairment is determined by stratifying rights into tranches based on predominant characteristics, such as interest rate, loan type, and investor type. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranche. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income. Capitalized servicing rights are stated separately on the Consolidated Balance Sheets and are amortized into noninterest income in proportion to, and over the period of, the estimated future net servicing income of the underlying financial assets. |
Income Taxes | Income Taxes - The Company follows the authoritative guidance issued related to accounting for uncertainty in income taxes. The guidance prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. It is the Company’s policy to record any penalties or interest arising from federal or state taxes as a component of income tax expense. |
Employee Stock Ownership Plan ("ESOP") | Employee Stock Ownership Plan (“ESOP”) |
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”) |
Comprehensive Income (Loss) | Comprehensive Income (Loss) - for-sale, net of tax and unrealized holding gains (losses) on derivatives designated as hedges, net of tax recorded directly to equity. |
Financial Instruments | Financial Instruments - |
Restricted Assets | Restricted Assets - |
Marketing and Advertising Costs | Marketing and Advertising Costs - |
Stock-Based Compensation | Stock-Based Compensation - |
Goodwill | Goodwill - |
Business Combinations | Business Combinations In the event that the fair value of net assets acquired exceeds the purchase price, including fair value of liabilities assumed, a bargain purchase gain is recorded on that acquisition. |
Acquired Loans | Acquired Loans For purchased non-credit-deteriorated loans, the difference between the fair value and unpaid principal balance of the loan at the acquisition date is amortized or accreted to interest income over the life of the loan. While credit discounts are included in the determination of the fair value for non-credit-deteriorated loans, since these discounts are expected to be accreted over the life of the loans, they cannot be used to offset the allowance for credit losses that must be recorded at the acquisition date. As a result, an allowance for credit losses is determined at the acquisition date using the same methodology as other loans held for investment and is recognized as a provision for credit losses in the Consolidated Statement of Income. Any subsequent deterioration (improvement) in credit quality is recognized by recording a provision for (or reversal of) credit losses. |
Application of New Accounting Guidance in 2022 | Application of New Accounting Guidance in 2022 On January 1, 2022, the Company adopted Accounting Standards Update (“ASU”) 2016-13 Financial Instruments - Credit Losses (Topic 326) Topic 326 The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost and off-balance-sheet credit exposures. Results for reporting periods beginning after January 1, 2022 are presented under ASC 326. The adoption resulted in a decrease of $2.9 million to our allowance for credit losses on loans (“ACLL”), an increase of $2.4 million to our allowance for unfunded commitments and letters of credit, an increase of $72,000 to our allowance for held-to-maturity securities, and a net-of-tax cumulative-effect adjustment of $297,000 to increase the beginning balance of retained earnings. The Company finalized the adoption of ASC 326 as of January 1, 2022 as detailed in the following table: January 1, 2022 As Reported January 1, 2022 Pre-Topic 326 Impact of Topic 326 Assets Under Topic 326 Adoption Adoption Allowance for credit losses on debt securities held-to-maturity $ 72 $ — $ 72 Loans Commercial $ 1,728 $ 5,667 $ (3,939) Construction and development 2,328 4,448 (2,120) Home equity 455 279 176 One-to-four-family 3,656 1,424 2,232 Multi-family 1,397 2,980 (1,583) Indirect home improvement 9,394 3,540 5,854 Marine 900 702 198 Other consumer 64 38 26 Commercial and industrial 2,727 5,953 (3,226) Warehouse lending 127 583 (456) Unallocated — 21 (21) Allowance for credit losses on loans $ 22,776 $ 25,635 $ (2,859) Liabilities Allowance for credit losses on unfunded loan commitments $ 2,908 $ 499 $ 2,409 Total $ (378) The adoption of the CECL methodology resulted in an increase of retained earnings of $297,000, net of tax. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-04, “Reference Rate Reform” (“Topic 848”) In March 2022, the FASB issued ASU No. 2022-01, Derivatives and Hedging (Topic 815): Fair Value Hedging - Portfolio Layer Method Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In March 2022, the FASB issued ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326) |
Loan Portfolio Segment | The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the manner in which management monitors performance and credit quality. The three loan portfolio segments are: (a) Real Estate Loans, (b) Consumer Loans and (c) Commercial Business Loans. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes: Real Estate Loans Commercial Lending. Loans originated by the Company primarily secured by income producing properties, including retail centers, warehouses, and office buildings located in our market areas. Construction and Development Lending Home Equity Lending One-to-Four-Family Real Estate Lending Multi-family Lending Consumer Loans Indirect Home Improvement Marine. Other Consumer. Commercial Business Loans Commercial and Industrial Lending (“C&I”) Warehouse Lending |
Nonaccrual and Past Due Loans | Nonaccrual and Past Due Loans |
Credit Quality Indicators | The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 considered “Pass” and loans in risk grades 7 to 10 are reported as classified loans in the Company’s allowance for loan loss analysis. A description of the 10 risk grades is as follows: ● Grades 1 and 2 - These grades include loans to very high quality borrowers with excellent or desirable business credit. ● Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk. ● Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk. ● Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term. ● Grade 7 - This grade is for “Other Assets Especially Mentioned (OAEM)” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected. ● Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected. ● Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable. ● Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off. Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification Policy, loans that are current or less than 90 days past due are graded “Pass” and risk graded “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell. Management may choose to conservatively risk rate credits even if paying in accordance with the loan’s repayment terms. Commercial real estate, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, nonowner-occupied commercial real estate borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly. |
401 (k) Plan | 401(k) Plan The Company has a salary deferral 401(k) Plan covering substantially all of its employees. Employees are eligible to participate in the 401(k) plan at the date of hire if they are 18 years of age. Eligible employees may contribute through payroll deductions and are 100% vested at all times in their deferral contributions account. The Company matches 100% for contributions of 1% to 3%, and 50% for contributions of 4% to 5%. There was a $1.9 million, $1.7 million, and $1.5 million matching contribution for the years ended December 31, 2022, 2021, and 2020, respectively. |
Loan Commitments | The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual amount of those instruments. The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments |
Determination of Fair Market Values | The following methods were used to estimate the fair value of certain assets and liabilities on a recurring and nonrecurring basis. Securities Mortgage Loans Held for Sale - Loans Receivable - Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including commercial, real estate and consumer loans. Each loan category is further segregated by fixed and adjustable-rate loans. The fair value of loans is calculated by discounting expected cash flows at rates at which similar loans are currently being made. These amounts are discounted further by embedded probable losses expected to be realized in the portfolio. Certain residential mortgage loans were initially originated for sale and measured at fair value; after origination, the loans were transferred to loans held for investment. As of December 31, 2022 and 2021, there were $14.0 million and $16.1 million, respectively, in residential mortgage loans recorded at fair value as they were previously transferred from held for sale to loans held for investment. The aggregate unpaid principal balance of these loans was $15.6 million and $16.1 million as of December 31, 2022 and 2021, respectively. Gains and losses from changes in fair value for these loans are reported in earnings as a component of “Other noninterest income” on the Consolidated Statements of Income. For the years ended December 31, 2022, 2021, and 2020, the Company recorded net decreases in fair value of $1.7 million and $29,000 , and a net increase in fair value of $15,000 , respectively. For loans originated as held for sale and transferred into loans held for investment, the fair value is determined based on quoted secondary market prices for similar loans (Level 2). Derivative Instruments - Other Real Estate Owned Loans Individually Evaluated - Expected credit losses for loans evaluated individually are measured based on the present value of expected future cash flows discounted at the loan’s original effective interest rate or when the Bank determines that foreclosure is probable, the expected credit loss is measured based on the fair value of the collateral as of the reporting date, less estimated selling costs, as applicable. As a practical expedient, the Bank measures the expected credit loss for a loan using the fair value of the collateral, if repayment is expected to be provided substantially through the operation or sale of the collateral when the borrower is experiencing financial difficulty based on the Bank’s assessment as of the reporting date. In both cases, if the fair value of the collateral is less than the amortized cost basis of the loan, the Bank will recognize an allowance as the difference between the fair value of the collateral, less costs to sell (if applicable) at the reporting date and the amortized cost basis of the loan. If the fair value of the collateral exceeds the amortized cost basis of the loan, any expected recovery added to the amortized cost basis will be limited to the amount previously charged-off by the subsequent changes in the expected credit losses for loans evaluated individually are included within the provision for credit losses in the same manner in which the expected credit loss initially was recognized or as a reduction in the provision that would otherwise be reported (Level 3). Servicing Rights |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of adoption | January 1, 2022 As Reported January 1, 2022 Pre-Topic 326 Impact of Topic 326 Assets Under Topic 326 Adoption Adoption Allowance for credit losses on debt securities held-to-maturity $ 72 $ — $ 72 Loans Commercial $ 1,728 $ 5,667 $ (3,939) Construction and development 2,328 4,448 (2,120) Home equity 455 279 176 One-to-four-family 3,656 1,424 2,232 Multi-family 1,397 2,980 (1,583) Indirect home improvement 9,394 3,540 5,854 Marine 900 702 198 Other consumer 64 38 26 Commercial and industrial 2,727 5,953 (3,226) Warehouse lending 127 583 (456) Unallocated — 21 (21) Allowance for credit losses on loans $ 22,776 $ 25,635 $ (2,859) Liabilities Allowance for credit losses on unfunded loan commitments $ 2,908 $ 499 $ 2,409 Total $ (378) |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INVESTMENTS | |
Schedule of Available-for-sale Securities Reconciliation | December 31, 2022 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values ACL U.S. agency securities $ 21,153 $ — $ (3,865) $ 17,288 $ — Corporate securities 9,497 27 (979) 8,545 — Municipal bonds 144,200 21 (23,619) 120,602 — Mortgage-backed securities 82,424 — (12,458) 69,966 — U.S. Small Business Administration securities 14,519 — (1,668) 12,851 — Total securities available-for-sale 271,793 48 (42,589) 229,252 — SECURITIES HELD-TO-MATURITY Corporate securities 8,500 — (571) 7,929 31 Total securities held-to-maturity 8,500 — (571) 7,929 31 Total securities $ 280,293 $ 48 $ (43,160) $ 237,181 $ 31 December 31, 2021 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values U.S. agency securities $ 21,155 $ 133 $ (318) $ 20,970 Corporate securities 9,495 31 (524) 9,002 Municipal bonds 136,377 1,577 (2,521) 135,433 Mortgage-backed securities 88,641 1,457 (696) 89,402 U.S. Small Business Administration securities 16,383 235 (66) 16,552 Total securities available-for-sale 272,051 3,433 (4,125) 271,359 SECURITIES HELD-TO-MATURITY Corporate securities 7,500 628 — 8,128 Total securities held-to-maturity 7,500 628 — 8,128 Total securities $ 279,551 $ 4,061 $ (4,125) $ 279,487 |
Schedule of allowance of credit losses | SECURITIES HELD-TO-MATURITY For the Year Ended Corporate Securities December 31, 2022 Beginning allowance balance $ — Impact of adopting ASU 2016-13 72 Reversal of provision for credit losses (41) Securities charged-off — Recoveries — Total ending allowance balance $ 31 |
Schedule of Amortized cost of debt securities | December 31, Corporate securities 2022 2021 BBB/BBB- $ 8,500 $ 7,500 |
Schedule of Unrealized Loss on Investments | December 31, 2022 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized SECURITIES AVAILABLE-FOR-SALE Value Losses Value Losses Value Losses U.S. agency securities $ 3,823 $ (118) $ 13,465 $ (3,747) $ 17,288 $ (3,865) Corporate securities 2,494 (4) 4,026 (975) 6,520 (979) Municipal bonds 44,261 (5,794) 73,990 (17,825) 118,251 (23,619) Mortgage-backed securities 29,791 (3,188) 40,175 (9,270) 69,966 (12,458) U.S. Small Business Administration securities 10,807 (1,162) 2,044 (506) 12,851 (1,668) Total securities available-for-sale $ 91,176 $ (10,266) $ 133,700 $ (32,323) $ 224,876 $ (42,589) SECURITIES HELD-TO-MATURITY Corporate securities 7,929 (571) — — 7,929 (571) Total securities held-to-maturity 7,929 (571) — — 7,929 (571) Total $ 99,105 $ (10,837) $ 133,700 $ (32,323) $ 232,805 $ (43,160) December 31, 2021 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized SECURITIES AVAILABLE-FOR-SALE Value Losses Value Losses Value Losses U.S. agency securities $ 13,125 $ (105) $ 3,752 $ (213) $ 16,877 $ (318) Corporate securities — — 5,476 (524) 5,476 (524) Municipal bonds 72,098 (1,961) 14,116 (560) 86,214 (2,521) Mortgage-backed securities 33,291 (620) 3,825 (76) 37,116 (696) U.S. Small Business Administration securities 2,988 (66) — — 2,988 (66) Total securities available-for-sale $ 121,502 $ (2,752) $ 27,169 $ (1,373) $ 148,671 $ (4,125) |
Schedule of Available-for-Sale and Held-To-Maturity Securities by Contractual Maturity | December 31, 2022 2021 SECURITIES AVAILABLE-FOR-SALE Amortized Fair Amortized Fair U.S. agency securities Cost Value Cost Value Due after one year through five years $ 4,874 $ 4,321 $ 959 $ 1,004 Due after five years through ten years 6,989 5,963 6,920 6,850 Due after ten years 9,290 7,004 13,276 13,116 Subtotal 21,153 17,288 21,155 20,970 Corporate securities Due within one year 1,000 997 — — Due after one year through five years 2,497 2,519 3,495 3,526 Due after five years through ten years 4,000 3,763 4,000 3,627 Due after ten years 2,000 1,266 2,000 1,849 Subtotal 9,497 8,545 9,495 9,002 Municipal bonds Due within one year 2,660 2,644 — — Due after one year through five years 1,038 1,012 3,724 3,850 Due after five years through ten years 6,341 5,771 6,857 7,035 Due after ten years 134,161 111,175 125,796 124,548 Subtotal 144,200 120,602 136,377 135,433 Mortgage-backed securities Federal National Mortgage Association (“FNMA”) 68,421 57,358 75,171 75,737 Federal Home Loan Mortgage Corporation (“FHLMC”) 9,290 8,424 9,606 9,768 Government National Mortgage Association (“GNMA”) 4,713 4,184 3,864 3,897 Subtotal 82,424 69,966 88,641 89,402 U.S. Small Business Administration securities Due after one year through five years 2,553 2,407 2,485 2,507 Due after five years through ten years 4,461 3,996 4,420 4,515 Due after ten years 7,505 6,448 9,478 9,530 Subtotal 14,519 12,851 16,383 16,552 Total securities available-for-sale 271,793 229,252 272,051 271,359 SECURITIES HELD-TO-MATURITY Corporate securities Due after five years through ten years 8,500 7,929 7,500 8,128 Total securities held-to-maturity 8,500 7,929 7,500 8,128 Total securities $ 280,293 $ 237,181 $ 279,551 $ 279,487 |
LOANS RECEIVABLE AND ALLOWANC_2
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS | |
Schedule of Accounts, Notes, Loans and Financing Receivable | December 31, REAL ESTATE LOANS 2022 2021 Commercial $ 334,059 $ 264,429 Construction and development 342,591 240,553 Home equity 55,387 41,017 One-to-four-family (excludes loans held for sale) 469,485 366,146 Multi-family 219,738 178,158 Total real estate loans 1,421,260 1,090,303 CONSUMER LOANS Indirect home improvement 495,941 336,285 Marine 70,567 82,778 Other consumer 3,064 2,980 Total consumer loans 569,572 422,043 COMMERCIAL BUSINESS LOANS Commercial and industrial (includes Paycheck Protection Program ("PPP") loans) 196,791 208,552 Warehouse lending 31,229 33,277 Total commercial business loans 228,020 241,829 Total loans receivable, gross 2,218,852 1,754,175 Allowance for credit losses on loans (1) (27,992) (25,635) Total loans receivable, net $ 2,190,860 $ 1,728,540 ______________________________ (1) Allowance for credit losses on loans in 2022 is reported using the CECL method and the allowance for loan losses in 2021 is reported using the incurred loss method. |
Allowance for Credit Losses on Financing Receivables | At or For the Year Ended December 31, 2022 ALLOWANCE FOR CREDIT Real Commercial LOSSES ON LOANS Estate Consumer Business Unallocated Total Beginning balance, prior to adoption of ASC 326 $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 Impact of adopting ASC 326 (5,234) 6,078 (3,682) (21) (2,859) Provision for credit losses on loans 2,559 3,158 906 — 6,623 Loans charged-off — (2,465) — — (2,465) Recoveries — 1,058 — — 1,058 Net Charge-offs — (1,407) — — (1,407) Total ending allowance balance $ 12,123 $ 12,109 $ 3,760 $ — $ 27,992 At or For the Year Ended December 31, 2021 Real Commercial ALLOWANCE FOR LOAN LOSSES Estate Consumer Business Unallocated Total Beginning balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 Provision for (reversal of) loan losses 952 (1,417) 1,635 (670) 500 Loans charged-off — (1,755) (38) — (1,793) Recoveries — 756 — — 756 Net charge-offs — (999) (38) — (1,037) Total ending allowance balance $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 Period end amount allocated to: Loans individually evaluated for impairment $ 23 $ 219 $ 921 $ — $ 1,163 Loans collectively evaluated for impairment 14,775 4,061 5,615 21 24,472 Ending balance $ 14,798 $ 4,280 $ 6,536 $ 21 $ 25,635 LOANS RECEIVABLE Loans individually evaluated for impairment $ 781 $ 629 $ 4,419 $ — $ 5,829 Loans collectively evaluated for impairment 1,089,522 421,414 237,410 — 1,748,346 Ending balance $ 1,090,303 $ 422,043 $ 241,829 $ — $ 1,754,175 At or For the Year Ended December 31, 2020 Commercial ALLOWANCE FOR LOAN LOSSES Real Estate Consumer Business Unallocated Total Beginning balance $ 6,206 $ 3,766 $ 3,254 $ 3 $ 13,229 Provision for loan losses 7,622 3,372 1,354 688 13,036 Charge-offs — (1,101) (22) — (1,123) Recoveries 18 659 353 — 1,030 Net recoveries (charge-offs) 18 (442) 331 — (93) Ending balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 Period end amount allocated to: Loans individually evaluated for impairment $ 15 $ 305 $ 990 $ — $ 1,310 Loans collectively evaluated for impairment 13,831 6,391 3,949 691 24,862 Ending balance $ 13,846 $ 6,696 $ 4,939 $ 691 $ 26,172 LOANS RECEIVABLE Loans individually evaluated for impairment $ 1,280 $ 871 $ 5,610 $ — $ 7,761 Loans collectively evaluated for impairment 922,261 373,282 267,849 — 1,563,392 Ending balance $ 923,541 $ 374,153 $ 273,459 $ — $ 1,571,153 |
Past Due Financing Receivables | December 31, 2022 30-59 60-89 Days Days 90 Days Total Total Past Past or More Past Loans Non- REAL ESTATE LOANS Due Due Past Due Due Current Receivable Accrual (1) Commercial $ — $ — $ — $ — $ 334,059 $ 334,059 $ — Construction and development — — — — 342,591 342,591 — Home equity 29 104 16 149 55,238 55,387 46 One-to-four-family — — 463 463 469,022 469,485 920 Multi-family — — — — 219,738 219,738 — Total real estate loans 29 104 479 612 1,420,648 1,421,260 966 CONSUMER LOANS Indirect home improvement 2,298 685 532 3,515 492,426 495,941 1,076 Marine 650 385 86 1,121 69,446 70,567 267 Other consumer 32 37 5 74 2,990 3,064 9 Total consumer loans 2,980 1,107 623 4,710 564,862 569,572 1,352 COMMERCIAL BUSINESS LOANS Commercial and industrial 1 — 2,617 2,618 194,173 196,791 6,334 Warehouse lending — — — — 31,229 31,229 — Total commercial business loans 1 — 2,617 2,618 225,402 228,020 6,334 Total loans $ 3,010 $ 1,211 $ 3,719 $ 7,940 $ 2,210,912 $ 2,218,852 $ 8,652 December 31, 2021 30-59 60-89 Days Days 90 Days Total Total Past Past or More Past Loans Non- REAL ESTATE LOANS Due Due Past Due Due Current Receivable Accrual (1) Commercial $ — $ — $ — $ — $ 264,429 $ 264,429 $ — Construction and development — — — — 240,553 240,553 — Home equity — — 179 179 40,838 41,017 301 One-to-four-family 593 264 480 1,337 364,809 366,146 480 Multi-family — — — — 178,158 178,158 — Total real estate loans 593 264 659 1,516 1,088,787 1,090,303 781 CONSUMER LOANS Indirect home improvement 1,047 280 295 1,622 334,663 336,285 554 Marine 119 — — 119 82,659 82,778 57 Other consumer 11 2 18 31 2,949 2,980 18 Total consumer loans 1,177 282 313 1,772 420,271 422,043 629 COMMERCIAL BUSINESS LOANS Commercial and industrial 791 — — 791 207,761 208,552 4,419 Warehouse lending — — — — 33,277 33,277 — Total commercial business loans 791 — — 791 241,038 241,829 4,419 Total loans $ 2,561 $ 546 $ 972 $ 4,079 $ 1,750,096 $ 1,754,175 $ 5,829 ______________________________ (1) Includes past due loans as applicable. |
