Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 04, 2023 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2023 | |
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, par value $.01 per share | |
Trading Symbol | FSBW | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 7,753,607 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001530249 | |
Amendment Flag | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and due from banks | $ 17,573 | $ 10,525 |
Interest-bearing deposits at other financial institutions | 114,526 | 30,912 |
Total cash and cash equivalents | 132,099 | 41,437 |
Certificates of deposit at other financial institutions | 14,747 | 4,712 |
Securities available-for-sale, at fair value | 225,869 | 229,252 |
Securities held-to-maturity, net of allowance for credit losses of $31 and $31, respectively (fair value of $7,475 and $7,929, respectively) | 8,469 | 8,469 |
Loans held for sale, at fair value | 16,714 | 20,093 |
Loans receivable, net (includes $14,349 and $14,035, at fair value, respectively) | 2,342,424 | 2,190,860 |
Accrued interest receivable | 12,244 | 11,144 |
Premises and equipment, net | 31,293 | 25,119 |
Operating lease right-of-use ("ROU") assets | 7,458 | 6,226 |
Federal Home Loan Bank ("FHLB") stock, at cost | 6,555 | 10,611 |
Other real estate owned ("OREO") | 570 | 570 |
Deferred tax asset, net | 5,784 | 6,670 |
Bank owned life insurance ("BOLI"), net | 37,247 | 36,799 |
Servicing rights, held at the lower of cost or fair value | 17,627 | 18,017 |
Goodwill | 3,592 | 2,312 |
Core deposit intangible, net | 19,325 | 3,369 |
Other assets | 23,604 | 17,238 |
TOTAL ASSETS | 2,905,621 | 2,632,898 |
LIABILITIES | ||
Noninterest-bearing accounts | 675,211 | 554,174 |
Interest-bearing accounts | 1,690,097 | 1,573,567 |
Total deposits | 2,365,308 | 2,127,741 |
Borrowings | 199,896 | 186,528 |
Principal amount | 50,000 | 50,000 |
Unamortized debt issuance costs | (506) | (539) |
Total subordinated notes less unamortized debt issuance costs | 49,494 | 49,461 |
Operating lease liabilities | 7,690 | 6,474 |
Other liabilities | 33,300 | 30,997 |
Total liabilities | 2,655,688 | 2,401,201 |
COMMITMENTS AND CONTINGENCIES (NOTE 10) | ||
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; 7,753,607 and 7,736,185 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively | 77 | 77 |
Additional paid-in capital | 56,781 | 55,187 |
Retained earnings | 215,519 | 202,065 |
Accumulated other comprehensive loss, net of tax | (22,444) | (25,632) |
Total stockholders' equity | 249,933 | 231,697 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 2,905,621 | $ 2,632,898 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
CONSOLIDATED BALANCE SHEETS. | ||
Allowance for credit losses | $ 31 | $ 31 |
Securities held-to-maturity, at fair value | 7,475 | 7,929 |
Loans receivable, at fair value | $ 14,349 | $ 14,035 |
Preferred stock par value, in dollars per share | $ 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 | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 7,753,607 | 7,736,185 |
Common stock, shares outstanding | 7,753,607 | 7,736,185 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
INTEREST INCOME | ||||
Loans receivable, including fees | $ 38,216 | $ 25,275 | $ 74,208 | $ 48,322 |
Interest and dividends on investment securities, cash and cash equivalents, and certificates of deposit at other financial institutions | 2,651 | 1,670 | 5,271 | 3,249 |
Total interest and dividend income | 40,867 | 26,945 | 79,479 | 51,571 |
INTEREST EXPENSE | ||||
Deposits | 7,610 | 1,557 | 14,234 | 2,842 |
Borrowings | 1,219 | 174 | 2,060 | 307 |
Subordinated notes | 486 | 485 | 971 | 971 |
Total interest expense | 9,315 | 2,216 | 17,265 | 4,120 |
NET INTEREST INCOME | 31,552 | 24,729 | 62,214 | 47,451 |
PROVISION FOR CREDIT LOSSES | 716 | 1,871 | 2,824 | 2,914 |
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES | 30,836 | 22,858 | 59,390 | 44,537 |
NONINTEREST INCOME | ||||
Service charges and fee income | 2,862 | 2,278 | 5,470 | 3,794 |
Gain on sale of loans | 1,947 | 2,066 | 3,423 | 5,923 |
Earnings on cash surrender value of BOLI | 227 | 216 | 448 | 433 |
Other noninterest income | (203) | (205) | 711 | 81 |
Total noninterest income | 4,833 | 4,355 | 10,052 | 10,231 |
NONINTEREST EXPENSE | ||||
Salaries and benefits | 13,513 | 11,736 | 27,377 | 23,708 |
Operations | 3,643 | 2,365 | 6,335 | 4,844 |
Occupancy | 1,562 | 1,258 | 3,082 | 2,481 |
Data processing | 1,683 | 1,455 | 3,251 | 2,815 |
Loan costs | 1,043 | 751 | 1,513 | 1,274 |
Professional and board fees | 657 | 763 | 1,335 | 1,756 |
Federal Deposit Insurance Corporation ("FDIC") insurance | 591 | 185 | 1,171 | 342 |
Marketing and advertising | 430 | 244 | 620 | 432 |
Acquisition cost | 61 | 1,562 | ||
Amortization of core deposit intangible | 1,023 | 172 | 1,482 | 345 |
Recovery of servicing rights | (2) | (1) | ||
Total noninterest expense | 24,204 | 18,929 | 47,728 | 37,996 |
INCOME BEFORE PROVISION FOR INCOME TAXES | 11,465 | 8,284 | 21,714 | 16,772 |
PROVISION FOR INCOME TAXES | 2,349 | 1,585 | 4,386 | 3,203 |
NET INCOME | $ 9,116 | $ 6,699 | $ 17,328 | $ 13,569 |
Basic earnings per share | $ 1.17 | $ 0.84 | $ 2.23 | $ 1.68 |
Diluted earnings per share | $ 1.16 | $ 0.83 | $ 2.19 | $ 1.66 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income | $ 9,116 | $ 6,699 | $ 17,328 | $ 13,569 |
Securities available-for-sale: | ||||
Unrealized (loss) gain during period | (3,715) | (11,506) | 2,421 | (32,479) |
Income tax benefit (provision) related to unrealized holding (loss) gain | 799 | 2,474 | (521) | 6,984 |
Derivative financial instruments: | ||||
Unrealized derivative gain during period | 5,335 | 1,717 | 3,818 | 4,544 |
Income tax provision related to unrealized derivative gain | (1,142) | (369) | (820) | (977) |
Reclassification adjustment for realized (gain) loss, net included in net income | (1,271) | (55) | (2,178) | 46 |
Income tax provision (benefit) related to reclassification, net | 273 | 13 | 468 | (10) |
Other comprehensive income (loss), net of tax | 279 | (7,726) | 3,188 | (21,892) |
COMPREHENSIVE INCOME (LOSS) | $ 9,395 | $ (1,027) | $ 20,516 | $ (8,323) |
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 (Loss) Income, Net of Tax | Total |
Beginning balance (Accounting Standards Update 2016-13) at Dec. 31, 2021 | $ 297 | $ 297 | |||
Beginning 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 | 13,569 | 13,569 | |||
Dividends paid | (4,006) | (4,006) | |||
Share-based compensation | 932 | 932 | |||
Common stock repurchased - repurchase plan | $ (5) | (13,891) | (13,896) | ||
Common stock repurchased - repurchase plan (in shares) | (476,607) | ||||
Stock options exercised, net | 130 | 130 | |||
Stock options exercised, net (in shares) | 32,952 | ||||
Other comprehensive income (loss), net of tax | (21,892) | (21,892) | |||
Ending balance at Jun. 30, 2022 | $ 77 | 55,129 | 189,075 | (21,640) | 222,641 |
Balance (in shares) at Jun. 30, 2022 | 7,726,232 | ||||
Beginning balance at Mar. 31, 2022 | $ 81 | 65,035 | 184,748 | (13,914) | 235,950 |
Balance (in shares) at Mar. 31, 2022 | 8,067,211 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 6,699 | 6,699 | |||
Dividends paid | (2,372) | (2,372) | |||
Share-based compensation | 481 | 481 | |||
Common stock repurchased - repurchase plan | $ (4) | (10,447) | (10,451) | ||
Common stock repurchased - repurchase plan (in shares) | (361,251) | ||||
Stock options exercised, net | 60 | 60 | |||
Stock options exercised, net (in shares) | 20,272 | ||||
Other comprehensive income (loss), net of tax | (7,726) | (7,726) | |||
Ending balance at Jun. 30, 2022 | $ 77 | 55,129 | 189,075 | (21,640) | 222,641 |
Balance (in shares) at Jun. 30, 2022 | 7,726,232 | ||||
Beginning balance at Dec. 31, 2022 | $ 77 | 55,187 | 202,065 | (25,632) | 231,697 |
Balance (in shares) at Dec. 31, 2022 | 7,736,185 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 17,328 | 17,328 | |||
Dividends paid | (3,874) | (3,874) | |||
Share-based compensation | 1,018 | 1,018 | |||
Issuance of common stock- employee stock purchase plan | 539 | 539 | |||
Issuance of common stock- employee stock purchase plan (in shares) | 16,449 | ||||
Restricted stock awards forfeited (in shares) | (4,812) | ||||
Common stock repurchased for employee/director taxes paid on restricted stock awards | (16) | (16) | |||
Common stock repurchased for employee/director taxes paid on restricted stock awards (in shares) | (440) | ||||
Stock options exercised, net | 53 | 53 | |||
Stock options exercised, net (in shares) | 6,225 | ||||
Other comprehensive income (loss), net of tax | 3,188 | 3,188 | |||
Ending balance at Jun. 30, 2023 | $ 77 | 56,781 | 215,519 | (22,444) | 249,933 |
Balance (in shares) at Jun. 30, 2023 | 7,753,607 | ||||
Beginning balance at Mar. 31, 2023 | $ 77 | 56,138 | 208,342 | (22,723) | 241,834 |
Balance (in shares) at Mar. 31, 2023 | 7,743,283 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Net income | 9,116 | 9,116 | |||
Dividends paid | (1,939) | (1,939) | |||
Share-based compensation | 364 | 364 | |||
Issuance of common stock- employee stock purchase plan | 268 | 268 | |||
Issuance of common stock- employee stock purchase plan (in shares) | 9,099 | ||||
Stock options exercised, net | 11 | 11 | |||
Stock options exercised, net (in shares) | 1,225 | ||||
Other comprehensive income (loss), net of tax | 279 | 279 | |||
Ending balance at Jun. 30, 2023 | $ 77 | $ 56,781 | $ 215,519 | $ (22,444) | $ 249,933 |
Balance (in shares) at Jun. 30, 2023 | 7,753,607 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY | ||||
Dividends paid (in dollars per share) | $ 0.25 | $ 0.30 | $ 0.50 | $ 0.50 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net income | $ 17,328 | $ 13,569 |
Adjustments to reconcile net income to net cash from operating activities | ||
Provision for credit losses | 2,824 | 2,914 |
Depreciation, amortization and accretion | 6,219 | 7,681 |
Compensation expense related to stock options and restricted stock awards | 1,018 | 932 |
Change in cash surrender value of BOLI | (448) | (433) |
Gain on sale of loans held for sale | (3,423) | (5,923) |
Origination of loans held for sale | (185,041) | (389,458) |
Proceeds from sale of loans held for sale | 206,392 | 501,367 |
Recovery of servicing rights | (1) | |
Changes in operating assets and liabilities | ||
Accrued interest receivable | (570) | (959) |
Other assets | (4,168) | 1,197 |
Other liabilities | 2,025 | (1,916) |
Net cash from operating activities | 42,156 | 128,970 |
Activity in securities available-for-sale: | ||
Maturities, prepayments, and calls | 8,758 | 11,016 |
Purchases | (3,933) | (21,002) |
Activity in securities held-to-maturity: | ||
Purchases | (1,000) | |
Maturities of certificates of deposit at other financial institutions | 5,582 | |
Purchase of certificates of deposit at other financial institutions | (10,035) | |
Portfolio loan originations and principal collections, net | (105,739) | (235,136) |
Net cash from acquisitions | 336,157 | |
Purchase of portfolio loans | (2,231) | (2,806) |
Purchase of premises and equipment | (1,113) | (401) |
Proceeds from bank owned life insurance death benefits | 419 | |
Change in FHLB stock, net | 4,056 | (1,517) |
Net cash from (used by) investing activities | 225,920 | (244,845) |
CASH FLOWS (USED BY) FROM FINANCING ACTIVITIES | ||
Net (decrease) increase in deposits | (187,484) | 100,315 |
Proceeds from borrowings | 1,043,500 | 324,500 |
Repayments of borrowings | (1,030,132) | (289,000) |
Dividends paid on common stock | (3,874) | (4,006) |
Proceeds from stock options exercised, net | 53 | 130 |
Common stock repurchased for employee/director taxes paid on restricted stock awards | (16) | |
Issuance of common stock - employee stock purchase plan | 539 | |
Common stock repurchased | (13,896) | |
Net cash (used by) from financing activities | (177,414) | 118,043 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 90,662 | 2,168 |
CASH AND CASH EQUIVALENTS, beginning of period | 41,437 | 26,491 |
CASH AND CASH EQUIVALENTS, end of period | 132,099 | 28,659 |
Cash paid during the period for: | ||
Interest on deposits and borrowings | 15,183 | 2,962 |
Income taxes | 5,985 | 1,530 |
SUPPLEMENTARY DISCLOSURES OF NONCASH OPERATING, INVESTING AND FINANCING ACTIVITIES | ||
Change in unrealized gain (loss) on available-for-sale investment securities | 2,421 | (32,479) |
Change in unrealized gain on fair value and cash flow hedges | 1,640 | 4,590 |
Retention in gross mortgage servicing rights from loan sales | 1,325 | 4,010 |
OREO received in settlement of loans | 145 | |
Right-of-use assets in exchange for lease liabilities | 2,034 | $ 938 |
Non-cash assets acquired | 87,512 | |
Non-cash liabilities assumed | $ 424,949 |
BASIS OF PRESENTATION AND SUMMA
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | FS BANCORP, INC. AND SUBSIDIARY NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (Table Dollar Amounts in Thousands, Except Per Share Amounts) NOTE 1 – BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Operations a Financial Statement Presentation The results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other future period. The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses (“ACL”), fair value of financial instruments, the valuation of servicing rights, business combinations, deferred income taxes, and if needed, a deferred tax asset valuation allowance. 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 – RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform” (“Topic 848”) Application of New Accounting Guidance Adopted in 2023 On January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments – Credit Losses (Topic 326) |
BUSINESS COMBINATION
BUSINESS COMBINATION | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS COMBINATION | |
BUSINESS COMBINATION | NOTE 2 BUSINESS COMBINATION On February 24, 2023, the Company’s wholly-owned subsidiary, 1st Security Bank, completed the purchase of seven branches (“Branch Purchase”) from Columbia State Bank to expand its franchise in Washington and Oregon. The Branch Purchase included seven retail bank branches located in the communities of Goldendale and White Salmon, Washington and Manzanita, Newport, Ontario, Tillamook, and Waldport, Oregon. In accordance with the Purchase and Assumption Agreement, dated as of November 7, 2022, between Columbia State Bank and 1st Security Bank, the Bank acquired $425.5 million of deposits, a portfolio of performing loans, six owned bank branches, one lease associated with the bank branches and certain other assets of the branches. In consideration of the purchased assets and transferred liabilities, 1st Security Bank paid (a) the unpaid principal balance and accrued interest of $66.6 million for the loans acquired, (b) the fair value, or approximately $6.3 million, for the bank facilities and certain other assets associated with 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 $16.4 million. The transaction was settled with Columbia State Bank paying cash of $334.7 million to 1st Security Bank for the difference between the total assets purchased and the total liabilities assumed. The Branch Purchase was accounted for under the acquisition method of accounting and accordingly, the assets and liabilities were recorded at fair values on February 24, 2023, the date of acquisition. Determining the fair value of assets and liabilities is a complicated process involving significant judgement 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. Due to the timing of the data conversion and the integration of operations of the branches onto the Company’s existing operations, historical reporting of the acquired branches is impracticable, and therefore, disclosure of the amounts of revenue and expenses attributable to the acquired branches since the acquisition date are not available. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of acquisition: Acquired Book Fair Value Amount February 24, 2023 Value Adjustments Recorded Assets Cash and cash equivalents $ 336,157 $ — $ 336,157 Loans receivable 66,093 (2,902) (1) 63,191 Premises and equipment 6,342 — 6,342 Accrued interest receivable 530 — 530 Core deposit intangible ("CDI") — 17,438 (2) 17,438 Goodwill — 1,280 (3) 1,280 Other assets 11 — 11 Total assets acquired $ 409,133 $ 15,816 $ 424,949 Liabilities Deposits: Noninterest-bearing accounts $ 225,567 $ — $ 225,567 Interest-bearing accounts 199,898 (548) (4) 199,350 Total deposits 425,465 (548) 424,917 Accrued interest payable 4 — 4 Other liabilities 28 — 28 Total liabilities assumed $ 425,497 $ (548) $ 424,949 _______________________________ (1) The fair value discount for acquired loans was determined by separate adjustments to reflect a credit risk and marketability component and a yield component reflecting the differential between portfolio and market yields. The discount on acquired loans will be accreted back into interest income using the effective yield method. None of the loans acquired are purchased financial assets with credit deterioration. The fair value of the loans is $63.2 million and the gross amount due is $66.1 million, none of which is expected to be uncollectable. (2) The fair value adjustment represents the value of the core deposit base assumed in the Branch Purchase based on a study performed by an independent consulting firm. This amount was recorded by the Company as an identifiable intangible asset and will be amortized as an expense on an accelerated basis over the average life of the core deposit base, which is estimated to be 10 years. (3) The fair value adjustment represents the value of the goodwill calculated from the purchase based on the purchase price, less the fair value of assets acquired net of liabilities assumed. The goodwill of $1.3 million is attributable to the workforce and customer relationships associated with the branches. All of the goodwill is deductible for tax purposes and will be amortized over a 15-year period. The goodwill was assigned to the Commercial and Consumer Banking segment. (4) The fair value of time deposits was calculated using a discounted cash flow analysis that calculated the present value of the projected cash flows from the portfolio versus the present value of a similar portfolio with a similar maturity profile at current market rates. This adjustment represents a difference in interest rates from the time deposits acquired and the estimated wholesale funding rates used in the application of fair value accounting. The discounted amount will be amortized into expense as an increase in interest expense over the maturity profile of the acquired time deposits. The disclosures regarding pro-forma data and the results of operations subsequent to the acquisition date are omitted as this information is not practical to obtain. The branches’ financial information is not reported on a stand-alone basis. |
INVESTMENTS
INVESTMENTS | 6 Months Ended |
Jun. 30, 2023 | |
INVESTMENTS | |
INVESTMENTS | NOTE 3 INVESTMENTS The following tables present the amortized costs, unrealized gains, unrealized losses, estimated fair values of securities available-for-sale and held-to-maturity, and ACL for securities held-to-maturity at June 30, 2023 and December 31, 2022: June 30, 2023 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values ACL U.S. agency securities $ 21,152 $ 8 $ (3,522) $ 17,638 $ — Corporate securities 6,999 36 (842) 6,193 — Municipal bonds 140,674 17 (22,027) 118,664 — Mortgage-backed securities 80,076 — (12,479) 67,597 — U.S. Small Business Administration securities 17,088 5 (1,316) 15,777 — Total securities available-for-sale 265,989 66 (40,186) 225,869 — SECURITIES HELD-TO-MATURITY Corporate securities 8,500 — (1,025) 7,475 31 Total securities held-to-maturity 8,500 — (1,025) 7,475 31 Total securities $ 274,489 $ 66 $ (41,211) $ 233,344 $ 31 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 The following table presents the activity in the ACL for securities held-to-maturity by major security type for the three and six months ended June 30, 2023 and 2022: SECURITIES HELD-TO-MATURITY For the Three Months Ended June 30, Corporate Securities 2023 2022 Beginning allowance balance $ 31 $ 72 Recapture for credit losses — (41) Securities charged-off — — Recoveries — — Total ending allowance balance $ 31 $ 31 SECURITIES HELD-TO-MATURITY For the Six Months Ended June 30, Corporate Securities 2023 2022 Beginning allowance balance $ 31 $ — Impact of adopting ASU 2016-13 — 72 Recapture for credit losses — (41) Securities charged-off — — Recoveries — — Total ending allowance balance $ 31 $ 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 as of both June 30, 2023 and December 31, 2022, and was $1.1 million and $1.2 million on available-for-sale debt securities as of June 30, 2023 and December 31, 2022, 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: June 30, December 31, Corporate securities 2023 2022 BBB/BBB- $ 7,000 $ 8,500 BB+ 1,500 — Total $ 8,500 $ 8,500 At June 30, 2023, 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. The following table presents, as of June 30, 2023, investment securities which were pledged to secure borrowings, public deposits or other obligations as permitted or required by law: June 30, 2023 Purpose or beneficiary Carrying Value Amortized Cost Fair Value State and local government public deposits $ 39,482 $ 45,979 $ 39,482 Interest rate swap counterparties 2,776 2,887 2,776 Federal Reserve Bank - Bank Term Funding Program facility 77,113 91,520 77,113 Total pledged securities $ 119,371 $ 140,386 $ 119,371 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. June 30, 2023 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 $ — $ — $ 15,631 $ (3,522) $ 15,631 $ (3,522) Corporate securities — — 4,158 (842) 4,158 (842) Municipal bonds 5,394 (47) 111,803 (21,980) 117,197 (22,027) Mortgage-backed securities 6,814 (312) 60,783 (12,167) 67,597 (12,479) U.S. Small Business Administration securities 4,879 — 8,507 (1,316) 13,386 (1,316) Total securities available-for-sale 17,087 (359) 200,882 (39,827) 217,969 (40,186) SECURITIES HELD-TO-MATURITY Corporate securities 800 (200) 6,675 (825) 7,475 (1,025) Total securities held-to-maturity 800 (200) 6,675 (825) 7,475 (1,025) Total $ 17,887 $ (559) $ 207,557 $ (40,652) $ 225,444 $ (41,211) 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) There was one held-to-maturity debt security in an unrealized loss position of less than one year and six held-to-maturity debt securities in an unrealized loss position of more than one year at June 30, 2023. There were seven held-to-maturity debt securities in an unrealized loss position of less than one year and none in an unrealized loss position of more than one year at December 31, 2022. There were 13 available-for-sale securities in an unrealized loss position of less than one year, and 175 available-for-sale securities in an unrealized loss position of more than one year at June 30, 2023. There were 88 available-for-sale securities in an unrealized loss position of less than one year, and 106 available-for-sale securities in an unrealized loss position of more than one year at December 31, 2022. 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 six months ended June 30, 2023, or for the year ended December 31, 2022. 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. June 30, December 31, 2023 2022 SECURITIES AVAILABLE-FOR-SALE Amortized Fair Amortized Fair U.S. agency securities Cost Value Cost Value Due within one year $ 931 $ 911 $ — $ — Due after one year through five years 3,941 3,435 4,874 4,321 Due after five years through ten years 8,990 7,675 6,989 5,963 Due after ten years 7,290 5,617 9,290 7,004 Subtotal 21,152 17,638 21,153 17,288 Corporate securities Due within one year 1,000 1,014 1,000 997 Due after one year through five years — — 2,497 2,519 Due after five years through ten years 4,000 3,838 4,000 3,763 Due after ten years 1,999 1,341 2,000 1,266 Subtotal 6,999 6,193 9,497 8,545 Municipal bonds Due within one year — — 2,660 2,644 Due after one year through five years 1,026 1,001 1,038 1,012 Due after five years through ten years 6,308 5,783 6,341 5,771 Due after ten years 133,340 111,880 134,161 111,175 Subtotal 140,674 118,664 144,200 120,602 Mortgage-backed securities Federal National Mortgage Association (“FNMA”) 66,597 55,569 68,421 57,358 Federal Home Loan Mortgage Corporation (“FHLMC”) 9,162 8,329 9,290 8,424 Government National Mortgage Association (“GNMA”) 4,317 3,699 4,713 4,184 Subtotal 80,076 67,597 82,424 69,966 U.S. Small Business Administration securities Due within one year 168 163 — — Due after one year through five years 2,325 2,183 2,553 2,407 Due after five years through ten years 3,756 3,486 4,461 3,996 Due after ten years 10,839 9,945 7,505 6,448 Subtotal 17,088 15,777 14,519 12,851 Total securities available-for-sale 265,989 225,869 271,793 229,252 SECURITIES HELD-TO-MATURITY Corporate securities Due after five years through ten years 8,500 7,475 8,500 7,929 Total securities held-to-maturity 8,500 7,475 8,500 7,929 Total securities $ 274,489 $ 233,344 $ 280,293 $ 237,181 There were no sales proceeds, gains or losses from the sale of securities available-for-sale for the three and six months ended June 30, 2023 and 2022. |
LOANS RECEIVABLE AND ALLOWANCE
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS | 6 Months Ended |
Jun. 30, 2023 | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS | NOTE 4 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES – LOANS The composition of the loan portfolio was as follows at the dates indicated: June 30, December 31, REAL ESTATE LOANS 2023 2022 Commercial $ 343,008 $ 334,059 Construction and development 312,093 342,591 Home equity 62,304 55,387 One-to-four-family (excludes loans held for sale) 521,734 469,485 Multi-family 231,675 219,738 Total real estate loans 1,470,814 1,421,260 CONSUMER LOANS Indirect home improvement 557,818 495,941 Marine 72,484 70,567 Other consumer 3,606 3,064 Total consumer loans 633,908 569,572 COMMERCIAL BUSINESS LOANS Commercial and industrial 237,403 196,791 Warehouse lending 30,649 31,229 Total commercial business loans 268,052 228,020 Total loans receivable, gross 2,372,774 2,218,852 ACL for loans (30,350) (27,992) Total loans receivable, net $ 2,342,424 $ 2,190,860 Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $8.3 million as of June 30, 2023 and $7.8 million as of December 31, 2022. Net loans include unamortized net discounts on acquired loans of $2.9 million and $437,000 as of June 30, 2023 and December 31, 2022, respectively. Net loans does not include accrued interest receivable. Accrued interest receivable on loans was $10.4 million and $9.6 million as of June 30, 2023 and December 31, 2022, respectively, 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/or commercial business lending activities are with customers located in Western Washington, the Oregon Coast, and near our loan production offices in Vancouver, Washington and 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, Montana, and recently New Hampshire. 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 June 30, 2023, the Bank held approximately $988.5 million in loans that are pledged as collateral for FHLB advances, compared to approximately $840.2 million at December 31, 2022. The Bank held approximately $618.8 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (the “FRB”) line of credit at June 30, 2023, compared to approximately $579.8 million at December 31, 2022. 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 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 (“C&I”) Lending. Warehouse Lending Allowance for Credit Losses Management identifies loans in the Company’s portfolio that must be individually evaluated for loss due to disparate risk characteristics or information suggesting that the Company will be unable to collect all the principal and interest due. For loans individually evaluated, a specific reserve is estimated based on either the fair value of collateral or the discounted value of expected future cash flows. In estimating the fair value of real estate collateral, management utilizes appraisals or evaluations adjusted for costs to dispose and a distressed sale adjustment, if needed. Estimating the fair value of collateral other than real estate is also subjective in nature and sometimes requires difficult and complex judgements. Determining expected future cash flows can be more subjective than determining fair values. Expected future cash flows could differ significantly, both in timing and amount, from the cash flows actually received over the loan’s remaining life. Individually evaluated loans are excluded from the estimation of credit losses for the pooled portfolio. Generally, collectively assessed loans are grouped by call report code and then risk-grade grouping. Risk grade is grouped 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 ACL for loans. 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. Modifications to borrowers experiencing financial difficulty are included in loans collectively evaluated for credit loss. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. A charge to the allowance for credit losses is generally not recorded upon modification. Management believes that the methods selected fairly reflect the historical loss component of expected losses inherent in the Company’s loan portfolio. However, since future losses could vary significantly from those experienced in the past, on a quarterly basis management adjusts its historical loss experience to reflect current and forecasted conditions. In doing so, management considers a variety of general qualitative and quantitative factors (“Q-factors”) and then subjectively determines the weight to assign to each in estimating losses. Qualitative characteristics include differences in underwriting standards, policies, lending staff and environmental risks. Management also considers whether further adjustments to historical loss information are needed to reflect the extent to which current conditions and reasonable and supportable forecasts over the forecasting horizon differ from the conditions that existed during the historical loss period. These quantitative adjustments reflect changes to relevant data such as changes in unemployment rates, average growth in pools of loans, concentrations of credit, delinquencies or other factors associated with the financial assets. The reversion method is applied for periods beyond the forecasting horizon. The Company’s ACL allocable to pools of loans that are collectively evaluated for credit loss results primarily from these qualitative and quantitative adjustments to historical loss experience. Because of the nature of the Q-factors and the degree of judgement involved in assessing their impact, management’s resulting estimate of losses may not accurately reflect current and future losses in the portfolio. The main drivers of the credit provision recorded in the first six months of 2023 were increases in outstanding loans and net charge-offs, average growth rates and increases in specific reserves on individually evaluated loans. The following tables detail activity in the ACL for loans by loan categories at or for the three and six months ended June 30, 2023 and 2022: At or For the Three Months Ended June 30, 2023 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 12,572 $ 13,401 $ 3,964 $ — $ 29,937 (Reversal of) provision for credit losses on loans (265) 1,266 62 — 1,063 Charge-offs — (876) — — (876) Recoveries — 226 — — 226 Net charge-offs — (650) — — (650) Total ending ACL balance $ 12,307 $ 14,017 $ 4,026 $ — $ 30,350 At or For the Three Months Ended June 30, 2022 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 10,560 $ 9,792 $ 3,013 $ — $ 23,365 Provision for (reversal of) credit losses on loans 952 830 (163) — 1,619 Charge-offs — (297) — — (297) Recoveries — 280 — — 280 Net charge-offs — (17) — — (17) Total ending ACL balance $ 11,512 $ 10,605 $ 2,850 $ — $ 24,967 At or For the Six Months Ended June 30, 2023 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 12,123 $ 12,109 $ 3,760 $ — $ 27,992 Provision for credit losses on loans 194 2,957 267 — 3,418 Charge-offs (10) (1,585) (1) — (1,596) Recoveries — 536 — — 536 Net Charge-offs (10) (1,049) (1) — (1,060) Total ending ACL balance $ 12,307 $ 14,017 $ 4,026 $ — $ 30,350 At or For the Six Months Ended June 30, 2022 Real Commercial ACL FOR 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 1,948 527 (4) — 2,471 Charge-offs — (820) — — (820) Recoveries — 540 — — 540 Net charge-offs — (280) — — (280) Total ending ACL balance $ 11,512 $ 10,605 $ 2,850 $ — $ 24,967 Nonaccrual and Past Due Loans Loan Modifications to Borrowers Experiencing Financial Difficulty The Company may agree to modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness. The Company restructured two related C&I loans during the first quarter of 2023. The restructuring included a consolidation of the loans into a single loan, an increase in contractual term of 60 months, and a reduction in the contractual interest rate from 7.5% to 4.1%. The loan had an amortized cost of $3.5 million or 1.4% of C&I loans, at June 30, 2023. The restructured loan has been paid as agreed subsequent to the restructuring, however, was classified as current and nonaccrual as of June 30, 2023, and individually evaluated in the determination of the associated ACL for loans. There were no loans that were modified on or after January 1, 2023, the date the Company adopted ASU 2022–02, through June 30, 2023 that subsequently defaulted during the period presented. Troubled Debt Restructurings (“TDRs”) At June 30, 2022, the Company had no TDRs. There were no TDRs which incurred a payment default within twelve months of the restructuring date during the three and six months ended June 30, 2022. The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at June 30, 2023 and December 31, 2022: June 30, 2023 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 $ — $ — $ — $ — $ 343,008 $ 343,008 $ 1,061 Construction and development — — — — 312,093 312,093 — Home equity 27 150 12 189 62,115 62,304 50 One-to-four-family — — 209 209 521,525 521,734 209 Multi-family — — — — 231,675 231,675 — Total real estate loans 27 150 221 398 1,470,416 1,470,814 1,320 CONSUMER LOANS Indirect home improvement 1,216 930 723 2,869 554,949 557,818 1,833 Marine 145 63 73 281 72,203 72,484 471 Other consumer 8 11 — 19 3,587 3,606 3 Total consumer loans 1,369 1,004 796 3,169 630,739 633,908 2,307 COMMERCIAL BUSINESS LOANS Commercial and industrial — — 2,117 2,117 235,286 237,403 5,645 Warehouse lending — — — — 30,649 30,649 — Total commercial business loans — — 2,117 2,117 265,935 268,052 5,645 Total loans $ 1,396 $ 1,154 $ 3,134 $ 5,684 $ 2,367,090 $ 2,372,774 $ 9,272 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 ___________________________ (1) Includes past due loans as applicable. There were no loans 90 days or more past due and still accruing interest at both June 30, 2023 and December 31, 2022. 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) non-performing 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 ACL loan 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 rated “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 the dates indicated. Term loans that were renewed or extended for periods longer than 90 days are presented as a new origination in the year of the most recent renewal or extension. June 30, 2023 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Converted Commercial 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 18,901 $ 88,035 $ 76,437 $ 48,519 $ 28,338 $ 70,116 $ — $ 329 $ 330,675 Watch — 9,507 — — 453 — 16 — 9,976 Special mention — — — — 417 — — — 417 Substandard — — — — — 1,940 — — 1,940 Total commercial 18,901 97,542 76,437 48,519 29,208 72,056 16 329 343,008 Construction and development Pass 51,332 177,805 66,261 16,102 — 593 — — 312,093 Total construction and development 51,332 177,805 66,261 16,102 — 593 — — 312,093 Home equity Pass 2,042 1,716 1,606 6,672 11 2,345 47,862 — 62,254 Substandard — — — — — 39 11 — 50 Total home equity 2,042 1,716 1,606 6,672 11 2,384 47,873 — 62,304 Home equity gross charge-offs — — — — — — 10 — 10 One-to-four-family Pass 59,664 165,085 125,437 80,959 33,353 53,756 — 477 518,731 Watch — 871 — — — — — — 871 Substandard — — — — — 2,132 — — 2,132 Total one-to-four-family 59,664 165,956 125,437 80,959 33,353 55,888 — 477 521,734 Multi-family Pass 4,426 34,254 78,174 47,901 38,398 28,522 — — 231,675 Total multi-family 4,426 34,254 78,174 47,901 38,398 28,522 — — 231,675 Total real estate loans $ 136,365 $ 477,273 $ 347,915 $ 200,153 $ 100,970 $ 159,443 $ 47,889 $ 806 $ 1,470,814 June 30, 2023 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Converted Indirect home improvement 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 109,645 $ 236,709 $ 106,692 $ 40,712 $ 26,991 $ 35,229 $ 7 $ — $ 555,985 Substandard 100 635 489 193 247 169 — — 1,833 Total indirect home improvement 109,745 237,344 107,181 40,905 27,238 35,398 7 — 557,818 Indirect home improvement gross charge-offs 31 511 194 113 104 228 — — 1,181 Marine Pass 8,001 25,589 10,717 14,130 5,523 8,053 — — 72,013 Substandard — — 25 — 147 299 — — 471 Total marine 8,001 25,589 10,742 14,130 5,670 8,352 — — 72,484 Marine gross charge-offs — 47 93 — 7 182 — — 329 Other consumer Pass 101 707 244 115 21 231 2,184 — 3,603 Substandard — — — — — — 3 — 3 Total other consumer 101 707 244 115 21 231 2,187 — 3,606 Other consumer gross charge-offs — 2 5 — — — 68 — 75 Total consumer loans $ 117,847 $ 263,640 $ 118,167 $ 55,150 $ 32,929 $ 43,981 $ 2,194 $ — $ 633,908 June 30, 2023 COMMERCIAL Revolving Loans BUSINESS LOANS Term Loans by Year of Origination Converted Commercial and industrial 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 11,976 $ 31,100 $ 24,364 $ 12,793 $ 5,661 $ 11,506 $ 116,799 $ 92 $ 214,291 Watch 194 — 601 2,649 — 1,157 6,563 — 11,164 Special mention — — — — 566 270 1,135 — 1,971 Substandard 3,529 — 1,565 1,477 1,781 173 1,452 — 9,977 Total commercial and industrial 15,699 31,100 26,530 16,919 8,008 13,106 125,949 92 237,403 Commercial and industrial gross charge-offs — — 1 — — — — — 1 Warehouse lending Pass — — — — — — 28,391 — 28,391 Watch — — — — — — 2,258 — 2,258 Total warehouse lending — — — — — — 30,649 — 30,649 Total commercial business loans $ 15,699 $ 31,100 $ 26,530 $ 16,919 $ 8,008 $ 13,106 $ 156,598 $ 92 $ 268,052 TOTAL LOANS RECEIVABLE, GROSS Pass $ 266,088 $ 761,000 $ 489,932 $ 267,903 $ 138,296 $ 210,351 $ 195,243 $ 898 $ 2,329,711 Watch 194 10,378 601 2,649 453 1,157 8,837 — 24,269 Special mention — — — — 983 270 1,135 — 2,388 Substandard 3,629 635 2,079 1,670 2,175 4,752 1,466 — 16,406 Total loans receivable, gross $ 269,911 $ 772,013 $ 492,612 $ 272,222 $ 141,907 $ 216,530 $ 206,681 $ 898 $ 2,372,774 Total gross charge-offs $ 31 $ 560 $ 293 $ 113 $ 111 $ 410 $ 78 $ — $ 1,596 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 $ 155,63 |
SERVICING RIGHTS
SERVICING RIGHTS | 6 Months Ended |
Jun. 30, 2023 | |
SERVICING RIGHTS | |
SERVICING RIGHTS | NOTE 5 – SERVICING RIGHTS Loans serviced for others are not included on the Consolidated Balance Sheets. The unpaid principal balance of permanent loans serviced for others was $2.80 billion and $2.78 billion at June 30, 2023 and December 31, 2022, respectively. The following table summarizes mortgage servicing rights (“MSR”) activity at or for the dates indicated: At or For the Three Months Ended June 30, 2023 2022 Beginning balance, at the lower of cost or fair value $ 17,599 $ 18,041 Additions 920 1,460 MSR amortized (894) (985) Recovery of servicing rights 2 — Ending balance, at the lower of cost or fair value $ 17,627 $ 18,516 At or For the Six Months Ended June 30, 2023 2022 Beginning balance, at the lower of cost or fair value $ 18,017 $ 16,970 Additions 1,325 4,010 MSR amortized (1,715) (2,465) Recovery of servicing rights — 1 Ending balance, at the lower of cost or fair value $ 17,627 $ 18,516 The fair value of the servicing rights’ assets was $37.5 million and $35.5 million at June 30, 2023 and December 31, 2022, 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 June 30, At December 31, Key assumptions: 2023 2022 Weighted average discount rate 9.6 % 9.6 % Conditional prepayment rate (“CPR”) 7.1 % 8.2 % Weighted average life in years 8.4 7.8 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: June 30, 2023 December 31, 2022 Aggregate portfolio principal balance $ 2,801,966 $ 2,783,458 Weighted average rate of note 3.5 % 3.4 % At June 30, 2023 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 7.1 % 7.7 % 8.9 % Fair value MSR $ 37,486 $ 36,845 $ 35,649 Percentage of MSR 1.3 % 1.3 % 1.3 % Discount rate 9.6 % 10.1 % 10.6 % Fair value MSR $ 37,486 $ 36,651 $ 35,851 Percentage of MSR 1.3 % 1.3 % 1.3 % 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 % 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 time. The Company recorded $1.8 million of gross contractually specified servicing fees, late fees, and other ancillary fees resulting from servicing of loans for both the three months ended June 30, 2023 and 2022, and $3.6 million and $3.5 million for the six months ended June 30, 2023 and 2022, respectively. The income, net of MSR amortization, is reported in “Service charges and fee income” on the Consolidated Statements of Income. |
DERIVATIVES
DERIVATIVES | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVES | |
DERIVATIVES | NOTE 6 – DERIVATIVES The Company is exposed to certain risk 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. Customer Swaps Not Designated as Hedges The Company also enters into derivative contracts, which consist of interest rate swaps, to facilitate the needs of clients desiring to manage interest rate risk. These swaps are not designated as accounting hedges under ASC 815, Derivatives and Hedging. To economically hedge the interest rate risk associated with offering this product, the Company simultaneously enters into derivative contracts with third parties to offset the customer contracts such that the Company minimizes its net risk exposure resulting from such transactions. The derivative contracts are structured such that the notional amounts reduce over time to generally match the expected amortization of the underlying loans. These derivatives are not speculative and arise from a service provided to clients. Cash Flow Hedges The Bank has entered into interest rate swaps to reduce the exposure to variability in interest-related cash outflows related to brokered deposits. These derivative instruments are designated as cash flow hedges. 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 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 $5.5 million will be reclassified from accumulated other comprehensive loss as a decrease to interest expense over the next 12 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 variable-rate amounts from a counterparty in exchange for the Company making fixed-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. The following amounts were recorded on the balance sheet related to cumulative-basis adjustment for fair value hedges for the dates indicated: Line item in the statement of financial position in which the hedged Item is included Hedged Assets June 30, 2023 Investment securities (1) $ 55,833 $ 4,167 Total $ 55,833 $ 4,167 December 31, 2022 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 June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $240.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.2 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: June 30, 2023 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 180,000 $ 7,361 $ — Fair value hedges: Interest rate swaps - securities 60,000 4,149 — Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 34,260 273 — Mandatory and best effort forward commitments with investors 7,856 123 — Forward TBA mortgage-backed securities 36,000 192 — Customer swap positions 882 — 79 Dealer offsets to customer swap positions 882 81 — 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 — The following table summarizes the effect of fair value and cash flow hedge accounting on the Consolidated Statements of Income for the three and six months ended June 30, 2023 and 2022: Three Months Ended June 30, 2023 2022 Interest Interest Interest Interest Expense Income Expense Income Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 7,610 $ 2,651 $ 1,557 $ 1,670 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items — (1,191) — (933) Recognized on derivatives designated as hedging instruments — 1,554 — 831 Net income (expense) recognized on fair value hedges $ — $ 363 $ — $ (102) Net gain on cash flow hedging relationships: Interest rate swaps - brokered deposits and borrowings Realized gains (pre-tax) reclassified from AOCI into net income $ 1,271 $ — $ 55 $ — Net income recognized on cash flow hedges $ 1,271 $ — $ 55 $ — Six Months Ended June 30, 2023 2022 Interest Interest Interest Interest Expense Income Expense Income Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 14,234 $ 5,271 $ 2,842 $ 3,249 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items — 597 — (933) Recognized on derivatives designated as hedging instruments — 59 — 831 Net income (expense) recognized on fair value hedges $ — $ 656 $ — $ (102) 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 $ 2,178 $ — $ (46) $ — Net income (expense) recognized on cash flow hedges $ 2,178 $ — $ (46) $ — 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 net losses of $51,000 and $1.5 million for the three months ended June 30, 2023 and 2022, and net gains of $373,000 and net losses of $1.7 million for the six months ended June 30, 2023 and 2022, respectively. The following tables present a summary of amounts outstanding in derivative financial instruments including those entered into in connection with the same counter-party under master netting agreements at the dates 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 of Recognized Statement of Statement of Financial Cash Collateral Offsetting of derivative assets Assets Financial Position Financial Position Instruments Received Net Amount June 30, 2023 Interest rate swaps $ 11,591 $ — $ 11,591 $ — $ — $ 11,591 December 31, 2022 Interest rate swaps $ 9,870 $ — $ 9,870 $ — $ — $ 9,870 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. At June 30, 2023, 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 at June 30, 2023. The Company had posted cash collateral of $115,000 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. |
LEASES
LEASES | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
LEASES | NOTE 7 – 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 nine months to seven years, 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) are as follows for the three and six months ended June 30, 2023 and 2022: Three Months Ended Three Months Ended Lease cost: June 30, 2023 June 30, 2022 Operating lease cost $ 471 $ 348 Short-term lease cost 5 7 Total lease cost $ 476 $ 355 Six Months Ended Six Months Ended Lease cost: June 30, 2023 June 30, 2022 Operating lease cost $ 881 $ 691 Short-term lease cost 9 8 Total lease cost $ 890 $ 699 The following tables provide supplemental information related to operating leases at or for the three and six months ended June 30, 2023 and 2022: At or For the At or For the Cash paid for amounts included in the Three Months Ended Three Months Ended measurement of lease liabilities: June 30, 2023 June 30, 2022 Operating cash flows from operating leases $ 482 $ 357 Weighted average remaining lease term- operating leases 4.4 years 4.7 years Weighted average discount rate- operating leases 2.92 % 2.05 % At or For the At or For the Cash paid for amounts included in the Six Months Ended Six Months Ended measurement of lease liabilities: June 30, 2023 June 30, 2022 Operating cash flows from operating leases $ 906 $ 703 Weighted average remaining lease term- operating leases 4.4 years 4.7 years Weighted average discount rate- operating leases 2.92 % 2.05 % 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 June 30, 2023 for future periods are as follows: Remainder of 2023 $ 964 2024 1,933 2025 1,628 2026 1,475 2027 1,173 Thereafter 1,383 Total lease payments 8,556 Less imputed interest (866) Total $ 7,690 |
OTHER REAL ESTATE OWNED ("OREO"
OTHER REAL ESTATE OWNED ("OREO") | 6 Months Ended |
Jun. 30, 2023 | |
OTHER REAL ESTATE OWNED ("OREO") | |
OTHER REAL ESTATE OWNED ("OREO") | NOTE 8 – OTHER REAL ESTATE OWNED (“OREO”) The following table presents the activity related to OREO at or for the three and six months ended June 30, 2023 and 2022: At or For the Three Months Ended At or For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 Beginning balance $ 570 $ — $ 570 $ — Loans transferred to OREO — 145 — 145 Ending balance $ 570 $ 145 $ 570 $ 145 There was one OREO property (a closed branch in Centralia, Washington) at June 30, 2023 and one at June 30, 2022. There were no OREO holding costs for the three and six months ended June 30, 2023 or 2022. There were $221,000 and $511,000 in portfolio mortgage loans collateralized by residential real estate property in the process of foreclosure |
DEPOSITS
DEPOSITS | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