Impaired Financing Receivables | December 31, 2021 Unpaid WITH NO RELATED ALLOWANCE RECORDED Principal Recorded Related Real estate loans: Balance Investment Allowance Home equity $ 259 $ 227 $ — One-to-four-family 497 480 — 756 707 — WITH RELATED ALLOWANCE RECORDED Real estate loans: Home equity 92 74 23 Consumer loans: Indirect 551 554 193 Marine 56 57 20 Other consumer 18 18 6 Commercial business loans: Commercial and industrial 4,417 4,419 921 5,134 5,122 1,163 Total $ 5,890 $ 5,829 $ 1,163 At or For the Year Ended December 31, 2021 2020 WITH NO RELATED ALLOWANCE RECORDED Average Recorded Interest Income Average Recorded Interest Income Real estate loans: Investment Recognized Investment Recognized Commercial $ — $ — $ 996 $ — Construction and development 771 — — — Home equity 427 15 485 25 One-to-four-family 513 15 954 17 Consumer loans: Other consumer — — 3 — Commercial business loans: Commercial and industrial — — 100 37 1,711 30 2,538 79 WITH RELATED ALLOWANCE RECORDED Real estate loans: Home equity 57 — — — One-to-four-family 20 — 60 — Consumer loans: Indirect 643 38 675 60 Marine 77 6 40 3 Other consumer 8 1 1 — Commercial business loans: Commercial and industrial 4,779 276 2,531 162 5,584 321 3,307 225 Total $ 7,295 $ 351 $ 5,845 $ 304 |
Summarize risk rated loan balances | December 31, 2022 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Converted Commercial 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 86,189 $ 76,030 $ 46,125 $ 38,930 $ 14,101 $ 55,271 $ — $ — $ 316,646 Watch 9,504 — 373 — — — — — 9,877 Special mention — — — 2,113 — — — — 2,113 Substandard — — — — 581 4,842 — — 5,423 Total commercial 95,693 76,030 46,498 41,043 14,682 60,113 — — 334,059 Construction and development Pass 193,084 118,724 21,966 8,379 — 438 — — 342,591 Total construction and development 193,084 118,724 21,966 8,379 — 438 — — 342,591 Home equity Pass 4,978 1,696 6,818 11 1,203 1,572 39,063 — 55,341 Substandard — — — — 13 33 — — 46 Total home equity 4,978 1,696 6,818 11 1,216 1,605 39,063 — 55,387 One-to-four-family Pass 166,388 129,282 82,461 31,878 15,837 40,526 — 199 466,571 Substandard — — — — 1,941 973 — — 2,914 Total one-to-four-family 166,388 129,282 82,461 31,878 17,778 41,499 — 199 469,485 Multi-family Pass 41,041 63,353 48,376 38,805 4,176 23,987 — — 219,738 Total multi-family 41,041 63,353 48,376 38,805 4,176 23,987 — — 219,738 Total real estate loans $ 501,184 $ 389,085 $ 206,119 $ 120,116 $ 37,852 $ 127,642 $ 39,063 $ 199 $ 1,421,260 December 31, 2022 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Converted Indirect home improvement 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 253,495 $ 123,264 $ 46,476 $ 31,251 $ 18,165 $ 22,205 $ 9 $ — $ 494,865 Substandard 347 213 137 62 169 148 — — 1,076 Total indirect home improvement 253,842 123,477 46,613 31,313 18,334 22,353 9 — 495,941 Marine Pass 27,904 11,762 15,139 6,224 5,415 3,856 — — 70,300 Substandard — — — 151 61 55 — — 267 Total marine 27,904 11,762 15,139 6,375 5,476 3,911 — — 70,567 Other consumer Pass 792 754 116 48 14 80 1,251 — 3,055 Substandard 1 5 — — — — 3 — 9 Total other consumer 793 759 116 48 14 80 1,254 — 3,064 Total consumer loans $ 282,539 $ 135,998 $ 61,868 $ 37,736 $ 23,824 $ 26,344 $ 1,263 $ — $ 569,572 December 31, 2022 COMMERCIAL Revolving Loans BUSINESS LOANS Term Loans by Year of Origination Converted Commercial and industrial 2022 2021 2020 2019 2018 Prior Revolving Loans to Term Total Loans Pass $ 24,337 $ 22,561 $ 12,461 $ 3,940 $ 3,074 $ 7,701 $ 104,524 $ — $ 178,598 Watch — 1,127 2,932 — — 746 1,327 — 6,132 Special mention — — — 634 — — 963 — 1,597 Substandard — 1,586 1,265 2,291 190 3,739 1,093 300 10,464 Total commercial and industrial 24,337 25,274 16,658 6,865 3,264 12,186 107,907 300 196,791 Warehouse lending Pass — — — — — — 31,227 — 31,227 Watch — — — — — — 2 — 2 Total warehouse lending — — — — — — 31,229 — 31,229 Total commercial business loans $ 24,337 $ 25,274 $ 16,658 $ 6,865 $ 3,264 $ 12,186 $ 139,136 $ 300 $ 228,020 TOTAL LOANS RECEIVABLE, GROSS Pass $ 798,208 $ 547,426 $ 279,938 $ 159,466 $ 61,985 $ 155,636 $ 176,074 $ 199 $ 2,178,932 Watch 9,504 1,127 3,305 — — 746 1,329 — 16,011 Special mention — — — 2,747 — — 963 — 3,710 Substandard 348 1,804 1,402 2,504 2,955 9,790 1,096 300 20,199 Total loans receivable, gross $ 808,060 $ 550,357 $ 284,645 $ 164,717 $ 64,940 $ 166,172 $ 179,462 $ 499 $ 2,218,852 The following table summarizes risk rated loan balances by category as of December 31, 2021: December 31, 2021 Special Pass Watch Mention Substandard Doubtful Loss REAL ESTATE LOANS (1 - 5) (6) (7) (8) (9) (10) Total Commercial $ 253,092 $ 4,652 $ 5,769 $ 916 $ — $ — $ 264,429 Construction and development 240,553 — — — — — 240,553 Home equity 40,716 — — 301 — — 41,017 One-to-four-family 363,682 — — 2,464 — — 366,146 Multi-family 178,158 — — — — — 178,158 Total real estate loans 1,076,201 4,652 5,769 3,681 — — 1,090,303 CONSUMER LOANS Indirect home improvement 335,731 — — 554 — — 336,285 Marine 82,721 — — 57 — — 82,778 Other consumer 2,962 — — 18 — — 2,980 Total consumer loans 421,414 — — 629 — — 422,043 COMMERCIAL BUSINESS LOANS Commercial and industrial 188,767 4,182 1,829 13,774 — — 208,552 Warehouse lending 33,277 — — — — — 33,277 Total commercial business loans 222,044 4,182 1,829 13,774 — — 241,829 Total loans receivable, gross $ 1,719,659 $ 8,834 $ 7,598 $ 18,084 $ — $ — $ 1,754,175 |
Schedule of amortized cost basis of loans | December 31, 2022 Nonaccrual with No Nonaccrual with Allowance for Credit Allowance for Credit Total REAL ESTATE LOANS Losses Losses Nonaccrual Home equity $ 46 $ — $ 46 One-to-four-family 920 — 920 966 — 966 CONSUMER LOANS Indirect home improvement — 1,076 1,076 Marine — 267 267 Other consumer — 9 9 — 1,352 1,352 COMMERCIAL BUSINESS LOANS Commercial and industrial — 6,334 6,334 Total $ 966 $ 7,686 $ 8,652 |
Schedule of amortized cost basis of collateral dependent impaired loans | December 31, 2022 REAL ESTATE LOANS Real Estate Equipment Total Home equity $ 46 $ — $ 46 One-to-four-family 920 — 920 966 — 966 CONSUMER LOANS Indirect home improvement — 1,076 1,076 Marine — 267 267 — 1,343 1,343 COMMERCIAL BUSINESS LOANS Commercial and industrial — 6,334 6,334 Total $ 966 $ 7,677 $ 8,643 |
Schedule of Related Party Loans | At December 31, 2022 2021 Beginning balance $ 4,207 $ 3,797 Additions — 647 Repayments (762) (237) Ending balance $ 3,445 $ 4,207 |
SERVICING RIGHTS (Tables)
SERVICING RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Summary of servicing rights activity | At or For the Year Ended December 31, 2022 2021 2020 Beginning balance, at the lower of cost or fair value $ 16,970 $ 12,595 $ 11,560 Additions 5,400 9,760 11,139 MSR amortized (4,354) (7,444) (8,135) Recovery (impairment) of servicing rights 1 2,059 (1,969) Ending balance, at the lower of cost or fair value $ 18,017 $ 16,970 $ 12,595 |
Key economic assumptions and the sensitivity of the current fair value for single family mortgage servicing rights | December 31, 2022 2021 Aggregate portfolio principal balance $ 2,783,458 $ 2,609,776 Weighted average rate of note 3.4 % 3.2 % At December 31, 2022 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 8.2 % 8.6 % 9.3 % Fair value MSR $ 35,478 $ 34,997 $ 34,188 Percentage of MSR 1.3 % 1.3 % 1.2 % Discount rate 9.6 % 10.1 % 10.6 % Fair value MSR $ 35,478 $ 34,715 $ 33,984 Percentage of MSR 1.3 % 1.2 % 1.2 % At December 31, 2021 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 13.8 % 20.0 % 31.5 % Fair value MSR $ 26,070 $ 21,188 $ 15,348 Percentage of MSR 1.0 % 0.8 % 0.6 % Discount rate 9.1 % 9.6 % 10.1 % Fair value MSR $ 26,070 $ 25,586 $ 25,119 Percentage of MSR 1.0 % 1.0 % 1.0 % |
Mortgage servicing rights. | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Valuation assumptions | At December 31, Key assumptions: 2022 2021 Weighted average discount rate 9.6 % 9.1 % Conditional prepayment rate (“CPR”) 8.2 % 13.8 % Weighted average life in years 7.8 5.9 |
PREMISES AND EQUIPMENT (Tables)
PREMISES AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PREMISES AND EQUIPMENT | |
Schedule of Premises and Equipment | December 31, 2022 2021 Land $ 5,715 $ 6,008 Buildings 16,934 17,290 Furniture, fixtures, and equipment 16,226 15,307 Leasehold improvements 2,461 2,461 Building improvements 7,688 7,558 Projects in process 537 67 Subtotal 49,561 48,691 Less accumulated depreciation and amortization (24,442) (22,100) Total $ 25,119 $ 26,591 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
LEASES | |
Summary of lease cost | For Year Ended December 31, Lease cost: 2022 2021 2020 Operating lease cost $ 1,422 $ 1,433 $ 1,393 Short-term lease cost 21 5 11 Total lease cost $ 1,443 $ 1,438 $ 1,404 |
Supplemental information related to operating leases | Cash paid for amounts included in the At or For the Year Ended December 31, measurement of lease liabilities: 2022 2021 Operating cash flows from operating leases $ 1,431 $ 1,402 Weighted average remaining lease term- operating leases 4.6 years 4.8 years Weighted average discount rate- operating leases 2.42 % 2.17 % |
Summary of maturities of operating lease liabilities | 2023 $ 1,512 2024 1,462 2025 1,152 2026 1,030 2027 745 Thereafter 1,251 Total lease payments 7,152 Less imputed interest (678) Total $ 6,474 |
OTHER REAL ESTATE OWNED ("ORE_2
OTHER REAL ESTATE OWNED ("OREO") (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
OTHER REAL ESTATE OWNED ("OREO") | |
Schedule of Other Real Estate Owned | At or For the Year Ended December 31, 2022 2021 2020 Beginning balance $ — $ 90 $ 168 Loans transferred to OREO 145 — — Closed retail branch transferred to OREO 570 — — Gross proceeds from sale of OREO (145) (81) (76) Loss on sale of OREO — (9) (2) Ending balance $ 570 $ — $ 90 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEPOSITS | |
Schedule of Deposit Liabilities | December 31, 2022 2021 Noninterest-bearing checking (1) $ 537,938 $ 564,360 Interest-bearing checking (1)(2) 135,127 228,024 Savings 134,358 193,922 Money market (3) 574,290 552,357 Certificates of deposit less than $100,000 (4) 440,785 186,974 Certificates of deposit of $100,000 through $250,000 195,447 116,206 Certificates of deposit of $250,000 and over 93,560 57,512 Escrow accounts related to mortgages serviced (5) 16,236 16,389 Total $ 2,127,741 $ 1,915,744 ____________________________ (1) Prior presentation of noninterest-bearing and interest-bearing checking balances was revised due to misclassification of certain checking products in the previous period. As a result of the misclassification, interest-bearing checking balances totaling $121.2 million at December 31, 2021, were reclassified to noninterest-bearing checking for comparative purposes. Balances as of the dates and average values included herein have been updated to reflect the reclassification. (2) Includes $2.3 million and $90.0 million of brokered deposits at December 31, 2022 and 2021, respectively. (3) Includes $59.7 million and $5.0 million of brokered deposits at December 31, 2022 and 2021, respectively. (4) Includes $332.0 million and $97.6 million of brokered certificates of deposit at December 31, 2022 and 2021, respectively. (5) Noninterest-bearing accounts. |
Schedule of Maturities of Time Deposits for Future Periods | December 31, 2022 Maturing in 2023 $ 472,231 Maturing in 2024 90,507 Maturing in 2025 113,434 Maturing in 2026 36,618 Maturing in 2027 16,947 Thereafter 55 Total $ 729,792 |
Schedule of Interest Expense by Deposit Category | Year Ended December 31, 2022 2021 2020 Interest-bearing checking $ 495 $ 282 $ 388 Savings and money market 3,775 1,604 2,458 Certificates of deposit 5,150 5,043 9,134 Total $ 9,420 $ 6,929 $ 11,980 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DEBT | |
Schedule of Advances on Borrowing Line | December 31, 2022 2021 Federal Home Loan Bank $ 186,528 $ 42,528 Total $ 186,528 $ 42,528 |
Schedule of Federal Home Loan Bank Advances Maturities Summary Due | Interest Years Ending December 31, Balances Rates 2023 $ 182,633 4.27 % 2024 3,895 2.27 % Total $ 186,528 |
Debt with Maximum and Average Balances | For the Year Ending December 31, 2022 2021 2020 Maximum balance: FHLB advances and Fed Funds $ 260,828 $ 102,528 $ 159,114 FRB — — 27,000 Fed Funds lines of credit — — — Subordinated notes 50,000 50,000 10,000 PPP Liquidity Facility — 59,349 74,112 Average balance: FHLB advances and Fed Funds 102,008 55,602 99,773 FRB 548 205 1,096 Fed Funds lines of credit 15 11 3 Subordinated notes 50,000 44,699 10,000 PPP Liquidity Facility — 7,310 46,965 Weighted average interest rates FHLB advances and Fed Funds 2.98 % 1.88 % 1.80 % FRB 1.69 % 0.25 % 0.25 % Fed Funds lines of credit 3.28 % 0.49 % 0.36 % Subordinated notes 3.75 % 3.75 % 6.50 % PPP Liquidity Facility — % 0.35 % 0.35 % |
EMPLOYEE BENEFITS (Tables)
EMPLOYEE BENEFITS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EMPLOYEE BENEFITS | |
Schedule of Shares Under ESOP | Balances at December 31, 2022 2021 2020 Allocated shares — — 427,488 Committed to be released shares — — — Unallocated shares — — 51,842 Total ESOP shares — — 479,330 Fair value of unallocated shares (in thousands) $ — $ — $ 1,307 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
INCOME TAXES | |
Schedule of Components of Income Tax Expense (Benefit) | Minnesot For the Year Ending December 31, Provision for income taxes 2022 2021 2020 Current $ 8,183 $ 8,258 $ 12,976 Deferred (844) 1,750 (2,390) Total provision for income taxes $ 7,339 $ 10,008 $ 10,586 |
Schedule of Effective Income Tax Rate Reconciliation | December 31, 2022 2021 2020 Amount Rate Amount Rate Amount Rate Income tax provision at statutory rate $ 7,767 21.0 % $ 9,958 21.0 % $ 10,469 21.0 % Tax exempt income (852) (2.3) (492) (1.0) (292) (0.6) Nondeductible items resulting in increase in tax 31 0.1 28 — 57 0.1 Increase in tax resulting from other items 274 0.7 100 0.2 175 0.4 Equity compensation (146) (0.4) (883) (1.9) (46) (0.1) Executive compensation 265 0.7 979 2.1 8 — ESOP — — 318 0.7 215 0.4 Total $ 7,339 19.8 % $ 10,008 21.1 % $ 10,586 21.2 % |
Schedule of Deferred Tax Assets and Liabilities | Deferred Tax Assets December 31, 2022 2021 Net operating loss carryforward $ — $ 189 Allowance for credit losses 6,119 5,673 Non-accrued loan interest 11 — Restricted stock awards 101 121 Non-qualified stock options 438 265 Lease liability 1,392 1,030 Securities available-for-sale 9,146 149 Unfunded commitments 547 107 Other 234 45 Total deferred tax assets 17,988 7,579 Deferred Tax Liabilities Loan origination costs (2,123) (1,982) Servicing rights (3,874) (3,649) Stock dividend - FHLB stock (35) (35) Property, plant, and equipment (1,095) (1,036) Purchase accounting adjustments (727) (863) Lease right-of-use assets (1,338) (979) Interest rate swaps designated as cash flow hedge (2,126) (218) Total deferred tax liabilities (11,318) (8,762) Net deferred tax assets (liabilities) $ 6,670 $ (1,183) |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of Commitments to Extend Credit | COMMITMENTS TO EXTEND CREDIT December 31, REAL ESTATE LOANS 2022 2021 Commercial $ 1,260 $ 787 Construction and development 201,708 182,297 One-to-four-family (includes locks for saleable loans) 10,713 78,264 Home equity 77,566 67,596 Multi-family 2,999 3,434 Total real estate loans 294,246 332,378 CONSUMER LOANS 39,406 35,873 COMMERCIAL BUSINESS LOANS Commercial and industrial 150,109 126,220 Warehouse lending 64,781 64,160 Total commercial business loans 214,890 190,380 Total commitments to extend credit $ 548,542 $ 558,631 |
REGULATORY CAPITAL (Tables)
REGULATORY CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REGULATORY CAPITAL | |
Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations | To be Well Capitalized Under Prompt For Capital For Capital Adequacy Corrective Actual Adequacy Purposes with Capital Buffer Action Provisions Bank Only Amount Ratio Amount Ratio Amount Ratio Amount Ratio At December 31, 2022 Total risk-based capital (to risk-weighted assets) $ 323,577 13.70 % $ 188,937 8.00 % $ 247,980 10.50 % $ 236,171 10.00 % Tier 1 risk-based capital (to risk-weighted assets) $ 294,043 12.45 % $ 141,703 6.00 % $ 200,746 8.50 % $ 188,937 8.00 % Tier 1 leverage capital (to average assets) $ 294,043 11.28 % $ 104,304 4.00 % $ N/A N/A $ 130,380 5.00 % CET 1 capital (to risk-weighted assets) $ 294,043 12.45 % $ 106,277 4.50 % $ 165,320 7.00 % $ 153,511 6.50 % |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Financial Assets At December 31, 2022 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 17,288 $ — $ 17,288 Corporate securities — 8,545 — 8,545 Municipal bonds — 120,602 — 120,602 Mortgage-backed securities — 69,966 — 69,966 U.S. Small Business Administration securities — 12,851 — 12,851 Mortgage loans held for sale, at fair value — 20,093 — 20,093 Loans receivable, at fair value — 14,035 — 14,035 Derivatives: Forward TBA mortgage-backed securities — 164 — 164 Interest rate lock commitments with customers — — 107 107 Interest rate swaps — 9,870 — 9,870 Total assets measured at fair value $ — $ 273,414 $ 107 $ 273,521 Financial Liabilities Derivatives: Mandatory and best effort forward commitments with investors $ — $ — $ (38) $ (38) Total liabilities measured at fair value $ — $ — $ (38) $ (38) Financial Assets At December 31, 2021 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 20,970 $ — $ 20,970 Corporate securities — 7,995 1,007 9,002 Municipal bonds — 135,302 131 135,433 Mortgage-backed securities — 89,402 — 89,402 U.S. Small Business Administration securities — 16,552 — 16,552 Mortgage loans held for sale, at fair value — 125,810 — 125,810 Loans receivable, at fair value — 16,083 — 16,083 Derivatives: Mandatory and best effort forward commitments with investors — — 808 808 Forward TBA mortgage-backed securities — 53 — 53 Interest rate swaps — 1,168 — 1,168 Interest rate lock commitments with customers — — 757 757 Total assets measured at fair value $ — $ 413,335 $ 2,703 $ 416,038 Financial Liabilities Derivatives: Interest rate swaps — (155) — (155) Total liabilities measured at fair value $ — $ (155) $ — $ (155) |
Schedule of Valuation Allowance for Impairment of Recognized Servicing Assets | December 31, 2022 Level 1 Level 2 Level 3 Total Loans individually evaluated $ — $ — $ 8,652 $ 8,652 OREO — — 570 570 MSR — — 35,478 35,478 December 31, 2021 Level 1 Level 2 Level 3 Total Loans individually evaluated $ — $ — $ 5,829 $ 5,829 MSR — — 26,070 26,070 |
Fair value reconciliation - Level 3 on recurring basis | Purchases Net change in Net change in Beginning and Sales and Ending fair value for fair value for 2022 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 757 $ 3,215 $ (3,865) $ 107 $ (650) $ — Individual forward sale commitments with investors 808 6,383 (7,229) (38) (846) — 2021 Interest rate lock commitments with customers $ 4,024 $ 23,164 $ (26,431) $ 757 $ (3,267) $ — Individual forward sale commitments with investors (67) 2,526 (1,651) 808 875 — Securities available-for-sale, at fair value 1,111 40 (13) 1,138 — 27 2020 Interest rate lock commitments with customers $ 557 $ 53,281 $ (49,814) $ 4,024 $ 3,467 $ — Individual forward sale commitments with investors (195) (4,857) 4,985 (67) 128 — Securities available-for-sale, at fair value 1,162 — (51) 1,111 — (40) _____________________________ (1) Relating to items held at end of period included in income. (2) Relating to items held at end of period included in other comprehensive income. |
Fair Value, by Balance Sheet Grouping | December 31, December 31, 2022 2021 Financial Assets Carrying Fair Carrying Fair Level 1 inputs: Amount Value Amount Value Cash and cash equivalents $ 41,437 $ 41,437 $ 26,491 $ 26,491 Certificates of deposit at other financial institutions 4,712 4,712 10,542 10,542 Level 2 inputs: Securities available-for-sale, at fair value 229,252 229,252 270,221 270,221 Securities held-to-maturity 8,500 7,929 7,500 8,128 Loans held for sale, at fair value 20,093 20,093 125,810 125,810 FHLB stock, at cost 10,611 10,611 4,778 4,778 Forward TBA mortgage-backed securities 164 164 53 53 Loans receivable, at fair value 14,035 14,035 16,083 16,083 Interest rate swaps 9,870 9,870 1,168 1,168 Accrued interest receivable 11,144 11,144 7,594 7,594 Level 3 inputs: Securities available-for-sale, at fair value — — 1,138 1,138 Loans receivable, gross 2,204,817 2,153,769 1,738,092 1,725,651 MSR, held at lower of cost or fair value 18,017 35,478 16,970 26,070 Fair value interest rate locks with customers 107 107 757 757 Mandatory and best effort forward commitments with investors — — 808 808 Financial Liabilities Level 2 inputs: Deposits 2,127,741 2,105,926 1,915,744 1,912,498 Borrowings 186,528 186,188 42,528 43,365 Subordinated notes, excluding unamortized debt issuance costs 50,000 44,500 50,000 51,688 Accrued interest payable 2,270 2,270 766 766 Interest rate swaps — — 155 155 Level 3 inputs: Mandatory and best effort forward commitments with investors 38 38 — — |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Valuation assumptions | Level 3 Significant Weighted Average Fair Value Valuation Unobservable December 31, December 31, Instruments Techniques Inputs Range 2022 2021 RECURRING Interest rate lock commitments with customers Quoted market prices Pull-through expectations 80% - 99% 92.5 % 93.3 % Individual forward sale commitments with investors Quoted market prices Pull-through expectations 80% - 99% 92.5 % 93.3 % NONRECURRING Loans individually evaluated Fair value of underlying collateral Discount applied to the obtained appraisal 10.0% 10.0 % 10.0 % OREO Fair value of collateral Discount applied to the obtained appraisal 10.0% 10.0 % N/A % MSR Industry sources Pre-payment speeds 0% - 50% 8.2 % 13.8 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
EARNINGS PER SHARE | |
Schedule of Earnings Per Share, Basic and Diluted | At or For the Year Ended December 31, Numerator (Dollars in thousands, except per share amounts): 2022 2021 2020 Net income $ 29,649 $ 37,412 $ 39,264 Dividends and undistributed earnings allocated to participating securities (554) (611) (545) Net income available to common shareholders $ 29,095 $ 36,801 $ 38,719 Denominator (shown as actual): Basic weighted average common shares outstanding 7,754,507 8,217,916 8,461,280 Dilutive shares 119,133 200,580 162,038 Diluted weighted average common shares outstanding 7,873,640 8,418,496 8,623,318 Basic earnings per share $ 3.75 $ 4.48 $ 4.58 Diluted earnings per share $ 3.70 $ 4.37 $ 4.49 Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive. 61,912 16,466 133,238 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