DEPOSITS | NOTE 9 – DEPOSITS Deposits are summarized as follows at the dates indicated: June 30, December 31, 2023 2022 Noninterest-bearing checking $ 658,440 $ 537,938 Interest-bearing checking (1) 183,012 135,127 Savings 169,013 134,358 Money market (2) 419,308 574,290 Certificates of deposit less than $100,000 (3) 473,026 440,785 Certificates of deposit of $100,000 through $250,000 358,238 195,447 Certificates of deposit of $250,000 and over 87,499 93,560 Escrow accounts related to mortgages serviced (4) 16,772 16,236 Total $ 2,365,308 $ 2,127,741 ________________________ (1) Includes $0 and $2.3 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (2) Includes $51,000 and $59.7 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (3) Includes $295.7 million and $332.0 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (4) Noninterest-bearing accounts. Scheduled maturities of time deposits at June 30, 2023 for future periods ending are as follows: Maturing in 2023 $ 382,635 Maturing in 2024 339,314 Maturing in 2025 130,136 Maturing in 2026 45,574 Maturing in 2027 20,697 Thereafter 408 Total $ 918,764 Interest expense by deposit category for the periods indicated is as follows: Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Interest-bearing checking $ 370 $ 92 $ 468 $ 253 Savings and money market 1,344 711 2,542 1,094 Certificates of deposit 5,896 754 11,224 1,495 Total $ 7,610 $ 1,557 $ 14,234 $ 2,842 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10 – 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 June 30, December 31, REAL ESTATE LOANS 2023 2022 Commercial $ 2,843 $ 1,260 Construction and development 168,952 201,708 One-to-four-family (includes locks for saleable loans) 42,270 10,713 Home equity 96,279 77,566 Multi-family 2,958 2,999 Total real estate loans 313,302 294,246 CONSUMER LOANS 32,731 39,406 COMMERCIAL BUSINESS LOANS Commercial and industrial 168,593 150,109 Warehouse lending 47,866 64,781 Total commercial business loans 216,459 214,890 Total commitments to extend credit $ 562,492 $ 548,542 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 an 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 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 June 30, 2023 and December 31, 2022 was $1.9 million and $2.5 million, respectively. The decline in the ACL was due to the Company recording a recovery from the ACL – unfunded loan commitments of $596,000 for the six months ended June 30, 2023, as compared to a provision for credit losses – unfunded loan commitments of $485,000 for the six months ended June 30, 2022. The Company recorded a recovery from the ACL – unfunded loan commitments of $347,000 for the three months ended June 30, 2023, as compared to a provision for credit losses – unfunded loan commitments of $520,000 for the three months ended June 30, 2022, primarily attributable to a decline in unfunded construction loan commitments over the periods. 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 June 30, 2023, total loans sold to the FHLB of Des Moines were $10.0 million with the FLA totaling $581,000 and the CE obligation at $389,000 or 3.9% of the loans outstanding. Management has established a holdback of 10% of the outstanding CE, or $39,000, which is a part of the off-balance sheet holdback for loans sold. At both June 30, 2023 and December 31, 2022, there were no loans sold to the FHLB of Des Moines that were 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 his 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 June 30, 2023. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jun. 30, 2023 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | NOTE 11 – FAIR VALUE MEASUREMENTS The Company determines fair value based on the requirements established in Accounting Standards Codification (“ASC”) Topic 820 Fair Value Measurements, Topic 820 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 June 30, 2023 and December 31, 2022, there were $14.3 million and $14.0 million, respectively, in residential mortgage loans accounted for under the fair value option as they were previously transferred from held for sale, at fair value to loans held for investment. The aggregate unpaid principal balance of these loans was $15.9 million and $15.6 million as of June 30, 2023 and December 31, 2022, 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 three months ended June 30, 2023, the Company recorded a net decrease in fair value of $520,000 , as compared to a net decrease in fair value of $516,000 for the three months ended June 30, 2022. For the six months ended June 30, 2023, the Company recorded a net increase in fair value of $57,000 , as compared to a net decrease in fair value of $ 1.0 million for the six months ended June 30, 2022. 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 Fair value adjustments to OREO are recorded at the lower of carrying amount of the loan or fair value of the collateral less selling costs. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ACL for loans. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell (Level 3). 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 tables present 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 June 30, 2023 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 17,638 $ — $ 17,638 Corporate securities — 6,193 — 6,193 Municipal bonds — 118,664 — 118,664 Mortgage-backed securities — 67,597 — 67,597 U.S. Small Business Administration securities — 15,777 — 15,777 Mortgage loans held for sale, at fair value — 16,714 — 16,714 Loans receivable, at fair value — 14,349 — 14,349 Derivatives: Interest rate lock commitments with customers — — 273 273 Forward TBA mortgage-backed securities — 192 — 192 Mandatory and best effort forward commitments with investors — — 123 123 Interest rate swaps — 11,591 — 11,591 Total assets measured at fair value $ — $ 268,715 $ 396 $ 269,111 Financial Liabilities Derivatives: Interest rate swaps $ — $ (79) $ — $ (79) Total liabilities measured at fair value $ — $ (79) $ — $ (79) 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 swaps — 9,870 — 9,870 Interest rate lock commitments with customers — — 107 107 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) The following table presents financial assets measured at fair value on a nonrecurring basis and the level within the fair value hierarchy at June 30, 2023. There were no financial assets measured at fair value on a nonrecurring basis as of December 31, 2022. June 30, 2023 Level 1 Level 2 Level 3 Total MSR $ — $ — $ 37,486 $ 37,486 Quantitative Information about Level 3 Fair Value Measurements Level 3 Significant Weighted Average Range Fair Value Valuation Unobservable June 30, December 31, Instruments Techniques Inputs Range 2023 2022 RECURRING Interest rate lock commitments with customers Quoted market prices Pull-through expectations 80% - 99% 91.3 % 92.5 % Individual forward sale commitments with investors Quoted market prices Pull-through expectations 80% - 99% 91.3 % 92.5 % NONRECURRING MSR Industry sources Pre-payment speeds 0% - 50% 7.1 % 8.2 % 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 dates indicated: Purchases Net change in Net change in Three Months Ended Beginning and Sales and Ending fair value for fair value for June 30, 2023 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 565 $ 948 $ (1,240) $ 273 $ (292) $ — Individual forward sale commitments with investors (13) 188 (52) 123 136 — June 30, 2022 Interest rate lock commitments with customers $ 250 $ 22 $ (88) $ 184 $ (66) $ — Individual forward sale commitments with investors 885 2,931 (3,298) 518 (367) — Purchases Net change in Net change in Six Months Ended Beginning and Sales and Ending fair value for fair value for June 30, 2023 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 107 $ 1,942 $ (1,776) $ 273 $ 166 $ — Individual forward sale commitments with investors (38) 410 (249) 123 161 — June 30, 2022 Interest rate lock commitments with customers $ 757 $ 2,117 $ (2,690) $ 184 $ (573) $ — Individual forward sale commitments with investors 808 5,073 (5,363) 518 (290) — __________________________ (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 (loss). (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: June 30, December 31, 2023 2022 Financial Assets Carrying Fair Carrying Fair Level 1 inputs: Amount Value Amount Value Cash and cash equivalents $ 132,099 $ 132,099 $ 41,437 $ 41,437 Certificates of deposit at other financial institutions 14,747 14,747 4,712 4,712 Level 2 inputs: Securities available-for-sale, at fair value 225,869 225,869 229,252 229,252 Securities held-to-maturity, gross 8,500 7,475 8,500 7,929 Loans held for sale, at fair value 16,714 16,714 20,093 20,093 FHLB stock, at cost 6,555 6,555 10,611 10,611 Forward TBA mortgage-backed securities 192 192 164 164 Loans receivable, at fair value 14,349 14,349 14,035 14,035 Interest rate swaps 11,591 11,591 9,870 9,870 Accrued interest receivable 12,244 12,244 11,144 11,144 Level 3 inputs: Loans receivable, gross 2,358,425 2,280,219 2,204,817 2,153,769 MSR, held at lower of cost or fair value 17,627 37,486 18,017 35,478 Fair value interest rate locks with customers 273 273 107 107 Mandatory and best effort forward commitments with investors 123 123 — — Financial Liabilities Level 2 inputs: Deposits 2,365,308 2,347,200 2,127,741 2,105,926 Borrowings 199,896 199,400 186,528 186,188 Subordinated notes, excluding unamortized debt issuance costs 50,000 47,455 50,000 44,500 Accrued interest payable 3,381 3,381 2,270 2,270 Interest rate swaps 79 79 — — Level 3 inputs: Mandatory and best effort forward commitments with investors — — 38 38 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 12 – 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. The following table presents a reconciliation of the components used to compute basic and diluted earnings per share at or for the dates indicated: At or For the Three Months Ended June 30, At or For the Six Months Ended June 30, Numerator 2023 2022 2023 2022 Net income $ 9,116 $ 6,699 $ 17,328 $ 13,569 Dividends and undistributed earnings allocated to participating securities (160) (138) (307) (265) Net income available to common shareholders $ 8,956 $ 6,561 $ 17,021 $ 13,304 Denominator (shown as actual): Basic weighted average common shares outstanding 7,637,210 7,776,939 7,635,647 7,899,522 Dilutive shares 109,126 119,271 133,870 131,214 Diluted weighted average common shares outstanding 7,746,336 7,896,210 7,769,517 8,030,736 Basic earnings per share $ 1.17 $ 0.84 $ 2.23 $ 1.68 Diluted earnings per share $ 1.16 $ 0.83 $ 2.19 $ 1.66 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. 67,675 68,008 50,555 52,364 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | NOTE 13 – STOCK-BASED COMPENSATION Stock Options and Restricted Stock On May 17, 2018, the shareholders of FS Bancorp, Inc. approved the 2018 Equity Incentive Plan (the “2018 Plan”) that authorized 1.3 million shares of the Company’s common stock to be awarded. The 2018 Plan provides for the grant of incentive stock options, nonqualified 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 June 30, 2023, there were 356,532 stock option awards and 114,222 RSAs available to be granted under the 2018 Plan. Total share-based compensation expense was $364,000 and $1.0 million for the three and six months ended June 30, 2023, respectively, and $481,000 and $932,000 for the three and six months ended June 30, 2022, 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 5.5 years for one-year vesting, 5.75 years for two-year vesting, 6.0 years for three-year vesting, and 6.5 years for five-year vesting. The following table presents a summary of the Company’s stock option awards during the dates indicated (shown as actual): Weighted-Average Weighted- Remaining Average Contractual Term In Aggregate Shares Exercise Price Years Intrinsic Value Outstanding at January 1, 2023 647,832 $ 26.67 6.84 $ 4,627,255 Granted — $ — — — Less exercised 6,225 $ 8.45 — $ 130,192 Less forfeited or expired 23,295 34.26 — — Outstanding at June 30, 2023 618,312 $ 26.57 6.35 $ 2,796,274 Expected to vest, assuming a 0.31% annual forfeiture rate at June 30, 2023 (1) 610,295 $ 26.55 6.27 $ 2,770,086 Exercisable at June 30, 2023 302,096 $ 24.18 5.04 $ 1,924,864 ____________________________ (1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options over 10 years . At June 30, 2023, there was $1.4 million of total unrecognized forfeiture adjusted 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 3.0 years. Restricted Stock Awards The RSAs’ fair value is equal to the value of the market price of FS Bancorp’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 dates indicated (shown as actual): Weighted-Average Grant-Date Fair Value Nonvested Shares Shares Per Share Nonvested at January 1, 2023 118,530 $ 28.85 Granted — — Less vested 1,453 — Less forfeited or expired 4,812 33.76 Nonvested at June 30, 2023 112,265 $ 28.64 At June 30, 2023, there was $2.2 million of total unrecognized forfeiture adjusted compensation cost 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 3.0 years. |
REGULATORY CAPITAL
REGULATORY CAPITAL | 6 Months Ended |
Jun. 30, 2023 | |
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. 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 June 30, 2023, 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 June 30, 2023, that the Bank met all capital adequacy requirements. The following table compares the Bank’s actual capital amounts and ratios at June 30, 2023 to their minimum regulatory capital requirements and well capitalized regulatory capital at that date: 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 June 30, 2023 Total risk-based capital (to risk-weighted assets) $ 322,010 12.93 % $ 199,223 8.00 % $ 261,480 10.50 % $ 249,028 10.00 % Tier 1 risk-based capital (to risk-weighted assets) $ 290,867 11.68 % $ 149,417 6.00 % $ 211,674 8.50 % $ 199,223 8.00 % Tier 1 leverage capital (to average assets) $ 290,867 10.31 % $ 112,816 4.00 % $ N/A N/A $ 141,020 5.00 % CET 1 capital (to risk-weighted assets) $ 290,867 11.68 % $ 112,063 4.50 % $ 174,320 7.00 % $ 161,868 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 June 30, 2023, 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 June 30, 2023, it would have exceeded all regulatory capital requirements. For informational purposes, the regulatory capital ratios calculated for the Company at June 30, 2023 were 8.8% for Tier 1 leverage-based capital, 10.0% for Tier 1 risk-based capital, 13.3% for total risk-based capital, and 10.0% for CET 1 capital ratio. 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. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS SEGMENTS | |
BUSINESS SEGMENTS | NOTE 15 – 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: ● ● ● ● ● 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, 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 June 30, 2023, the Company’s retail deposit branch network consisted of 27 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 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 for the three and six months ended June 30, 2023 and 2022: At or For the Three Months Ended June 30, 2023 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 28,269 $ 3,283 $ 31,552 Provision for credit losses on loans (629) (87) (716) Noninterest income 2,706 2,127 4,833 Noninterest expense (18,950) (5,254) (24,204) Income before provision for income taxes 11,396 69 11,465 Provision for income taxes (2,335) (14) (2,349) Net income $ 9,061 $ 55 $ 9,116 Total average assets for period ended $ 2,313,228 $ 528,662 $ 2,841,890 Full-time employees ("FTEs") 444 137 581 At or For the Three Months Ended June 30, 2022 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 22,084 $ 2,645 $ 24,729 Provision for credit losses on loans (719) (1,152) (1,871) Noninterest income 2,125 2,230 4,355 Noninterest expense (14,231) (4,698) (18,929) Income before (provision) benefit for income taxes 9,259 (975) 8,284 (Provision) benefit for income taxes (1,804) 219 (1,585) Net income (loss) $ 7,455 $ (756) $ 6,699 Total average assets for period ended $ 1,957,630 $ 398,690 $ 2,356,320 FTEs 389 148 537 At or For the Six Months Ended June 30, 2023 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 55,769 $ 6,445 $ 62,214 Provision for credit losses on loans (2,118) (706) (2,824) Noninterest income (2) 5,086 4,966 10,052 Noninterest expense (37,560) (10,168) (47,728) Income before provision for income taxes 21,177 537 21,714 Provision for income taxes (4,278) (108) (4,386) Net income $ 16,899 $ 429 $ 17,328 Total average assets for period ended $ 2,281,815 $ 510,419 $ 2,792,234 FTEs 444 137 581 At or For the Six Months Ended June 30, 2022 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 42,362 $ 5,089 $ 47,451 Provision for credit losses on loans (1,916) (998) (2,914) Noninterest income 4,630 5,601 10,231 Noninterest expense (28,407) (9,589) (37,996) Income before provision for income taxes 16,669 103 16,772 Provision for income taxes (3,182) (21) (3,203) Net income $ 13,487 $ 82 $ 13,569 Total average assets for period ended $ 1,921,426 $ 392,107 $ 2,313,533 FTEs 389 148 537 _____________________________ (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. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 16 – 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 $3.6 million at June 30, 2023, and $2.3 million at December 31, 2022, 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 Branch Purchase on February 24, 2023, and the purchase of four retail bank branches 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 June 30, 2023, 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 year ended December 31, 2022, and the six months ended June 30, 2023. Other Intangible Assets Accumulated Gross CDI Amortization Net CDI Balance, December 31, 2021 $ 7,490 $ (3,430) $ 4,060 Amortization — (691) (691) Balance, December 31, 2022 7,490 (4,121) 3,369 Additions as a result of the Branch Purchase 17,438 — 17,438 Amortization — (1,482) (1,482) Balance, June 30, 2023 $ 24,928 $ (5,603) $ 19,325 The CDI represents the fair value of the intangible core deposit base acquired in business combinations. The CDI will be amortized on an accelerated basis over 10 years for the CDI related to the Branch Purchase, on a straight-line basis over 10 years for the CDI related to the Anchor Bank acquisition in November 2018 (“Anchor Acquisition”) and on an accelerated basis over approximately nine years for the CDI related to the four retail bank purchase from Bank of America on January 22, 2016. Total amortization expense was $1.0 million and $1.5 million for the three and six months ended June 30, 2023, and $172,000 and $345,000 for the same periods in 2022. Amortization expense for CDI is expected to be as follows at June 30, 2023: Remainder of 2023 $ 1,982 2024 3,633 2025 3,191 2026 2,846 2027 2,500 Thereafter 5,173 Total $ 19,325 |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 17 – 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 and/or immaterial to Topic 606, for the dates indicated. At or For the Three Months Ended June 30, For the Six Months Ended June 30, Noninterest income 2023 2022 2023 2022 In-scope of Topic 606: Debit card interchange fees $ 882 $ 584 $ 1,520 $ 1,127 Deposit service and account maintenance fees 388 225 664 441 Noninterest income (in-scope of Topic 606) 1,270 809 2,184 1,568 Noninterest income (out-of-scope and/or immaterial to Topic 606) 3,563 3,546 7,868 8,663 Total noninterest income $ 4,833 $ 4,355 $ 10,052 $ 10,231 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 deposit 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. |
BASIS OF PRESENTATION AND SUM_2
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Financial Statement Presentation | Financial Statement Presentation The results for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, or any other future period. The preparation of financial statements, in conformity with U.S. GAAP, requires management to make estimates and assumptions that affect amounts reported in the financial statements. Actual results could differ from these estimates. Material estimates that are particularly susceptible to significant change relate to the determination of the allowance for credit losses (“ACL”), fair value of financial instruments, the valuation of servicing rights, business combinations, deferred income taxes, and if needed, a deferred tax asset valuation allowance. 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 – |
Earnings Per Share ("EPS") | 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. |
RECENT ACCOUNTING PRONOUNCEMENTS | RECENT ACCOUNTING PRONOUNCEMENTS In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2020-04, “Reference Rate Reform” (“Topic 848”) |
Application of New Accounting Guidance Adopted in 2023 | Application of New Accounting Guidance Adopted in 2023 On January 1, 2023, the Company adopted 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 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 (“C&I”) Lending. Warehouse Lending Allowance for Credit Losses Management identifies loans in the Company’s portfolio that must be individually evaluated for loss due to disparate risk characteristics or information suggesting that the Company will be unable to collect all the principal and interest due. For loans individually evaluated, a specific reserve is estimated based on either the fair value of collateral or the discounted value of expected future cash flows. In estimating the fair value of real estate collateral, management utilizes appraisals or evaluations adjusted for costs to dispose and a distressed sale adjustment, if needed. Estimating the fair value of collateral other than real estate is also subjective in nature and sometimes requires difficult and complex judgements. Determining expected future cash flows can be more subjective than determining fair values. Expected future cash flows could differ significantly, both in timing and amount, from the cash flows actually received over the loan’s remaining life. Individually evaluated loans are excluded from the estimation of credit losses for the pooled portfolio. Generally, collectively assessed loans are grouped by call report code and then risk-grade grouping. Risk grade is grouped 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 ACL for loans. 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. Modifications to borrowers experiencing financial difficulty are included in loans collectively evaluated for credit loss. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. A charge to the allowance for credit losses is generally not recorded upon modification. Management believes that the methods selected fairly reflect the historical loss component of expected losses inherent in the Company’s loan portfolio. However, since future losses could vary significantly from those experienced in the past, on a quarterly basis management adjusts its historical loss experience to reflect current and forecasted conditions. In doing so, management considers a variety of general qualitative and quantitative factors (“Q-factors”) and then subjectively determines the weight to assign to each in estimating losses. Qualitative characteristics include differences in underwriting standards, policies, lending staff and environmental risks. Management also considers whether further adjustments to historical loss information are needed to reflect the extent to which current conditions and reasonable and supportable forecasts over the forecasting horizon differ from the conditions that existed during the historical loss period. These quantitative adjustments reflect changes to relevant data such as changes in unemployment rates, average growth in pools of loans, concentrations of credit, delinquencies or other factors associated with the financial assets. The reversion method is applied for periods beyond the forecasting horizon. The Company’s ACL allocable to pools of loans that are collectively evaluated for credit loss results primarily from these qualitative and quantitative adjustments to historical loss experience. Because of the nature of the Q-factors and the degree of judgement involved in assessing their impact, management’s resulting estimate of losses may not accurately reflect current and future losses in the portfolio. The main drivers of the credit provision recorded in the first six months of 2023 were increases in outstanding loans and net charge-offs, average growth rates and increases in specific reserves on individually evaluated 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 ACL loan 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 rated “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. |
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 June 30, 2023 and December 31, 2022, there were $14.3 million and $14.0 million, respectively, in residential mortgage loans accounted for under the fair value option as they were previously transferred from held for sale, at fair value to loans held for investment. The aggregate unpaid principal balance of these loans was $15.9 million and $15.6 million as of June 30, 2023 and December 31, 2022, 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 three months ended June 30, 2023, the Company recorded a net decrease in fair value of $520,000 , as compared to a net decrease in fair value of $516,000 for the three months ended June 30, 2022. For the six months ended June 30, 2023, the Company recorded a net increase in fair value of $57,000 , as compared to a net decrease in fair value of $ 1.0 million for the six months ended June 30, 2022. 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 Fair value adjustments to OREO are recorded at the lower of carrying amount of the loan or fair value of the collateral less selling costs. Any write-downs based on the asset’s fair value at the date of acquisition are charged to the ACL for loans. After foreclosure, management periodically performs valuations such that the real estate is carried at the lower of its new cost basis or fair value, net of estimated costs to sell (Level 3). 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 |
BUSINESS COMBINATION (Tables)
BUSINESS COMBINATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS COMBINATION | |
Schedule of estimated fair values of assets acquired and liabilities assumed | Acquired Book Fair Value Amount February 24, 2023 Value Adjustments Recorded Assets Cash and cash equivalents $ 336,157 $ — $ 336,157 Loans receivable 66,093 (2,902) (1) 63,191 Premises and equipment 6,342 — 6,342 Accrued interest receivable 530 — 530 Core deposit intangible ("CDI") — 17,438 (2) 17,438 Goodwill — 1,280 (3) 1,280 Other assets 11 — 11 Total assets acquired $ 409,133 $ 15,816 $ 424,949 Liabilities Deposits: Noninterest-bearing accounts $ 225,567 $ — $ 225,567 Interest-bearing accounts 199,898 (548) (4) 199,350 Total deposits 425,465 (548) 424,917 Accrued interest payable 4 — 4 Other liabilities 28 — 28 Total liabilities assumed $ 425,497 $ (548) $ 424,949 |
INVESTMENTS (Tables)
INVESTMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
INVESTMENTS | |
Schedule of available-for-sale securities reconciliation | June 30, 2023 Estimated Amortized Unrealized Unrealized Fair SECURITIES AVAILABLE-FOR-SALE Cost Gains Losses Values ACL U.S. agency securities $ 21,152 $ 8 $ (3,522) $ 17,638 $ — Corporate securities 6,999 36 (842) 6,193 — Municipal bonds 140,674 17 (22,027) 118,664 — Mortgage-backed securities 80,076 — (12,479) 67,597 — U.S. Small Business Administration securities 17,088 5 (1,316) 15,777 — Total securities available-for-sale 265,989 66 (40,186) 225,869 — SECURITIES HELD-TO-MATURITY Corporate securities 8,500 — (1,025) 7,475 31 Total securities held-to-maturity 8,500 — (1,025) 7,475 31 Total securities $ 274,489 $ 66 $ (41,211) $ 233,344 $ 31 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 |
Schedule of allowance of credit losses | SECURITIES HELD-TO-MATURITY For the Three Months Ended June 30, Corporate Securities 2023 2022 Beginning allowance balance $ 31 $ 72 Recapture for credit losses — (41) Securities charged-off — — Recoveries — — Total ending allowance balance $ 31 $ 31 SECURITIES HELD-TO-MATURITY For the Six Months Ended June 30, Corporate Securities 2023 2022 Beginning allowance balance $ 31 $ — Impact of adopting ASU 2016-13 — 72 Recapture for credit losses — (41) Securities charged-off — — Recoveries — — Total ending allowance balance $ 31 $ 31 |
Schedule of amortized cost of debt securities | June 30, December 31, Corporate securities 2023 2022 BBB/BBB- $ 7,000 $ 8,500 BB+ 1,500 — Total $ 8,500 $ 8,500 |
Summary of pledged securities | June 30, 2023 Purpose or beneficiary Carrying Value Amortized Cost Fair Value State and local government public deposits $ 39,482 $ 45,979 $ 39,482 Interest rate swap counterparties 2,776 2,887 2,776 Federal Reserve Bank - Bank Term Funding Program facility 77,113 91,520 77,113 Total pledged securities $ 119,371 $ 140,386 $ 119,371 |
Schedule of unrealized loss on investments | June 30, 2023 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 $ — $ — $ 15,631 $ (3,522) $ 15,631 $ (3,522) Corporate securities — — 4,158 (842) 4,158 (842) Municipal bonds 5,394 (47) 111,803 (21,980) 117,197 (22,027) Mortgage-backed securities 6,814 (312) 60,783 (12,167) 67,597 (12,479) U.S. Small Business Administration securities 4,879 — 8,507 (1,316) 13,386 (1,316) Total securities available-for-sale 17,087 (359) 200,882 (39,827) 217,969 (40,186) SECURITIES HELD-TO-MATURITY Corporate securities 800 (200) 6,675 (825) 7,475 (1,025) Total securities held-to-maturity 800 (200) 6,675 (825) 7,475 (1,025) Total $ 17,887 $ (559) $ 207,557 $ (40,652) $ 225,444 $ (41,211) 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) |
Schedule of available-for-sale and held-to-maturity securities by contractual maturity | June 30, December 31, 2023 2022 SECURITIES AVAILABLE-FOR-SALE Amortized Fair Amortized Fair U.S. agency securities Cost Value Cost Value Due within one year $ 931 $ 911 $ — $ — Due after one year through five years 3,941 3,435 4,874 4,321 Due after five years through ten years 8,990 7,675 6,989 5,963 Due after ten years 7,290 5,617 9,290 7,004 Subtotal 21,152 17,638 21,153 17,288 Corporate securities Due within one year 1,000 1,014 1,000 997 Due after one year through five years — — 2,497 2,519 Due after five years through ten years 4,000 3,838 4,000 3,763 Due after ten years 1,999 1,341 2,000 1,266 Subtotal 6,999 6,193 9,497 8,545 Municipal bonds Due within one year — — 2,660 2,644 Due after one year through five years 1,026 1,001 1,038 1,012 Due after five years through ten years 6,308 5,783 6,341 5,771 Due after ten years 133,340 111,880 134,161 111,175 Subtotal 140,674 118,664 144,200 120,602 Mortgage-backed securities Federal National Mortgage Association (“FNMA”) 66,597 55,569 68,421 57,358 Federal Home Loan Mortgage Corporation (“FHLMC”) 9,162 8,329 9,290 8,424 Government National Mortgage Association (“GNMA”) 4,317 3,699 4,713 4,184 Subtotal 80,076 67,597 82,424 69,966 U.S. Small Business Administration securities Due within one year 168 163 — — Due after one year through five years 2,325 2,183 2,553 2,407 Due after five years through ten years 3,756 3,486 4,461 3,996 Due after ten years 10,839 9,945 7,505 6,448 Subtotal 17,088 15,777 14,519 12,851 Total securities available-for-sale 265,989 225,869 271,793 229,252 SECURITIES HELD-TO-MATURITY Corporate securities Due after five years through ten years 8,500 7,475 8,500 7,929 Total securities held-to-maturity 8,500 7,475 8,500 7,929 Total securities $ 274,489 $ 233,344 $ 280,293 $ 237,181 |
LOANS RECEIVABLE AND ALLOWANC_2
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS | |
Schedule of accounts, notes, loans and financing receivable | June 30, December 31, REAL ESTATE LOANS 2023 2022 Commercial $ 343,008 $ 334,059 Construction and development 312,093 342,591 Home equity 62,304 55,387 One-to-four-family (excludes loans held for sale) 521,734 469,485 Multi-family 231,675 219,738 Total real estate loans 1,470,814 1,421,260 CONSUMER LOANS Indirect home improvement 557,818 495,941 Marine 72,484 70,567 Other consumer 3,606 3,064 Total consumer loans 633,908 569,572 COMMERCIAL BUSINESS LOANS Commercial and industrial 237,403 196,791 Warehouse lending 30,649 31,229 Total commercial business loans 268,052 228,020 Total loans receivable, gross 2,372,774 2,218,852 ACL for loans (30,350) (27,992) Total loans receivable, net $ 2,342,424 $ 2,190,860 |
Schedule of allowance for credit losses on financing receivables | At or For the Three Months Ended June 30, 2023 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 12,572 $ 13,401 $ 3,964 $ — $ 29,937 (Reversal of) provision for credit losses on loans (265) 1,266 62 — 1,063 Charge-offs — (876) — — (876) Recoveries — 226 — — 226 Net charge-offs — (650) — — (650) Total ending ACL balance $ 12,307 $ 14,017 $ 4,026 $ — $ 30,350 At or For the Three Months Ended June 30, 2022 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 10,560 $ 9,792 $ 3,013 $ — $ 23,365 Provision for (reversal of) credit losses on loans 952 830 (163) — 1,619 Charge-offs — (297) — — (297) Recoveries — 280 — — 280 Net charge-offs — (17) — — (17) Total ending ACL balance $ 11,512 $ 10,605 $ 2,850 $ — $ 24,967 At or For the Six Months Ended June 30, 2023 Real Commercial ACL FOR LOANS Estate Consumer Business Unallocated Total Beginning balance $ 12,123 $ 12,109 $ 3,760 $ — $ 27,992 Provision for credit losses on loans 194 2,957 267 — 3,418 Charge-offs (10) (1,585) (1) — (1,596) Recoveries — 536 — — 536 Net Charge-offs (10) (1,049) (1) — (1,060) Total ending ACL balance $ 12,307 $ 14,017 $ 4,026 $ — $ 30,350 At or For the Six Months Ended June 30, 2022 Real Commercial ACL FOR 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 1,948 527 (4) — 2,471 Charge-offs — (820) — — (820) Recoveries — 540 — — 540 Net charge-offs — (280) — — (280) Total ending ACL balance $ 11,512 $ 10,605 $ 2,850 $ — $ 24,967 |
Schedule of past due financing receivables | June 30, 2023 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 $ — $ — $ — $ — $ 343,008 $ 343,008 $ 1,061 Construction and development — — — — 312,093 312,093 — Home equity 27 150 12 189 62,115 62,304 50 One-to-four-family — — 209 209 521,525 521,734 209 Multi-family — — — — 231,675 231,675 — Total real estate loans 27 150 221 398 1,470,416 1,470,814 1,320 CONSUMER LOANS Indirect home improvement 1,216 930 723 2,869 554,949 557,818 1,833 Marine 145 63 73 281 72,203 72,484 471 Other consumer 8 11 — 19 3,587 3,606 3 Total consumer loans 1,369 1,004 796 3,169 630,739 633,908 2,307 COMMERCIAL BUSINESS LOANS Commercial and industrial — — 2,117 2,117 235,286 237,403 5,645 Warehouse lending — — — — 30,649 30,649 — Total commercial business loans — — 2,117 2,117 265,935 268,052 5,645 Total loans $ 1,396 $ 1,154 $ 3,134 $ 5,684 $ 2,367,090 $ 2,372,774 $ 9,272 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 ___________________________ (1) Includes past due loans as applicable. |
Summarize risk rated loan balances | June 30, 2023 Revolving Loans REAL ESTATE LOANS Term Loans by Year of Origination Converted Commercial 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 18,901 $ 88,035 $ 76,437 $ 48,519 $ 28,338 $ 70,116 $ — $ 329 $ 330,675 Watch — 9,507 — — 453 — 16 — 9,976 Special mention — — — — 417 — — — 417 Substandard — — — — — 1,940 — — 1,940 Total commercial 18,901 97,542 76,437 48,519 29,208 72,056 16 329 343,008 Construction and development Pass 51,332 177,805 66,261 16,102 — 593 — — 312,093 Total construction and development 51,332 177,805 66,261 16,102 — 593 — — 312,093 Home equity Pass 2,042 1,716 1,606 6,672 11 2,345 47,862 — 62,254 Substandard — — — — — 39 11 — 50 Total home equity 2,042 1,716 1,606 6,672 11 2,384 47,873 — 62,304 Home equity gross charge-offs — — — — — — 10 — 10 One-to-four-family Pass 59,664 165,085 125,437 80,959 33,353 53,756 — 477 518,731 Watch — 871 — — — — — — 871 Substandard — — — — — 2,132 — — 2,132 Total one-to-four-family 59,664 165,956 125,437 80,959 33,353 55,888 — 477 521,734 Multi-family Pass 4,426 34,254 78,174 47,901 38,398 28,522 — — 231,675 Total multi-family 4,426 34,254 78,174 47,901 38,398 28,522 — — 231,675 Total real estate loans $ 136,365 $ 477,273 $ 347,915 $ 200,153 $ 100,970 $ 159,443 $ 47,889 $ 806 $ 1,470,814 June 30, 2023 Revolving Loans CONSUMER LOANS Term Loans by Year of Origination Converted Indirect home improvement 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 109,645 $ 236,709 $ 106,692 $ 40,712 $ 26,991 $ 35,229 $ 7 $ — $ 555,985 Substandard 100 635 489 193 247 169 — — 1,833 Total indirect home improvement 109,745 237,344 107,181 40,905 27,238 35,398 7 — 557,818 Indirect home improvement gross charge-offs 31 511 194 113 104 228 — — 1,181 Marine Pass 8,001 25,589 10,717 14,130 5,523 8,053 — — 72,013 Substandard — — 25 — 147 299 — — 471 Total marine 8,001 25,589 10,742 14,130 5,670 8,352 — — 72,484 Marine gross charge-offs — 47 93 — 7 182 — — 329 Other consumer Pass 101 707 244 115 21 231 2,184 — 3,603 Substandard — — — — — — 3 — 3 Total other consumer 101 707 244 115 21 231 2,187 — 3,606 Other consumer gross charge-offs — 2 5 — — — 68 — 75 Total consumer loans $ 117,847 $ 263,640 $ 118,167 $ 55,150 $ 32,929 $ 43,981 $ 2,194 $ — $ 633,908 June 30, 2023 COMMERCIAL Revolving Loans BUSINESS LOANS Term Loans by Year of Origination Converted Commercial and industrial 2023 2022 2021 2020 2019 Prior Revolving Loans to Term Total Loans Pass $ 11,976 $ 31,100 $ 24,364 $ 12,793 $ 5,661 $ 11,506 $ 116,799 $ 92 $ 214,291 Watch 194 — 601 2,649 — 1,157 6,563 — 11,164 Special mention — — — — 566 270 1,135 — 1,971 Substandard 3,529 — 1,565 1,477 1,781 173 1,452 — 9,977 Total commercial and industrial 15,699 31,100 26,530 16,919 8,008 13,106 125,949 92 237,403 Commercial and industrial gross charge-offs — — 1 — — — — — 1 Warehouse lending Pass — — — — — — 28,391 — 28,391 Watch — — — — — — 2,258 — 2,258 Total warehouse lending — — — — — — 30,649 — 30,649 Total commercial business loans $ 15,699 $ 31,100 $ 26,530 $ 16,919 $ 8,008 $ 13,106 $ 156,598 $ 92 $ 268,052 TOTAL LOANS RECEIVABLE, GROSS Pass $ 266,088 $ 761,000 $ 489,932 $ 267,903 $ 138,296 $ 210,351 $ 195,243 $ 898 $ 2,329,711 Watch 194 10,378 601 2,649 453 1,157 8,837 — 24,269 Special mention — — — — 983 270 1,135 — 2,388 Substandard 3,629 635 2,079 1,670 2,175 4,752 1,466 — 16,406 Total loans receivable, gross $ 269,911 $ 772,013 $ 492,612 $ 272,222 $ 141,907 $ 216,530 $ 206,681 $ 898 $ 2,372,774 Total gross charge-offs $ 31 $ 560 $ 293 $ 113 $ 111 $ 410 $ 78 $ — $ 1,596 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 |
Schedule of amortized cost basis of loans | June 30, 2023 December 31, 2022 Nonaccrual with Nonaccrual with Total Nonaccrual with Nonaccrual with Total REAL ESTATE LOANS No ACL ACL Nonaccrual No ACL ACL Nonaccrual Commercial $ 1,061 $ — $ 1,061 $ — $ — $ — Home equity 50 — 50 46 — 46 One-to-four-family 209 — 209 920 — 920 1,320 — 1,320 966 — 966 CONSUMER LOANS Indirect home improvement — 1,833 1,833 — 1,076 1,076 Marine — 471 471 — 267 267 Other consumer — 3 3 — 9 9 — 2,307 2,307 — 1,352 1,352 COMMERCIAL BUSINESS LOANS Commercial and industrial — 5,645 5,645 — 6,334 6,334 Total $ 1,320 $ 7,952 $ 9,272 $ 966 $ 7,686 $ 8,652 |
Schedule of amortized cost basis of collateral dependent impaired loans | June 30, 2023 December 31, 2022 Commercial Residential Other Residential Other REAL ESTATE LOANS Real Estate Real Estate Total Real Estate Total Commercial $ 1,061 $ — $ — $ 1,061 $ — $ — $ — Home equity — 50 — 50 46 — 46 One-to-four-family — 209 — 209 920 — 920 1,061 259 — 1,320 966 — 966 CONSUMER LOANS Indirect home improvement — — 1,833 1,833 — 1,076 1,076 Marine — — 471 471 — 267 267 — — 2,304 2,304 — 1,343 1,343 COMMERCIAL BUSINESS LOANS Commercial and industrial — — 5,645 5,645 — 6,334 6,334 Total $ 1,061 $ 259 $ 7,949 $ 9,269 $ 966 $ 7,677 $ 8,643 |
SERVICING RIGHTS (Tables)
SERVICING RIGHTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Summary of servicing rights activity | At or For the Three Months Ended June 30, 2023 2022 Beginning balance, at the lower of cost or fair value $ 17,599 $ 18,041 Additions 920 1,460 MSR amortized (894) (985) Recovery of servicing rights 2 — Ending balance, at the lower of cost or fair value $ 17,627 $ 18,516 At or For the Six Months Ended June 30, 2023 2022 Beginning balance, at the lower of cost or fair value $ 18,017 $ 16,970 Additions 1,325 4,010 MSR amortized (1,715) (2,465) Recovery of servicing rights — 1 Ending balance, at the lower of cost or fair value $ 17,627 $ 18,516 |
Key economic assumptions and the sensitivity of the current fair value for single family mortgage servicing rights | June 30, 2023 December 31, 2022 Aggregate portfolio principal balance $ 2,801,966 $ 2,783,458 Weighted average rate of note 3.5 % 3.4 % At June 30, 2023 Base 0.5% Adverse Rate Change 1.0% Adverse Rate Change Conditional prepayment rate 7.1 % 7.7 % 8.9 % Fair value MSR $ 37,486 $ 36,845 $ 35,649 Percentage of MSR 1.3 % 1.3 % 1.3 % Discount rate 9.6 % 10.1 % 10.6 % Fair value MSR $ 37,486 $ 36,651 $ 35,851 Percentage of MSR 1.3 % 1.3 % 1.3 % 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 % |
Mortgage servicing rights. | |
Fair Value, Off-balance Sheet Risks, Disclosure Information [Line Items] | |
Schedule of valuation assumptions | At June 30, At December 31, Key assumptions: 2023 2022 Weighted average discount rate 9.6 % 9.6 % Conditional prepayment rate (“CPR”) 7.1 % 8.2 % Weighted average life in years 8.4 7.8 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DERIVATIVES | |
Schedule of cumulative-basis adjustment for fair value hedges | Line item in the statement of financial position in which the hedged Item is included Hedged Assets June 30, 2023 Investment securities (1) $ 55,833 $ 4,167 Total $ 55,833 $ 4,167 December 31, 2022 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 June 30, 2023, the amortized cost basis of the closed portfolios used in these hedging relationships was $240.1 million; the cumulative basis adjustments associated with these hedging relationships was $4.2 million; and the amounts of the designated hedged items was $60.0 million. |
Schedule of derivative instruments | June 30, 2023 Fair Value Cash flow hedges: Notional Asset Liability Interest rate swaps - brokered deposits $ 180,000 $ 7,361 $ — Fair value hedges: Interest rate swaps - securities 60,000 4,149 — Non-hedging derivatives: Fallout adjusted interest rate lock commitments with customers 34,260 273 — Mandatory and best effort forward commitments with investors 7,856 123 — Forward TBA mortgage-backed securities 36,000 192 — Customer swap positions 882 — 79 Dealer offsets to customer swap positions 882 81 — 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 — |
Schedule of effect of fair value and cash flow hedge accounting on the income statement | Three Months Ended June 30, 2023 2022 Interest Interest Interest Interest Expense Income Expense Income Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 7,610 $ 2,651 $ 1,557 $ 1,670 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items — (1,191) — (933) Recognized on derivatives designated as hedging instruments — 1,554 — 831 Net income (expense) recognized on fair value hedges $ — $ 363 $ — $ (102) Net gain on cash flow hedging relationships: Interest rate swaps - brokered deposits and borrowings Realized gains (pre-tax) reclassified from AOCI into net income $ 1,271 $ — $ 55 $ — Net income recognized on cash flow hedges $ 1,271 $ — $ 55 $ — Six Months Ended June 30, 2023 2022 Interest Interest Interest Interest Expense Income Expense Income Deposits Securities Deposits Securities Total amounts presented on the Consolidated Statements of Income $ 14,234 $ 5,271 $ 2,842 $ 3,249 Net gains (losses) on fair value hedging relationships: Interest rate swaps - securities Recognized on hedged items — 597 — (933) Recognized on derivatives designated as hedging instruments — 59 — 831 Net income (expense) recognized on fair value hedges $ — $ 656 $ — $ (102) 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 $ 2,178 $ — $ (46) $ — Net income (expense) recognized on cash flow hedges $ 2,178 $ — $ (46) $ — |
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 of Recognized Statement of Statement of Financial Cash Collateral Offsetting of derivative assets Assets Financial Position Financial Position Instruments Received Net Amount June 30, 2023 Interest rate swaps $ 11,591 $ — $ 11,591 $ — $ — $ 11,591 December 31, 2022 Interest rate swaps $ 9,870 $ — $ 9,870 $ — $ — $ 9,870 |
LEASES (Tables)
LEASES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
LEASES | |
Summary of lease cost | Three Months Ended Three Months Ended Lease cost: June 30, 2023 June 30, 2022 Operating lease cost $ 471 $ 348 Short-term lease cost 5 7 Total lease cost $ 476 $ 355 Six Months Ended Six Months Ended Lease cost: June 30, 2023 June 30, 2022 Operating lease cost $ 881 $ 691 Short-term lease cost 9 8 Total lease cost $ 890 $ 699 |
Supplemental information related to operating leases | At or For the At or For the Cash paid for amounts included in the Three Months Ended Three Months Ended measurement of lease liabilities: June 30, 2023 June 30, 2022 Operating cash flows from operating leases $ 482 $ 357 Weighted average remaining lease term- operating leases 4.4 years 4.7 years Weighted average discount rate- operating leases 2.92 % 2.05 % At or For the At or For the Cash paid for amounts included in the Six Months Ended Six Months Ended measurement of lease liabilities: June 30, 2023 June 30, 2022 Operating cash flows from operating leases $ 906 $ 703 Weighted average remaining lease term- operating leases 4.4 years 4.7 years Weighted average discount rate- operating leases 2.92 % 2.05 % |
Summary of maturities of operating lease liabilities | Remainder of 2023 $ 964 2024 1,933 2025 1,628 2026 1,475 2027 1,173 Thereafter 1,383 Total lease payments 8,556 Less imputed interest (866) Total $ 7,690 |
OTHER REAL ESTATE OWNED ("ORE_2
OTHER REAL ESTATE OWNED ("OREO") (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
OTHER REAL ESTATE OWNED ("OREO") | |
Schedule of other real estate owned | At or For the Three Months Ended At or For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 Beginning balance $ 570 $ — $ 570 $ — Loans transferred to OREO — 145 — 145 Ending balance $ 570 $ 145 $ 570 $ 145 |
DEPOSITS (Tables)
DEPOSITS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
DEPOSITS | |
Schedule of deposit liabilities | June 30, December 31, 2023 2022 Noninterest-bearing checking $ 658,440 $ 537,938 Interest-bearing checking (1) 183,012 135,127 Savings 169,013 134,358 Money market (2) 419,308 574,290 Certificates of deposit less than $100,000 (3) 473,026 440,785 Certificates of deposit of $100,000 through $250,000 358,238 195,447 Certificates of deposit of $250,000 and over 87,499 93,560 Escrow accounts related to mortgages serviced (4) 16,772 16,236 Total $ 2,365,308 $ 2,127,741 ________________________ (1) Includes $0 and $2.3 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (2) Includes $51,000 and $59.7 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (3) Includes $295.7 million and $332.0 million of brokered deposits at June 30, 2023 and December 31, 2022, respectively. (4) Noninterest-bearing accounts. |
Schedule of maturities of time deposits for future periods | Maturing in 2023 $ 382,635 Maturing in 2024 339,314 Maturing in 2025 130,136 Maturing in 2026 45,574 Maturing in 2027 20,697 Thereafter 408 Total $ 918,764 |
Schedule of interest expense by deposit category | Three Months Ended Six Months Ended June 30, June 30, 2023 2022 2023 2022 Interest-bearing checking $ 370 $ 92 $ 468 $ 253 Savings and money market 1,344 711 2,542 1,094 Certificates of deposit 5,896 754 11,224 1,495 Total $ 7,610 $ 1,557 $ 14,234 $ 2,842 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
COMMITMENTS AND CONTINGENCIES | |
Schedule of commitments to extend credit | COMMITMENTS TO EXTEND CREDIT June 30, December 31, REAL ESTATE LOANS 2023 2022 Commercial $ 2,843 $ 1,260 Construction and development 168,952 201,708 One-to-four-family (includes locks for saleable loans) 42,270 10,713 Home equity 96,279 77,566 Multi-family 2,958 2,999 Total real estate loans 313,302 294,246 CONSUMER LOANS 32,731 39,406 COMMERCIAL BUSINESS LOANS Commercial and industrial 168,593 150,109 Warehouse lending 47,866 64,781 Total commercial business loans 216,459 214,890 Total commitments to extend credit $ 562,492 $ 548,542 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
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 June 30, 2023 Securities available-for-sale: Level 1 Level 2 Level 3 Total U.S. agency securities $ — $ 17,638 $ — $ 17,638 Corporate securities — 6,193 — 6,193 Municipal bonds — 118,664 — 118,664 Mortgage-backed securities — 67,597 — 67,597 U.S. Small Business Administration securities — 15,777 — 15,777 Mortgage loans held for sale, at fair value — 16,714 — 16,714 Loans receivable, at fair value — 14,349 — 14,349 Derivatives: Interest rate lock commitments with customers — — 273 273 Forward TBA mortgage-backed securities — 192 — 192 Mandatory and best effort forward commitments with investors — — 123 123 Interest rate swaps — 11,591 — 11,591 Total assets measured at fair value $ — $ 268,715 $ 396 $ 269,111 Financial Liabilities Derivatives: Interest rate swaps $ — $ (79) $ — $ (79) Total liabilities measured at fair value $ — $ (79) $ — $ (79) 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 swaps — 9,870 — 9,870 Interest rate lock commitments with customers — — 107 107 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) |
Schedule of valuation allowance for impairment of recognized servicing assets | June 30, 2023 Level 1 Level 2 Level 3 Total MSR $ — $ — $ 37,486 $ 37,486 |
Schedule of fair value reconciliation - Level 3 on recurring basis | Purchases Net change in Net change in Three Months Ended Beginning and Sales and Ending fair value for fair value for June 30, 2023 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 565 $ 948 $ (1,240) $ 273 $ (292) $ — Individual forward sale commitments with investors (13) 188 (52) 123 136 — June 30, 2022 Interest rate lock commitments with customers $ 250 $ 22 $ (88) $ 184 $ (66) $ — Individual forward sale commitments with investors 885 2,931 (3,298) 518 (367) — Purchases Net change in Net change in Six Months Ended Beginning and Sales and Ending fair value for fair value for June 30, 2023 Balance Issuances Settlements Balance gains/(losses) (1) gains/(losses) (2) Interest rate lock commitments with customers $ 107 $ 1,942 $ (1,776) $ 273 $ 166 $ — Individual forward sale commitments with investors (38) 410 (249) 123 161 — June 30, 2022 Interest rate lock commitments with customers $ 757 $ 2,117 $ (2,690) $ 184 $ (573) $ — Individual forward sale commitments with investors 808 5,073 (5,363) 518 (290) — __________________________ (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 (loss). |
Schedule of fair value, by balance sheet grouping | June 30, December 31, 2023 2022 Financial Assets Carrying Fair Carrying Fair Level 1 inputs: Amount Value Amount Value Cash and cash equivalents $ 132,099 $ 132,099 $ 41,437 $ 41,437 Certificates of deposit at other financial institutions 14,747 14,747 4,712 4,712 Level 2 inputs: Securities available-for-sale, at fair value 225,869 225,869 229,252 229,252 Securities held-to-maturity, gross 8,500 7,475 8,500 7,929 Loans held for sale, at fair value 16,714 16,714 20,093 20,093 FHLB stock, at cost 6,555 6,555 10,611 10,611 Forward TBA mortgage-backed securities 192 192 164 164 Loans receivable, at fair value 14,349 14,349 14,035 14,035 Interest rate swaps 11,591 11,591 9,870 9,870 Accrued interest receivable 12,244 12,244 11,144 11,144 Level 3 inputs: Loans receivable, gross 2,358,425 2,280,219 2,204,817 2,153,769 MSR, held at lower of cost or fair value 17,627 37,486 18,017 35,478 Fair value interest rate locks with customers 273 273 107 107 Mandatory and best effort forward commitments with investors 123 123 — — Financial Liabilities Level 2 inputs: Deposits 2,365,308 2,347,200 2,127,741 2,105,926 Borrowings 199,896 199,400 186,528 186,188 Subordinated notes, excluding unamortized debt issuance costs 50,000 47,455 50,000 44,500 Accrued interest payable 3,381 3,381 2,270 2,270 Interest rate swaps 79 79 — — 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] | |