DERIVATIVES | |
Schedule of cumulative-basis adjustment for fair value hedges | December 31, 2022 Line item in the statement of financial position in which the hedged Item is included Hedged Assets Investment securities (1) $ 55,893 $ 4,107 Total $ 55,893 $ 4,107 ____________________________________ 1) These amounts include the amortized cost basis of closed portfolios used in designated hedging relationships in which the hedged item is the last layer expected to be remaining at the end of the hedging relationship. At December 31, 2022, the amortized cost basis of the closed portfolios used in these hedging relationships was $242.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.1 million; and the amounts of the designated hedged items was $60.0 million. |
Schedule of Derivative Instruments | December 31, 2022 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 90,000 $ 5,780 $ — Fair value hedges: Interest rate swaps - securities $ 60,000 $ 4,090 $ — Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 8,837 107 — Mandatory and best effort forward commitments with investors 4,558 — 38 Forward TBA mortgage-backed securities 27,000 164 — December 31, 2021 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 90,000 $ 1,168 $ 155 Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 71,890 757 — Mandatory and best effort forward commitments with investors 74,375 808 — Forward TBA mortgage-backed securities 111,000 53 — |
Schedule of effect of fair value and cash flow hedge accounting on the income statement | Year Ended December 31, 2022 2021 2020 Interest Interest Interest Interest Interest Interest Expense Income Expense Income Expense Income Deposits Securities Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 9,420 $ 7,046 $ 6,929 $ 5,637 $ 11,980 $ 4,709 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items $ — $ (4,107) $ — $ — $ — $ — Recognized on derivatives designated as hedging instruments — 4,103 — — — — Net expense recognized on fair value hedges $ — $ (4) $ — $ — $ — $ — Net gain (loss) on cash flow hedging relationships: Interest rate swaps - brokered deposits and borrowings Realized gains (losses) (pre-tax) reclassified from AOCI into net income $ 970 $ — $ (538) $ — $ (198) $ — Net income (expense) recognized on cash flow hedges $ 970 $ — $ (538) $ — $ (198) $ — |
Schedule of offsetting derivative assets | Gross Amounts Net Amounts of Assets Gross Amounts Not Offset Gross Amounts Offset in the Presented in the in the Statement of Financial Position Offsetting of derivative assets of Recognized Statement of Statement of Financial Cash Collateral at December 31, 2022 Assets Financial Position Financial Position Instruments Received Net Amount Interest rate swaps $ 9,870 $ — $ 9,870 $ — $ — $ 9,870 at December 31, 2021 Interest rate swaps $ 1,168 $ — $ 1,168 $ — $ — $ 1,168 |
Schedule of offsetting derivative liabilities | Gross Amounts Net Amounts of Gross Amounts Not Offset Gross Amounts Offset in the Liabilities in the Statement of Financial Position Offsetting of derivative liabilities of Recognized Statement of Presented in the Statement Financial Cash Collateral at December 31, 2022 Liabilities Financial Position of Financial Position Instruments Posted Net Amount Interest rate swaps $ — $ — $ — $ — $ — $ — at December 31, 2021 Interest rate swaps $ 155 $ — $ 155 $ — $ 155 $ — |
ACCUMULATED OTHER COMPREHENSI_2
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of changes in accumulated other comprehensive income (loss) by component, net of tax | Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2022 Instruments Securities Total Beginning balance $ 794 $ (542) $ 252 Other comprehensive income (loss) before reclassification, net of tax 7,728 (32,851) (25,123) Amounts reclassified from accumulated other comprehensive loss, net of tax (761) — (761) Net current period other comprehensive income (loss) 6,967 (32,851) (25,884) Ending balance $ 7,761 $ (33,393) $ (25,632) Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2021 Instruments Securities Total Beginning balance $ (967) $ 3,500 $ 2,533 Other comprehensive income (loss) before reclassification, net of tax 1,339 (4,042) (2,703) Amounts reclassified from accumulated other comprehensive income, net of tax 422 — 422 Net current period other comprehensive income (loss) 1,761 (4,042) (2,281) Ending balance $ 794 $ (542) $ 252 Unrealized Gains Gains and and (Losses) (Losses) on on Available Derivative for Sale Year Ended December 31, 2020 Instruments Securities Total Beginning balance $ — $ 788 $ 788 Other comprehensive (loss) income before reclassification, net of tax (1,122) 2,947 1,825 Amounts reclassified from accumulated other comprehensive income (loss), net of tax 155 (235) (80) Net current period other comprehensive (loss) income (967) 2,712 1,745 Ending balance $ (967) $ 3,500 $ 2,533 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
STOCK-BASED COMPENSATION | |
Weighted-Average Assumptions - Fair value of options granted | For the Year Ended December 31, 2022 2021 2020 Dividend yield 2.59% 1.58% 1.97% Expected volatility 26.86% 37.10% 26.79% Risk-free interest rate 2.88% 1.01% 0.42% Expected term in years 6.5 6.5 6.5 Weighted-average grant date fair value per option granted $ 7.13 $ 10.67 $ 8.00 |
Summary of Stock Option Awards | Weighted-Average Weighted- Remaining Average Contractual Term In Aggregate Shares Exercise Price Years Intrinsic Value Outstanding at January 1, 2020 575,980 $ 18.49 6.77 $ 7,722,369 Granted 124,570 $ 21.35 — — Less exercised 28,796 $ 8.45 — $ 453,674 Forfeited or expired — — — — Outstanding at December 31, 2020 671,754 $ 19.45 6.58 $ 5,721,159 Outstanding at January 1, 2021 671,754 $ 19.45 6.58 $ 5,721,159 Granted 118,850 $ 35.46 — — Less exercised 176,978 $ 12.73 — $ 4,265,369 Forfeited or expired — — — — Outstanding at December 31, 2021 613,626 $ 25.24 7.17 $ 5,362,902 Outstanding at January 1, 2022 613,626 $ 25.24 7.17 $ 5,362,902 Granted 99,200 $ 30.94 — — Less exercised 64,994 $ 19.75 — $ 790,558 Forfeited or expired — — — — Outstanding at December 31, 2022 647,832 $ 26.67 6.84 $ 4,627,255 Expected to vest, assuming a 0.31% annual forfeiture rate at December 31, 2022 (1) 645,998 $ 26.66 6.84 $ 4,619,599 Exercisable at December 31, 2022 312,821 $ 24.03 5.46 $ 3,007,299 ___________________________ (1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options forfeited over 10 years. |
Summary of Nonvested Awards | Weighted-Average Grant-Date Fair Value Nonvested Shares Shares Per Share Nonvested at January 1, 2020 80,430 $ 26.82 Granted 49,760 21.35 Less vested 20,006 26.84 Forfeited or expired — — Nonvested at December 31, 2020 110,184 $ 24.35 Nonvested at January 1, 2021 110,184 $ 24.35 Granted 41,350 35.46 Less vested 29,862 24.78 Forfeited or expired — — Nonvested at December 31, 2021 121,672 $ 28.02 Nonvested at January 1, 2022 121,672 $ 28.02 Granted 35,050 30.94 Less vested 38,192 28.12 Forfeited or expired — — Nonvested at December 31, 2022 118,530 $ 28.85 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
BUSINESS SEGMENTS | |
Schedule of Segment Reporting Information, by Segment | At or For the Year Ended December 31, 2022 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 93,358 $ 10,922 $ 104,280 Provision for credit losses on loans (2) (5,064) (1,153) (6,217) Noninterest income 10,158 7,950 18,108 Noninterest expense (59,723) (19,460) (79,183) Income (loss) before (provision) benefit for income taxes 38,729 (1,741) 36,988 (Provision) benefit for income taxes (7,684) 345 (7,339) Net income (loss) $ 31,045 $ (1,396) $ 29,649 Total average assets for period ended $ 2,018,263 $ 417,431 $ 2,435,694 FTEs 405 132 537 At or For the Year Ended December 31, 2021 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 78,306 $ 8,343 $ 86,649 (Provision for) reversal of loan losses (2) (2,613) 2,113 (500) Noninterest income 8,545 28,968 37,513 Noninterest expense (56,557) (19,685) (76,242) Income before provision for income taxes 27,681 19,739 47,420 Provision for income taxes (5,842) (4,166) (10,008) Net income $ 21,839 $ 15,573 $ 37,412 Total average assets for period ended $ 1,779,850 $ 409,363 $ 2,189,213 FTEs 384 152 536 At or For the Year Ended December 31, 2020 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 68,997 $ 5,123 $ 74,120 Provision for loan losses (2) (10,278) (2,758) (13,036) Noninterest income 10,551 44,808 55,359 Noninterest expense (49,242) (17,351) (66,593) Income before provision for income taxes 20,028 29,822 49,850 Provision for income taxes (4,253) (6,333) (10,586) Net income $ 15,775 $ 23,489 $ 39,264 Total average assets for period ended $ 1,543,681 $ 396,367 $ 1,940,048 FTEs 354 152 506 __________________________ (1) Net interest income is the difference between interest earned on assets and the cost of liabilities to fund those assets. Interest earned includes actual interest earned on segment assets and, if the segment has excess liabilities, interest credits for providing funding to the other segment. The cost of liabilities includes interest expense on segment liabilities and, if the segment does not have enough liabilities to fund its assets, a funding charge based on the cost of assigned liabilities to fund segment assets. (2) The provision for credit losses was calculated using the CECL methodology in 2022 and the provision for loan losses was calculated using the previous incurred loss methodology in 2021 and 2020. The change in methodology reflects shifts in allocation between segments due to various changes, to include adjustments to qualitative factors, changes in loan balances, and charge-off and recovery activity. |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of noninterest income, segregated by revenue streams in-scope and out-of-scope of Topic 606 | For the Year Ended December 31, Noninterest income 2022 2021 2020 In-scope of Topic 606: Debit card interchange fees $ 2,266 $ 2,252 $ 1,879 Deposit service and account maintenance fees 919 757 786 Noninterest income (in-scope of Topic 606) 3,185 3,009 2,665 Noninterest income (out-of-scope of Topic 606) 14,923 34,504 52,694 Total noninterest income $ 18,108 $ 37,513 $ 55,359 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in other intangible assets | Other Intangible Assets Accumulated Gross CDI Amortization Net CDI Balance, December 31, 2019 $ 7,490 $ (2,033) $ 5,457 Amortization — (706) (706) Balance, December 31, 2020 7,490 (2,739) 4,751 Amortization — (691) (691) Balance, December 31, 2021 7,490 (3,430) 4,060 Amortization — (691) (691) Balance, December 31, 2022 $ 7,490 $ (4,121) $ 3,369 |
Schedule of amortization expense | 2023 $ 691 2024 621 2025 525 2026 525 2027 525 Thereafter 482 Total $ 3,369 |
PARENT COMPANY ONLY FINANCIAL_2
PARENT COMPANY ONLY FINANCIAL INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
PARENT COMPANY ONLY FINANCIAL INFORMATION | |
Schedule of Condensed Balance Sheet | Condensed Balance Sheets December 31, Assets 2022 2021 Cash and due from banks $ 7,195 $ 19,883 Investment in subsidiary 274,092 277,390 Other assets 704 407 Total assets $ 281,991 $ 297,680 Liabilities and Stockholders' Equity Subordinated notes, net 49,461 49,394 Other liabilities 833 779 Total liabilities 50,294 50,173 Stockholders' equity 231,697 247,507 Total liabilities and stockholders' equity $ 281,991 $ 297,680 |
Schedule of Condensed Statements of Income | Condensed Statements of Income Year Ended December 31, 2022 2021 2020 Interest expense on subordinated note $ (1,942) $ (1,722) $ (776) Dividends received from subsidiary 9,110 9,800 20,862 Other expenses (274) (272) (195) Income before income tax benefit and equity in undistributed net income of subsidiary 6,894 7,806 19,891 Income tax benefit 465 419 204 Equity in undistributed earnings of subsidiary 22,290 29,187 19,169 Net income $ 29,649 $ 37,412 $ 39,264 |
Schedule of Condensed Statements of Cash Flows | Condensed Statements of Cash Flows Year Ended December 31, 2022 2021 2020 Cash flows from operating activities: Net income $ 29,649 $ 37,412 $ 39,264 Equity in undistributed net income of subsidiary (22,290) (29,187) (19,169) Amortization 67 61 115 ESOP compensation expense for allocated shares — 1,482 1,025 Share-based compensation expense related to stock options and restricted stock 1,971 1,446 1,020 Changes in operating assets and liabilities Other assets (297) (205) (30) Other liabilities 55 569 27 Net cash from operating activities 9,155 11,578 22,252 Cash flows (used by) from investing activities: Net proceeds from ESOP — 291 282 Investment in subsidiary — (25,000) — Net cash from (used by) investing activities — (24,709) 282 Cash flows (used by) from financing activities: Net proceeds from issuance of subordinated notes — 49,333 — Repayment of subordinated notes — (10,000) — Proceeds (disbursements) from stock options exercised 568 (2,076) (161) Common stock repurchased for employee/director taxes paid on restricted stock awards (190) (211) (34) Issuance of common stock - employee stock purchase plan 503 — — Common stock repurchased (15,628) (13,961) (9,802) Dividends paid on common stock (7,096) (4,602) (3,574) Net cash (used by) from financing activities (21,843) 18,483 (13,571) Net (decrease) increase in cash and cash equivalents (12,688) 5,352 8,963 Cash and cash equivalents, beginning of year 19,883 14,531 5,568 Cash and cash equivalents, end of year $ 7,195 $ 19,883 $ 14,531 |
BASIS OF PRESENTATION AND SUM_4
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 12 Months Ended | |||
Dec. 31, 2022 USD ($) segment Office item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Feb. 24, 2023 USD ($) item | |
Schedule of Accounting Policies [Line Items] | ||||
Number of operating segments | 2 | |||
Maximum term to qualify as cash and cash equivalents | 90 days | |||
Cash and due from banks and interest-bearing deposits in excess of FDIC insured limits | $ 281,000 | $ 327,000 | ||
FHLB investment requirement, capital stock amount | $ 2,500,000 | |||
FHLB investment requirement, percent of advances from FHLB | 4% | |||
Federal Home Loan Bank Stock | $ 10,611,000 | 4,778,000 | ||
Impairment of FHLB stock | $ 0 | 0 | ||
Minimum term for accrual of interest on loans to be discontinued | 90 days | |||
Minimum term delinquent loan performs under contract terms and returned to accrual status | 6 months | |||
Reserve requirement | $ 0 | 0 | ||
Marketing and advertising | 897,000 | 634,000 | $ 530,000 | |
Goodwill, Impairment Loss | 0 | 0 | $ 0 | |
Total deposits | 2,127,741,000 | 1,915,744,000 | ||
Loans receivable, net | $ 2,190,860,000 | $ 1,728,540,000 | ||
Building and building improvements | Minimum | ||||
Schedule of Accounting Policies [Line Items] | ||||
Useful life | 25 years | |||
Furniture, fixtures and equipment | Minimum | ||||
Schedule of Accounting Policies [Line Items] | ||||
Useful life | 3 years | |||
Furniture, fixtures and equipment | Maximum | ||||
Schedule of Accounting Policies [Line Items] | ||||
Useful life | 10 years | |||
Puget Sound | ||||
Schedule of Accounting Policies [Line Items] | ||||
Number of bank branches | item | 20 | |||
Number of administrative offices that originates loans and accept deposits | Office | 1 | |||
Columbia State Bank | Subsequent Event | ||||
Schedule of Accounting Policies [Line Items] | ||||
Number of bank branches | item | 7 | |||
Total deposits | $ 425,500,000 | |||
Loans receivable, net | $ 65,800,000 | |||
Columbia State Bank | Subsequent Event | Purchase and Assumption Agreement | ||||
Schedule of Accounting Policies [Line Items] | ||||
Number of bank branches | item | 7 |
BASIS OF PRESENTATION AND SUM_5
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Error Corrections (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule of Accounting Policies [Line Items] | |||
Basic earnings per share | $ 3.75 | $ 4.48 | $ 4.58 |
Diluted earnings per share | $ 3.70 | $ 4.37 | 4.49 |
Interest-bearing accounts | $ 1,573,567 | $ 1,334,995 | |
Noninterest-bearing accounts | $ 554,174 | 580,749 | |
Error correction | |||
Schedule of Accounting Policies [Line Items] | |||
Noninterest-bearing accounts | $ 121,200 | ||
Previously reported | |||
Schedule of Accounting Policies [Line Items] | |||
Basic earnings per share | $ 4.42 | 4.57 | |
Diluted earnings per share | $ 4.32 | $ 4.49 | |
Interest-bearing accounts | $ 121,200 |
BASIS OF PRESENTATION AND SUM_6
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Adoption (Details) - USD ($) | Dec. 31, 2022 | Jan. 01, 2022 | Dec. 31, 2021 |
Schedule of Accounting Policies [Line Items] | |||
Accrued interest receivable on available-for-sale debt securities | $ 1,200,000 | $ 1,100,000 | |
Accrued interest receivable on held to maturity debt securities | 116,000 | 113,000 | |
Increase in retained earnings | 202,065,000 | 179,215,000 | |
Assets | |||
Allowance for credit losses on loans | 27,992,000 | 25,635,000 | |
Liabilities | |||
Allowance for credit losses on unfunded loan commitments | 2,500,000 | $ 499,000 | |
ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | $ 25,635,000 | ||
Liabilities | |||
Allowance for credit losses on unfunded loan commitments | 499,000 | ||
ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Schedule of Accounting Policies [Line Items] | |||
Increase in retained earnings | $ 297,000 | ||
Assets | |||
Allowance for credit losses on debt securities held-to-maturity | 72,000 | ||
Allowance for credit losses on loans | 22,776,000 | ||
Liabilities | |||
Allowance for credit losses on unfunded loan commitments | 2,908,000 | ||
ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Schedule of Accounting Policies [Line Items] | |||
Increase in retained earnings | 297,000 | ||
Assets | |||
Allowance for credit losses on debt securities held-to-maturity | 72,000 | ||
Allowance for credit losses on loans | (2,859,000) | ||
Liabilities | |||
Allowance for credit losses on unfunded loan commitments | 2,409,000 | ||
Total | (378,000) | ||
Commercial | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 5,667,000 | ||
Commercial | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 1,728,000 | ||
Commercial | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | (3,939,000) | ||
Construction and development | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 4,448,000 | ||
Construction and development | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 2,328,000 | ||
Construction and development | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | (2,120,000) | ||
Home equity. | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 279,000 | ||
Home equity. | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 455,000 | ||
Home equity. | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | 176,000 | ||
One-to-four-family | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 1,424,000 | ||
One-to-four-family | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 3,656,000 | ||
One-to-four-family | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | 2,232,000 | ||
Multi-family | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 2,980,000 | ||
Multi-family | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 1,397,000 | ||
Multi-family | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | (1,583,000) | ||
Indirect home improvement | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 3,540,000 | ||
Indirect home improvement | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 9,394,000 | ||
Indirect home improvement | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | 5,854,000 | ||
Marine | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 702,000 | ||
Marine | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 900,000 | ||
Marine | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | 198,000 | ||
Other consumer loans | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 38,000 | ||
Other consumer loans | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 64,000 | ||
Other consumer loans | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | 26,000 | ||
Commercial and industrial | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 5,953,000 | ||
Commercial and industrial | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 2,727,000 | ||
Commercial and industrial | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | (3,226,000) | ||
Warehouse lending | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 583,000 | ||
Warehouse lending | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
Assets | |||
Allowance for credit losses on loans | 127,000 | ||
Warehouse lending | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | (456,000) | ||
Unallocated | ASU No 2016-13 | |||
Assets | |||
Allowance for credit losses on loans | 21,000 | ||
Unallocated | ASU No 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
Assets | |||
Allowance for credit losses on loans | $ (21,000) |
INVESTMENTS - Securities Reconc
INVESTMENTS - Securities Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | $ 271,793 | $ 272,051 |
Unrealized Gains | 48 | 3,433 |
Unrealized Losses | (42,589) | (4,125) |
Securities available-for-sale, at fair value | 229,252 | 271,359 |
SECURITIES HELD-TO-MATURITY | ||
Amortized cost | 8,500 | 7,500 |
Unrealized gains | 628 | |
Unrealized losses | (571) | |
Securities held-to-maturity, at fair value | 7,929 | 8,128 |
Allowance for credit losses | 31 | 0 |
Total securities | ||
Amortized cost | 280,293 | 279,551 |
Unrealized gains | 48 | 4,061 |
Unrealized losses | (43,160) | (4,125) |
Total securities, at fair value | 237,181 | 279,487 |
Allowance for credit losses | 31 | |
U.S. agency securities | ||
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | 21,153 | 21,155 |
Unrealized gains | 133 | |
Unrealized losses | (3,865) | (318) |
Securities available-for-sale, at fair value | 17,288 | 20,970 |
Corporate securities | ||
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | 9,497 | 9,495 |
Unrealized gains | 27 | 31 |
Unrealized losses | (979) | (524) |
Securities available-for-sale, at fair value | 8,545 | 9,002 |
SECURITIES HELD-TO-MATURITY | ||
Amortized cost | 8,500 | 7,500 |
Unrealized gains | 628 | |
Unrealized losses | (571) | |
Securities held-to-maturity, at fair value | 7,929 | 8,128 |
Allowance for credit losses | 31 | |
Municipal bonds | ||
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | 144,200 | 136,377 |
Unrealized gains | 21 | 1,577 |
Unrealized losses | (23,619) | (2,521) |
Securities available-for-sale, at fair value | 120,602 | 135,433 |