Schedule of valuation assumptions | Level 3 Significant Weighted Average Range Fair Value Valuation Unobservable June 30, December 31, Instruments Techniques Inputs Range 2023 2022 RECURRING Interest rate lock commitments with customers Quoted market prices Pull-through expectations 80% - 99% 91.3 % 92.5 % Individual forward sale commitments with investors Quoted market prices Pull-through expectations 80% - 99% 91.3 % 92.5 % NONRECURRING MSR Industry sources Pre-payment speeds 0% - 50% 7.1 % 8.2 % |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
EARNINGS PER SHARE | |
Schedule of earnings per share, basic and diluted | At or For the Three Months Ended June 30, At or For the Six Months Ended June 30, Numerator 2023 2022 2023 2022 Net income $ 9,116 $ 6,699 $ 17,328 $ 13,569 Dividends and undistributed earnings allocated to participating securities (160) (138) (307) (265) Net income available to common shareholders $ 8,956 $ 6,561 $ 17,021 $ 13,304 Denominator (shown as actual): Basic weighted average common shares outstanding 7,637,210 7,776,939 7,635,647 7,899,522 Dilutive shares 109,126 119,271 133,870 131,214 Diluted weighted average common shares outstanding 7,746,336 7,896,210 7,769,517 8,030,736 Basic earnings per share $ 1.17 $ 0.84 $ 2.23 $ 1.68 Diluted earnings per share $ 1.16 $ 0.83 $ 2.19 $ 1.66 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. 67,675 68,008 50,555 52,364 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
STOCK-BASED COMPENSATION | |
Summary of stock option awards | Weighted-Average Weighted- Remaining Average Contractual Term In Aggregate Shares Exercise Price Years Intrinsic Value Outstanding at January 1, 2023 647,832 $ 26.67 6.84 $ 4,627,255 Granted — $ — — — Less exercised 6,225 $ 8.45 — $ 130,192 Less forfeited or expired 23,295 34.26 — — Outstanding at June 30, 2023 618,312 $ 26.57 6.35 $ 2,796,274 Expected to vest, assuming a 0.31% annual forfeiture rate at June 30, 2023 (1) 610,295 $ 26.55 6.27 $ 2,770,086 Exercisable at June 30, 2023 302,096 $ 24.18 5.04 $ 1,924,864 ____________________________ (1) Forfeiture rate has been calculated and estimated to assume a forfeiture of 3.1% of the options over 10 years . |
Summary of nonvested awards | Weighted-Average Grant-Date Fair Value Nonvested Shares Shares Per Share Nonvested at January 1, 2023 118,530 $ 28.85 Granted — — Less vested 1,453 — Less forfeited or expired 4,812 33.76 Nonvested at June 30, 2023 112,265 $ 28.64 |
REGULATORY CAPITAL (Tables)
REGULATORY CAPITAL (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
REGULATORY CAPITAL | |
Schedule of compliance with regulatory capital requirements under banking regulations | The following table compares the Bank’s actual capital amounts and ratios at June 30, 2023 to their minimum regulatory capital requirements and well capitalized regulatory capital at that date: 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 June 30, 2023 Total risk-based capital (to risk-weighted assets) $ 322,010 12.93 % $ 199,223 8.00 % $ 261,480 10.50 % $ 249,028 10.00 % Tier 1 risk-based capital (to risk-weighted assets) $ 290,867 11.68 % $ 149,417 6.00 % $ 211,674 8.50 % $ 199,223 8.00 % Tier 1 leverage capital (to average assets) $ 290,867 10.31 % $ 112,816 4.00 % $ N/A N/A $ 141,020 5.00 % CET 1 capital (to risk-weighted assets) $ 290,867 11.68 % $ 112,063 4.50 % $ 174,320 7.00 % $ 161,868 6.50 % |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
BUSINESS SEGMENTS | |
Schedule of segment reporting information, by segment | At or For the Three Months Ended June 30, 2023 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 28,269 $ 3,283 $ 31,552 Provision for credit losses on loans (629) (87) (716) Noninterest income 2,706 2,127 4,833 Noninterest expense (18,950) (5,254) (24,204) Income before provision for income taxes 11,396 69 11,465 Provision for income taxes (2,335) (14) (2,349) Net income $ 9,061 $ 55 $ 9,116 Total average assets for period ended $ 2,313,228 $ 528,662 $ 2,841,890 Full-time employees ("FTEs") 444 137 581 At or For the Three Months Ended June 30, 2022 Condensed income statement: Commercial and Consumer Banking Home Lending Total Net interest income (1) $ 22,084 $ 2,645 $ 24,729 Provision for credit losses on loans (719) (1,152) (1,871) Noninterest income 2,125 2,230 4,355 Noninterest expense (14,231) (4,698) (18,929) Income before (provision) benefit for income taxes 9,259 (975) 8,284 (Provision) benefit for income taxes (1,804) 219 (1,585) Net income (loss) $ 7,455 $ (756) $ 6,699 Total average assets for period ended $ 1,957,630 $ 398,690 $ 2,356,320 FTEs 389 148 537 At or For the Six Months Ended June 30, 2023 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 55,769 $ 6,445 $ 62,214 Provision for credit losses on loans (2,118) (706) (2,824) Noninterest income (2) 5,086 4,966 10,052 Noninterest expense (37,560) (10,168) (47,728) Income before provision for income taxes 21,177 537 21,714 Provision for income taxes (4,278) (108) (4,386) Net income $ 16,899 $ 429 $ 17,328 Total average assets for period ended $ 2,281,815 $ 510,419 $ 2,792,234 FTEs 444 137 581 At or For the Six Months Ended June 30, 2022 Commercial and Consumer Condensed income statement: Banking Home Lending Total Net interest income (1) $ 42,362 $ 5,089 $ 47,451 Provision for credit losses on loans (1,916) (998) (2,914) Noninterest income 4,630 5,601 10,231 Noninterest expense (28,407) (9,589) (37,996) Income before provision for income taxes 16,669 103 16,772 Provision for income taxes (3,182) (21) (3,203) Net income $ 13,487 $ 82 $ 13,569 Total average assets for period ended $ 1,921,426 $ 392,107 $ 2,313,533 FTEs 389 148 537 _____________________________ (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. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
GOODWILL AND OTHER INTANGIBLE ASSETS | |
Schedule of changes in other intangible assets | Other Intangible Assets Accumulated Gross CDI Amortization Net CDI Balance, December 31, 2021 $ 7,490 $ (3,430) $ 4,060 Amortization — (691) (691) Balance, December 31, 2022 7,490 (4,121) 3,369 Additions as a result of the Branch Purchase 17,438 — 17,438 Amortization — (1,482) (1,482) Balance, June 30, 2023 $ 24,928 $ (5,603) $ 19,325 |
Schedule of amortization expense | Remainder of 2023 $ 1,982 2024 3,633 2025 3,191 2026 2,846 2027 2,500 Thereafter 5,173 Total $ 19,325 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | |
Schedule of noninterest income, segregated by revenue streams in-scope and out-of-scope and/or immaterial to Topic 606 | At or For the Three Months Ended June 30, For the Six Months Ended June 30, Noninterest income 2023 2022 2023 2022 In-scope of Topic 606: Debit card interchange fees $ 882 $ 584 $ 1,520 $ 1,127 Deposit service and account maintenance fees 388 225 664 441 Noninterest income (in-scope of Topic 606) 1,270 809 2,184 1,568 Noninterest income (out-of-scope and/or immaterial to Topic 606) 3,563 3,546 7,868 8,663 Total noninterest income $ 4,833 $ 4,355 $ 10,052 $ 10,231 |
BASIS OF PRESENTATION AND SUM_3
BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) | 6 Months Ended |
Jun. 30, 2023 item segment Office | |
Schedule of Accounting Policies [Line Items] | |
Number of operating segments | segment | 2 |
Puget Sound | |
Schedule of Accounting Policies [Line Items] | |
Number of administrative offices that originates loans and accept deposits | Office | 1 |
Retail Deposit | Pacific Northwest | |
Schedule of Accounting Policies [Line Items] | |
Number of bank branches | item | 27 |
BUSINESS COMBINATION (Details)
BUSINESS COMBINATION (Details) | 6 Months Ended | ||
Feb. 24, 2023 USD ($) item | Jun. 30, 2023 USD ($) | Dec. 31, 2022 USD ($) | |
Business Acquisition | |||
Total deposits | $ 2,365,308,000 | $ 2,127,741,000 | |
Acquisition settled by cash | $ 336,157,000 | ||
Number of loans acquired, purchased financial assets with credit deterioration | 0 | ||
Number of loans expected to be uncollectable | 0 | ||
Goodwill | $ 3,592,000 | $ 2,312,000 | |
Workforce and customer relationships | |||
Business Acquisition | |||
Goodwill | $ 1,300,000 | ||
Amortization period | 15 years | ||
Columbia State Bank | |||
Business Acquisition | |||
Number of bank branches | item | 7 | ||
Number of bank owned branches acquired | item | 6 | ||
Total deposits | $ 425,500,000 | ||
Deposit premium, core deposits (as a percentage) | 4.15% | ||
Deposit premium, public funds (as a percentage) | 2.50% | ||
Deposit premium | $ 16,400,000 | ||
Acquisition settled by cash | $ 334,700,000 | ||
Fair values refinement period | 1 year | ||
Number of leases acquired with the bank branches | item | 1 | ||
Loans and associated interest receivables | $ 66,600,000 | ||
Facilities and other assets, net of other liabilities | $ 6,300,000 | ||
Amortization period | 10 years | 10 years | |
Columbia State Bank | Acquired Book Value | |||
Business Acquisition | |||
Loans receivable | $ 66,093,000 | ||
Columbia State Bank | Fair Value Adjustments | |||
Business Acquisition | |||
Loans receivable | (2,902,000) | ||
Goodwill | 1,280,000 | ||
Columbia State Bank | Carrying Amount | |||
Business Acquisition | |||
Loans receivable | 63,191,000 | ||
Goodwill | $ 1,280,000 |
BUSINESS COMBINATION - Amounts
BUSINESS COMBINATION - Amounts Recognized for Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Feb. 24, 2023 | Dec. 31, 2022 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Goodwill | $ 3,592 | $ 2,312 | |
Acquired Book Value | Columbia State Bank | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Cash and cash equivalents | $ 336,157 | ||
Loans receivable | 66,093 | ||
Premises and equipment | 6,342 | ||
Accrued interest receivable | 530 | ||
Other assets | 11 | ||
Total assets acquired | 409,133 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||
Noninterest-bearing accounts | 225,567 | ||
Interest-bearing accounts | 199,898 | ||
Total deposits | 425,465 | ||
Accrued interest payable | 4 | ||
Other liabilities | 28 | ||
Total liabilities assumed | 425,497 | ||
Fair Value Adjustments | Columbia State Bank | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Loans receivable | (2,902) | ||
Core deposit intangible ("CDI") | 17,438 | ||
Goodwill | 1,280 | ||
Total assets acquired | 15,816 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||
Interest-bearing accounts | (548) | ||
Total deposits | (548) | ||
Total liabilities assumed | (548) | ||
Carrying Amount | Columbia State Bank | |||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets [Abstract] | |||
Cash and cash equivalents | 336,157 | ||
Loans receivable | 63,191 | ||
Premises and equipment | 6,342 | ||
Accrued interest receivable | 530 | ||
Core deposit intangible ("CDI") | 17,438 | ||
Goodwill | 1,280 | ||
Other assets | 11 | ||
Total assets acquired | 424,949 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities [Abstract] | |||
Noninterest-bearing accounts | 225,567 | ||
Interest-bearing accounts | 199,350 | ||
Total deposits | 424,917 | ||
Accrued interest payable | 4 | ||
Other liabilities | 28 | ||
Total liabilities assumed | $ 424,949 |
INVESTMENTS - Securities Reconc
INVESTMENTS - Securities Reconciliation (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 |
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | $ 265,989 | $ 271,793 | |||
Unrealized Gains | 66 | 48 | |||
Unrealized Losses | (40,186) | (42,589) | |||
Securities available-for-sale, at fair value | 225,869 | 229,252 | |||
SECURITIES HELD-TO-MATURITY | |||||
Amortized Cost | 8,500 | 8,500 | |||
Unrealized losses | (1,025) | (571) | |||
Securities held-to-maturity, at fair value | 7,475 | 7,929 | |||
Allowance for credit losses | 31 | 31 | |||
Total securities | |||||
Amortized cost | 274,489 | 280,293 | |||
Unrealized gains | 66 | 48 | |||
Unrealized losses | (41,211) | (43,160) | |||
Total securities, at fair value | 233,344 | 237,181 | |||
Allowance for credit losses | 31 | 31 | |||
U.S. agency securities | |||||
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | 21,152 | 21,153 | |||
Unrealized Gains | 8 | ||||
Unrealized Losses | (3,522) | (3,865) | |||
Securities available-for-sale, at fair value | 17,638 | 17,288 | |||
Corporate securities | |||||
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | 6,999 | 9,497 | |||
Unrealized Gains | 36 | 27 | |||
Unrealized Losses | (842) | (979) | |||
Securities available-for-sale, at fair value | 6,193 | 8,545 | |||
SECURITIES HELD-TO-MATURITY | |||||
Amortized Cost | 8,500 | 8,500 | |||
Unrealized losses | (1,025) | (571) | |||
Securities held-to-maturity, at fair value | 7,475 | 7,929 | |||
Allowance for credit losses | 31 | $ 31 | 31 | $ 31 | $ 72 |
Municipal bonds | |||||
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | 140,674 | 144,200 | |||
Unrealized Gains | 17 | 21 | |||
Unrealized Losses | (22,027) | (23,619) | |||
Securities available-for-sale, at fair value | 118,664 | 120,602 | |||
Mortgage-backed securities | |||||
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | 80,076 | 82,424 | |||
Unrealized Losses | (12,479) | (12,458) | |||
Securities available-for-sale, at fair value | 67,597 | 69,966 | |||
U.S. Small Business Administration securities | |||||
SECURITIES AVAILABLE-FOR-SALE | |||||
Amortized Cost | 17,088 | 14,519 | |||
Unrealized Gains | 5 | ||||
Unrealized Losses | (1,316) | (1,668) | |||
Securities available-for-sale, at fair value | $ 15,777 | $ 12,851 |
INVESTMENTS - Narrative (Detail
INVESTMENTS - Narrative (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2023 USD ($) security | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) security | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) security | |
INVESTMENTS | |||||
Held-to maturity securities with unrealized losses of less than one year | security | 1 | 1 | 7 | ||
Held-to maturity securities with unrealized losses of more than one year | security | 6 | 0 | |||
Available-for-sale securities with unrealized losses of less than one year | security | 13 | 13 | 88 | ||
Available-for-sale securities with unrealized losses of more than one year | security | 175 | 106 | |||
Proceeds from sale of available-for-sale securities | $ 0 | $ 0 | $ 0 | $ 0 | |
Amount of credit impairment | 0 | $ 0 | |||
Accrued interest receivable on held to maturity debt securities | 116,000 | 116,000 | 116,000 | ||
Accrued interest receivable on available-for-sale debt securities | 1,100,000 | 1,100,000 | $ 1,200,000 | ||
Debt securities held to maturity classified as nonaccrual or 90 days or more past due and still accruing | $ 0 | $ 0 |
INVESTMENTS - Allowance for Cre
INVESTMENTS - Allowance for Credit Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Securities, Held-to-Maturity, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||||
Beginning allowance balance | $ 31 | |||
Total ending allowance balance | $ 31 | 31 | ||
Corporate securities | ||||
Debt Securities, Held-to-Maturity, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||||
Beginning allowance balance | 31 | $ 72 | 31 | |
Provision (recapture) for credit losses | (41) | $ (41) | ||
Securities charged-off | ||||
Recoveries | ||||
Total ending allowance balance | $ 31 | 31 | 31 | 31 |
Corporate securities | Accounting Standards Update 2016-13 | ||||
Debt Securities, Held-to-Maturity, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward] | ||||
Beginning allowance balance | ||||
Total ending allowance balance | $ 72 | $ 72 |
INVESTMENTS - Amortized Cost of
INVESTMENTS - Amortized Cost of Debt Securities Held-to-Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized Cost | $ 8,500 | $ 8,500 |
Corporate securities | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized Cost | 8,500 | 8,500 |
BBB/BBB- | Corporate securities | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized Cost | 7,000 | $ 8,500 |
BB+ | Corporate securities | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized Cost | $ 1,500 |
INVESTMENTS - Investment Securi
INVESTMENTS - Investment Securities (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Carrying Value | $ 119,371 |
Amortized Cost | 140,386 |
Fair Value | 119,371 |
State and local government public deposits | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Carrying Value | 39,482 |
Amortized Cost | 45,979 |
Fair Value | 39,482 |
Interest rate swap counterparties | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Carrying Value | 2,776 |
Amortized Cost | 2,887 |
Fair Value | 2,776 |
Federal Reserve Bank - Bank Term Funding Program facility | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | |
Carrying Value | 77,113 |
Amortized Cost | 91,520 |
Fair Value | $ 77,113 |
INVESTMENTS - Investments with
INVESTMENTS - Investments with Unrealized Losses Policy (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | $ 17,087 | $ 91,176 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 200,882 | 133,700 |
Securities available-for-sale, Unrealized loss position, Fair Value | 217,969 | 224,876 |
Securities held-to-maturity, Unrealized loss position, Fair Value, Less than 12 Months | 800 | 7,929 |
Securities held-to-maturity, Unrealized loss position, Fair Value, 12 Months or Longer | 6,675 | |
Securities held-to-maturity, Unrealized loss position, Fair Value | 7,475 | 7,929 |
Total securities, Unrealized loss position, Fair Value, Less than 12 Months | 17,887 | 99,105 |
Total securities, Unrealized loss position, Fair Value, 12 Months or Longer | 207,557 | 133,700 |
Total securities, Unrealized loss position, Fair Value | 225,444 | 232,805 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (359) | (10,266) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (39,827) | (32,323) |
Securities available-for-sale, Unrealized losses | (40,186) | (42,589) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, Less than 12 Months | (200) | (571) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, 12 Months or Longer | (825) | |
Securities held-to-maturity, Unrealized losses | (1,025) | (571) |
Unrealized loss position, Less than 12 Months, Unrealized Losses | (559) | (10,837) |
Unrealized loss position, 12 Months or Longer, Unrealized Losses | (40,652) | (32,323) |
Unrealized loss position, Unrealized Losses | (41,211) | (43,160) |
U.S. agency securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 3,823 | |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 15,631 | 13,465 |
Securities available-for-sale, Unrealized loss position, Fair Value | 15,631 | 17,288 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (118) | |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (3,522) | (3,747) |
Securities available-for-sale, Unrealized losses | (3,522) | (3,865) |
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 | 4,158 | 4,026 |
Securities available-for-sale, Unrealized loss position, Fair Value | 4,158 | 6,520 |
Securities held-to-maturity, Unrealized loss position, Fair Value, Less than 12 Months | 800 | 7,929 |
Securities held-to-maturity, Unrealized loss position, Fair Value, 12 Months or Longer | 6,675 | |
Securities held-to-maturity, Unrealized loss position, Fair Value | 7,475 | 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 | (842) | (975) |
Securities available-for-sale, Unrealized losses | (842) | (979) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, Less than 12 Months | (200) | (571) |
Securities held-to-maturity, Unrealized loss position, Unrealized losses, 12 Months or Longer | (825) | |
Securities held-to-maturity, Unrealized losses | (1,025) | (571) |
Municipal bonds | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 5,394 | 44,261 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 111,803 | 73,990 |
Securities available-for-sale, Unrealized loss position, Fair Value | 117,197 | 118,251 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (47) | (5,794) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (21,980) | (17,825) |
Securities available-for-sale, Unrealized losses | (22,027) | (23,619) |
Mortgage-backed securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 6,814 | 29,791 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 60,783 | 40,175 |
Securities available-for-sale, Unrealized loss position, Fair Value | 67,597 | 69,966 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (312) | (3,188) |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (12,167) | (9,270) |
Securities available-for-sale, Unrealized losses | (12,479) | (12,458) |
U.S. Small Business Administration securities | ||
Fair Value | ||
Securities available-for-sale, Unrealized loss position, Fair Value, Less than 12 Months | 4,879 | 10,807 |
Securities available-for-sale, Unrealized loss position, Fair Value, 12 Months or Longer | 8,507 | 2,044 |
Securities available-for-sale, Unrealized loss position, Fair Value | 13,386 | 12,851 |
Unrealized Losses | ||
Securities available-for-sale, Unrealized loss position, Unrealized losses, Less than 12 Months | (1,162) | |
Securities available-for-sale, Unrealized loss position, Unrealized losses, 12 Months or Longer | (1,316) | (506) |
Securities available-for-sale, Unrealized losses | $ (1,316) | $ (1,668) |
INVESTMENTS - Available for Sal
INVESTMENTS - Available for Sale Securities by Contractual Maturity (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Amortized Cost | ||
Securities available-for-sale, Total | $ 265,989 | $ 271,793 |
Securities held-to-maturity, Total | 8,500 | 8,500 |
Amortized cost | 274,489 | 280,293 |
Fair Value | ||
Securities available-for-sale, Total | 225,869 | 229,252 |
Securities held-to-maturity, Total | 7,475 | 7,929 |
Total securities | 233,344 | 237,181 |
U.S. agency securities | ||
Amortized Cost | ||
Securities available-for-sale, Due within one year or less | 931 | 0 |
Securities available-for-sale, Due after one year through five years | 3,941 | 4,874 |
Securities available-for-sale, Due after five years through ten years | 8,990 | 6,989 |
Securities available-for-sale, Due after ten years | 7,290 | 9,290 |
Securities available-for-sale, Total | 21,152 | 21,153 |
Fair Value | ||
Securities available-for-sale, Due in one year or less | 911 | 0 |
Securities available-for-sale, Due after one year through five years | 3,435 | 4,321 |
Securities available-for-sale, Due after five years through ten years | 7,675 | 5,963 |
Securities available-for-sale, Due after ten years | 5,617 | 7,004 |
Securities available-for-sale, Subtotal | 17,638 | 17,288 |
Securities available-for-sale, Total | 17,638 | 17,288 |
Corporate securities | ||
Amortized Cost | ||
Securities available-for-sale, Due within one year or less | 1,000 | 1,000 |
Securities available-for-sale, Due after one year through five years | 0 | 2,497 |
Securities available-for-sale, Due after five years through ten years | 4,000 | 4,000 |
Securities available-for-sale, Due after ten years | 1,999 | 2,000 |
Securities available-for-sale, Total | 6,999 | 9,497 |
Securities held-to-maturity, Due after five years through ten years | 8,500 | 8,500 |
Fair Value | ||
Securities available-for-sale, Due in one year or less | 1,014 | 997 |
Securities available-for-sale, Due after one year through five years | 0 | 2,519 |
Securities available-for-sale, Due after five years through ten years | 3,838 | 3,763 |
Securities available-for-sale, Due after ten years | 1,341 | 1,266 |
Securities available-for-sale, Subtotal | 6,193 | 8,545 |
Securities available-for-sale, Total | 6,193 | 8,545 |
Securities held-to-maturity, Due after five years through ten years | 7,475 | 7,929 |
Municipal bonds | ||
Amortized Cost | ||
Securities available-for-sale, Due within one year or less | 0 | 2,660 |
Securities available-for-sale, Due after one year through five years | 1,026 | 1,038 |
Securities available-for-sale, Due after five years through ten years | 6,308 | 6,341 |
Securities available-for-sale, Due after ten years | 133,340 | 134,161 |
Securities available-for-sale, Total | 140,674 | 144,200 |
Fair Value | ||
Securities available-for-sale, Due in one year or less | 0 | 2,644 |
Securities available-for-sale, Due after one year through five years | 1,001 | 1,012 |
Securities available-for-sale, Due after five years through ten years | 5,783 | 5,771 |
Securities available-for-sale, Due after ten years | 111,880 | 111,175 |
Securities available-for-sale, Subtotal | 118,664 | 120,602 |
Securities available-for-sale, Total | 118,664 | 120,602 |
Mortgage-backed securities | ||
Amortized Cost | ||
Securities available-for-sale, Total | 80,076 | 82,424 |
Fair Value | ||
Securities available-for-sale, Mortgage-backed securities | 67,597 | 69,966 |
Securities available-for-sale, Total | 67,597 | 69,966 |
Federal National Mortgage Association ("FNMA") | ||
Amortized Cost | ||
Securities available-for-sale, Total | 66,597 | 68,421 |
Fair Value | ||
Securities available-for-sale, Mortgage-backed securities | 55,569 | 57,358 |
Federal Home Loan Mortgage Corporation ("FHLMC") | ||
Amortized Cost | ||
Securities available-for-sale, Total | 9,162 | 9,290 |
Fair Value | ||
Securities available-for-sale, Mortgage-backed securities | 8,329 | 8,424 |
Government National Mortgage Association ("GNMA") | ||
Amortized Cost | ||
Securities available-for-sale, Total | 4,317 | 4,713 |
Fair Value | ||
Securities available-for-sale, Mortgage-backed securities | 3,699 | 4,184 |
U.S. Small Business Administration securities | ||
Amortized Cost | ||
Securities available-for-sale, Due within one year or less | 168 | 0 |
Securities available-for-sale, Due after one year through five years | 2,325 | 2,553 |
Securities available-for-sale, Due after five years through ten years | 3,756 | 4,461 |
Securities available-for-sale, Due after ten years | 10,839 | 7,505 |
Securities available-for-sale, Total | 17,088 | 14,519 |
Fair Value | ||
Securities available-for-sale, Due in one year or less | 163 | 0 |
Securities available-for-sale, Due after one year through five years | 2,183 | 2,407 |
Securities available-for-sale, Due after five years through ten years | 3,486 | 3,996 |
Securities available-for-sale, Due after ten years | 9,945 | 6,448 |
Securities available-for-sale, Subtotal | 15,777 | 12,851 |
Securities available-for-sale, Total | $ 15,777 | $ 12,851 |
LOANS RECEIVABLE AND ALLOWANC_3
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Composition of Loan Portfolio (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 | Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | $ 2,372,774 | $ 2,218,852 | ||||
ACL for loans | (30,350) | $ (29,937) | (27,992) | $ (24,967) | $ (23,365) | $ (25,635) |
Total loans receivable, net | 2,342,424 | 2,190,860 | ||||
REAL ESTATE LOANS | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 1,470,814 | 1,421,260 | ||||
ACL for loans | (12,307) | (12,572) | (12,123) | (11,512) | (10,560) | (14,798) |
REAL ESTATE LOANS | Commercial | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 343,008 | 334,059 | ||||
REAL ESTATE LOANS | Construction and development | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 312,093 | 342,591 | ||||
REAL ESTATE LOANS | Home equity. | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 62,304 | 55,387 | ||||
REAL ESTATE LOANS | One-to-four-family | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 521,734 | 469,485 | ||||
REAL ESTATE LOANS | Multi-family | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 231,675 | 219,738 | ||||
CONSUMER LOANS | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 633,908 | 569,572 | ||||
ACL for loans | (14,017) | (13,401) | (12,109) | (10,605) | (9,792) | (4,280) |
CONSUMER LOANS | Indirect home improvement | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 557,818 | 495,941 | ||||
CONSUMER LOANS | Marine | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 72,484 | 70,567 | ||||
CONSUMER LOANS | Other consumer loans | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 3,606 | 3,064 | ||||
COMMERCIAL BUSINESS LOANS | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 268,052 | 228,020 | ||||
ACL for loans | (4,026) | $ (3,964) | (3,760) | $ (2,850) | $ (3,013) | $ (6,536) |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | 237,403 | 196,791 | ||||
COMMERCIAL BUSINESS LOANS | Warehouse lending | ||||||
Financing Receivable, Recorded Investment [Line Items] | ||||||
Total loans receivable, gross | $ 30,649 | $ 31,229 |
LOANS RECEIVABLE AND ALLOWANC_4
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended |
Mar. 31, 2023 contract | Jun. 30, 2023 USD ($) division segment item | Dec. 31, 2022 USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of loan portfolio segments | segment | 3 | ||
Number of warehouse lending divisions | division | 2 | ||
Loans receivable, net | $ 2,342,424 | $ 2,190,860 | |
Loans pledged as collateral for Federal Reserve Bank lines of credit | $ 618,800 | 579,800 | |
Minimum term for accrual of interest on loans to be discontinued | 90 days | ||
Unearned loan fees in excess of unamortized costs and premiums | $ 8,300 | 7,800 | |
Net discounts on acquired loans | 2,900 | 437 | |
Accrued interest receivable | $ 10,400 | $ 9,600 | |
Accounts Receivable, Noncurrent, Accrued Interest, after Allowance for Credit Loss, Statement of Financial Position [Extensible Enumeration] | Interest Receivable | Interest Receivable | |
Accounting Standards Update 2022-02 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans modified | $ 0 | ||
Asset Pledged as Collateral without Right | Federal Home Loan Bank Advances [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Loans receivable, net | $ 988,500 | $ 840,200 | |
Minimum | Multi-family | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of Units in Real Estate Property | item | 5 | ||
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Number of restructured loans | contract | 2 | ||
Loans modified | $ 3,500 | ||
Percentage of financing receivables that have been modified | 1.40% | ||
COMMERCIAL BUSINESS LOANS | Commercial and industrial | Extended Maturity [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractual term increased | 60 months | ||
COMMERCIAL BUSINESS LOANS | Commercial and industrial | Contractual Interest Rate Reduction [Member] | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Contractual interest rate | 4.10% | 7.50% |
LOANS RECEIVABLE AND ALLOWANC_5
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Allowance for Credit Losses on Loans by Loan Categories (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
ACL FOR LOANS | ||||
Beginning balance | $ 29,937 | $ 23,365 | $ 27,992 | $ 25,635 |
Provision for (reversal of) credit losses on loans | 1,063 | 1,619 | 3,418 | 2,471 |
Loans charged off | (876) | (297) | (1,596) | (820) |
Recoveries | 226 | 280 | 536 | 540 |
Net charge-offs | (650) | (17) | (1,060) | (280) |
Ending balance | 30,350 | 24,967 | 30,350 | 24,967 |
Cumulative Effect, Period of Adoption, Adjustment | ||||
ACL FOR LOANS | ||||
Beginning balance | (2,859) | |||
Unallocated Financing Receivables [Member] | ||||
ACL FOR LOANS | ||||
Beginning balance | 21 | |||
Unallocated Financing Receivables [Member] | Cumulative Effect, Period of Adoption, Adjustment | ||||
ACL FOR LOANS | ||||
Beginning balance | (21) | |||
REAL ESTATE LOANS | ||||
ACL FOR LOANS | ||||
Beginning balance | 12,572 | 10,560 | 12,123 | 14,798 |
Provision for (reversal of) credit losses on loans | (265) | 952 | 194 | 1,948 |
Loans charged off | (10) | |||
Net charge-offs | (10) | |||
Ending balance | 12,307 | 11,512 | 12,307 | 11,512 |
REAL ESTATE LOANS | Cumulative Effect, Period of Adoption, Adjustment | ||||
ACL FOR LOANS | ||||
Beginning balance | (5,234) | |||
CONSUMER LOANS | ||||
ACL FOR LOANS | ||||
Beginning balance | 13,401 | 9,792 | 12,109 | 4,280 |
Provision for (reversal of) credit losses on loans | 1,266 | 830 | 2,957 | 527 |
Loans charged off | (876) | (297) | (1,585) | (820) |
Recoveries | 226 | 280 | 536 | 540 |
Net charge-offs | (650) | (17) | (1,049) | (280) |
Ending balance | 14,017 | 10,605 | 14,017 | 10,605 |
CONSUMER LOANS | Cumulative Effect, Period of Adoption, Adjustment | ||||
ACL FOR LOANS | ||||
Beginning balance | 6,078 | |||
COMMERCIAL BUSINESS LOANS | ||||
ACL FOR LOANS | ||||
Beginning balance | 3,964 | 3,013 | 3,760 | 6,536 |
Provision for (reversal of) credit losses on loans | 62 | (163) | 267 | (4) |
Loans charged off | (1) | |||
Net charge-offs | (1) | |||
Ending balance | $ 4,026 | $ 2,850 | $ 4,026 | 2,850 |
COMMERCIAL BUSINESS LOANS | Cumulative Effect, Period of Adoption, Adjustment | ||||
ACL FOR LOANS | ||||
Beginning balance | $ (3,682) |
LOANS RECEIVABLE AND ALLOWANC_6
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Aging Analysis of Past Due Loans (Details) $ in Thousands | Jun. 30, 2023 USD ($) loan | Dec. 31, 2022 USD ($) loan | Jun. 30, 2022 loan |
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | $ 2,372,774 | $ 2,218,852 | |
Non-Accrual | 9,272 | 8,652 | |
Number of TDR loans | loan | 0 | ||
Number of TDRs which incurred payment default | loan | 0 | ||
REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,470,814 | 1,421,260 | |
Non-Accrual | 1,320 | 966 | |
CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 633,908 | 569,572 | |
Non-Accrual | 2,307 | 1,352 | |
COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 268,052 | 228,020 | |
Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 343,008 | 334,059 | |
Non-Accrual | 1,061 | ||
Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 312,093 | 342,591 | |
Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 62,304 | 55,387 | |
Non-Accrual | 50 | 46 | |
One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 521,734 | 469,485 | |
Non-Accrual | 209 | 920 | |
Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 231,675 | 219,738 | |
Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 557,818 | 495,941 | |
Non-Accrual | 1,833 | 1,076 | |
Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 72,484 | 70,567 | |
Non-Accrual | 471 | 267 | |
Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 3,606 | 3,064 | |
Non-Accrual | 3 | 9 | |
Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 237,403 | 196,791 | |
Non-Accrual | 5,645 | 6,334 | |
Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 30,649 | 31,229 | |
30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,396 | 3,010 | |
30-59 Days Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 27 | 29 | |
30-59 Days Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,369 | 2,980 | |
30-59 Days Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1 | ||
30-59 Days Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 27 | 29 | |
30-59 Days Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,216 | 2,298 | |
30-59 Days Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 145 | 650 | |
30-59 Days Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 8 | 32 | |
30-59 Days Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1 | ||
60-89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,154 | 1,211 | |
60-89 Days Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 150 | 104 | |
60-89 Days Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,004 | 1,107 | |
60-89 Days Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 150 | 104 | |
60-89 Days Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 930 | 685 | |
60-89 Days Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 63 | 385 | |
60-89 Days Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 11 | 37 | |
90 Days or More Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | $ 3,134 | $ 3,719 | |
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, gross | $ 221 | $ 479 | |
90 Days or More Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 796 | 623 | |
90 Days or More Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,117 | 2,617 | |
90 Days or More Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 12 | 16 | |
90 Days or More Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 209 | 463 | |
90 Days or More Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 723 | 532 | |
90 Days or More Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 73 | 86 | |
90 Days or More Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 5 | ||
90 Days or More Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,117 | 2,617 | |
Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 5,684 | 7,940 | |
Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 398 | 612 | |
Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 3,169 | 4,710 | |
Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,117 | 2,618 | |
Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 189 | 149 | |
Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 209 | 463 | |
Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,869 | 3,515 | |
Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 281 | 1,121 | |
Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 19 | 74 | |
Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,117 | 2,618 | |
Not Past Due | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 2,367,090 | 2,210,912 | |
Not Past Due | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 1,470,416 | 1,420,648 | |
Not Past Due | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 630,739 | 564,862 | |
Not Past Due | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 265,935 | 225,402 | |
Not Past Due | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 343,008 | 334,059 | |
Not Past Due | Construction and development | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 312,093 | 342,591 | |
Not Past Due | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 62,115 | 55,238 | |
Not Past Due | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 521,525 | 469,022 | |
Not Past Due | Multi-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 231,675 | 219,738 | |
Not Past Due | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 554,949 | 492,426 | |
Not Past Due | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 72,203 | 69,446 | |
Not Past Due | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 3,587 | 2,990 | |
Not Past Due | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 235,286 | 194,173 | |
Not Past Due | Warehouse lending | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Total loans receivable, gross | 30,649 | 31,229 | |
Non-Accrual | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 9,272 | 8,652 | |
Non-Accrual | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 1,320 | 966 | |
Non-Accrual | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 2,307 | 1,352 | |
Non-Accrual | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 5,645 | 6,334 | |
Non-Accrual | Commercial | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 1,061 | ||
Non-Accrual | Home equity. | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 50 | 46 | |
Non-Accrual | One-to-four-family | REAL ESTATE LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 209 | 920 | |
Non-Accrual | Indirect home improvement | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 1,833 | 1,076 | |
Non-Accrual | Marine | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 471 | 267 | |
Non-Accrual | Other consumer loans | CONSUMER LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | 3 | 9 | |
Non-Accrual | Commercial and industrial | COMMERCIAL BUSINESS LOANS | |||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||
Non-Accrual | $ 5,645 | $ 6,334 |
LOANS RECEIVABLE AND ALLOWANC_7
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Risk Rated Loan Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | $ 269,911 | $ 269,911 | $ 808,060 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 772,013 | 772,013 | 550,357 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 492,612 | 492,612 | 284,645 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 272,222 | 272,222 | 164,717 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 141,907 | 141,907 | 64,940 | ||
Prior | 216,530 | 216,530 | 166,172 | ||
Revolving Loans | 206,681 | 206,681 | 179,462 | ||
Revolving Loans Converted to Term | 898 | 898 | 499 | ||
Total Loans | 2,372,774 | 2,372,774 | 2,218,852 | ||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year, charge-offs | 31 | ||||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year, charge-offs | 560 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year, charge-offs | 293 | ||||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year, charge-offs | 113 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year, charge-offs | 111 | ||||
Prior, charge-offs | 410 | ||||
Revolving Loans, charge-offs | 78 | ||||
Total Charge-offs | 876 | $ 297 | 1,596 | $ 820 | |
Pass | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 266,088 | 266,088 | 798,208 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 761,000 | 761,000 | 547,426 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 489,932 | 489,932 | 279,938 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 267,903 | 267,903 | 159,466 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 138,296 | 138,296 | 61,985 | ||
Prior | 210,351 | 210,351 | 155,636 | ||
Revolving Loans | 195,243 | 195,243 | 176,074 | ||
Revolving Loans Converted to Term | 898 | 898 | 199 | ||
Total Loans | 2,329,711 | 2,329,711 | 2,178,932 | ||
Watch | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 194 | 194 | 9,504 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 10,378 | 10,378 | 1,127 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 601 | 601 | 3,305 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 2,649 | 2,649 | |||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 453 | 453 | |||
Prior | 1,157 | 1,157 | 746 | ||
Revolving Loans | 8,837 | 8,837 | 1,329 | ||
Total Loans | 24,269 | 24,269 | 16,011 | ||
Special Mention | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 2,747 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 983 | 983 | |||
Prior | 270 | 270 | |||
Revolving Loans | 1,135 | 1,135 | 963 | ||
Total Loans | 2,388 | 2,388 | 3,710 | ||
Substandard | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 3,629 | 3,629 | 348 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 635 | 635 | 1,804 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 2,079 | 2,079 | 1,402 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 1,670 | 1,670 | 2,504 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 2,175 | 2,175 | 2,955 | ||
Prior | 4,752 | 4,752 | 9,790 | ||
Revolving Loans | 1,466 | 1,466 | 1,096 | ||
Revolving Loans Converted to Term | 300 | ||||
Total Loans | 16,406 | 16,406 | 20,199 | ||
REAL ESTATE LOANS | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 136,365 | 136,365 | 501,184 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 477,273 | 477,273 | 389,085 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 347,915 | 347,915 | 206,119 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 200,153 | 200,153 | 120,116 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 100,970 | 100,970 | 37,852 | ||
Prior | 159,443 | 159,443 | 127,642 | ||
Revolving Loans | 47,889 | 47,889 | 39,063 | ||
Revolving Loans Converted to Term | 806 | 806 | 199 | ||
Total Loans | 1,470,814 | 1,470,814 | 1,421,260 | ||
Total Charge-offs | 10 | ||||
REAL ESTATE LOANS | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 18,901 | 18,901 | 95,693 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 97,542 | 97,542 | 76,030 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 76,437 | 76,437 | 46,498 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 48,519 | 48,519 | 41,043 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 29,208 | 29,208 | 14,682 | ||
Prior | 72,056 | 72,056 | 60,113 | ||
Revolving Loans | 16 | 16 | |||
Revolving Loans Converted to Term | 329 | 329 | |||
Total Loans | 343,008 | 343,008 | 334,059 | ||
REAL ESTATE LOANS | Construction and development | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 51,332 | 51,332 | 193,084 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 177,805 | 177,805 | 118,724 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 66,261 | 66,261 | 21,966 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 16,102 | 16,102 | 8,379 | ||
Prior | 593 | 593 | 438 | ||
Total Loans | 312,093 | 312,093 | 342,591 | ||
REAL ESTATE LOANS | Home equity. | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 2,042 | 2,042 | 4,978 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 1,716 | 1,716 | 1,696 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 1,606 | 1,606 | 6,818 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 6,672 | 6,672 | 11 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 11 | 11 | 1,216 | ||
Prior | 2,384 | 2,384 | 1,605 | ||
Revolving Loans | 47,873 | 47,873 | 39,063 | ||
Total Loans | 62,304 | 62,304 | 55,387 | ||
Revolving Loans, charge-offs | 10 | ||||
Total Charge-offs | 10 | ||||
REAL ESTATE LOANS | One-to-four-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 59,664 | 59,664 | 166,388 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 165,956 | 165,956 | 129,282 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 125,437 | 125,437 | 82,461 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 80,959 | 80,959 | 31,878 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 33,353 | 33,353 | 17,778 | ||
Prior | 55,888 | 55,888 | 41,499 | ||
Revolving Loans Converted to Term | 477 | 477 | 199 | ||
Total Loans | 521,734 | 521,734 | 469,485 | ||
REAL ESTATE LOANS | Multi-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 4,426 | 4,426 | 41,041 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 34,254 | 34,254 | 63,353 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 78,174 | 78,174 | 48,376 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 47,901 | 47,901 | 38,805 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 38,398 | 38,398 | 4,176 | ||
Prior | 28,522 | 28,522 | 23,987 | ||
Total Loans | 231,675 | 231,675 | 219,738 | ||
REAL ESTATE LOANS | Pass | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 18,901 | 18,901 | 86,189 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 88,035 | 88,035 | 76,030 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 76,437 | 76,437 | 46,125 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 48,519 | 48,519 | 38,930 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 28,338 | 28,338 | 14,101 | ||
Prior | 70,116 | 70,116 | 55,271 | ||
Revolving Loans Converted to Term | 329 | 329 | |||
Total Loans | 330,675 | 330,675 | 316,646 | ||
REAL ESTATE LOANS | Pass | Construction and development | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 51,332 | 51,332 | 193,084 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 177,805 | 177,805 | 118,724 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 66,261 | 66,261 | 21,966 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 16,102 | 16,102 | 8,379 | ||
Prior | 593 | 593 | 438 | ||
Total Loans | 312,093 | 312,093 | 342,591 | ||
REAL ESTATE LOANS | Pass | Home equity. | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 2,042 | 2,042 | 4,978 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 1,716 | 1,716 | 1,696 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 1,606 | 1,606 | 6,818 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 6,672 | 6,672 | 11 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 11 | 11 | 1,203 | ||
Prior | 2,345 | 2,345 | 1,572 | ||
Revolving Loans | 47,862 | 47,862 | 39,063 | ||
Total Loans | 62,254 | 62,254 | 55,341 | ||
REAL ESTATE LOANS | Pass | One-to-four-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 59,664 | 59,664 | 166,388 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 165,085 | 165,085 | 129,282 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 125,437 | 125,437 | 82,461 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 80,959 | 80,959 | 31,878 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 33,353 | 33,353 | 15,837 | ||
Prior | 53,756 | 53,756 | 40,526 | ||
Revolving Loans Converted to Term | 477 | 477 | 199 | ||
Total Loans | 518,731 | 518,731 | 466,571 | ||
REAL ESTATE LOANS | Pass | Multi-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 4,426 | 4,426 | 41,041 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 34,254 | 34,254 | 63,353 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 78,174 | 78,174 | 48,376 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 47,901 | 47,901 | 38,805 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 38,398 | 38,398 | 4,176 | ||
Prior | 28,522 | 28,522 | 23,987 | ||
Total Loans | 231,675 | 231,675 | 219,738 | ||
REAL ESTATE LOANS | Watch | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 9,504 | ||||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 9,507 | 9,507 | |||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 373 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 453 | 453 | |||
Revolving Loans | 16 | 16 | |||
Total Loans | 9,976 | 9,976 | 9,877 | ||
REAL ESTATE LOANS | Watch | One-to-four-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 871 | 871 | |||
Total Loans | 871 | 871 | |||
REAL ESTATE LOANS | Special Mention | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 2,113 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 417 | 417 | |||
Total Loans | 417 | 417 | 2,113 | ||
REAL ESTATE LOANS | Substandard | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 581 | ||||
Prior | 1,940 | 1,940 | 4,842 | ||
Total Loans | 1,940 | 1,940 | 5,423 | ||
REAL ESTATE LOANS | Substandard | Home equity. | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 13 | ||||
Prior | 39 | 39 | 33 | ||
Revolving Loans | 11 | 11 | |||
Total Loans | 50 | 50 | 46 | ||
REAL ESTATE LOANS | Substandard | One-to-four-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 1,941 | ||||
Prior | 2,132 | 2,132 | 973 | ||
Total Loans | 2,132 | 2,132 | 2,914 | ||
CONSUMER LOANS | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 117,847 | 117,847 | 282,539 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 263,640 | 263,640 | 135,998 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 118,167 | 118,167 | 61,868 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 55,150 | 55,150 | 37,736 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 32,929 | 32,929 | 23,824 | ||