Mortgage-backed securities | ||
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | 82,424 | 88,641 |
Unrealized gains | 1,457 | |
Unrealized losses | (12,458) | (696) |
Securities available-for-sale, at fair value | 69,966 | 89,402 |
U.S. Small Business Administration securities | ||
SECURITIES AVAILABLE-FOR-SALE | ||
Amortized cost | 14,519 | 16,383 |
Unrealized gains | 0 | 235 |
Unrealized losses | (1,668) | (66) |
Securities available-for-sale, at fair value | 12,851 | $ 16,552 |
Allowance for credit losses | $ 0 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) security | Dec. 31, 2021 USD ($) security | |
Debt and Equity Securities, FV-NI [Line Items] | ||
Held-to maturity securities with unrealized losses of less than one year | security | 7 | |
Held-to maturity securities with unrealized losses of more than one year | security | 0 | |
Held-to maturity securities with unrealized losses | security | 0 | |
Available-for-sale securities with unrealized losses of less than one year | security | 88 | 75 |
Available-for-sale securities with unrealized losses of more than one year | security | 106 | 17 |
Number of securities pledged and held at FHLB | 10 | 7 |
Carrying value of pledged securities | $ 13,500,000 | $ 8,100,000 |
Public deposits | 15,600,000 | 13,900,000 |
Amount of credit impairment | 0 | 0 |
Accrued interest receivable on held to maturity debt securities | 116,000 | 113,000 |
Accrued interest receivable on available-for-sale debt securities | $ 1,200,000 | $ 1,100,000 |
Debt Securities, Available-for-Sale, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | Interest Receivable |
Debt securities held to maturity classified as nonaccrual or 90 days or more past due and still accruing | $ 0 | |
Asset pledged as collateral | Washington Public Deposit Protection Commission | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Collateral requirement | $ 6,300,000 | $ 5,600,000 |
Cash Flow Hedges | Asset pledged as collateral | ||
Debt and Equity Securities, FV-NI [Line Items] | ||
Number of Securities Pledged | 1 | |
Carrying value of pledged securities | $ 2,800,000 |
INVESTMENTS - Allowance for cre
INVESTMENTS - Allowance for credit losses (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |
Beginning allowance balance | $ 0 |
Total ending allowance balance | 31 |
Corporate securities | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |
Reversal of provision for credit losses | (41) |
Total ending allowance balance | 31 |
Corporate securities | Accounting Standards Update 2016-13 | |
Debt Securities, Held-to-maturity, Allowance for Credit Loss [Roll Forward] | |
Total ending allowance balance | $ 72 |
INVESTMENTS - Amortized cost of
INVESTMENTS - Amortized cost of debt (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost | $ 8,500 | $ 7,500 |
Corporate securities | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost | 8,500 | 7,500 |
BBB/BBB- | Corporate securities | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost | $ 8,500 | $ 7,500 |
INVESTMENTS - Investments with
INVESTMENTS - Investments with Unrealized Losses Policy (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | $ 91,176 | $ 121,502 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 133,700 | 27,169 |
Securities available-for-sale, Unrealized loss position, Fair Value | 224,876 | 148,671 |
Securities held-to-maturity, Unrealized loss position, Fair Value, Less than 12 Months | 7,929 | |
Securities held-to-maturity, Unrealized loss position, Fair Value | 7,929 | |
Total securities, Unrealized loss position, Fair Value, Less than 12 Months | 99,105 | |
Total securities, Unrealized loss position, Fair Value, 12 Months or Longer | 133,700 | |
Total securities, Unrealized loss position, Fair Value | 232,805 | |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (10,266) | (2,752) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (32,323) | (1,373) |
Securities available-for-sale, Unrealized losses | (42,589) | (4,125) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, Less than 12 Months | (571) | |
Securities held-to-maturity, Unrealized losses | (571) | |
Unrealized loss position, Less than 12 Months, Unrealized Losses | (10,837) | |
Unrealized loss position, 12 Months or Longer, Unrealized Losses | (32,323) | |
Unrealized loss position, Unrealized Losses | (43,160) | |
U.S. agency securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 3,823 | 13,125 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 13,465 | 3,752 |
Securities available-for-sale, Unrealized loss position, Fair Value | 17,288 | 16,877 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (118) | (105) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (3,747) | (213) |
Securities available-for-sale, Unrealized losses | (3,865) | (318) |
Corporate securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 2,494 | |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 4,026 | 5,476 |
Securities available-for-sale, Unrealized loss position, Fair Value | 6,520 | 5,476 |
Securities held-to-maturity, Unrealized loss position, Fair Value, Less than 12 Months | 7,929 | |
Securities held-to-maturity, Unrealized loss position, Fair Value | 7,929 | |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (4) | |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (975) | (524) |
Securities available-for-sale, Unrealized losses | (979) | (524) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, Less than 12 Months | (571) | |
Securities held-to-maturity, Unrealized losses | (571) | |
Municipal bonds | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 44,261 | 72,098 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 73,990 | 14,116 |
Securities available-for-sale, Unrealized loss position, Fair Value | 118,251 | 86,214 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (5,794) | (1,961) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (17,825) | (560) |
Securities available-for-sale, Unrealized losses | (23,619) | (2,521) |
Mortgage-backed securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 29,791 | 33,291 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 40,175 | 3,825 |
Securities available-for-sale, Unrealized loss position, Fair Value | 69,966 | 37,116 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (3,188) | (620) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (9,270) | (76) |
Securities available-for-sale, Unrealized losses | (12,458) | (696) |
U.S. Small Business Administration securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 10,807 | 2,988 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 2,044 | |
Securities available-for-sale, Unrealized loss position, Fair Value | 12,851 | 2,988 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (1,162) | (66) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (506) | |
Securities available-for-sale, Unrealized losses | $ (1,668) | $ (66) |
INVESTMENTS - Available for Sal
INVESTMENTS - Available for Sale Securities by Contractual Maturity (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt and Equity Securities, FV-NI [Line Items] | |||
Proceeds from sale of available-for-sale securities | $ 0 | $ 0 | $ 12,214,000 |
Gains from securities available-for-sale | 0 | 0 | $ 300,000 |
Amortized Cost | |||
Securities available-for-sale, Total | 271,793,000 | 272,051,000 | |
Securities held-to-maturity, Total | 8,500,000 | 7,500,000 | |
Total securities | 280,293,000 | 279,551,000 | |
Fair Value | |||
Securities available-for-sale, Total | 229,252,000 | 271,359,000 | |
Securities held-to-maturity, Total | 7,929,000 | 8,128,000 | |
Total securities | 237,181,000 | 279,487,000 | |
U.S. agency securities | |||
Amortized Cost | |||
Securities available-for-sale, Due after one year through five years | 4,874,000 | 959,000 | |
Securities available-for-sale, Due after five years through ten years | 6,989,000 | 6,920,000 | |
Securities available-for-sale, Due after ten years | 9,290,000 | 13,276,000 | |
Securities available-for-sale, Subtotal | 21,153,000 | 21,155,000 | |
Securities available-for-sale, Total | 21,153,000 | 21,155,000 | |
Fair Value | |||
Securities available-for-sale, Due after one year through five years | 4,321,000 | 1,004,000 | |
Securities available-for-sale, Due after five years through ten years | 5,963,000 | 6,850,000 | |
Securities available-for-sale, Due after ten years | 7,004,000 | 13,116,000 | |
Securities available-for-sale, Subtotal | 17,288,000 | 20,970,000 | |
Securities available-for-sale, Total | 17,288,000 | 20,970,000 | |
Corporate securities | |||
Amortized Cost | |||
Securities available-for-sale, Due in one year or less | 1,000,000 | ||
Securities available-for-sale, Due after one year through five years | 2,497,000 | 3,495,000 | |
Securities available-for-sale, Due after five years through ten years | 4,000,000 | 4,000,000 | |
Securities available-for-sale, Due after ten years | 2,000,000 | 2,000,000 | |
Securities available-for-sale, Subtotal | 9,497,000 | 9,495,000 | |
Securities available-for-sale, Total | 9,497,000 | 9,495,000 | |
Securities held-to-maturity, Due after five years through ten years | 8,500,000 | 7,500,000 | |
Fair Value | |||
Securities available-for-sale, Due in one year or less | 997,000 | ||
Securities available-for-sale, Due after one year through five years | 2,519,000 | 3,526,000 | |
Securities available-for-sale, Due after five years through ten years | 3,763,000 | 3,627,000 | |
Securities available-for-sale, Due after ten years | 1,266,000 | 1,849,000 | |
Securities available-for-sale, Subtotal | 8,545,000 | 9,002,000 | |
Securities available-for-sale, Total | 8,545,000 | 9,002,000 | |
Securities held-to-maturity, Due after five years through ten years | 7,929,000 | 8,128,000 | |
Municipal bonds | |||
Amortized Cost | |||
Securities available-for-sale, Due in one year or less | 2,660,000 | ||
Securities available-for-sale, Due after one year through five years | 1,038,000 | 3,724,000 | |
Securities available-for-sale, Due after five years through ten years | 6,341,000 | 6,857,000 | |
Securities available-for-sale, Due after ten years | 134,161,000 | 125,796,000 | |
Securities available-for-sale, Subtotal | 144,200,000 | 136,377,000 | |
Securities available-for-sale, Total | 144,200,000 | 136,377,000 | |
Fair Value | |||
Securities available-for-sale, Due in one year or less | 2,644,000 | ||
Securities available-for-sale, Due after one year through five years | 1,012,000 | 3,850,000 | |
Securities available-for-sale, Due after five years through ten years | 5,771,000 | 7,035,000 | |
Securities available-for-sale, Due after ten years | 111,175,000 | 124,548,000 | |
Securities available-for-sale, Subtotal | 120,602,000 | 135,433,000 | |
Securities available-for-sale, Total | 120,602,000 | 135,433,000 | |
Mortgage-backed securities | |||
Amortized Cost | |||
Securities available-for-sale, Mortgage-backed securities | 82,424,000 | 88,641,000 | |
Securities available-for-sale, Total | 82,424,000 | 88,641,000 | |
Fair Value | |||
Securities available-for-sale, Mortgage-backed securities | 69,966,000 | 89,402,000 | |
Securities available-for-sale, Total | 69,966,000 | 89,402,000 | |
Federal National Mortgage Association ("FNMA") | |||
Amortized Cost | |||
Securities available-for-sale, Mortgage-backed securities | 68,421,000 | 75,171,000 | |
Fair Value | |||
Securities available-for-sale, Mortgage-backed securities | 57,358,000 | 75,737,000 | |
Federal Home Loan Mortgage Corporation ("FHLMC") | |||
Amortized Cost | |||
Securities available-for-sale, Mortgage-backed securities | 9,290,000 | 9,606,000 | |
Fair Value | |||
Securities available-for-sale, Mortgage-backed securities | 8,424,000 | 9,768,000 | |
Government National Mortgage Association ("GNMA") | |||
Amortized Cost | |||
Securities available-for-sale, Mortgage-backed securities | 4,713,000 | 3,864,000 | |
Fair Value | |||
Securities available-for-sale, Mortgage-backed securities | 4,184,000 | 3,897,000 | |
U.S. Small Business Administration securities | |||
Amortized Cost | |||
Securities available-for-sale, Due after one year through five years | 2,553,000 | 2,485,000 | |
Securities available-for-sale, Due after five years through ten years | 4,461,000 | 4,420,000 | |
Securities available-for-sale, Due after ten years | 7,505,000 | 9,478,000 | |
Securities available-for-sale, Subtotal | 14,519,000 | 16,383,000 | |
Securities available-for-sale, Total | 14,519,000 | 16,383,000 | |
Fair Value | |||
Securities available-for-sale, Due after one year through five years | 2,407,000 | 2,507,000 | |
Securities available-for-sale, Due after five years through ten years | 3,996,000 | 4,515,000 | |
Securities available-for-sale, Due after ten years | 6,448,000 | 9,530,000 | |
Securities available-for-sale, Subtotal | 12,851,000 | 16,552,000 | |
Securities available-for-sale, Total | $ 12,851,000 | $ 16,552,000 |
LOANS RECEIVABLE AND ALLOWANC_3
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | $ 2,218,852 | $ 1,754,175 | $ 1,571,153 |
Allowance for credit losses on loans | (27,992) | (25,635) | |
Total loans receivable, net | 2,190,860 | 1,728,540 | |
REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 1,421,260 | 1,090,303 | 923,541 |
REAL ESTATE LOANS | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 334,059 | 264,429 | |
REAL ESTATE LOANS | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 342,591 | 240,553 | |
REAL ESTATE LOANS | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 55,387 | 41,017 | |
REAL ESTATE LOANS | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 469,485 | 366,146 | |
REAL ESTATE LOANS | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 219,738 | 178,158 | |
CONSUMER LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 569,572 | 422,043 | 374,153 |
CONSUMER LOANS | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 495,941 | 336,285 | |
CONSUMER LOANS | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 70,567 | 82,778 | |
CONSUMER LOANS | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 3,064 | 2,980 | |
COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 228,020 | 241,829 | $ 273,459 |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | 196,791 | 208,552 | |
COMMERCIAL BUSINESS LOANS | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total loans receivable, gross | $ 31,229 | $ 33,277 |
LOANS RECEIVABLE AND ALLOWANC_4
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) item division segment | Dec. 31, 2021 USD ($) segment division | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of loan portfolio segments | segment | 3 | 3 |
Number of warehouse lending divisions | division | 2 | 2 |
Loans pledged as collateral for FHLB advances | $ 840,200,000 | $ 761,600,000 |
Loans pledged as collateral for Federal Reserve Bank lines of credit | $ 579,800,000 | 428,700,000 |
Minimum term for accrual of interest on loans to be discontinued | 90 days | |
Unearned loan fees in excess of unamortized costs and premiums | $ 7,800,000 | 4,900,000 |
Net discounts on acquired loans | 437,000 | 751,000 |
Accrued interest receivable | $ 9,600,000 | $ 6,300,000 |
Accounts Receivable, Noncurrent, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | Interest Receivable |
Minimum | Multi-family | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Number of Units in Real Estate Property | item | 5 |
LOANS RECEIVABLE AND ALLOWANC_5
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Allowance for Loan Losses by Loan Categories (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | $ 25,635 | $ 26,172 | |
Provision for credit losses on loans | 6,623 | 500 | $ 13,036 |
Loans charged-off | (2,465) | (1,793) | (1,123) |
Recoveries | 1,058 | 756 | 1,030 |
Net recoveries (charge-offs) | (1,407) | (1,037) | (93) |
Ending balance | 27,992 | 25,635 | 26,172 |
Period end amount allocated to: | |||
Loans individually evaluated for impairment | 1,163 | 1,310 | |
Loans collectively evaluated for impairment | 24,472 | 24,862 | |
Ending balance | 27,992 | 25,635 | 26,172 |
LOANS RECEIVABLE | |||
Loans individually evaluated for impairment | 5,829 | 7,761 | |
Loans collectively evaluated for impairment | 1,748,346 | 1,563,392 | |
Total loans receivable | 2,218,852 | 1,754,175 | 1,571,153 |
Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 25,635 | 26,172 | 13,229 |
Ending balance | 25,635 | 26,172 | |
Period end amount allocated to: | |||
Ending balance | 25,635 | 26,172 | |
Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
ALLOWANCE FOR LOAN LOSSES | |||
Ending balance | (2,859) | ||
Period end amount allocated to: | |||
Ending balance | (2,859) | ||
Unallocated Financing Receivables [Member] | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 21 | 691 | |
Provision for credit losses on loans | (670) | 688 | |
Ending balance | 21 | 691 | |
Period end amount allocated to: | |||
Loans collectively evaluated for impairment | 21 | 691 | |
Ending balance | 21 | 691 | |
Unallocated Financing Receivables [Member] | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 21 | 691 | 3 |
Ending balance | 21 | 691 | |
Period end amount allocated to: | |||
Ending balance | 21 | 691 | |
Unallocated Financing Receivables [Member] | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
ALLOWANCE FOR LOAN LOSSES | |||
Ending balance | (21) | ||
Period end amount allocated to: | |||
Ending balance | (21) | ||
REAL ESTATE LOANS | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 14,798 | 13,846 | |
Provision for credit losses on loans | 2,559 | 952 | 7,622 |
Recoveries | 18 | ||
Net recoveries (charge-offs) | 18 | ||
Ending balance | 12,123 | 14,798 | 13,846 |
Period end amount allocated to: | |||
Loans individually evaluated for impairment | 23 | 15 | |
Loans collectively evaluated for impairment | 14,775 | 13,831 | |
Ending balance | 12,123 | 14,798 | 13,846 |
LOANS RECEIVABLE | |||
Loans individually evaluated for impairment | 781 | 1,280 | |
Loans collectively evaluated for impairment | 1,089,522 | 922,261 | |
Total loans receivable | 1,421,260 | 1,090,303 | 923,541 |
REAL ESTATE LOANS | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 14,798 | 13,846 | 6,206 |
Ending balance | 14,798 | 13,846 | |
Period end amount allocated to: | |||
Ending balance | 14,798 | 13,846 | |
REAL ESTATE LOANS | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
ALLOWANCE FOR LOAN LOSSES | |||
Ending balance | (5,234) | ||
Period end amount allocated to: | |||
Ending balance | (5,234) | ||
CONSUMER LOANS | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 4,280 | 6,696 | |
Provision for credit losses on loans | 3,158 | (1,417) | 3,372 |
Loans charged-off | (2,465) | (1,755) | (1,101) |
Recoveries | 1,058 | 756 | 659 |
Net recoveries (charge-offs) | (1,407) | (999) | (442) |
Ending balance | 12,109 | 4,280 | 6,696 |
Period end amount allocated to: | |||
Loans individually evaluated for impairment | 219 | 305 | |
Loans collectively evaluated for impairment | 4,061 | 6,391 | |
Ending balance | 12,109 | 4,280 | 6,696 |
LOANS RECEIVABLE | |||
Loans individually evaluated for impairment | 629 | 871 | |
Loans collectively evaluated for impairment | 421,414 | 373,282 | |
Total loans receivable | 569,572 | 422,043 | 374,153 |
CONSUMER LOANS | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 4,280 | 6,696 | 3,766 |
Ending balance | 4,280 | 6,696 | |
Period end amount allocated to: | |||
Ending balance | 4,280 | 6,696 | |
CONSUMER LOANS | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
ALLOWANCE FOR LOAN LOSSES | |||
Ending balance | 6,078 | ||
Period end amount allocated to: | |||
Ending balance | 6,078 | ||
COMMERCIAL BUSINESS LOANS | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 6,536 | 4,939 | |
Provision for credit losses on loans | 906 | 1,635 | 1,354 |
Loans charged-off | (38) | (22) | |
Recoveries | 353 | ||
Net recoveries (charge-offs) | (38) | 331 | |
Ending balance | 3,760 | 6,536 | 4,939 |
Period end amount allocated to: | |||
Loans individually evaluated for impairment | 921 | 990 | |
Loans collectively evaluated for impairment | 5,615 | 3,949 | |
Ending balance | 3,760 | 6,536 | 4,939 |
LOANS RECEIVABLE | |||
Loans individually evaluated for impairment | 4,419 | 5,610 | |
Loans collectively evaluated for impairment | 237,410 | 267,849 | |
Total loans receivable | 228,020 | 241,829 | 273,459 |
COMMERCIAL BUSINESS LOANS | Cumulative Effect, Period of Adoption, Adjusted Balance | |||
ALLOWANCE FOR LOAN LOSSES | |||
Beginning balance | 6,536 | 4,939 | 3,254 |
Ending balance | 6,536 | 4,939 | |
Period end amount allocated to: | |||
Ending balance | $ 6,536 | $ 4,939 | |
COMMERCIAL BUSINESS LOANS | Accounting Standards Update 2016-13 | Cumulative Effect, Period of Adoption, Adjustment | |||
ALLOWANCE FOR LOAN LOSSES | |||
Ending balance | (3,682) | ||
Period end amount allocated to: | |||
Ending balance | $ (3,682) |
LOANS RECEIVABLE AND ALLOWANC_6
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Schedule of Troubled Debt Restructurings Accrual and Non-accrual (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) | |
Financing Receivable, Modifications [Line Items] | ||
Non-Accrual | $ | $ 8,652,000 | |
Number of TDRs which incurred payment default | loan | 0 | |
COMMERCIAL BUSINESS LOANS | ||
Financing Receivable, Modifications [Line Items] | ||
Number of TDR loans on non-accrual | loan | 2 | |
Non-Accrual | $ | $ 3,700,000 | $ 0 |
Number of Non-accrual loans | loan | 2 | |
Commitments to lend additional loans | $ | $ 0 |
LOANS RECEIVABLE AND ALLOWANC_7
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Aging Analysis of Past Due Loans (Details) $ in Thousands | Dec. 31, 2022 USD ($) loan | Dec. 31, 2021 USD ($) loan | Dec. 31, 2020 USD ($) |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | $ 2,218,852 | $ 1,754,175 | $ 1,571,153 |
Non-Accrual | $ 8,652 | ||
Number of TDRs which incurred payment default | loan | 0 | ||
REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | $ 1,421,260 | 1,090,303 | 923,541 |
Non-Accrual | 966 | ||
CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 569,572 | 422,043 | 374,153 |
Non-Accrual | 1,352 | ||
COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 228,020 | 241,829 | $ 273,459 |
Non-Accrual | 3,700 | 0 | |
Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 334,059 | 264,429 | |
Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 342,591 | 240,553 | |
Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 55,387 | 41,017 | |
Non-Accrual | 46 | ||