Prior | 43,981 | 43,981 | 26,344 | ||
Revolving Loans | 2,194 | 2,194 | 1,263 | ||
Total Loans | 633,908 | 633,908 | 569,572 | ||
Total Charge-offs | 876 | $ 297 | 1,585 | $ 820 | |
CONSUMER LOANS | Indirect home improvement | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 109,745 | 109,745 | 253,842 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 237,344 | 237,344 | 123,477 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 107,181 | 107,181 | 46,613 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 40,905 | 40,905 | 31,313 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 27,238 | 27,238 | 18,334 | ||
Prior | 35,398 | 35,398 | 22,353 | ||
Revolving Loans | 7 | 7 | 9 | ||
Total Loans | 557,818 | 557,818 | 495,941 | ||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year, charge-offs | 31 | ||||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year, charge-offs | 511 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year, charge-offs | 194 | ||||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year, charge-offs | 113 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year, charge-offs | 104 | ||||
Prior, charge-offs | 228 | ||||
Total Charge-offs | 1,181 | ||||
CONSUMER LOANS | Marine | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 8,001 | 8,001 | 27,904 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 25,589 | 25,589 | 11,762 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 10,742 | 10,742 | 15,139 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 14,130 | 14,130 | 6,375 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 5,670 | 5,670 | 5,476 | ||
Prior | 8,352 | 8,352 | 3,911 | ||
Total Loans | 72,484 | 72,484 | 70,567 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year, charge-offs | 47 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year, charge-offs | 93 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year, charge-offs | 7 | ||||
Prior, charge-offs | 182 | ||||
Total Charge-offs | 329 | ||||
CONSUMER LOANS | Other consumer loans | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 101 | 101 | 793 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 707 | 707 | 759 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 244 | 244 | 116 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 115 | 115 | 48 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 21 | 21 | 14 | ||
Prior | 231 | 231 | 80 | ||
Revolving Loans | 2,187 | 2,187 | 1,254 | ||
Total Loans | 3,606 | 3,606 | 3,064 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year, charge-offs | 2 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year, charge-offs | 5 | ||||
Revolving Loans, charge-offs | 68 | ||||
Total Charge-offs | 75 | ||||
CONSUMER LOANS | Pass | Indirect home improvement | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 109,645 | 109,645 | 253,495 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 236,709 | 236,709 | 123,264 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 106,692 | 106,692 | 46,476 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 40,712 | 40,712 | 31,251 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 26,991 | 26,991 | 18,165 | ||
Prior | 35,229 | 35,229 | 22,205 | ||
Revolving Loans | 7 | 7 | 9 | ||
Total Loans | 555,985 | 555,985 | 494,865 | ||
CONSUMER LOANS | Pass | Marine | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 8,001 | 8,001 | 27,904 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 25,589 | 25,589 | 11,762 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 10,717 | 10,717 | 15,139 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 14,130 | 14,130 | 6,224 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 5,523 | 5,523 | 5,415 | ||
Prior | 8,053 | 8,053 | 3,856 | ||
Total Loans | 72,013 | 72,013 | 70,300 | ||
CONSUMER LOANS | Pass | Other consumer loans | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 101 | 101 | 792 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 707 | 707 | 754 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 244 | 244 | 116 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 115 | 115 | 48 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 21 | 21 | 14 | ||
Prior | 231 | 231 | 80 | ||
Revolving Loans | 2,184 | 2,184 | 1,251 | ||
Total Loans | 3,603 | 3,603 | 3,055 | ||
CONSUMER LOANS | Substandard | Indirect home improvement | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 100 | 100 | 347 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 635 | 635 | 213 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 489 | 489 | 137 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 193 | 193 | 62 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 247 | 247 | 169 | ||
Prior | 169 | 169 | 148 | ||
Total Loans | 1,833 | 1,833 | 1,076 | ||
CONSUMER LOANS | Substandard | Marine | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 25 | 25 | |||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 151 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 147 | 147 | 61 | ||
Prior | 299 | 299 | 55 | ||
Total Loans | 471 | 471 | 267 | ||
CONSUMER LOANS | Substandard | Other consumer loans | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 1 | ||||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 5 | ||||
Revolving Loans | 3 | 3 | 3 | ||
Total Loans | 3 | 3 | 9 | ||
COMMERCIAL BUSINESS LOANS | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 15,699 | 15,699 | 24,337 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 31,100 | 31,100 | 25,274 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 26,530 | 26,530 | 16,658 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 16,919 | 16,919 | 6,865 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 8,008 | 8,008 | 3,264 | ||
Prior | 13,106 | 13,106 | 12,186 | ||
Revolving Loans | 156,598 | 156,598 | 139,136 | ||
Revolving Loans Converted to Term | 92 | 92 | 300 | ||
Total Loans | 268,052 | 268,052 | 228,020 | ||
Total Charge-offs | 1 | ||||
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 15,699 | 15,699 | 24,337 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 31,100 | 31,100 | 25,274 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 26,530 | 26,530 | 16,658 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 16,919 | 16,919 | 6,865 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 8,008 | 8,008 | 3,264 | ||
Prior | 13,106 | 13,106 | 12,186 | ||
Revolving Loans | 125,949 | 125,949 | 107,907 | ||
Revolving Loans Converted to Term | 92 | 92 | 300 | ||
Total Loans | 237,403 | 237,403 | 196,791 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year, charge-offs | 1 | ||||
Total Charge-offs | 1 | ||||
COMMERCIAL BUSINESS LOANS | Warehouse lending | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Revolving Loans | 30,649 | 30,649 | 31,229 | ||
Total Loans | 30,649 | 30,649 | 31,229 | ||
COMMERCIAL BUSINESS LOANS | Pass | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 11,976 | 11,976 | 24,337 | ||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 31,100 | 31,100 | 22,561 | ||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 24,364 | 24,364 | 12,461 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 12,793 | 12,793 | 3,940 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 5,661 | 5,661 | 3,074 | ||
Prior | 11,506 | 11,506 | 7,701 | ||
Revolving Loans | 116,799 | 116,799 | 104,524 | ||
Revolving Loans Converted to Term | 92 | 92 | |||
Total Loans | 214,291 | 214,291 | 178,598 | ||
COMMERCIAL BUSINESS LOANS | Pass | Warehouse lending | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Revolving Loans | 28,391 | 28,391 | 31,227 | ||
Total Loans | 28,391 | 28,391 | 31,227 | ||
COMMERCIAL BUSINESS LOANS | Watch | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 194 | 194 | |||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 1,127 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 601 | 601 | 2,932 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 2,649 | 2,649 | |||
Prior | 1,157 | 1,157 | 746 | ||
Revolving Loans | 6,563 | 6,563 | 1,327 | ||
Total Loans | 11,164 | 11,164 | 6,132 | ||
COMMERCIAL BUSINESS LOANS | Watch | Warehouse lending | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Revolving Loans | 2,258 | 2,258 | 2 | ||
Total Loans | 2,258 | 2,258 | 2 | ||
COMMERCIAL BUSINESS LOANS | Special Mention | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 634 | ||||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 566 | 566 | |||
Prior | 270 | 270 | |||
Revolving Loans | 1,135 | 1,135 | 963 | ||
Total Loans | 1,971 | 1,971 | 1,597 | ||
COMMERCIAL BUSINESS LOANS | Substandard | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Financing receivable, excluding accrued interest, year one, originated, current fiscal year | 3,529 | 3,529 | |||
Financing receivable, excluding accrued interest, year two, originated, fiscal year before current fiscal year | 1,586 | ||||
Financing receivable, excluding accrued interest, year three, originated, two years before current fiscal year | 1,565 | 1,565 | 1,265 | ||
Financing receivable, excluding accrued interest, year four, originated, three years before current fiscal year | 1,477 | 1,477 | 2,291 | ||
Financing receivable, excluding accrued interest, year five, originated, four years before current fiscal year | 1,781 | 1,781 | 190 | ||
Prior | 173 | 173 | 3,739 | ||
Revolving Loans | 1,452 | 1,452 | 1,093 | ||
Revolving Loans Converted to Term | 300 | ||||
Total Loans | $ 9,977 | $ 9,977 | $ 10,464 |
LOANS RECEIVABLE AND ALLOWANC_8
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Amortized Cost Basis of Loans (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with no Allowance for Credit Losses | $ 1,320,000 | $ 1,320,000 | $ 966,000 | ||
Nonaccrual with Allowance for Credit Losses | 7,952,000 | 7,952,000 | 7,686,000 | ||
Total Nonaccrual | 9,272,000 | 9,272,000 | 8,652,000 | ||
Recognized interest income on nonaccrual loans | 106,000 | $ 128,000 | 168,000 | $ 226,000 | |
REAL ESTATE LOANS | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with no Allowance for Credit Losses | 1,320,000 | 1,320,000 | 966,000 | ||
Total Nonaccrual | 1,320,000 | 1,320,000 | 966,000 | ||
REAL ESTATE LOANS | Commercial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with no Allowance for Credit Losses | 1,061,000 | 1,061,000 | |||
Total Nonaccrual | 1,061,000 | 1,061,000 | |||
REAL ESTATE LOANS | Home equity. | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with no Allowance for Credit Losses | 50,000 | 50,000 | 46,000 | ||
Total Nonaccrual | 50,000 | 50,000 | 46,000 | ||
REAL ESTATE LOANS | One-to-four-family | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with no Allowance for Credit Losses | 209,000 | 209,000 | 920,000 | ||
Total Nonaccrual | 209,000 | 209,000 | 920,000 | ||
CONSUMER LOANS | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with Allowance for Credit Losses | 2,307,000 | 2,307,000 | 1,352,000 | ||
Total Nonaccrual | 2,307,000 | 2,307,000 | 1,352,000 | ||
CONSUMER LOANS | Indirect home improvement | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with Allowance for Credit Losses | 1,833,000 | 1,833,000 | 1,076,000 | ||
Total Nonaccrual | 1,833,000 | 1,833,000 | 1,076,000 | ||
CONSUMER LOANS | Marine | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with Allowance for Credit Losses | 471,000 | 471,000 | 267,000 | ||
Total Nonaccrual | 471,000 | 471,000 | 267,000 | ||
CONSUMER LOANS | Other consumer loans | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with Allowance for Credit Losses | 3,000 | 3,000 | 9,000 | ||
Total Nonaccrual | 3,000 | 3,000 | 9,000 | ||
COMMERCIAL BUSINESS LOANS | Commercial and industrial | |||||
Financing Receivable, Recorded Investment [Line Items] | |||||
Nonaccrual with Allowance for Credit Losses | 5,645,000 | 5,645,000 | 6,334,000 | ||
Total Nonaccrual | $ 5,645,000 | $ 5,645,000 | $ 6,334,000 |
LOANS RECEIVABLE AND ALLOWANC_9
LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES - LOANS - Amortized Cost Basis of Collateral Dependent Impaired Loans (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | $ 9,269 | $ 8,643 |
Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,061 | |
Residential Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 259 | 966 |
Equipment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 7,949 | 7,677 |
REAL ESTATE LOANS | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,320 | 966 |
REAL ESTATE LOANS | Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,061 | |
REAL ESTATE LOANS | Home equity. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 50 | 46 |
REAL ESTATE LOANS | One-to-four-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 209 | 920 |
REAL ESTATE LOANS | Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,061 | |
REAL ESTATE LOANS | Commercial | Commercial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,061 | |
REAL ESTATE LOANS | Residential Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 259 | 966 |
REAL ESTATE LOANS | Residential Real Estate | Home equity. | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 50 | 46 |
REAL ESTATE LOANS | Residential Real Estate | One-to-four-family | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 209 | 920 |
CONSUMER LOANS | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 2,304 | 1,343 |
CONSUMER LOANS | Indirect home improvement | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,833 | 1,076 |
CONSUMER LOANS | Marine | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 471 | 267 |
CONSUMER LOANS | Equipment | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 2,304 | 1,343 |
CONSUMER LOANS | Equipment | Indirect home improvement | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 1,833 | 1,076 |
CONSUMER LOANS | Equipment | Marine | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 471 | 267 |
COMMERCIAL BUSINESS LOANS | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | 5,645 | 6,334 |
COMMERCIAL BUSINESS LOANS | Equipment | Commercial and industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Amortized cost basis of collateral dependent impaired loans | $ 5,645 | $ 6,334 |
SERVICING RIGHTS - Narrative (D
SERVICING RIGHTS - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
Contractually specified servicing fees, late fees, and other ancillary fees | $ 1.8 | $ 1.8 | $ 3.6 | $ 3.5 | |
Mortgage servicing rights. | |||||
Off-balance Sheet Risks, Disclosure Information [Line Items] | |||||
The unpaid principal balances of mortgage loans serviced | 2,800 | 2,800 | $ 2,780 | ||
Fair market value of servicing rights' assets | $ 37.5 | $ 37.5 | $ 35.5 |
SERVICING RIGHTS - Servicing Ri
SERVICING RIGHTS - Servicing Rights (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance, at the lower of cost or fair value | $ 17,599 | $ 18,041 | $ 18,017 | $ 16,970 |
Additions | 920 | 1,460 | 1,325 | 4,010 |
MSR amortized | (894) | (985) | (1,715) | (2,465) |
Recovery of servicing rights | 2 | 1 | ||
Ending balance, at the lower of cost or fair value | $ 17,627 | $ 18,516 | $ 17,627 | $ 18,516 |
SERVICING RIGHTS - Valuation As
SERVICING RIGHTS - Valuation Assumptions (Details) - Mortgage servicing rights. | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Weighted average discount rate | 9.60% | 9.60% |
Conditional prepayment rate ("CPR") | 7.10% | 8.20% |
Weighted average life in years | 8 years 4 months 24 days | 7 years 9 months 18 days |
SERVICING RIGHTS - Changes in V
SERVICING RIGHTS - Changes in Valuation Assumptions (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
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 | $ 2,801,966 | $ 2,783,458 |
Weighted average rate of note | 3.50% | 3.40% |
Conditional prepayment rate, base | 7.10% | 8.20% |
Conditional prepayment rate, 0.5% Adverse Change | 7.70% | 8.60% |
Conditional prepayment rate, 1.0% Adverse Change | 8.90% | 9.30% |
Fair value MSR, base | $ 37,486 | $ 35,478 |
Fair value MSR, 0.5% Adverse Change | 36,845 | 34,997 |
Fair value of MSR, 1.0% Adverse Change | $ 35,649 | $ 34,188 |
Percentage of MSR, base | 1.30% | 1.30% |
Percentage of MSR, 0.5% Adverse Change | 1.30% | 1.30% |
Percentage of MSR, 1.0% Adverse Change | 1.30% | 1.20% |
Discount rate, base | 9.60% | 9.60% |
Discount rate, 0.5% Adverse Change | 10.10% | 10.10% |
Discount rate, 1.0% Adverse Change | 10.60% | 10.60% |
Fair value MSR, 0.5% Adverse Change | $ 36,651 | $ 34,715 |
Fair value MSR, 1.0% Adverse Change | $ 35,851 | $ 33,984 |
Percentage of MSR, 0.5% Adverse Change | 1.30% | 1.20% |
Percentage of MSR, 1.0% Adverse Change | 1.30% | 1.20% |
DERIVATIVES (Details)
DERIVATIVES (Details) $ in Millions | Jun. 30, 2023 USD ($) |
DERIVATIVES | |
Reclassification to interest expense related to cash flow hedges over next 12 months | $ (5.5) |
DERIVATIVES - Cumulative-basis
DERIVATIVES - Cumulative-basis Adjustment for Fair Value Hedges (Details) - Fair Value Hedges - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Carrying Amount of the Hedged Assets | $ 55,833 | $ 55,893 |
Cumulative Amount of Fair Value Hedging Adjustment Included in Carrying Amount of the Hedged Assets | 4,167 | $ 4,107 |
Amortized cost basis of closed portfolios used in hedging relationships | 240,100 | |
Amount of designated hedged item | $ 60,000 |
DERIVATIVES - Derivative instru
DERIVATIVES - Derivative instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Designated as Hedging Instrument | Interest rate swaps | Cash Flow Hedges | ||
Derivative [Line Items] | ||
Notional | $ 180,000 | $ 90,000 |
Fair Value, Asset | 7,361 | 5,780 |
Designated as Hedging Instrument | Interest rate swaps | Fair Value Hedges | ||
Derivative [Line Items] | ||
Notional | 60,000 | 60,000 |
Fair Value, Asset | 4,149 | 4,090 |
Not Designated as Hedging Instrument | Interest rate lock commitments with customers | ||
Derivative [Line Items] | ||
Notional | 34,260 | 8,837 |
Fair Value, Asset | 273 | 107 |
Not Designated as Hedging Instrument | Mandatory and best effort forward commitments | ||
Derivative [Line Items] | ||
Notional | 7,856 | 4,558 |
Fair Value, Asset | 123 | |
Fair Value, Liability | 38 | |
Not Designated as Hedging Instrument | Forward TBA mortgage-backed securities | ||
Derivative [Line Items] | ||
Notional | 36,000 | 27,000 |
Fair Value, Asset | 192 | $ 164 |
Not Designated as Hedging Instrument | Customer swap positions | ||
Derivative [Line Items] | ||
Notional | 882 | |
Fair Value, Liability | 79 | |
Not Designated as Hedging Instrument | Dealer offsets to customer swap positions | ||
Derivative [Line Items] | ||
Notional | 882 | |
Fair Value, Asset | $ 81 |
DERIVATIVES - Effect of Fair Va
DERIVATIVES - Effect of Fair Value and Cash Flow Hedge Accounting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
DERIVATIVES | ||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income | $ 1,271 | $ 55 | $ 2,178 | $ (46) |
Changes in the fair value of the non hedging derivatives | (51) | (1,500) | 373 | (1,700) |
Interest rate swaps | Interest Expense Deposits | ||||
DERIVATIVES | ||||
Total amounts presented on the Consolidated Statements of Income | 7,610 | 1,557 | 14,234 | 2,842 |
Interest rate swaps | Interest Income Securities | ||||
DERIVATIVES | ||||
Total amounts presented on the Consolidated Statements of Income | 2,651 | 1,670 | 5,271 | 3,249 |
Fair Value Hedges | Interest rate swaps | Interest Income Securities | ||||
DERIVATIVES | ||||
Net gains (losses) on fair value hedging relationships - Recognized on hedged items | (1,191) | (933) | 597 | (933) |
Net gains on fair value hedging relationships - Recognized on derivatives designated as hedging instruments | 1,554 | 831 | 59 | 831 |
Net income (expense) recognized on fair value hedges | 363 | (102) | 656 | (102) |
Cash Flow Hedges | Interest rate swaps | Interest Expense Deposits | ||||
DERIVATIVES | ||||
Realized gains (losses) (pre-tax) reclassified from AOCI into net income | 1,271 | 55 | 2,178 | (46) |
Net income (expense) recognized on cash flow hedges | $ 1,271 | $ 55 | $ 2,178 | $ (46) |
DERIVATIVES - Offsetting Deriva
DERIVATIVES - Offsetting Derivative Assets (Details) - Interest rate swaps - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Offsetting Assets [Line Items] | ||
Gross Amounts of Recognized Assets | $ 11,591 | $ 9,870 |
Net Amounts of Assets Presented in the Statement of Financial Position | 11,591 | 9,870 |
Gross Amounts Not Offset in the Statement of Financial Position - Net Amount | $ 11,591 | $ 9,870 |
DERIVATIVES - Credit-risk-relat
DERIVATIVES - Credit-risk-related Contingent Features (Details) | Jun. 30, 2023 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 | |
Credit-risk-related Contingent Features | |
Cash collateral for borrowed securities | $ 115,000 |
LEASES (Details)
LEASES (Details) | 6 Months Ended |
Jun. 30, 2023 | |
Lessee, Lease, Description [Line Items] | |
Options to extend | true |
Renewal term | 5 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 9 months |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 7 years |
LEASES - Components of lease co
LEASES - Components of lease cost and Supplemental information related to operating leases (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Lease cost: | ||||
Operating lease cost | $ 471 | $ 348 | $ 881 | $ 691 |
Short-term lease cost | 5 | 7 | 9 | 8 |
Total lease cost | 476 | 355 | 890 | 699 |
Operating cash flows from operating leases | $ 482 | $ 357 | $ 906 | $ 703 |
Weighted average remaining lease term- operating leases | 4 years 4 months 24 days | 4 years 8 months 12 days | 4 years 4 months 24 days | 4 years 8 months 12 days |
Weighted average discount rate- operating leases | 2.92% | 2.05% | 2.92% | 2.05% |
LEASES - Maturities of operatin
LEASES - Maturities of operating lease liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Maturities of operating lease liabilities | ||
Remainder of 2023 | $ 964 | |
2024 | 1,933 | |
2025 | 1,628 | |
2026 | 1,475 | |
2027 | 1,173 | |
Thereafter | 1,383 | |
Total lease payments | 8,556 | |
Less imputed interest | (866) | |
Total | $ 7,690 | $ 6,474 |
OTHER REAL ESTATE OWNED ("ORE_3
OTHER REAL ESTATE OWNED ("OREO") - Activity related to OREO (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Other Real Estate [Roll Forward] | ||||
Beginning balance | $ 570 | $ 570 | ||
Loans transferred to OREO | 145 | 145 | ||
Ending balance | $ 570 | $ 145 | $ 570 | $ 145 |
OTHER REAL ESTATE OWNED ("ORE_4
OTHER REAL ESTATE OWNED ("OREO") - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) property | Jun. 30, 2023 USD ($) property | Jun. 30, 2022 USD ($) property | Dec. 31, 2022 USD ($) | |
OTHER REAL ESTATE OWNED ("OREO") | |||||
Number of OREO Properties | property | 1 | 1 | 1 | 1 | |
Holding costs | $ 0 | $ 0 | $ 0 | $ 0 | |
Mortgage loans in process of foreclosure | $ 221,000 | $ 221,000 | $ 511,000 |
DEPOSITS - Deposit Liabilities
DEPOSITS - Deposit Liabilities (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
DEPOSITS | ||
Noninterest-bearing checking | $ 658,440,000 | $ 537,938,000 |
Interest-bearing checking | 183,012,000 | 135,127,000 |
Savings | 169,013,000 | 134,358,000 |
Money market | 419,308,000 | 574,290,000 |
Certificates of deposit less than $100,000 | 473,026,000 | 440,785,000 |
Certificates of deposit of $100,000 through $250,000 | 358,238,000 | 195,447,000 |
Certificates of deposit of $250,000 and over | 87,499,000 | 93,560,000 |
Escrow accounts related to mortgages serviced | 16,772,000 | 16,236,000 |
Total deposits | 2,365,308,000 | 2,127,741,000 |
Interest-bearing domestic deposit, brokered deposits | 0 | 2,300,000 |
Deposits, money market deposits, brokered deposits | 51,000 | 59,700,000 |
Certificates of deposits less than 100000 brokered deposits | $ 295,700,000 | $ 332,000,000 |
DEPOSITS - Maturities of Time D
DEPOSITS - Maturities of Time Deposits for Future Periods (Details) $ in Thousands | Jun. 30, 2023 USD ($) |
DEPOSITS | |
Maturing in 2023 | $ 382,635 |
Maturing in 2024 | 339,314 |
Maturing in 2025 | 130,136 |
Maturing in 2026 | 45,574 |
Maturing in 2027 | 20,697 |
Thereafter | 408 |
Total | $ 918,764 |
DEPOSITS - Interest Expense by
DEPOSITS - Interest Expense by Deposit Category (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
DEPOSITS | ||||
Interest-bearing checking | $ 370 | $ 92 | $ 468 | $ 253 |
Savings and money market | 1,344 | 711 | 2,542 | 1,094 |
Certificates of deposit | 5,896 | 754 | 11,224 | 1,495 |
Total | $ 7,610 | $ 1,557 | $ 14,234 | $ 2,842 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Commitment (Details) - Commitments to Extend Credit - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | $ 562,492 | $ 548,542 |
REAL ESTATE LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 313,302 | 294,246 |
Commercial | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 2,843 | 1,260 |
Construction and development | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 168,952 | 201,708 |
One-to-four-family | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 42,270 | 10,713 |
Home equity. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 96,279 | 77,566 |
Multi-family | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 2,958 | 2,999 |
CONSUMER LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 32,731 | 39,406 |
COMMERCIAL BUSINESS LOANS. | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 216,459 | 214,890 |