One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 469,485 | 366,146 | |
Non-Accrual | 920 | ||
Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 219,738 | 178,158 | |
Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 495,941 | 336,285 | |
Non-Accrual | 1,076 | ||
Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 70,567 | 82,778 | |
Non-Accrual | 267 | ||
Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 3,064 | 2,980 | |
Non-Accrual | 9 | ||
Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 196,791 | 208,552 | |
Non-Accrual | 6,334 | ||
Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 31,229 | 33,277 | |
30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 3,010 | 2,561 | |
30-59 Days Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 29 | 593 | |
30-59 Days Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,980 | 1,177 | |
30-59 Days Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1 | 791 | |
30-59 Days Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
30-59 Days Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
30-59 Days Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 29 | 0 | |
30-59 Days Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 593 | |
30-59 Days Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
30-59 Days Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,298 | 1,047 | |
30-59 Days Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 650 | 119 | |
30-59 Days Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 32 | 11 | |
30-59 Days Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1 | 791 | |
30-59 Days Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1,211 | 546 | |
60-89 Days Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 104 | 264 | |
60-89 Days Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1,107 | 282 | |
60-89 Days Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 104 | 0 | |
60-89 Days Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 264 | |
60-89 Days Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 685 | 280 | |
60-89 Days Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 385 | 0 | |
60-89 Days Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 37 | 2 | |
60-89 Days Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
60-89 Days Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
90 Days or More Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | $ 3,719 | $ 972 | |
Number Of Loans Accruing Interest | loan | 0 | 0 | |
90 Days or More Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | $ 479 | $ 659 | |
90 Days or More Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 623 | 313 | |
90 Days or More Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,617 | 0 | |
90 Days or More Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
90 Days or More Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
90 Days or More Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 16 | 179 | |
90 Days or More Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 463 | 480 | |
90 Days or More Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
90 Days or More Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 532 | 295 | |
90 Days or More Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 86 | 0 | |
90 Days or More Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 5 | 18 | |
90 Days or More Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,617 | 0 | |
90 Days or More Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 7,940 | 4,079 | |
Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 612 | 1,516 | |
Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 4,710 | 1,772 | |
Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,618 | 791 | |
Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 149 | 179 | |
Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 463 | 1,337 | |
Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 3,515 | 1,622 | |
Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1,121 | 119 | |
Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 74 | 31 | |
Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,618 | 791 | |
Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 0 | 0 | |
Not Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,210,912 | 1,750,096 | |
Not Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 1,420,648 | 1,088,787 | |
Not Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 564,862 | 420,271 | |
Not Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 225,402 | 241,038 | |
Not Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 334,059 | 264,429 | |
Not Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 342,591 | 240,553 | |
Not Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 55,238 | 40,838 | |
Not Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 469,022 | 364,809 | |
Not Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 219,738 | 178,158 | |
Not Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 492,426 | 334,663 | |
Not Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 69,446 | 82,659 | |
Not Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 2,990 | 2,949 | |
Not Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 194,173 | 207,761 | |
Not Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable | 31,229 | 33,277 | |
Non-Accrual | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 8,652 | 5,829 | |
Non-Accrual | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 966 | 781 | |
Non-Accrual | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 1,352 | 629 | |
Non-Accrual | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 6,334 | 4,419 | |
Non-Accrual | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 0 | 0 | |
Non-Accrual | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 0 | 0 | |
Non-Accrual | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 46 | 301 | |
Non-Accrual | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 920 | 480 | |
Non-Accrual | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 0 | 0 | |
Non-Accrual | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 1,076 | 554 | |
Non-Accrual | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 267 | 57 | |
Non-Accrual | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 9 | 18 | |
Non-Accrual | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 6,334 | 4,419 | |
Non-Accrual | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | $ 0 | $ 0 |
LOANS RECEIVABLE AND ALLOWANC_8
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Average Recorded Investment (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | $ 1,711 | $ 2,538 |
Average Recorded Investment, with an allowance recorded | 5,584 | 3,307 |
Average Recorded Investment | 7,295 | 5,845 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with no related allowance recorded | 30 | 79 |
Interest Income Recognized, with an allowance recorded | 321 | 225 |
Interest Income Recognized | 351 | 304 |
REAL ESTATE LOANS | Commercial | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 996 | |
REAL ESTATE LOANS | Construction and development | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 771 | |
REAL ESTATE LOANS | Home equity. | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 427 | 485 |
Average Recorded Investment, with an allowance recorded | 57 | |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with no related allowance recorded | 15 | 25 |
REAL ESTATE LOANS | One-to-four-family | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 513 | 954 |
Average Recorded Investment, with an allowance recorded | 20 | 60 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with no related allowance recorded | 15 | 17 |
CONSUMER LOANS | Indirect home improvement | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with an allowance recorded | 643 | 675 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with an allowance recorded | 38 | 60 |
CONSUMER LOANS | Marine | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with an allowance recorded | 77 | 40 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with an allowance recorded | 6 | 3 |
CONSUMER LOANS | Other consumer loans | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 3 | |
Average Recorded Investment, with an allowance recorded | 8 | 1 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with an allowance recorded | 1 | |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | ||
Impaired Financing Receivable, Average Recorded Investment [Abstract] | ||
Average Recorded Investment, with no related allowance recorded | 100 | |
Average Recorded Investment, with an allowance recorded | 4,779 | 2,531 |
Impaired Financing Receivable, Interest Income [Abstract] | ||
Interest Income Recognized, with no related allowance recorded | 37 | |
Interest Income Recognized, with an allowance recorded | $ 276 | $ 162 |
LOANS RECEIVABLE AND ALLOWANC_9
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Financing Receivables, Related Allowance Recorded and No Related Allowance Recorded (Details) $ in Thousands | Dec. 31, 2021 USD ($) |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with no related allowance recorded | $ 756 |
Unpaid Principal Balance, with an allowance recorded | 5,134 |
Impaired Financing Receivable, Unpaid Principal Balance, Total | 5,890 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with no related allowance recorded | 707 |
Recorded Investment, with an allowance recorded | 5,122 |
Recorded Investment | 5,829 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | 1,163 |
Related Allowance | 1,163 |
REAL ESTATE LOANS | Home equity. | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with no related allowance recorded | 259 |
Unpaid Principal Balance, with an allowance recorded | 92 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with no related allowance recorded | 227 |
Recorded Investment, with an allowance recorded | 74 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | 23 |
REAL ESTATE LOANS | One-to-four-family | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with no related allowance recorded | 497 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with no related allowance recorded | 480 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with no related allowance recorded | 0 |
CONSUMER LOANS | Indirect home improvement | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with an allowance recorded | 551 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with an allowance recorded | 554 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | 193 |
CONSUMER LOANS | Marine | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with an allowance recorded | 56 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with an allowance recorded | 57 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | 20 |
CONSUMER LOANS | Other consumer loans | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with an allowance recorded | 18 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with an allowance recorded | 18 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | 6 |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |
Impaired Financing Receivable, Unpaid Principal Balance [Abstract] | |
Unpaid Principal Balance, with an allowance recorded | 4,417 |
Impaired Financing Receivable, Recorded Investment [Abstract] | |
Recorded Investment, with an allowance recorded | 4,419 |
Impaired Financing Receivable Related Allowance Abstract | |
Related Allowance, with an allowance recorded | $ 921 |
LOANS RECEIVABLE AND ALLOWAN_10
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Risk Rated Loan Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | $ 808,060 | ||
2021 | 550,357 | ||
2020 | 284,645 | ||
2019 | 164,717 | ||
2018 | 64,940 | ||
Prior | 166,172 | ||
Revolving Loans | 179,462 | ||
Revolving Loans Converted to Term | 499 | ||
Total Loans | 2,218,852 | ||
Total Loans | 2,218,852 | $ 1,754,175 | $ 1,571,153 |
Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 798,208 | ||
2021 | 547,426 | ||
2020 | 279,938 | ||
2019 | 159,466 | ||
2018 | 61,985 | ||
Prior | 155,636 | ||
Revolving Loans | 176,074 | ||
Revolving Loans Converted to Term | 199 | ||
Total Loans | 2,178,932 | ||
Total Loans | 1,719,659 | ||
Watch | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 9,504 | ||
2021 | 1,127 | ||
2020 | 3,305 | ||
Prior | 746 | ||
Revolving Loans | 1,329 | ||
Total Loans | 16,011 | ||
Total Loans | 8,834 | ||
Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2019 | 2,747 | ||
Revolving Loans | 963 | ||
Total Loans | 3,710 | ||
Total Loans | 7,598 | ||
Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 348 | ||
2021 | 1,804 | ||
2020 | 1,402 | ||
2019 | 2,504 | ||
2018 | 2,955 | ||
Prior | 9,790 | ||
Revolving Loans | 1,096 | ||
Revolving Loans Converted to Term | 300 | ||
Total Loans | 20,199 | ||
Total Loans | 18,084 | ||
Doubtful | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
Loss | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 501,184 | ||
2021 | 389,085 | ||
2020 | 206,119 | ||
2019 | 120,116 | ||
2018 | 37,852 | ||
Prior | 127,642 | ||
Revolving Loans | 39,063 | ||
Revolving Loans Converted to Term | 199 | ||
Total Loans | 1,421,260 | ||
Total Loans | 1,421,260 | 1,090,303 | 923,541 |
REAL ESTATE LOANS | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 95,693 | ||
2021 | 76,030 | ||
2020 | 46,498 | ||
2019 | 41,043 | ||
2018 | 14,682 | ||
Prior | 60,113 | ||
Total Loans | 334,059 | ||
Total Loans | 334,059 | 264,429 | |
REAL ESTATE LOANS | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 193,084 | ||
2021 | 118,724 | ||
2020 | 21,966 | ||
2019 | 8,379 | ||
Prior | 438 | ||
Total Loans | 342,591 | ||
Total Loans | 342,591 | 240,553 | |
REAL ESTATE LOANS | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 4,978 | ||
2021 | 1,696 | ||
2020 | 6,818 | ||
2019 | 11 | ||
2018 | 1,216 | ||
Prior | 1,605 | ||
Revolving Loans | 39,063 | ||
Total Loans | 55,387 | ||
Total Loans | 55,387 | 41,017 | |
REAL ESTATE LOANS | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 166,388 | ||
2021 | 129,282 | ||
2020 | 82,461 | ||
2019 | 31,878 | ||
2018 | 17,778 | ||
Prior | 41,499 | ||
Revolving Loans Converted to Term | 199 | ||
Total Loans | 469,485 | ||
Total Loans | 469,485 | 366,146 | |
REAL ESTATE LOANS | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 41,041 | ||
2021 | 63,353 | ||
2020 | 48,376 | ||
2019 | 38,805 | ||
2018 | 4,176 | ||
Prior | 23,987 | ||
Total Loans | 219,738 | ||
Total Loans | 219,738 | 178,158 | |
REAL ESTATE LOANS | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 1,076,201 | ||
REAL ESTATE LOANS | Pass | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 86,189 | ||
2021 | 76,030 | ||
2020 | 46,125 | ||
2019 | 38,930 | ||
2018 | 14,101 | ||
Prior | 55,271 | ||
Total Loans | 316,646 | ||
Total Loans | 253,092 | ||
REAL ESTATE LOANS | Pass | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 193,084 | ||
2021 | 118,724 | ||
2020 | 21,966 | ||
2019 | 8,379 | ||
Prior | 438 | ||
Total Loans | 342,591 | ||
Total Loans | 240,553 | ||
REAL ESTATE LOANS | Pass | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 4,978 | ||
2021 | 1,696 | ||
2020 | 6,818 | ||
2019 | 11 | ||
2018 | 1,203 | ||
Prior | 1,572 | ||
Revolving Loans | 39,063 | ||
Total Loans | 55,341 | ||
Total Loans | 40,716 | ||
REAL ESTATE LOANS | Pass | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 166,388 | ||
2021 | 129,282 | ||
2020 | 82,461 | ||
2019 | 31,878 | ||
2018 | 15,837 | ||
Prior | 40,526 | ||
Revolving Loans Converted to Term | 199 | ||
Total Loans | 466,571 | ||
Total Loans | 363,682 | ||
REAL ESTATE LOANS | Pass | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 41,041 | ||
2021 | 63,353 | ||
2020 | 48,376 | ||
2019 | 38,805 | ||
2018 | 4,176 | ||
Prior | 23,987 | ||
Total Loans | 219,738 | ||
Total Loans | 178,158 | ||
REAL ESTATE LOANS | Watch | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 4,652 | ||
REAL ESTATE LOANS | Watch | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 9,504 | ||
2020 | 373 | ||
Total Loans | 9,877 | ||
Total Loans | 4,652 | ||
REAL ESTATE LOANS | Watch | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Watch | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Watch | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Watch | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 5,769 | ||
REAL ESTATE LOANS | Special Mention | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2019 | 2,113 | ||
Total Loans | 2,113 | ||
Total Loans | 5,769 | ||
REAL ESTATE LOANS | Special Mention | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Special Mention | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Special Mention | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Special Mention | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 3,681 | ||
REAL ESTATE LOANS | Substandard | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2018 | 581 | ||
Prior | 4,842 | ||
Total Loans | 5,423 | ||
Total Loans | 916 | ||
REAL ESTATE LOANS | Substandard | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Substandard | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2018 | 13 | ||
Prior | 33 | ||
Total Loans | 46 | ||
Total Loans | 301 | ||
REAL ESTATE LOANS | Substandard | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2018 | 1,941 | ||
Prior | 973 | ||
Total Loans | 2,914 | ||
Total Loans | 2,464 | ||
REAL ESTATE LOANS | Substandard | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Doubtful | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | Commercial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | Construction and development | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
REAL ESTATE LOANS | Loss | Multi-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 282,539 | ||
2021 | 135,998 | ||
2020 | 61,868 | ||
2019 | 37,736 | ||
2018 | 23,824 | ||
Prior | 26,344 | ||
Revolving Loans | 1,263 | ||
Total Loans | 569,572 | ||
Total Loans | 569,572 | 422,043 | 374,153 |
CONSUMER LOANS | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 253,842 | ||
2021 | 123,477 | ||
2020 | 46,613 | ||
2019 | 31,313 | ||
2018 | 18,334 | ||
Prior | 22,353 | ||
Revolving Loans | 9 | ||
Total Loans | 495,941 | ||
Total Loans | 495,941 | 336,285 | |
CONSUMER LOANS | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 27,904 | ||
2021 | 11,762 | ||
2020 | 15,139 | ||
2019 | 6,375 | ||
2018 | 5,476 | ||
Prior | 3,911 | ||
Total Loans | 70,567 | ||
Total Loans | 70,567 | 82,778 | |
CONSUMER LOANS | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 793 | ||
2021 | 759 | ||
2020 | 116 | ||
2019 | 48 | ||
2018 | 14 | ||
Prior | 80 | ||
Revolving Loans | 1,254 | ||
Total Loans | 3,064 | ||
Total Loans | 3,064 | 2,980 | |
CONSUMER LOANS | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 421,414 | ||
CONSUMER LOANS | Pass | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 253,495 | ||
2021 | 123,264 | ||
2020 | 46,476 | ||
2019 | 31,251 | ||
2018 | 18,165 | ||
Prior | 22,205 | ||
Revolving Loans | 9 | ||
Total Loans | 494,865 | ||
Total Loans | 335,731 | ||
CONSUMER LOANS | Pass | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 27,904 | ||
2021 | 11,762 | ||
2020 | 15,139 | ||
2019 | 6,224 | ||
2018 | 5,415 | ||
Prior | 3,856 | ||
Total Loans | 70,300 | ||
Total Loans | 82,721 | ||
CONSUMER LOANS | Pass | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 792 | ||
2021 | 754 | ||
2020 | 116 | ||
2019 | 48 | ||
2018 | 14 | ||
Prior | 80 | ||
Revolving Loans | 1,251 | ||
Total Loans | 3,055 | ||
Total Loans | 2,962 | ||
CONSUMER LOANS | Watch | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Watch | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Watch | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Watch | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Special Mention | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Special Mention | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Special Mention | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 629 | ||
CONSUMER LOANS | Substandard | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 347 | ||
2021 | 213 | ||
2020 | 137 | ||
2019 | 62 | ||
2018 | 169 | ||
Prior | 148 | ||
Total Loans | 1,076 | ||
Total Loans | 554 | ||
CONSUMER LOANS | Substandard | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2019 | 151 | ||
2018 | 61 | ||
Prior | 55 | ||
Total Loans | 267 | ||
Total Loans | 57 | ||
CONSUMER LOANS | Substandard | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 1 | ||
2021 | 5 | ||
Revolving Loans | 3 | ||
Total Loans | 9 | ||
Total Loans | 18 | ||
CONSUMER LOANS | Doubtful | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Doubtful | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Doubtful | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Doubtful | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Loss | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Loss | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Loss | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
CONSUMER LOANS | Loss | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 24,337 | ||
2021 | 25,274 | ||
2020 | 16,658 | ||
2019 | 6,865 | ||
2018 | 3,264 | ||
Prior | 12,186 | ||
Revolving Loans | 139,136 | ||
Revolving Loans Converted to Term | 300 | ||
Total Loans | 228,020 | ||
Total Loans | 228,020 | 241,829 | $ 273,459 |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 24,337 | ||
2021 | 25,274 | ||
2020 | 16,658 | ||
2019 | 6,865 | ||
2018 | 3,264 | ||
Prior | 12,186 | ||
Revolving Loans | 107,907 | ||
Revolving Loans Converted to Term | 300 | ||
Total Loans | 196,791 | ||
Total Loans | 196,791 | 208,552 | |
COMMERCIAL BUSINESS LOANS | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Revolving Loans | 31,229 | ||
Total Loans | 31,229 | ||
Total Loans | 31,229 | 33,277 | |
COMMERCIAL BUSINESS LOANS | Pass | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 222,044 | ||
COMMERCIAL BUSINESS LOANS | Pass | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2022 | 24,337 | ||
2021 | 22,561 | ||
2020 | 12,461 | ||
2019 | 3,940 | ||
2018 | 3,074 | ||
Prior | 7,701 | ||
Revolving Loans | 104,524 | ||
Total Loans | 178,598 | ||
Total Loans | 188,767 | ||
COMMERCIAL BUSINESS LOANS | Pass | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Revolving Loans | 31,227 | ||
Total Loans | 31,227 | ||
Total Loans | 33,277 | ||
COMMERCIAL BUSINESS LOANS | Watch | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 4,182 | ||
COMMERCIAL BUSINESS LOANS | Watch | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2021 | 1,127 | ||
2020 | 2,932 | ||
Prior | 746 | ||
Revolving Loans | 1,327 | ||
Total Loans | 6,132 | ||
Total Loans | 4,182 | ||
COMMERCIAL BUSINESS LOANS | Watch | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Revolving Loans | 2 | ||
Total Loans | 2 | ||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Special Mention | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 1,829 | ||
COMMERCIAL BUSINESS LOANS | Special Mention | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2019 | 634 | ||
Revolving Loans | 963 | ||
Total Loans | 1,597 | ||
Total Loans | 1,829 | ||
COMMERCIAL BUSINESS LOANS | Special Mention | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Substandard | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 13,774 | ||
COMMERCIAL BUSINESS LOANS | Substandard | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
2021 | 1,586 | ||
2020 | 1,265 | ||
2019 | 2,291 | ||
2018 | 190 | ||
Prior | 3,739 | ||
Revolving Loans | 1,093 | ||
Revolving Loans Converted to Term | 300 | ||
Total Loans | $ 10,464 | ||
Total Loans | 13,774 | ||
COMMERCIAL BUSINESS LOANS | Substandard | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Doubtful | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Doubtful | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Doubtful | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Loss | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Loss | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | 0 | ||
COMMERCIAL BUSINESS LOANS | Loss | Warehouse lending | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Loans | $ 0 |
LOANS RECEIVABLE AND ALLOWAN_11
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Amortized Cost Basis of Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with no Allowance for Credit Losses | $ 966 | ||
Nonaccrual with Allowance for Credit Losses | 7,686 | ||
Total Nonaccrual | 8,652 | ||
Recognized interest income on nonaccrual loans | 506,000 | $ 351,000 | $ 304,000 |
REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with no Allowance for Credit Losses | 966 | ||
Total Nonaccrual | 966 | ||
REAL ESTATE LOANS | Home equity. | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with no Allowance for Credit Losses | 46 | ||
Total Nonaccrual | 46 | ||
REAL ESTATE LOANS | One-to-four-family | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with no Allowance for Credit Losses | 920 | ||
Total Nonaccrual | 920 | ||
CONSUMER LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with Allowance for Credit Losses | 1,352 | ||
Total Nonaccrual | 1,352 | ||
CONSUMER LOANS | Indirect home improvement | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with Allowance for Credit Losses | 1,076 | ||
Total Nonaccrual | 1,076 | ||
CONSUMER LOANS | Marine | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with Allowance for Credit Losses | 267 | ||
Total Nonaccrual | 267 | ||
CONSUMER LOANS | Other consumer loans | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with Allowance for Credit Losses | 9 | ||
Total Nonaccrual | 9 | ||
COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Total Nonaccrual | 3,700 | $ 0 | |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||
Financing Receivable, Recorded Investment [Line Items] | |||
Nonaccrual with Allowance for Credit Losses | 6,334 | ||
Total Nonaccrual | $ 6,334 |
LOANS RECEIVABLE AND ALLOWAN_12
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Amortized Cost Basis of Collateral Dependent Impaired Loans (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | $ 8,643 |
Real Estate | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 966 |
Equipment | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 7,677 |
REAL ESTATE LOANS | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 966 |
REAL ESTATE LOANS | Home equity. | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 46 |
REAL ESTATE LOANS | One-to-four-family | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 920 |
REAL ESTATE LOANS | Real Estate | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 966 |
REAL ESTATE LOANS | Real Estate | Home equity. | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 46 |
REAL ESTATE LOANS | Real Estate | One-to-four-family | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 920 |
CONSUMER LOANS | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 1,343 |
CONSUMER LOANS | Indirect home improvement | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 1,076 |
CONSUMER LOANS | Marine | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 267 |
CONSUMER LOANS | Equipment | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 1,343 |
CONSUMER LOANS | Equipment | Indirect home improvement | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 1,076 |
CONSUMER LOANS | Equipment | Marine | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 267 |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | 6,334 |
COMMERCIAL BUSINESS LOANS | Equipment | Commercial and industrial | |
Financing Receivable, Recorded Investment [Line Items] | |
Amortized cost basis of collateral dependent impaired loans | $ 6,334 |
LOANS RECEIVABLE AND ALLOWAN_13
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES ON LOANS - Related Party Loans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Loans and Leases Receivable, Related Parties [Roll Forward] | ||
Beginning balance | $ 4,207 | $ 3,797 |
Additions | 647 | |
Repayments | (762) | (237) |
Ending balance | 3,445 | 4,207 |
Aggregate loan balances of extended credit | $ 3,400 | $ 4,300 |
SERVICING RIGHTS - Narrative (D
SERVICING RIGHTS - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
Contractually specified servicing fees, late fees, and other ancillary fees | $ 7.1 | $ 6.3 | $ 4.4 |
Mortgage servicing rights. | |||
Off-balance Sheet Risks, Disclosure Information [Line Items] | |||
The unpaid principal balances of mortgage loans serviced | 2,780 | 2,610 | |
Fair market value of servicing rights' assets | $ 35.5 | $ 26.1 |
SERVICING RIGHTS - Servicing Ri
SERVICING RIGHTS - Servicing Rights (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | |||
Beginning balance, at the lower of cost or fair value | $ 16,970 | $ 12,595 | $ 11,560 |
Additions | 5,400 | 9,760 | 11,139 |
MSR amortized | (4,354) | (7,444) | (8,135) |
Recovery (impairment) of servicing rights | 1 | 2,059 | (1,969) |
Ending balance, at the lower of cost or fair value | $ 18,017 | $ 16,970 | $ 12,595 |
SERVICING RIGHTS - Valuation As
SERVICING RIGHTS - Valuation Assumptions (Details) - Mortgage servicing rights. | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Weighted average discount rate | 9.60% | 9.10% |
Conditional prepayment rate ("CPR") | 8.20% | 13.80% |
Weighted average life in years | 7 years 9 months 18 days | 5 years 10 months 24 days |
SERVICING RIGHTS - Changes in V
SERVICING RIGHTS - Changes in Valuation Assumptions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Basis Points Drop in Rate, Assumption One | 0.50% | 0.50% |
Basis Points Drop in Rate, Assumption Two | 1% | 1% |
Mortgage servicing rights. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Aggregate portfolio principal balance | $ 2,783,458 | $ 2,609,776 |
Weighted average rate of note | 3.40% | 3.20% |
Conditional prepayment rate, base | 8.20% | 13.80% |
Conditional prepayment rate, 0.5% Adverse Change | 8.60% | 20% |
Conditional prepayment rate, 1.0% Adverse Change | 9.30% | 31.50% |
Fair value MSR, base | $ 35,478 | $ 26,070 |
Fair value MSR, 0.5% Adverse Change | 34,997 | 21,188 |
Fair value of MSR, 1.0% Adverse Change | $ 34,188 | $ 15,348 |
Percentage of MSR, base | 1.30% | 1% |
Percentage of MSR, 0.5% Adverse Change | 1.30% | 0.80% |
Percentage of MSR, 1.0% Adverse Change | 1.20% | 0.60% |
Discount rate, base | 9.60% | 9.10% |
Discount rate, 0.5% Adverse Change | 10.10% | 9.60% |
Discount rate, 1.0% Adverse Change | 10.60% | 10.10% |
Fair value MSR, 0.5% Adverse Change | $ 34,715 | $ 25,586 |
Fair value MSR, 1.0% Adverse Change | $ 33,984 | $ 25,119 |
Percentage of MSR, 0.5% Adverse Change | 1.20% | 1% |
Percentage of MSR, 1.0% Adverse Change | 1.20% | 1% |
PREMISES AND EQUIPMENT (Details
PREMISES AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | $ 49,561 | $ 48,691 | |
Less accumulated depreciation and amortization | (24,442) | (22,100) | |
Property, Plant and Equipment, Net, Total | 25,119 | 26,591 | |
Depreciation and amortization | 2,500 | 2,700 | $ 2,800 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 5,715 | 6,008 | |
Buildings | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 16,934 | 17,290 | |
Furniture, fixtures and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 16,226 | 15,307 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 2,461 | 2,461 | |
Building improvements | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | 7,688 | 7,558 | |
Projects in process | |||
Property, Plant and Equipment [Line Items] | |||
Premises and equipment, gross | $ 537 | $ 67 |
LEASES (Details)
LEASES (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Lessee, Lease, Description [Line Items] | |
Options to extend | true |
Renewal term | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 3 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 7 years 6 months |
LEASES - Components of lease co
LEASES - Components of lease cost and Supplemental information related to operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Lease cost: | |||
Operating lease cost | $ 1,422 | $ 1,433 | $ 1,393 |
Short-term lease cost | 21 | 5 | 11 |
Total lease cost | 1,443 | 1,438 | $ 1,404 |
Operating cash flows from operating leases | $ 1,431 | $ 1,402 | |
Weighted average remaining lease term- operating leases | 4 years 7 months 6 days | 4 years 9 months 18 days | |
Weighted average discount rate- operating leases | 2.42% | 2.17% |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Maturities of operating lease liabilities | ||
2023 | $ 1,512 | |
2024 | 1,462 | |
2025 | 1,152 | |
2026 | 1,030 | |
2027 | 745 | |
Thereafter | 1,251 | |
Total lease payments | 7,152 | |
Less imputed interest | (678) | |
Total | $ 6,474 | $ 4,792 |
OTHER REAL ESTATE OWNED ("ORE_3
OTHER REAL ESTATE OWNED ("OREO") - Activity related to OREO (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Real Estate [Roll Forward] | |||
Beginning balance | $ 90 | $ 168 | |
Loans transferred to OREO | $ 145 | ||
Closed retail branch transferred to OREO | 570 | ||
Gross proceeds from sale of OREO | (145) | (81) | (76) |
Loss on sale of OREO | $ (9) | (2) | |
Ending balance | $ 570 | $ 90 |
OTHER REAL ESTATE OWNED ("ORE_4
OTHER REAL ESTATE OWNED ("OREO") - Narrative (Details) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) property | Dec. 31, 2021 USD ($) property | Dec. 31, 2020 USD ($) | |
OTHER REAL ESTATE OWNED ("OREO") | |||
Number of OREO Properties | property | 1 | 0 | |
Holding costs | $ 10,000 | $ 0 | $ 4,000 |
Mortgage loans in process of foreclosure | $ 511,000 | $ 710,000 |
DEPOSITS - Deposit Liabilities
DEPOSITS - Deposit Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
DEPOSITS | ||
Noninterest-bearing checking | $ 537,938 | $ 564,360 |
Interest-bearing checking | 135,127 | 228,024 |
Savings | 134,358 | 193,922 |
Money market | 574,290 | 552,357 |
Certificates of deposit less than $100,000 | 440,785 | 186,974 |
Certificates of deposit of $100,000 through $250,000 | 195,447 | 116,206 |
Certificates of deposit of $250,000 and over | 93,560 | 57,512 |
Escrow accounts related to mortgages serviced | 16,236 | 16,389 |
Total deposits | 2,127,741 | 1,915,744 |
Interest-bearing domestic deposit, brokered deposits | 2,300 | 90,000 |
Deposits, money market deposits, brokered deposits | 59,700 | 5,000 |
Certificates of deposits less than 100000 brokered deposits | 332,000 | 97,600 |
Interest-bearing to noninterest-bearing due to reclass | 121,200 | |
Related-party deposits | $ 5,700 | $ 3,900 |
DEPOSITS - Maturities of Time D
DEPOSITS - Maturities of Time Deposits for Future Periods (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
DEPOSITS | |
Maturing in 2023 | $ 472,231 |
Maturing in 2024 | 90,507 |
Maturing in 2025 | 113,434 |
Maturing in 2026 | 36,618 |
Maturing in 2027 | 16,947 |
Thereafter | 55 |
Total | $ 729,792 |
DEPOSITS - Interest Expense by
DEPOSITS - Interest Expense by Deposit Category (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DEPOSITS | |||
Interest-bearing checking | $ 495 | $ 282 | $ 388 |
Savings and money market | 3,775 | 1,604 | 2,458 |
Certificates of deposit | 5,150 | 5,043 | 9,134 |
Total | $ 9,420 | $ 6,929 | $ 11,980 |
DEBT - Narrative (Details)
DEBT - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Feb. 10, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||||
Federal home loan bank, advances, general debt obligations, maximum amount available, percentage of total assets (as a percent) | 45% | |||
Federal home loan bank, advances, general debt obligations, collateral pledged | $ 840,200 | |||
Federal home loan bank, borrowing capacity | 601,700 | |||
Federal home loan bank, unused borrowing capacity | 414,800 | |||
Unsecured Fed Funds lines of credit | 101,000 | |||
Unsecured Fed Funds, lines of credit, outstanding balance | 0 | |||
Total loans receivable, gross | 2,218,852 | $ 1,754,175 | $ 1,571,153 | |
Fixed To Floating Rate Subordinated Note Due 2031 | Private Placement | ||||
Debt Instrument [Line Items] | ||||
Private placement amount | $ 50,000 | |||
Annual interest rate (as a percent) | 3.75% | |||
Offering price percentage (as a percent) | 100% | |||
Net proceeds | $ 49,300 | |||
Period for fixed interest rate on debt | 5 years | |||
Debt Instrument, Basis Spread on Variable Rate | 3.37% | |||
Federal Reserve Bank | ||||
Debt Instrument [Line Items] | ||||
Warehouse lines of credit | 205,800 | 200,100 | ||
Line of credit, outstanding balance | 0 | 0 | ||
Federal Reserve Bank | ||||
Debt Instrument [Line Items] | ||||
Loans pledged as collateral | $ 579,800 | $ 428,700 |
DEBT - Advances on Borrowing Li
DEBT - Advances on Borrowing Line (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal home loan bank, advances, general debt obligations | $ 186,528 | |
Long-term Debt | 186,528 | $ 42,528 |
Securities Line | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal home loan bank, advances, general debt obligations | $ 186,528 | $ 42,528 |
Securities Line | Maximum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank, interest rates | 4.60% | 2.87% |
Securities Line | Minimum | ||
Federal Home Loan Bank, Advances, Branch of FHLB Bank [Line Items] | ||
Federal Home Loan Bank, interest rates | 1.72% | 0.30% |
DEBT - Maximum and Average bala
DEBT - Maximum and Average balances, Weighted Average Interest Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Maximum balance: | |||
FHLB advances and Fed Funds | $ 260,828 | $ 102,528 | $ 159,114 |
FRB | 27,000 | ||
Long-term Debt | 186,528 | 42,528 | |
Average balance: | |||
FHLB advances and Fed Funds | 102,008 | 55,602 | 99,773 |
FRB | 548 | 205 | 1,096 |
Fed Funds lines of credit | $ 15 | $ 11 | $ 3 |
Weighted average interest rates | |||
FHLB advances and Fed Funds (as a percent) | 2.98% | 1.88% | 1.80% |
FRB (as a percent) | 1.69% | 0.25% | 0.25% |
Fed Funds lines of credit (as a percent) | 3.28% | 0.49% | 0.36% |
Subordinated notes | |||
Average balance: | |||
Long term debt | $ 50,000 | $ 44,699 | $ 10,000 |
Weighted average interest rates | |||
Weighted average interest rate (as a percent) | 3.75% | 3.75% | 6.50% |
Subordinated notes | Maximum | |||
Maximum balance: | |||
Long-term Debt | $ 50,000 | $ 50,000 | $ 10,000 |
PPP Liquidity Facility | |||
Average balance: | |||
Long term debt | $ 7,310 | $ 46,965 | |
Weighted average interest rates | |||
Weighted average interest rate (as a percent) | 0.35% | 0.35% | |
PPP Liquidity Facility | Maximum | |||
Maximum balance: | |||
Long-term Debt | $ 59,349 | $ 74,112 |
DEBT - Schedule of Federal Home
DEBT - Schedule of Federal Home Loan Bank Advances Maturities Summary Due (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
Federal Home Loan Bank, Advances, Fiscal Year Maturity [Abstract] | |
2023 | $ 182,633 |
2024 | 3,895 |
Total | $ 186,528 |
Federal Home Loan Bank, Advances, Maturities Summary, Average Interest Rate of Amounts Due [Abstract] | |
2023, Interest Rates (percent) | 4.27% |
2024, Interest Rates (percent) | 2.27% |
EMPLOYEE BENEFITS - Narrative (
EMPLOYEE BENEFITS - Narrative (Details) - USD ($) | 12 Months Ended | ||||
Jan. 01, 2012 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2012 | |
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Defined contribution plan, minimum age requirement | 18 years | ||||
Percentage vested in deferral contributions account | 100% | ||||
Employer contributions | $ 1,900,000 | $ 1,700,000 | $ 1,500,000 | ||
Employee Stock Ownership Plan (ESOP), Interest Payments from ESOP | 7,000 | ||||
Number of hours of service required for participation in ESOP, per first 12 month period (in hours) | 1000 hours | ||||
Vesting percentage after requisite service period is met (as a percent) | 100% | ||||
Requisite service period (in years) | 2 years | ||||
Number of hours per service period year (in hours) | 1000 hours | ||||
ESOP borrowings from FS Bancorp | $ 2,600,000 | ||||
Shares acquired (in shares) | 518,420 | 479,330 | |||
Employee stock ownership plan (ESOP), weighted average purchase price of shares purchased (in dollars per share) | $ 5.09 | ||||
Amortization period of ESOP loan | 10 years | ||||
Employee Stock Ownership Plan (ESOP), Debt Structure, Employer Loan, Interest Rate | 2.30% | ||||
Employee stock ownership plan (ESOP), periodic installment payments from esop, amount paid | 288,000 | ||||
ESOP compensation expense for allocated shares | $ 1,773,000 | $ 1,307,000 | |||
Contributions between 1% to 3% | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Employer matching percentage | 100% | ||||
Contributions between 1% to 3% | Minimum | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Defined contribution plan, employee contribution (percent) | 1% | ||||
Contributions between 1% to 3% | Maximum | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Defined contribution plan, employee contribution (percent) | 3% | ||||
Contributions between 4% and 5% | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Employer matching percentage | 50% | ||||
Contributions between 4% and 5% | Minimum | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Defined contribution plan, employee contribution (percent) | 4% | ||||
Contributions between 4% and 5% | Maximum | |||||
Schedule of Defined Contribution Plans Disclosures [Line Items] | |||||
Defined contribution plan, employee contribution (percent) | 5% |
EMPLOYEE BENEFITS - Schedule of
EMPLOYEE BENEFITS - Schedule of Shares Under ESOP (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jan. 01, 2012 |
Employee Stock Ownership Plan (ESOP), Shares in ESOP [Abstract] | ||
Allocated shares | 427,488 | |
Unallocated shares | 51,842 | |
Total ESOP shares (in shares) | 479,330 | 518,420 |
Fair value of unallocated shares (in thousands) | $ 1,307 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Provision for income taxes | |||
Current | $ 8,183 | $ 8,258 | $ 12,976 |
Deferred | (844) | 1,750 | (2,390) |
Income Tax Expense (Benefit), Total | $ 7,339 | $ 10,008 | $ 10,586 |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Tax Expense (Benefit), Continuing Operations, Income Tax Reconciliation [Abstract] | |||
Income tax provision at statutory rate | $ 7,767 | $ 9,958 | $ 10,469 |
Tax exempt income | (852) | (492) | (292) |
Nondeductible items resulting in increase in tax | 31 | 28 | 57 |
Increase in tax resulting from other items | 274 | 100 | 175 |
Equity compensation | (146) | (883) | (46) |
Executive compensation | 265 | 979 | 8 |
ESOP | 0 | 318 | 215 |
Income Tax Expense (Benefit), Total | $ 7,339 | $ 10,008 | $ 10,586 |
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract] | |||
Income tax provision at statutory rate | 21% | 21% | 21% |
Tax exempt income | (2.30%) | (1.00%) | (0.60%) |
Nondeductible items resulting in increase in tax | 0.10% | 0% | 0.10% |
Increase in tax resulting from other items | 0.70% | 0.20% | 0.40% |
Equity compensation | (0.40%) | (1.90%) | (0.10%) |
Executive compensation | 0.70% | 2.10% | 0% |
ESOP | 0% | 0.70% | 0.40% |
Total | 19.80% | 21.10% | 21.20% |
INCOME TAXES - Deferred Assets
INCOME TAXES - Deferred Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Tax Assets | ||
Net operating loss carryforward | $ 0 | $ 189 |
Allowance for credit losses | 6,119 | 5,673 |
Non-accrued loan interest | 11 | 0 |
Restricted stock awards | 101 | 121 |
Non-qualified stock options | 438 | 265 |
Lease liability | 1,392 | 1,030 |
Securities available-for-sale | 9,146 | 149 |
Unfunded commitments | 547 | 107 |
Other | 234 | 45 |
Total deferred tax assets | 17,988 | 7,579 |
Deferred Tax Liabilities | ||
Loan origination costs | (2,123) | (1,982) |
Servicing rights | (3,874) | (3,649) |
Stock dividend - FHLB stock | (35) | (35) |
Property, plant, and equipment | (1,095) | (1,036) |
Purchase accounting adjustments | (727) | (863) |
Lease right-of-use assets | (1,338) | (979) |
Interest rate swaps designated as cash flow hedge | (2,126) | (218) |
Total deferred tax liabilities | (11,318) | (8,762) |
Net deferred tax assets (liabilities) | $ 6,670 | |
Net deferred tax assets (liabilities) | $ (1,183) |
INCOME TAXES - Narrative (Detai
INCOME TAXES - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | |||
Uncertain tax positions | $ 0 | $ 0 | |
Recognized interest and penalties | $ 0 | $ 0 | $ 0 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitment (Details) - Commitments to Extend Credit - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | $ 548,542 | $ 558,631 |
REAL ESTATE LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 294,246 | 332,378 |
Commercial | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 1,260 | 787 |
Construction and development | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 201,708 | 182,297 |
One-to-four-family | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 10,713 | 78,264 |
Home equity. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 77,566 | 67,596 |
Multi-family | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 2,999 | 3,434 |
CONSUMER LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 39,406 | 35,873 |