Commercial and industrial | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | 168,593 | 150,109 |
Warehouse lending | ||
Off-balance Sheet Risks, Disclosure Information [Line Items] | ||
Commitments | $ 47,866 | $ 64,781 |
COMMITMENTS AND CONTINGENCIES_2
COMMITMENTS AND CONTINGENCIES - Narrative (Details) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 USD ($) action | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) action | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Loss Contingencies [Line Items] | |||||
Allowance for unfunded loan commitments | $ 1,900,000 | $ 1,900,000 | $ 2,500,000 | ||
Amount of loans sold to FHLB | 10,000,000 | ||||
Amount of federal home loan bank, first loss account established | 581,000 | 581,000 | |||
Bank recourse obligation | 389,000 | $ 389,000 | |||
Bank recourse obligation, percentage of loans outstanding | 3.90% | ||||
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 | 0 | ||
Change of control agreement, executive payment, period following change in control (in months) | 12 months | ||||
Pending material legal actions | action | 0 | 0 | |||
Provision (recovery) for allowance for credit loss on unfunded loan commitments | $ (347,000) | $ 520,000 | $ (596,000) | $ 485,000 | |
CEO | |||||
Loss Contingencies [Line Items] | |||||
Severance agreement, period of base compensation disbursed as lump sum payment (in months) | 24 months | ||||
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 | ||||
One-to-four-family | Guarantee on loans sold | |||||
Loss Contingencies [Line Items] | |||||
Reserve for estimated losses | $ 2,100,000 | $ 2,100,000 | $ 2,300,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | $ 14,349 | $ 14,035 |
Level 2 | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 14,300 | 14,000 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 269,111 | 273,521 |
Total liabilities measured at fair value | (79) | (38) |
Fair Value, Measurements, Recurring | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 16,714 | 20,093 |
Fair Value, Measurements, Recurring | Residential Mortgage | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Loans receivable, at fair value | 14,349 | 14,035 |
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] | ||
Financial assets measured at fair value | 17,638 | 17,288 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Corporate securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 6,193 | 8,545 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 118,664 | 120,602 |
Fair Value, Measurements, Recurring | Securities available-for-sale. | Mortgage-backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 67,597 | 69,966 |
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] | ||
Financial assets measured at fair value | 15,777 | 12,851 |
Fair Value, Measurements, Recurring | Derivative | Forward TBA mortgage backed securities | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 192 | 164 |
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] | ||
Financial assets measured at fair value | 123 | |
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] | ||
Financial assets measured at fair value | 11,591 | 9,870 |
Total liabilities measured at fair value | (79) | |
Fair Value, Measurements, Recurring | Derivative | Interest rate lock commitments with customers | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 273 | 107 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 0 | 0 |
Total liabilities measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 1 | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 268,715 | 273,414 |
Total liabilities measured at fair value | (79) | 0 |
Fair Value, Measurements, Recurring | Level 2 | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 16,714 | 20,093 |
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 | 14,349 | 14,035 |
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] | ||
Financial assets measured at fair value | 17,638 | 17,288 |
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] | ||
Financial assets measured at fair value | 6,193 | 8,545 |
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] | ||
Financial assets measured at fair value | 118,664 | 120,602 |
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] | ||
Financial assets measured at fair value | 67,597 | 69,966 |
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] | ||
Financial assets measured at fair value | 15,777 | 12,851 |
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] | ||
Financial assets measured at fair value | 192 | 164 |
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] | ||
Financial 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] | ||
Financial assets measured at fair value | 11,591 | 9,870 |
Total liabilities measured at fair value | (79) | |
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] | ||
Financial assets measured at fair value | 0 | 0 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 396 | 107 |
Total liabilities measured at fair value | 0 | (38) |
Fair Value, Measurements, Recurring | Level 3 | Mortgage loans held for sale | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets measured at fair value | 0 | 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] | ||
Financial 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] | ||
Financial assets measured at fair value | 0 | 0 |
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] | ||
Financial assets measured at fair value | 0 | 0 |
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] | ||
Financial 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] | ||
Financial 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] | ||
Financial 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] | ||
Financial assets measured at fair value | 123 | |
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] | ||
Financial 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] | ||
Financial assets measured at fair value | $ 273 | $ 107 |
FAIR VALUE MEASUREMENTS - Asset
FAIR VALUE MEASUREMENTS - Assets Measured at Fair Value on a Non-recurring Basis (Details) - Fair Value, Measurements, Nonrecurring $ in Thousands | Jun. 30, 2023 USD ($) |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
MSR | $ 37,486 |
Level 1 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
MSR | 0 |
Level 2 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
MSR | 0 |
Level 3 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
MSR | $ 37,486 |
FAIR VALUE MEASUREMENTS - Disco
FAIR VALUE MEASUREMENTS - Discount Rate (Details) | Jun. 30, 2023 | Dec. 31, 2022 |
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 | 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) | 0.913 | 0.925 |
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) | 0.913 | 0.925 |
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) | 0.071 | 0.082 |
FAIR VALUE MEASUREMENTS - Fair
FAIR VALUE MEASUREMENTS - Fair Value Level 3 on recurring basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Interest rate lock commitments with customers | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | $ 565 | $ 250 | $ 107 | $ 757 |
Purchases and Issuances | 948 | 22 | 1,942 | 2,117 |
Sales and Settlements | (1,240) | (88) | (1,776) | (2,690) |
Ending Balance | 273 | 184 | 273 | 184 |
Net change in fair value for gains/(losses) relating to items held at end of period included in income | (292) | (66) | 166 | (573) |
Individual forward sale commitments with investors | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning Balance | (13) | 885 | (38) | 808 |
Purchases and Issuances | 188 | 2,931 | 410 | 5,073 |
Sales and Settlements | (52) | (3,298) | (249) | (5,363) |
Ending Balance | 123 | 518 | 123 | 518 |
Net change in fair value for gains/(losses) relating to items held at end of period included in income | $ 136 | $ (367) | $ 161 | $ (290) |
FAIR VALUE MEASUREMENTS - Fai_2
FAIR VALUE MEASUREMENTS - Fair Value By Balance Sheet Grouping (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Dec. 31, 2022 |
Financial Assets | ||
Certificates of deposit at other financial institutions | $ 14,747 | $ 4,712 |
Securities available-for-sale, at fair value | 225,869 | 229,252 |
Securities held-to-maturity, gross | 8,500 | 8,500 |
Loans held for sale, at fair value | 16,714 | 20,093 |
Loans receivable, at fair value | 14,349 | 14,035 |
Carrying Amount | Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | 132,099 | 41,437 |
Certificates of deposit at other financial institutions | 14,747 | 4,712 |
Carrying Amount | Level 2 | ||
Financial Assets | ||
Securities available-for-sale, at fair value | 225,869 | 229,252 |
Securities held-to-maturity, gross | 8,500 | 8,500 |
Loans held for sale, at fair value | 16,714 | 20,093 |
FHLB stock, at cost | 6,555 | 10,611 |
Forward TBA mortgage-backed securities | 192 | 164 |
Loans receivable, at fair value | 14,349 | 14,035 |
Interest rate swaps | 11,591 | 9,870 |
Accrued interest receivable | 12,244 | 11,144 |
Financial Liabilities | ||
Deposits | 2,365,308 | 2,127,741 |
Borrowings | 199,896 | 186,528 |
Subordinated notes, excluding unamortized debt issuance costs | 50,000 | 50,000 |
Accrued interest payable | 3,381 | 2,270 |
Interest rate swaps | 79 | |
Carrying Amount | Level 3 | ||
Financial Assets | ||
Loans receivable, gross | 2,358,425 | 2,204,817 |
Servicing rights, held at lower of cost or fair value | 17,627 | 18,017 |
Fair value interest rate locks with customers | 273 | 107 |
Mandatory and best effort forward commitments with investors | 123 | |
Financial Liabilities | ||
Mandatory and best effort forward commitments with investors | 38 | |
Fair Value | Level 1 | ||
Financial Assets | ||
Cash and cash equivalents | 132,099 | 41,437 |
Certificates of deposit at other financial institutions | 14,747 | 4,712 |
Fair Value | Level 2 | ||
Financial Assets | ||
Securities available-for-sale, at fair value | 225,869 | 229,252 |
Securities held-to-maturity, gross | 7,475 | 7,929 |
Loans held for sale, at fair value | 16,714 | 20,093 |
FHLB stock, at cost | 6,555 | 10,611 |
Forward TBA mortgage-backed securities | 192 | 164 |
Loans receivable, at fair value | 14,349 | 14,035 |
Interest rate swaps | 11,591 | 9,870 |
Accrued interest receivable | 12,244 | 11,144 |
Financial Liabilities | ||
Deposits | 2,347,200 | 2,105,926 |
Borrowings | 199,400 | 186,188 |
Subordinated notes, excluding unamortized debt issuance costs | 47,455 | 44,500 |
Accrued interest payable | 3,381 | 2,270 |
Interest rate swaps | 79 | |
Fair Value | Level 3 | ||
Financial Assets | ||
Loans receivable, gross | 2,280,219 | 2,153,769 |
Servicing rights, held at lower of cost or fair value | 37,486 | 35,478 |
Fair value interest rate locks with customers | 273 | 107 |
Mandatory and best effort forward commitments with investors | $ 123 | |
Financial Liabilities | ||
Mandatory and best effort forward commitments with investors | $ 38 |
FAIR VALUE MEASUREMENTS - Narra
FAIR VALUE MEASUREMENTS - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Loans receivable, at fair value | $ 14,349,000 | $ 14,349,000 | $ 14,035,000 | ||
Increase (decrease) in fair value of loans receivable | (520,000) | $ (516,000) | 57,000 | $ (1,000,000) | |
Fair Value, Measurements, Nonrecurring | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Financial assets measured at fair value | 0 | ||||
Level 2 | Residential Mortgage | |||||
Financing Receivable, Allowance for Credit Losses [Line Items] | |||||
Loans receivable, at fair value | 14,300,000 | 14,300,000 | 14,000,000 | ||
The unpaid principal balances of mortgage loans serviced for loans receivable at fair value | $ 15,900,000 | $ 15,900,000 | $ 15,600,000 |
EARNINGS PER SHARE - Schedule o
EARNINGS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Numerator (Dollars in thousands, except per share amounts): | ||||
Net Income | $ 9,116 | $ 6,699 | $ 17,328 | $ 13,569 |
Dividends and undistributed earnings allocated to participating securities | (160) | (138) | (307) | (265) |
Net income available to common shareholders | $ 8,956 | $ 6,561 | $ 17,021 | $ 13,304 |
Denominator (shown as actual): | ||||
Basic weighted average common shares outstanding (in shares) | 7,637,210 | 7,776,939 | 7,635,647 | 7,899,522 |
Dilutive shares (in shares) | 109,126 | 119,271 | 133,870 | 131,214 |
Diluted weighted average common shares outstanding (in shares) | 7,746,336 | 7,896,210 | 7,769,517 | 8,030,736 |
Basic earnings per share | $ 1.17 | $ 0.84 | $ 2.23 | $ 1.68 |
Diluted earnings per share | $ 1.16 | $ 0.83 | $ 2.19 | $ 1.66 |
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 | 67,675 | 68,008 | 50,555 | 52,364 |
STOCK-BASED COMPENSATION - Narr
STOCK-BASED COMPENSATION - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | May 17, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award contractual life | 10 years | ||||
2018 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense | $ 364,000 | $ 481,000 | $ 1,000,000 | $ 932,000 | |
2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual award vesting percentage | 20% | ||||
Award contractual life | 10 years | ||||
Shares available for grant | 356,532 | 356,532 | |||
Unrecognized compensation cost, nonvested awards | $ 1,400,000 | $ 1,400,000 | |||
Remaining weighted-average vesting period | 3 years | ||||
2018 Equity Incentive Plan | Restricted stock awards | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares authorized (in shares) | 326,000 | ||||
Shares available for grant | 114,222 | 114,222 | |||
Unrecognized compensation cost, nonvested awards | $ 2,200,000 | $ 2,200,000 | |||
Weighted-average vesting period | 3 years | ||||
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) | 1,300,000 | ||||
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 | ||||
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 | ||||
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 | Equity option | Directors Excluding CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 1 year | ||||
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 | ||||
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 | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 5 years 6 months | ||||
One 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 | 1 year | ||||
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 | 2 years | ||||
Three year vesting | 2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected term in years | 6 years | ||||
Three 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 | ||||
Five year vesting | 2018 Equity Incentive Plan | Equity option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
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 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Option Activity (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | |
Shares | ||
Award contractual life | 10 years | |
Equity option | ||
Shares | ||
Expected forfeiture rate over contractual term | 3.10% | |
2018 Equity Incentive Plan | ||
Shares | ||
Outstanding, beginning balance (in shares) | shares | 647,832 | |
Less exercised (in shares) | shares | 6,225 | |
Forfeited or Expired, Shares | shares | 23,295 | |
Outstanding, ending balance (in shares) | shares | 618,312 | 647,832 |
Expected to vest, assuming a 0.31% annual forfeiture rate (in shares) | shares | 610,295 | |
Exercisable (in shares) | shares | 302,096 | |
Annual forfeiture rate | 0.31% | |
Weighted-Average Exercise Price | ||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 26.67 | |
Less exercised (in dollars per share) | $ / shares | 8.45 | |
Forfeited or expired, Weighted-Average Exercise Price (in dollars per share) | $ / shares | 34.26 | |
Outstanding, ending balance (in dollars per share) | $ / shares | 26.57 | $ 26.67 |
Expected to vest, assuming a 0.31% annual forfeiture rate (in dollars per share) | $ / shares | 26.55 | |
Exercisable (in dollars per share) | $ / shares | $ 24.18 | |
Weighted-Average Remaining Contractual Term In Years | ||
Remaining weighted-average vesting period | 6 years 4 months 6 days | 6 years 10 months 2 days |
Expected to vest, assuming a 0.31% annual forfeiture rate, Weighted Average Remaining Contractual Term | 6 years 3 months 7 days | |
Exercisable | 5 years 14 days | |
Aggregate Intrinsic Value | ||
Beginning balance | $ | $ 4,627,255 | |
Less exercised | $ | 130,192 | |
Ending balance | $ | 2,796,274 | $ 4,627,255 |
Expected to vest, assuming a 0.31% annual forfeiture rate | $ | 2,770,086 | |
Exercisable | $ | $ 1,924,864 | |
2018 Equity Incentive Plan | Equity option | ||
Shares | ||
Award contractual life | 10 years |
STOCK-BASED COMPENSATION - Rest
STOCK-BASED COMPENSATION - Restricted Stock Awards (Details) - Restricted stock awards | 6 Months Ended |
Jun. 30, 2023 $ / shares shares | |
Shares | |
Nonvested, Beginning balance (in shares) | shares | 118,530 |
Granted (shares) | shares | 0 |
Less vested (in shares) | shares | 1,453 |
Forfeited or expired ( in shares) | shares | 4,812 |
Nonvested, Ending balance (in shares) | shares | 112,265 |
Weighted-Average Grant-Date Fair Value Per Share | |
Nonvested, Beginning balance (in dollars per share) | $ / shares | $ 28.85 |
Granted (in dollars per share) | $ / shares | 0 |
Less vested (in dollars per share) | $ / shares | 0 |
Forfeited or expired (in dollars per share) | $ / shares | 33.76 |
Nonvested, Ending balance (in dollars per share) | $ / shares | $ 28.64 |
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 |
REGULATORY CAPITAL - (Narrative
REGULATORY CAPITAL - (Narrative) (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 leverage capital, Ratio | 0.088 | 0.097 |
Tier 1 risk-based capital, Ratio | 0.100 | 0.107 |
Total risk-based capital, Ratio | 0.133 | 0.140 |
CET 1 capital, Ratio | 0.100 | 0.107 |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Tier 1 leverage capital, Ratio | 0.1031 | |
CET 1 capital, Amount | $ 290,867 | |
Tier 1 leverage capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Amount | $ 141,020 | |
Tier 1 risk-based capital, Ratio | 0.1168 | |
Total risk-based capital, Ratio | 0.1293 | |
CET 1 capital, Ratio | 0.1168 |
REGULATORY CAPITAL - Compliance
REGULATORY CAPITAL - Compliance with Regulatory Capital Requirements under Banking Regulations (Details) $ in Thousands | Jun. 30, 2023 USD ($) | Dec. 31, 2022 |
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital, Ratio | 0.133 | 0.140 |
Tier 1 risk-based capital, Ratio | 0.100 | 0.107 |
Tier 1 leverage capital, Ratio | 0.088 | 0.097 |
CET 1 capital, Ratio | 0.100 | 0.107 |
Bank | ||
Compliance with Regulatory Capital Requirements under Banking Regulations [Line Items] | ||
Total risk-based capital, Amount | $ 322,010 | |
Total risk-based capital, Ratio | 0.1293 | |
Total risk-based capital, For Capital Adequacy Purposes, Amount | $ 199,223 | |
Total risk-based capital, For Capital Adequacy Purposes, Ratio | 0.0800 | |
Total risk-based capital, For Capital Adequacy with Capital Buffer, Amount | $ 261,480 | |
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 | $ 249,028 | |
Total risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.1000 | |
Tier 1 risk-based capital, Amount | $ 290,867 | |
Tier 1 risk-based capital, Ratio | 0.1168 | |
Tier 1 risk-based capital, For Capital Adequacy Purposes, Amount | $ 149,417 | |
Tier 1 risk-based capital, For Capital Adequacy Purposes, Ratio | 0.0600 | |
Tier 1 risk-based capital, For Capital Adequacy with Capital Buffer, Amount | $ 211,674 | |
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 | $ 199,223 | |
Tier 1 risk-based capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0800 | |
Tier 1 leverage capital | $ 290,867 | |
Tier 1 leverage capital, Ratio | 0.1031 | |
Tier 1 leverage capital, For Capital Adequacy Purposes, Amount | $ 112,816 | |
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 | $ 141,020 | |
Tier 1 leverage capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0500 | |
CET 1 capital, Amount | $ 290,867 | |
CET 1 capital, Ratio | 0.1168 | |
CET 1 capital, For Capital Adequacy Purposes, Amount | $ 112,063 | |
CET 1 capital, For Capital Adequacy Purposes, Ratio | 0.0450 | |
CET 1 capital, For Capital Adequacy with Capital Buffer, Amount | $ 174,320 | |
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 | $ 161,868 | |
CET 1 capital, To be Well Capitalized Under Prompt Corrective Action Provisions, Ratio | 0.0650 |
BUSINESS SEGMENTS - Segment Fin
BUSINESS SEGMENTS - Segment Financial Results (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) | Jun. 30, 2022 USD ($) | Jun. 30, 2023 employee | Jun. 30, 2022 employee | |
Segment Reporting Information [Line Items] | ||||||
Net interest income | $ 31,552 | $ 24,729 | $ 62,214 | $ 47,451 | ||
Provision for credit losses on loans | (716) | (1,871) | (2,824) | (2,914) | ||
Noninterest income | 4,833 | 4,355 | 10,052 | 10,231 | ||
Noninterest expense | (24,204) | (18,929) | (47,728) | (37,996) | ||
INCOME BEFORE PROVISION FOR INCOME TAXES | 11,465 | 8,284 | 21,714 | 16,772 | ||
(Provision) benefit for income taxes | (2,349) | (1,585) | (4,386) | (3,203) | ||
NET INCOME | 9,116 | 6,699 | 17,328 | 13,569 | ||
Total average assets for period ended | $ 2,841,890 | $ 2,356,320 | $ 2,792,234 | $ 2,313,533 | ||
FTEs | 581 | 537 | 581 | 537 | 581 | 537 |
Home Lending | ||||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | $ 3,283 | $ 2,645 | $ 6,445 | $ 5,089 | ||
Provision for credit losses on loans | (87) | (1,152) | (706) | (998) | ||
Noninterest income | 2,127 | 2,230 | 4,966 | 5,601 | ||
Noninterest expense | (5,254) | (4,698) | (10,168) | (9,589) | ||
INCOME BEFORE PROVISION FOR INCOME TAXES | 69 | (975) | 537 | 103 | ||
(Provision) benefit for income taxes | (14) | 219 | (108) | (21) | ||
NET INCOME | 55 | (756) | 429 | 82 | ||
Total average assets for period ended | $ 528,662 | $ 398,690 | $ 510,419 | $ 392,107 | ||
FTEs | 137 | 148 | 137 | 148 | 137 | 148 |
Commercial and Consumer Banking | ||||||
Segment Reporting Information [Line Items] | ||||||
Net interest income | $ 28,269 | $ 22,084 | $ 55,769 | $ 42,362 | ||
Provision for credit losses on loans | (629) | (719) | (2,118) | (1,916) | ||
Noninterest income | 2,706 | 2,125 | 5,086 | 4,630 | ||
Noninterest expense | (18,950) | (14,231) | (37,560) | (28,407) | ||
INCOME BEFORE PROVISION FOR INCOME TAXES | 11,396 | 9,259 | 21,177 | 16,669 | ||
(Provision) benefit for income taxes | (2,335) | (1,804) | (4,278) | (3,182) | ||
NET INCOME | 9,061 | 7,455 | 16,899 | 13,487 | ||
Total average assets for period ended | $ 2,313,228 | $ 1,957,630 | $ 2,281,815 | $ 1,921,426 | ||
FTEs | 444 | 389 | 444 | 389 | 444 | 389 |
BUSINESS SEGMENTS - Narrative (
BUSINESS SEGMENTS - Narrative (Details) | 6 Months Ended |
Jun. 30, 2023 item segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | segment | 2 |
Retail Deposit | Pacific Northwest | |
Segment Reporting Information [Line Items] | |
Number of bank branches | item | 27 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||||
Feb. 24, 2023 | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Jun. 30, 2023 USD ($) item | Jun. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | Jan. 22, 2016 item | |
Finite-Lived Intangible Assets [Line Items] | |||||||
Goodwill | $ 3,592 | $ 3,592 | $ 2,312 | ||||
Goodwill, Impairment Loss | 0 | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||
Finite-Lived Intangible Assets, Gross, Total | 7,490 | $ 7,490 | 7,490 | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (4,121) | (3,430) | (3,430) | ||||
Finite-Lived Intangible Assets, Net, Beginning Balance | 3,369 | 4,060 | 4,060 | ||||
Amortization | (1,023) | $ (172) | (1,482) | $ (345) | (691) | ||
Additions as a result of the Branch Purchase, Gross | 17,438 | ||||||
Additions as a result of the Branch Purchase, net | 17,438 | ||||||
Finite-Lived Intangible Assets, Gross, Total | 24,928 | 24,928 | 7,490 | ||||
Finite-Lived Intangible Assets, Accumulated Amortization | (5,603) | (5,603) | (4,121) | ||||
Finite-Lived Intangible Assets, Net, Ending Balance | 19,325 | 19,325 | 3,369 | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |||||||
Remainder of 2023 | 1,982 | 1,982 | |||||
2024 | 3,633 | 3,633 | |||||
2025 | 3,191 | 3,191 | |||||
2026 | 2,846 | 2,846 | |||||
2027 | 2,500 | 2,500 | |||||
Thereafter | 5,173 | 5,173 | |||||
Total | $ 19,325 | $ 19,325 | $ 3,369 | ||||
Anchor Bancorp | |||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||
Amortization period | 10 years | ||||||
Bank of America | |||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||
Amortization period | 9 years | ||||||
Number of Retail Bank Branches Acquired | item | 4 | 4 | 4 | ||||
Columbia State Bank | |||||||
Finite-Lived Intangible Assets, Net [Abstract] | |||||||
Amortization period | 10 years | 10 years |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Noninterest Income | ||||
Noninterest income (in-scope of Topic 606) | $ 1,270 | $ 809 | $ 2,184 | $ 1,568 |
Noninterest income (out-of-scope and/or immaterial to Topic 606) | 3,563 | 3,546 | 7,868 | 8,663 |
Total noninterest income | 4,833 | 4,355 | 10,052 | 10,231 |
Debit Card Interchange Fees | ||||
Noninterest Income | ||||
Noninterest income (in-scope of Topic 606) | 882 | 584 | 1,520 | 1,127 |
Deposit service and account maintenance fees | ||||
Noninterest Income | ||||
Noninterest income (in-scope of Topic 606) | $ 388 | $ 225 | $ 664 | $ 441 |