COMMERCIAL BUSINESS LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 214,890 | 190,380 |
Commercial and industrial | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 150,109 | 126,220 |
Warehouse lending | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | $ 64,781 | $ 64,160 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 USD ($) action | Dec. 31, 2021 USD ($) | |
Loss Contingencies [Line Items] | ||
Allowance for unfunded loan commitments | $ 2,500,000 | $ 499,000 |
Amount of loans sold to FHLB | 10,100,000 | |
Amount of federal home loan bank, first loss account established | 581,000 | |
Bank recourse obligation | $ 389,000 | |
Bank recourse obligation, percentage of loans outstanding | 3.80% | |
Holdback as a percentage of outstanding CE | 10% | |
Holdback for loans sold to FHLB | $ 39,000 | |
Outstanding delinquencies on loans sold to Federal Home Loan Bank | $ 0 | 0 |
Change of control agreement, executive payment, period following change in control (in months) | 12 months | |
Pending material legal actions | action | 0 | |
Maximum | ||
Loss Contingencies [Line Items] | ||
Change of control agreement, executive payment, period prior to change in control (in months) | 6 months | |
Change of control agreement, period of base compensation disbursed as lump sum payment (in months) | 12 months | |
Minimum | ||
Loss Contingencies [Line Items] | ||
Change of control agreement, notice required to cancel agreement (in months) | 24 months | |
CEO | ||
Loss Contingencies [Line Items] | ||
Severance agreement, period of base compensation disbursed as lump sum payment (in months) | 24 months | |
One-to-four-family | Guarantee on loans sold | ||
Loss Contingencies [Line Items] | ||
Reserve for estimated losses | $ 2,300,000 | $ 2,700,000 |
SIGNIFICANT CONCENTRATION OF _2
SIGNIFICANT CONCENTRATION OF CREDIT RISK (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Credit Concentration Risk | Construction Land Development And Other Land Concentration | Regulatory Capital | |
Concentration Risk [Line Items] | |
Concentration Risk, Percentage | 106.50% |
REGULATORY CAPITAL - (Narrative
REGULATORY CAPITAL - (Narrative) (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 leverage capital, Ratio | 0.097 | 0.108 |
Tier 1 risk-based capital, Ratio | 0.107 | |
Total risk-based capital, Ratio | 0.140 | |
CET 1 capital, Ratio | 0.107 | |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 leverage capital, Ratio | 0.1128 | 0.122 |
CET 1 capital, Amount | $ 294,043 | $ 270,800 |
Tier 1 leverage capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 130,380 | $ 189,300 |
Tier 1 risk-based capital, Ratio | 0.1245 | |
Total risk-based capital, Ratio | 0.1370 | |
CET 1 capital, Ratio | 0.1245 |
REGULATORY CAPITAL - Compliance
REGULATORY CAPITAL - Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital, Ratio | 0.140 | |
Tier 1 risk-based capital, Ratio | 0.107 | |
Tier 1 leverage capital, Ratio | 0.097 | 0.108 |
CET 1 capital, Ratio | 0.107 | |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital, Amount | $ 323,577 | |
Total risk-based capital, Ratio | 0.1370 | |
Total risk-based capital, For Capital Adequacy Purposes, Amount | $ 188,937 | |
Total risk-based capital, For Capital Adequacy Purposes, Ratio | 0.0800 | |
Total risk-based capital, For Capital Adequacy with Capital Buffer, Amount | $ 247,980 | |
Total risk-based capital, For Capital Adequacy with Capital Buffer, Ratio | 0.1050 | |
Total risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 236,171 | |
Total risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.1000 | |
Tier 1 risk-based capital, Amount | $ 294,043 | |
Tier 1 risk-based capital, Ratio | 0.1245 | |
Tier 1 risk-based capital, For Capital Adequacy Purposes, Amount | $ 141,703 | |
Tier 1 risk-based capital, For Capital Adequacy Purposes, Ratio | 0.0600 | |
Tier 1 risk-based capital, For Capital Adequacy with Capital Buffer, Amount | $ 200,746 | |
Tier 1 risk-based capital, For Capital Adequacy with Capital Buffer, Ratio | 0.0850 | |
Tier 1 risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 188,937 | |
Tier 1 risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0800 | |
Tier 1 leverage capital | $ 294,043 | |
Tier 1 leverage capital, Ratio | 0.1128 | 0.122 |
Tier 1 leverage capital, For Capital Adequacy Purposes, Amount | $ 104,304 | |
Tier 1 leverage capital, For Capital Adequacy Purposes, Ratio | 0.0400 | |
Tier 1 leverage capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 130,380 | $ 189,300 |
Tier 1 leverage capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0500 | |
CET 1 capital, Amount | $ 294,043 | $ 270,800 |
CET 1 capital, Ratio | 0.1245 | |
CET 1 capital, For Capital Adequacy Purposes, Amount | $ 106,277 | |
CET 1 capital, For Capital Adequacy Purposes, Ratio | 0.0450 | |
CET 1 capital, For Capital Adequacy with Capital Buffer, Amount | $ 165,320 | |
CET 1 capital, For Capital Adequacy with Capital Buffer, Ratio | 0.0700 | |
CET 1 capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 153,511 | |
CET 1 capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0650 |
FAIR VALUE MEASUREMENTS - Avail
FAIR VALUE MEASUREMENTS - Available for Sale Securities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | $ 14,035 | $ 16,083 |
Level 2 | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 14,000 | 16,100 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 273,521 | 416,038 |
Total liabilities measured at fair value | (38) | (155) |
Fair Value, Measurements, Recurring | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 14,035 | 16,083 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 17,288 | 20,970 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 8,545 | 9,002 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 120,602 | 135,433 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 69,966 | 89,402 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | U.S. Small Business Administration securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 12,851 | 16,552 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 20,093 | 125,810 |
Fair Value, Measurements, Recurring | Derivative | Forward TBA mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 164 | 53 |
Fair Value, Measurements, Recurring | Derivative | Mandatory and best effort forward commitments with investors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 808 | |
Total liabilities measured at fair value | (38) | |
Fair Value, Measurements, Recurring | Derivative | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 9,870 | 1,168 |
Total liabilities measured at fair value | (155) | |
Fair Value, Measurements, Recurring | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 107 | |
Fair Value, Measurements, Recurring | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 757 | |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | U.S. Small Business Administration securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Securities available-for-sale. | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivative | Forward TBA mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Derivative | Mandatory and best effort forward commitments with investors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Total liabilities measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Derivative | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 1 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 273,414 | 413,335 |
Total liabilities measured at fair value | 0 | (155) |
Fair Value, Measurements, Recurring | Level 2 | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 14,035 | 16,083 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 17,288 | 20,970 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 8,545 | 7,995 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 120,602 | 135,302 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 69,966 | 89,402 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | U.S. Small Business Administration securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 12,851 | 16,552 |
Fair Value, Measurements, Recurring | Level 2 | Securities available-for-sale. | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 20,093 | 125,810 |
Fair Value, Measurements, Recurring | Level 2 | Derivative | Forward TBA mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 164 | 53 |
Fair Value, Measurements, Recurring | Level 2 | Derivative | Mandatory and best effort forward commitments with investors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Total liabilities measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Derivative | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 9,870 | 1,168 |
Total liabilities measured at fair value | (155) | |
Fair Value, Measurements, Recurring | Level 2 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 2 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 107 | 2,703 |
Total liabilities measured at fair value | (38) | 0 |
Fair Value, Measurements, Recurring | Level 3 | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | U.S. agency securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 1,007 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 131 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | U.S. Small Business Administration securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Securities available-for-sale. | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivative | Forward TBA mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | Derivative | Mandatory and best effort forward commitments with investors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 808 | |
Total liabilities measured at fair value | (38) | |
Fair Value, Measurements, Recurring | Level 3 | Derivative | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | |
Fair Value, Measurements, Recurring | Level 3 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 107 | |
Fair Value, Measurements, Recurring | Level 3 | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Total assets measured at fair value | $ 757 |
FAIR VALUE MEASUREMENTS - Loans
FAIR VALUE MEASUREMENTS - Loans Individually Evaluated, OREO and Servicing Rights on Non-recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other real estate owned | $ 570 | |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans individually evaluated | 8,652 | $ 5,829 |
Other real estate owned | 570 | |
MSR | 35,478 | 26,070 |
Fair Value, Measurements, Nonrecurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans individually evaluated | 0 | 0 |
Other real estate owned | 0 | |
MSR | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans individually evaluated | 0 | 0 |
Other real estate owned | 0 | |
MSR | 0 | 0 |
Fair Value, Measurements, Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans individually evaluated | 8,652 | 5,829 |
Other real estate owned | 570 | |
MSR | $ 35,478 | $ 26,070 |
FAIR VALUE MEASUREMENTS - Disco
FAIR VALUE MEASUREMENTS - Discount Rate (Details) | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Measurements, Recurring | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Available-for-sale, Valuation Technique [Extensible List] | fsbw:QuotedMarketPricesMember | fsbw:QuotedMarketPricesMember |
Debt Securities, Available-for-sale, Measurement Input [Extensible List] | fsbw:MeasurementInputPullThroughExpectationsMember | fsbw:MeasurementInputPullThroughExpectationsMember |
Fair Value, Measurements, Recurring | Individual forward sale commitments with investors | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Available-for-sale, Valuation Technique [Extensible List] | fsbw:QuotedMarketPricesMember | fsbw:QuotedMarketPricesMember |
Debt Securities, Available-for-sale, Measurement Input [Extensible List] | fsbw:MeasurementInputPullThroughExpectationsMember | fsbw:MeasurementInputPullThroughExpectationsMember |
Fair Value, Measurements, Nonrecurring | Impaired Loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Available-for-sale, Valuation Technique [Extensible List] | fsbw:FairValueOfUnderlyingCollateralMember | fsbw:FairValueOfUnderlyingCollateralMember |
Debt Securities, Available-for-sale, Measurement Input [Extensible List] | fsbw:MeasurementInputDiscountAppliedToObtainedAppraisalMember | fsbw:MeasurementInputDiscountAppliedToObtainedAppraisalMember |
Fair Value, Measurements, Nonrecurring | OREO | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Available-for-sale, Valuation Technique [Extensible List] | fsbw:FairValueOfCollateralMember | fsbw:FairValueOfCollateralMember |
Debt Securities, Available-for-sale, Measurement Input [Extensible List] | fsbw:MeasurementInputDiscountAppliedToObtainedAppraisalMember | fsbw:MeasurementInputDiscountAppliedToObtainedAppraisalMember |
Fair Value, Measurements, Nonrecurring | Servicing rights | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Debt Securities, Available-for-sale, Valuation Technique [Extensible List] | fsbw:IndustrySourcesMember | fsbw:IndustrySourcesMember |
Debt Securities, Available-for-sale, Measurement Input [Extensible List] | fsbw:PrepaymentSpeedsMember | fsbw:PrepaymentSpeedsMember |
Level 3 | Fair Value, Measurements, Recurring | Interest rate lock commitments with customers | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.80 | 0.80 |
Level 3 | Fair Value, Measurements, Recurring | Interest rate lock commitments with customers | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.99 | 0.99 |
Level 3 | Fair Value, Measurements, Recurring | Interest rate lock commitments with customers | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.925 | 0.933 |
Level 3 | Fair Value, Measurements, Recurring | Individual forward sale commitments with investors | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.80 | 0.80 |
Level 3 | Fair Value, Measurements, Recurring | Individual forward sale commitments with investors | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.99 | 0.99 |
Level 3 | Fair Value, Measurements, Recurring | Individual forward sale commitments with investors | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.925 | 0.933 |
Level 3 | Fair Value, Measurements, Nonrecurring | Impaired Loans | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.100 | 0.100 |
Level 3 | Fair Value, Measurements, Nonrecurring | Impaired Loans | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.100 | 0.100 |
Level 3 | Fair Value, Measurements, Nonrecurring | OREO | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.100 | 0.100 |
Level 3 | Fair Value, Measurements, Nonrecurring | OREO | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 10 | |
Level 3 | Fair Value, Measurements, Nonrecurring | Servicing rights | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0 | 0 |
Level 3 | Fair Value, Measurements, Nonrecurring | Servicing rights | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.50 | 0.50 |
Level 3 | Fair Value, Measurements, Nonrecurring | Servicing rights | Weighted Average | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Measurement inputs (as a percent) | 0.082 | 0.138 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Level 3 on recurring basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest rate lock commitments with customers | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | $ 757 | $ 4,024 | $ 557 |
Purchases and Issuances | 3,215 | 23,164 | 53,281 |
Sales and Settlements | (3,865) | (26,431) | (49,814) |
Ending Balance | 107 | 757 | 4,024 |
Net change in fair value for gains/(losses) relating to items held at end of period included in income | (650) | (3,267) | 3,467 |
Individual forward sale commitments with investors | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | 808 | (67) | (195) |
Purchases and Issuances | 6,383 | 2,526 | (4,857) |
Sales and Settlements | (7,229) | (1,651) | 4,985 |
Ending Balance | (38) | 808 | (67) |
Net change in fair value for gains/(losses) relating to items held at end of period included in income | (846) | 875 | 128 |
Securities available-for-sale. | |||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning Balance | $ 1,138 | 1,111 | 1,162 |
Purchases and Issuances | 40 | ||
Sales and Settlements | (13) | (51) | |
Ending Balance | 1,138 | 1,111 | |
Net change in fair value for gains/(losses) relating to items held at end of period included in other comprehensive | $ 27 | $ (40) |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value By Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financial Assets | |||
Certificates of deposit at other financial institutions | $ 4,712 | $ 10,542 | |
Securities available-for-sale, at fair value | 229,252 | 271,359 | |
Securities held-to-maturity | 8,500 | 7,500 | |
Loans held for sale, at fair value | 20,093 | 125,810 | |
Loans receivable, at fair value | 14,035 | 16,083 | |
Loans receivable, gross | 2,218,852 | 1,754,175 | $ 1,571,153 |
Carrying Amount | Level 1 | |||
Financial Assets | |||
Cash and cash equivalents | 41,437 | 26,491 | |
Certificates of deposit at other financial institutions | 4,712 | 10,542 | |
Carrying Amount | Level 2 | |||
Financial Assets | |||
Securities available-for-sale, at fair value | 229,252 | 270,221 | |
Securities held-to-maturity | 8,500 | 7,500 | |
Loans held for sale, at fair value | 20,093 | 125,810 | |
FHLB stock, at cost | 10,611 | 4,778 | |
Forward TBA mortgage-backed securities | 164 | 53 | |
Loans receivable, at fair value | 14,035 | 16,083 | |
Interest rate swaps | 9,870 | 1,168 | |
Accrued interest receivable | 11,144 | 7,594 | |
Financial Liabilities | |||
Deposits | 2,127,741 | 1,915,744 | |
Borrowings | 186,528 | 42,528 | |
Subordinated notes, excluding unamortized debt issuance costs | 50,000 | 50,000 | |
Accrued interest payable | 2,270 | 766 | |
Interest rate swaps | 155 | ||
Carrying Amount | Level 3 | |||
Financial Assets | |||
Securities available-for-sale, at fair value | 1,138 | ||
Loans receivable, gross | 2,204,817 | 1,738,092 | |
Servicing rights, held at lower of cost or fair value | 18,017 | 16,970 | |
Fair value interest rate locks with customers | 107 | 757 | |
Mandatory and best effort forward commitments with investors | 808 | ||
Financial Liabilities | |||
Mandatory and best effort forward commitments with investors | 38 | ||
Fair Value | Level 1 | |||
Financial Assets | |||
Cash and cash equivalents | 41,437 | 26,491 | |
Certificates of deposit at other financial institutions | 4,712 | 10,542 | |
Fair Value | Level 2 | |||
Financial Assets | |||
Securities available-for-sale, at fair value | 229,252 | 270,221 | |
Securities held-to-maturity | 7,929 | 8,128 | |
Loans held for sale, at fair value | 20,093 | 125,810 | |
FHLB stock, at cost | 10,611 | 4,778 | |
Forward TBA mortgage-backed securities | 164 | 53 | |
Loans receivable, at fair value | 14,035 | 16,083 | |
Interest rate swaps | 9,870 | 1,168 | |
Accrued interest receivable | 11,144 | 7,594 | |
Financial Liabilities | |||
Deposits | 2,105,926 | 1,912,498 | |
Borrowings | 186,188 | 43,365 | |
Subordinated notes, excluding unamortized debt issuance costs | 44,500 | 51,688 | |
Accrued interest payable | 2,270 | 766 | |
Interest rate swaps | 155 | ||
Fair Value | Level 3 | |||
Financial Assets | |||
Securities available-for-sale, at fair value | 1,138 | ||
Loans receivable, gross | 2,153,769 | 1,725,651 | |
Servicing rights, held at lower of cost or fair value | 35,478 | 26,070 | |
Fair value interest rate locks with customers | 107 | 757 | |
Mandatory and best effort forward commitments with investors | $ 808 | ||
Financial Liabilities | |||
Mandatory and best effort forward commitments with investors | $ 38 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans receivable, at fair value | $ 14,035,000 | $ 16,083,000 | |
Increase (decrease) in fair value of loans receivable | (1,700,000) | (29,000) | $ 15,000 |
Level 2 | Residential Mortgage | |||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||
Loans receivable, at fair value | 14,000,000 | 16,100,000 | |
The unpaid principal balances of mortgage loans serviced | $ 15,600,000 | $ 16,100,000 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator (Dollars in thousands, except per share amounts): | |||
Net Income | $ 29,649 | $ 37,412 | $ 39,264 |
Dividends and undistributed earnings allocated to participating securities | (554) | (611) | (545) |
Net income available to common shareholders | $ 29,095 | $ 36,801 | $ 38,719 |
Denominator (shown as actual): | |||
Basic weighted average common shares outstanding (in shares) | 7,754,507 | 8,217,916 | 8,461,280 |
Dilutive shares (in shares) | 119,133 | 200,580 | 162,038 |
Diluted weighted average common shares outstanding (in shares) | 7,873,640 | 8,418,496 | 8,623,318 |
Basic earnings per share | $ 3.75 | $ 4.48 | $ 4.58 |
Diluted earnings per share | $ 3.70 | $ 4.37 | $ 4.49 |
Potentially dilutive weighted average share options that were not included in the computation of diluted earnings per share because to do so would be anti-dilutive | 61,912 | 16,466 | 133,238 |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Millions | Dec. 31, 2022 USD ($) |
DERIVATIVES | |
Reclassification to interest expense related to cash flow hedges over next 12 months | $ 3.8 |
DERIVATIVES - Cumulative-basis
DERIVATIVES - Cumulative-basis Adjustment for Fair Value Hedges (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Fair value hedges | $ 0 | |
Fair Value Hedges | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 55,893 | |
Cumulative Amount of Fair Value Hedging Adjustment Included in Carrying Amount of the Hedged Assets | 4,107 | |
Amortized cost basis of closed portfolios used in hedging relationships | 242,100 | |
Amount of designated hedged item | $ 60,000 |
DERIVATIVES - Derivative instru
DERIVATIVES - Derivative instruments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Notional | $ 90,000 | $ 90,000 |
Fair Value, Asset | 5,780 | 1,168 |
Fair Value, Liability | 0 | 155 |
Designated as Hedging Instrument | Interest rate swaps | Fair Value Hedges | ||
Derivative [Line Items] | ||
Notional | 60,000 | |
Fair Value, Asset | 4,090 | |
Fair Value, Liability | 0 | |
Not Designated as Hedging Instrument | Interest rate lock commitments with customers | ||
Derivative [Line Items] | ||
Notional | 8,837 | 71,890 |
Fair Value, Asset | 107 | 757 |
Fair Value, Liability | 0 | 0 |
Not Designated as Hedging Instrument | Mandatory and best effort forward commitments | ||
Derivative [Line Items] | ||
Notional | 4,558 | 74,375 |
Fair Value, Asset | 0 | 808 |
Fair Value, Liability | 38 | 0 |
Not Designated as Hedging Instrument | Forward TBA mortgage-backed securities | ||
Derivative [Line Items] | ||
Notional | 27,000 | 111,000 |
Fair Value, Asset | 164 | $ 53 |
Fair Value, Liability | $ 0 |
DERIVATIVES - Effect of Fair Va
DERIVATIVES - Effect of Fair Value and Cash Flow Hedge Accounting (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
DERIVATIVES | |||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income | $ 970 | $ (538) | $ (198) |
Changes in the fair value of the non hedging derivatives | (2,600) | 5,100 | 6,300 |
Interest rate swaps | Interest Expense Deposits | |||
DERIVATIVES | |||
Total amounts presented on the Consolidated Statements of Income | 9,420 | 6,929 | 11,980 |
Interest rate swaps | Interest Income Securities | |||
DERIVATIVES | |||
Total amounts presented on the Consolidated Statements of Income | 7,046 | 5,637 | 4,709 |
Fair Value Hedges | Interest rate swaps | Interest Income Securities | |||
DERIVATIVES | |||
Net gains (losses) on fair value hedging relationships - Recognized on hedged items | (4,107) | ||
Net gains (losses) on fair value hedging relationships - Recognized on derivatives designated as hedging instruments | 4,103 | ||
Net expense recognized on fair value hedges | (4) | ||
Cash Flow Hedges | Interest rate swaps | Interest Expense Deposits | |||
DERIVATIVES | |||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income | 970 | (538) | (198) |
Net income (expense) recognized on cash flow hedges | $ 970 | $ (538) | $ (198) |
DERIVATIVES - Offsetting Deriva
DERIVATIVES - Offsetting Derivative Assets (Details) - Interest rate swaps - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Offsetting Assets [Line Items] | ||
Gross Amounts of Recognized Assets | $ 9,870 | $ 1,168 |
Net Amounts of Assets Presented in the Statement of Financial Position | 9,870 | 1,168 |
Gross Amounts Not Offset in the Statement of Financial Position - Net Amount | $ 9,870 | $ 1,168 |
DERIVATIVES - Offsetting Deri_2
DERIVATIVES - Offsetting Derivative Liabilities (Details) - Interest rate swaps $ in Thousands | Dec. 31, 2021 USD ($) |
Offsetting Liabilities [Line Items] | |
Gross Amounts of Recognized Liabilities | $ 155 |
Net Amounts of Liabilities Presented in the Statement of Financial Position | 155 |
Gross Amounts Not Offset in the Statement of Financial Position - Cash Collateral Posted | $ 155 |
DERIVATIVES - Credit-risk-relat
DERIVATIVES - Credit-risk-related Contingent Features (Details) | Dec. 31, 2022 USD ($) |
Credit-risk-related Contingent Features | |
Derivative, net liability position | $ 0 |
Carrying value of collateral already posted | 2,800,000 |
Interest rate swaps | |
Credit-risk-related Contingent Features | |
Cash collateral for borrowed securities | 680,000 |
Collateral for TBA Trades [Member] | |
Credit-risk-related Contingent Features | |
Cash collateral for borrowed securities | $ 170,000 |
ACCUMULATED OTHER COMPREHENSI_3
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | $ 247,507 | $ 230,007 | $ 200,242 |
Net current period other comprehensive income (loss) | (25,884) | (2,281) | 1,745 |
Ending balance | 231,697 | 247,507 | 230,007 |
Gains and Losses on Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 794 | (967) | |
Other comprehensive income (loss) before reclassification, net of tax | 7,728 | 1,339 | (1,122) |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (761) | 422 | 155 |
Net current period other comprehensive income (loss) | 6,967 | 1,761 | (967) |
Ending balance | 7,761 | 794 | (967) |
Unrealized Gains and Losses on Available for Sale Securities | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | (542) | 3,500 | 788 |
Other comprehensive income (loss) before reclassification, net of tax | (32,851) | (4,042) | 2,947 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (235) | ||
Net current period other comprehensive income (loss) | (32,851) | (4,042) | 2,712 |
Ending balance | (33,393) | (542) | 3,500 |
Accumulated Other Comprehensive Income (Loss), Net of Tax. | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Beginning balance | 252 | 2,533 | 788 |
Other comprehensive income (loss) before reclassification, net of tax | (25,123) | (2,703) | 1,825 |
Amounts reclassified from accumulated other comprehensive income (loss), net of tax | (761) | 422 | (80) |
Net current period other comprehensive income (loss) | (25,884) | (2,281) | 1,745 |
Ending balance | $ (25,632) | $ 252 | $ 2,533 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) | 12 Months Ended | ||||
Jul. 14, 2021 | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | May 17, 2018 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award contractual life | 10 years | ||||
Stock split, conversion ratio | 2 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 6 years 6 months | 6 years 6 months | 6 years 6 months | ||
2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ | $ 2,000,000 | $ 1,400,000 | $ 1,000,000 | ||
Income tax benefit from share-based compensation expense | $ | $ 414,000 | $ 304,000 | $ 214,000 | ||
Remaining weighted-average vesting period | 6 years 10 months 2 days | 7 years 2 months 1 day | 6 years 6 months 29 days | ||
2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award contractual life | 10 years | ||||
Shares available for grant | shares | 342,096 | ||||
Expiration period | 10 years | ||||
Unrecognized compensation cost, nonvested awards | $ | $ 2,000,000 | ||||
Remaining weighted-average vesting period | 3 years 3 months 18 days | ||||
2018 Equity Incentive Plan | Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | shares | 326,000 | ||||
Shares available for grant | shares | 109,410 | ||||
Unrecognized compensation cost, nonvested awards | $ | $ 2,900,000 | ||||
Weighted-average vesting period | 3 years 3 months 18 days | ||||
2018 Equity Incentive Plan | Equity option and restricted stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | shares | 1,300,000 | ||||
Maximum | 2018 Equity Incentive Plan | Restricted stock awards | Independent Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Maximum | 2018 Equity Incentive Plan | Restricted stock awards | Officers And Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Minimum | 2018 Equity Incentive Plan | Restricted stock awards | Independent Director | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Minimum | 2018 Equity Incentive Plan | Restricted stock awards | Officers And Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
One year vesting | 2018 Equity Incentive Plan | Stock Options | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
One year vesting | 2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 5 years 6 months | ||||
One year vesting | Minimum | 2018 Equity Incentive Plan | Equity option | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
Two year vesting | 2018 Equity Incentive Plan | Stock Options | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Two year vesting | 2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 5 years 9 months | ||||
Two year vesting | 2018 Equity Incentive Plan | Equity option | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Two year vesting | Minimum | 2018 Equity Incentive Plan | Equity option | Officers And Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 2 years | ||||
Three year vesting | 2018 Equity Incentive Plan | Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 6 years | ||||
Three year vesting | Maximum | 2018 Equity Incentive Plan | Equity option | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 3 years | ||||
Five year vesting | 2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual award vesting percentage | 20% | ||||
Expected term in years | 6 years 6 months | ||||
Five year vesting | 2018 Equity Incentive Plan | Equity option | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years | ||||
Five year vesting | Maximum | 2018 Equity Incentive Plan | Equity option | Officers And Employees | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 5 years |
STOCK-BASED COMPENSATION - Fair
STOCK-BASED COMPENSATION - Fair Value of Options (Details) - Stock Options - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dividend yield | 2.59% | 1.58% | 1.97% |
Expected volatility | 26.86% | 37.10% | 26.79% |
Risk-free interest rate | 2.88% | 1.01% | 0.42% |
Expected term in years | 6 years 6 months | 6 years 6 months | 6 years 6 months |
Weighted-average grant date fair value per option granted | $ 7.13 | $ 10.67 | $ 8 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Shares | ||||
Award contractual life | 10 years | |||
Aggregate Intrinsic Value | ||||
Forfeited or Expired, Aggregate Intrinsic Value | $ 0 | |||
2013 Equity Incentive Plan | ||||
Shares | ||||
Annual forfeiture rate | 0.31% | |||
Expected forfeiture rate over contractual term | 3.10% | |||
2018 Equity Incentive Plan | ||||
Shares | ||||
Outstanding, beginning balance (in shares) | 613,626 | 671,754 | 575,980 | |
Granted, Shares | 99,200 | 118,850 | 124,570 | |
Less exercised (in shares) | 64,994 | 176,978 | 28,796 | |
Forfeited or Expired, Shares | 0 | |||
Outstanding, ending balance (in shares) | 647,832 | 613,626 | 671,754 | 575,980 |
Expected to vest, assuming a 0.31% annual forfeiture rate (in shares) | 645,998 | |||
Exercisable (in shares) | 312,821 | |||
Weighted-Average Exercise Price | ||||
Outstanding, beginning balance (in dollars per share) | $ 25.24 | $ 19.45 | $ 18.49 | |
Granted (in dollars per share) | 30.94 | 35.46 | 21.35 | |
Less exercised (in dollars per share) | 19.75 | 12.73 | 8.45 | |
Forfeited or expired, Weighted-Average Exercise Price (in dollars per share) | 0 | |||
Outstanding, ending balance (in dollars per share) | 26.67 | $ 25.24 | $ 19.45 | $ 18.49 |
Expected to vest, assuming a 0.31% annual forfeiture rate (in dollars per share) | 26.66 | |||
Exercisable (in dollars per share) | $ 24.03 | |||
Weighted-Average Remaining Contractual Term In Years | ||||
Outstanding, beginning balance | 6 years 10 months 2 days | 7 years 2 months 1 day | 6 years 6 months 29 days | 6 years 9 months 7 days |
Outstanding, ending balance | 6 years 10 months 2 days | 7 years 2 months 1 day | 6 years 6 months 29 days | |
Expected to vest, assuming a 0.31% annual forfeiture rate, Weighted Average Remaining Contractual Term | 6 years 10 months 2 days | 7 years 2 months 1 day | 6 years 6 months 29 days | 6 years 9 months 7 days |
Exercisable | 5 years 5 months 15 days | |||
Aggregate Intrinsic Value | ||||
Beginning balance | $ 5,362,902 | $ 5,721,159 | $ 7,722,369 | |
Less exercised | 790,558 | 4,265,369 | 453,674 | |
Forfeited or Expired, Aggregate Intrinsic Value | 0 | |||
Ending balance | 4,627,255 | $ 5,362,902 | $ 5,721,159 | $ 7,722,369 |
Expected to vest, assuming a 0.31% annual forfeiture rate | 4,619,599 | |||
Exercisable | $ 3,007,299 | |||
2018 Equity Incentive Plan | Equity option | ||||
Shares | ||||
Award contractual life | 10 years | |||
Weighted-Average Remaining Contractual Term In Years | ||||
Outstanding, ending balance | 3 years 3 months 18 days |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | |||
Nonvested, Beginning balance (in shares) | 121,672 | 110,184 | 80,430 |
Granted (shares) | 35,050 | 41,350 | 49,760 |
Less vested (in shares) | 38,192 | 29,862 | 20,006 |
Nonvested, Ending balance (in shares) | 118,530 | 121,672 | 110,184 |
Weighted-Average Grant-Date Fair Value Per Share | |||
Nonvested, Beginning balance (in dollars per share) | $ 28.02 | $ 24.35 | $ 26.82 |
Granted (in dollars per share) | 30.94 | 35.46 | 21.35 |
Less vested (in dollars per share) | 28.12 | 24.78 | 26.84 |
Nonvested, Ending balance (in dollars per share) | $ 28.85 | $ 28.02 | $ 24.35 |
Minimum | 2018 Equity Incentive Plan | Independent Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 1 year | ||
Minimum | 2018 Equity Incentive Plan | Officers And Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 2 years | ||
Maximum | 2018 Equity Incentive Plan | Independent Director | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Maximum | 2018 Equity Incentive Plan | Officers And Employees | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 5 years |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 12 Months Ended | |
Dec. 31, 2022 segment item | Dec. 31, 2022 USD ($) item | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 2 | 2 |
Retail Deposit | Pacific Northwest | ||
Segment Reporting Information [Line Items] | ||
Number of bank branches | 20 | 20 |
BUSINESS SEGMENTS - Segment Fin
BUSINESS SEGMENTS - Segment Financial Results (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) employee | Dec. 31, 2021 USD ($) employee | Dec. 31, 2020 USD ($) employee | |
Segment Reporting Information [Line Items] | |||
Net interest income | $ 104,280 | $ 86,649 | $ 74,120 |
(Provision for) reversal of loan losses | (6,217) | (500) | (13,036) |
Noninterest income | 18,108 | 37,513 | 55,359 |
Noninterest expense | (79,183) | (76,242) | (66,593) |
INCOME BEFORE PROVISION FOR INCOME TAXES | 36,988 | 47,420 | 49,850 |
(Provision) benefit for income taxes | (7,339) | (10,008) | (10,586) |
NET INCOME | 29,649 | 37,412 | 39,264 |
Total assets | 2,632,898 | 2,286,391 | |
Total average assets for period ended | $ 2,435,694 | $ 2,189,213 | $ 1,940,048 |
FTEs | employee | 537 | 536 | 506 |
Home Lending | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 10,922 | $ 8,343 | $ 5,123 |
(Provision for) reversal of loan losses | (1,153) | 2,113 | (2,758) |
Noninterest income | 7,950 | 28,968 | 44,808 |
Noninterest expense | (19,460) | (19,685) | (17,351) |
INCOME BEFORE PROVISION FOR INCOME TAXES | (1,741) | 19,739 | 29,822 |
(Provision) benefit for income taxes | 345 | (4,166) | (6,333) |
NET INCOME | (1,396) | 15,573 | 23,489 |
Total average assets for period ended | $ 417,431 | $ 409,363 | $ 396,367 |
FTEs | employee | 132 | 152 | 152 |
Commercial and Consumer Banking | |||
Segment Reporting Information [Line Items] | |||
Net interest income | $ 93,358 | $ 78,306 | $ 68,997 |
(Provision for) reversal of loan losses | (5,064) | (2,613) | (10,278) |
Noninterest income | 10,158 | 8,545 | 10,551 |
Noninterest expense | (59,723) | (56,557) | (49,242) |
INCOME BEFORE PROVISION FOR INCOME TAXES | 38,729 | 27,681 | 20,028 |
(Provision) benefit for income taxes | (7,684) | (5,842) | (4,253) |
NET INCOME | 31,045 | 21,839 | 15,775 |
Total average assets for period ended | $ 2,018,263 | $ 1,779,850 | $ 1,543,681 |
FTEs | employee | 405 | 384 | 354 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Noninterest Income | |||
Noninterest income (in-scope of Topic 606) | $ 3,185 | $ 3,009 | $ 2,665 |
Noninterest income (out-of-scope of Topic 606) | 14,923 | 34,504 | 52,694 |
Total noninterest income | 18,108 | 37,513 | 55,359 |
Debit Card Interchange Fees | |||
Noninterest Income | |||
Noninterest income (in-scope of Topic 606) | 2,266 | 2,252 | 1,879 |
Deposit service and account maintenance fees | |||
Noninterest Income | |||
Noninterest income (in-scope of Topic 606) | $ 919 | $ 757 | $ 786 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,312,000 | $ 2,312,000 | |
Goodwill, Impairment Loss | 0 | 0 | $ 0 |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Finite-Lived Intangible Assets, Gross, Total | 7,490,000 | 7,490,000 | 7,490,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (3,430,000) | (2,739,000) | (2,033,000) |
Finite-Lived Intangible Assets, Net, Beginning Balance | 4,060,000 | 4,751,000 | 5,457,000 |
Amortization | (691,000) | (691,000) | (706,000) |
Finite-Lived Intangible Assets, Gross, Total | 7,490,000 | 7,490,000 | 7,490,000 |
Finite-Lived Intangible Assets, Accumulated Amortization | (4,121,000) | (3,430,000) | (2,739,000) |
Finite-Lived Intangible Assets, Net, Ending Balance | 3,369,000 | 4,060,000 | 4,751,000 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||
2023 | 691,000 | ||
2024 | 621,000 | ||
2025 | 525,000 | ||
2026 | 525,000 | ||
2027 | 525,000 | ||
Thereafter | 482,000 | ||
Total | $ 3,369,000 | 4,060,000 | $ 4,751,000 |
Anchor Bancorp | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization period - CDI | 10 years | ||
Bank of America | |||
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,300,000 | $ 2,300,000 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Amortization period - CDI | 9 years |
PARENT COMPANY ONLY FINANCIAL_3
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Balance Sheets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||||
Cash and due from banks | $ 10,525 | $ 12,043 | ||
Other assets | 17,238 | 12,195 | ||
TOTAL ASSETS | 2,632,898 | 2,286,391 | ||
Liabilities and Stockholders' Equity | ||||
Subordinated note, net | 49,461 | 49,394 | ||
Other liabilities | 30,997 | 25,243 | ||
Total liabilities | 2,401,201 | 2,038,884 | ||
Total stockholders' equity | 231,697 | 247,507 | $ 230,007 | $ 200,242 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 2,632,898 | 2,286,391 | ||
FS Bancorp, Inc. | ||||
Assets | ||||
Cash and due from banks | 7,195 | 19,883 | ||
Investment in subsidiary | 274,092 | 277,390 | ||
Other assets | 704 | 407 | ||
TOTAL ASSETS | 281,991 | 297,680 | ||
Liabilities and Stockholders' Equity | ||||
Subordinated note, net | 49,461 | 49,394 | ||
Other liabilities | 833 | 779 | ||
Total liabilities | 50,294 | 50,173 | ||
Total stockholders' equity | 231,697 | 247,507 | ||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 281,991 | $ 297,680 |
PARENT COMPANY ONLY FINANCIAL_4
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Income (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Condensed Income Statements, Captions [Line Items] | |||
Interest from subsidiary | $ 111,648 | $ 90,737 | $ 84,128 |
Interest expense on subordinated note | (1,942) | (1,722) | (776) |
Dividends received from subsidiary | 7,046 | 5,637 | 4,709 |
Income tax benefit | 7,339 | 10,008 | 10,586 |
NET INCOME | 29,649 | 37,412 | 39,264 |
FS Bancorp, Inc. | |||
Condensed Income Statements, Captions [Line Items] | |||
Interest expense on subordinated note | (1,942) | (1,722) | (776) |
Dividends received from subsidiary | 9,110 | 9,800 | 20,862 |
Other expenses | (274) | (272) | (195) |
Income before income tax benefit and equity in undistributed net income of subsidiary | 6,894 | 7,806 | 19,891 |
Income tax benefit | 465 | 419 | 204 |
Equity in undistributed earnings of subsidiary | 22,290 | 29,187 | 19,169 |
NET INCOME | $ 29,649 | $ 37,412 | $ 39,264 |
PARENT COMPANY ONLY FINANCIAL_5
PARENT COMPANY ONLY FINANCIAL INFORMATION - Condensed Statements of Cash Flows (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net income | $ 29,649 | $ 37,412 | $ 39,264 |
ESOP compensation expense for allocated shares | 1,773 | 1,307 | |
Changes in operating assets and liabilities | |||
Other assets | 2,127 | (3,670) | 5,511 |
Other liabilities | 2,616 | (1,491) | 5,714 |
Net cash from (used by) operating activities | 184,898 | 109,009 | (32,317) |
Cash flows from investing activities: | |||
Net cash used by investing activities | (504,044) | (310,833) | (270,690) |
Cash flows used by financing activities: | |||
Repayment of subordinated notes | (10,000) | ||
Proceeds (disbursements) from stock options exercised, net | 568 | (2,076) | (161) |
Common stock repurchased for employee/director taxes paid on restricted stock awards | (190) | (211) | (34) |
Issuance of common stock - employee stock purchase plan | 503 | ||
Common stock repurchased | (15,628) | (13,961) | (9,802) |
Dividends paid on common stock | (7,096) | (4,602) | (3,574) |
Net cash from financing activities | 334,092 | 136,739 | 348,805 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 14,946 | (65,085) | 45,798 |
CASH AND CASH EQUIVALENTS, beginning of year | 26,491 | 91,576 | 45,778 |
CASH AND CASH EQUIVALENTS, end of year | 41,437 | 26,491 | 91,576 |
FS Bancorp, Inc. | |||
Cash flows from operating activities: | |||
Net income | 29,649 | 37,412 | 39,264 |
Equity in undistributed net income of subsidiary | (22,290) | (29,187) | (19,169) |
Amortization | 67 | 61 | 115 |
ESOP compensation expense for allocated shares | 1,482 | 1,025 | |
Share-based compensation expense related to stock options and restricted stock | 1,971 | 1,446 | 1,020 |
Changes in operating assets and liabilities | |||
Other assets | (297) | (205) | (30) |
Other liabilities | 55 | 569 | 27 |
Net cash from (used by) operating activities | 9,155 | 11,578 | 22,252 |
Cash flows from investing activities: | |||
Net proceeds from ESOP | 291 | 282 | |
Investment in subsidiary | (25,000) | ||
Net cash used by investing activities | (24,709) | 282 | |
Cash flows used by financing activities: | |||
Net proceeds from issuance of subordinated notes | 49,333 | ||
Repayment of subordinated notes | (10,000) | ||
Proceeds (disbursements) from stock options exercised, net | 568 | (2,076) | (161) |
Common stock repurchased for employee/director taxes paid on restricted stock awards | (190) | (211) | (34) |
Issuance of common stock - employee stock purchase plan | 503 | ||
Common stock repurchased | (15,628) | (13,961) | (9,802) |
Dividends paid on common stock | (7,096) | (4,602) | (3,574) |
Net cash from financing activities | (21,843) | 18,483 | (13,571) |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (12,688) | 5,352 | 8,963 |
CASH AND CASH EQUIVALENTS, beginning of year | 19,883 | 14,531 | 5,568 |
CASH AND CASH EQUIVALENTS, end of year | $ 7,195 | $ 19,883 | $ 14,531 |
RECENT DEVELOPMENTS (Details)
RECENT DEVELOPMENTS (Details) $ in Thousands | Feb. 24, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) |
Subsequent Event [Line Items] | |||
Total deposits | $ 2,127,741 | $ 1,915,744 | |
Loans receivable, net | $ 2,190,860 | $ 1,728,540 | |
Subsequent Event | Columbia State Bank | |||
Subsequent Event [Line Items] | |||
Number of bank branches | item | 7 | ||
Total deposits | $ 425,500 | ||
Loans receivable, net | 65,800 | ||
Consideration transferred for facilities and certain assets | $ 6,400 | ||
Deposit premium, core deposits (as a percentage) | 4.15% | ||
Deposit premium | $ 16,800 | ||
Acquisition settled by cash | $ 337,300 | ||
Subsequent Event | Columbia State Bank | Maximum | |||
Subsequent Event [Line Items] | |||
Deposit premium, public funds (as a percentage) | 2.50% | ||
Fair values refinement period | 1 year | ||
Subsequent Event | Purchase and Assumption Agreement | Columbia State Bank | |||
Subsequent Event [Line Items] | |||
Number of bank branches | item | 7 |